International Journal of Financial Studies

17 pages, 1201 KB

Open AccessArticle

Corporate Governance Structures and Firm Value: The Mediating Role of Financial Distress in ASEAN Construction Companies

by Anton Firdaus, Nunuy Nur Afiah, Harry Suharman and Tettet Fitrijanti

Int. J. Financial Stud. 2026, 14(1), 24; https://doi.org/10.3390/ijfs14010024 - 21 Jan 2026

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Abstract

This study tests the connectionbetween corporate governance structures and firm value, incorporating financial distress as a mediating mechanism among construction companies listed in ASEAN markets. Utilizing a sample of 58 firms drawn from an initial population of 169 companies over the 2018–2021 period, [...] Read more.

This study tests the connectionbetween corporate governance structures and firm value, incorporating financial distress as a mediating mechanism among construction companies listed in ASEAN markets. Utilizing a sample of 58 firms drawn from an initial population of 169 companies over the 2018–2021 period, this study measures governance mechanisms through managerial ownership, institutional ownership, independent commissioners, audit committees, and litigation risk. Firm value is proxied by Tobin’s Q, while financial distress is assessed utilizing the Altman Z-Score. Panel data regression is employed to test the direct connections, and the Sobel test is used to evaluate the mediating role of financial distress. The outcome describes that managerial ownership and audit committees have a favorable effect on firm value, whereas independent commissioners and litigation risk exert a negative influence. Institutional ownership shows no significant association with firm value. Moreover, institutional ownership significantly affects financial distress, whereas the other governance mechanisms show no significant association with financial distress, although financial distress itself has a detrimental impact on firm value. The mediation analysis describes that financial distress mediates only the connection between institutional ownership and firm value. These outcomes help clarify prior inconsistencies in the literature and underscore the importance of strengthening managerial ownership and audit committees, optimizing the role of independent commissioners, and mitigating litigation risk to sustain firm value. Full article

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24 pages, 479 KB

Open AccessArticle

How Environmental Uncertainty Drives Asymmetric Mispricing in China: Dual Channels and Heterogeneous Media Effect

by Shuya Hu and Shengnian Wang

Int. J. Financial Stud. 2026, 14(1), 23; https://doi.org/10.3390/ijfs14010023 - 14 Jan 2026

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Abstract

The essay delves into the impact of environmental uncertainty on asymmetric mispricing, utilizing the data from listed firms in China spanning from 2007 to 2023. Our analysis reveals that environmental uncertainty amplifies stock mispricing within capital markets, whether upward or downward. Diverging from [...] Read more.

The essay delves into the impact of environmental uncertainty on asymmetric mispricing, utilizing the data from listed firms in China spanning from 2007 to 2023. Our analysis reveals that environmental uncertainty amplifies stock mispricing within capital markets, whether upward or downward. Diverging from prior research, we distinguish between upward and downward mispricing and reveal the black box of environmental uncertainty affecting stock mispricing from dual channels. Specifically, environmental uncertainty intensifies upward mispricing through heightened earnings management and exacerbates downward mispricing by boosting investor irrationality. Furthermore, we explore the heterogeneous impact of different media coverage. In the downward mispricing sample, negative media exacerbated the relationship between the two, while positive coverage played a mitigating role. In the upward mispricing sample, only negative reports have a significant impact and mitigate the impact of uncertainty on mispricing. Our research on media heterogeneity once again proves that it is a double-edged sword. Our research indicates that improving the capacity to recognize different mispricing mechanisms in various market directions can greatly boost decision-making efficiency. Meanwhile, it is vital to strengthen professional ethics in media organizations and encourage more objective reporting. These efforts can jointly contribute to improving the efficiency of emerging capital markets. Full article

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26 pages, 406 KB

Open AccessArticle

Risk Aversion, Self-Control, Commitment Savings Device and Benchmark-Defined Undersaving Among Nano Enterprises in Urban Slums: A Logistic Regression Approach

by Edward A. Osifodunrin and José Dias Lopes

Int. J. Financial Stud. 2026, 14(1), 22; https://doi.org/10.3390/ijfs14010022 - 14 Jan 2026

Viewed by 336

Abstract

Low-income individuals are unlikely to save relatively large sums on a regular basis; however, many still fall short of even the modest threshold required for long-term financial security. This study examines the determinants of benchmark-defined undersaving among retail e-payment agents (REAs) operating in [...] Read more.

Low-income individuals are unlikely to save relatively large sums on a regular basis; however, many still fall short of even the modest threshold required for long-term financial security. This study examines the determinants of benchmark-defined undersaving among retail e-payment agents (REAs) operating in the urban slums of Lagos, Nigeria. We use a contingent valuation survey, descriptive analysis, and logistic regression to examine how selected behavioural and demographic factors, alongside a 60-day experimental intervention—the Programmed Microsaving Scheme (PMSS), a hard daily commitment savings device—affect the likelihood of undersaving, defined as saving less than 12% of each REA’s average daily income. While the PMSS appears to have contributed to improvements in post-treatment saving participation and performance among REAs, it did not significantly increase the likelihood of reaching or exceeding the benchmark savings threshold. Consistent with this, average daily income, age, gender, marital status, education, and religion are statistically insignificant predictors of benchmark-defined undersaving. In contrast, self-control, measured using a literature-validated instrument, exhibits a statistically significant negative association with benchmark-defined undersaving, indicating that higher self-control reduces the likelihood of failing to meet the benchmark. Measured risk aversion similarly shows no significant association. Notably, this study introduces a novel 60-day PMSS, co-designed with REAs and neobanks to accommodate daily income savings—a characteristic of the informal sector largely overlooked in the literature on commitment savings devices. From a policy perspective, the findings suggest that while short-horizon commitment devices (such as the 60-day PMSS) and financial literacy are associated with improvements in microsavings among low-income daily earners, achieving benchmark-level saving might require longer-term and more adaptive mechanisms that address income volatility and mitigate other inherent risks. Full article

33 pages, 512 KB

Open AccessArticle

Distance to Governance Regulatory on Financial Performance: Evidence from Managerial Disclosure Activities at Vietnam

by Thi Ngoc Anh Nguyen and Hail Jung

Int. J. Financial Stud. 2026, 14(1), 21; https://doi.org/10.3390/ijfs14010021 - 13 Jan 2026

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Abstract

This study examines how geographic distance to Vietnam’s centralized securities regulator—the State Securities Commission (SSC)—influences firm-level stock price crash risk. In emerging markets characterized by weak governance, corruption, and political connections, distance can erode monitoring effectiveness and heighten managerial incentives to conceal bad [...] Read more.

This study examines how geographic distance to Vietnam’s centralized securities regulator—the State Securities Commission (SSC)—influences firm-level stock price crash risk. In emerging markets characterized by weak governance, corruption, and political connections, distance can erode monitoring effectiveness and heighten managerial incentives to conceal bad news. Using data on Vietnamese listed firms from 2010 to 2024, we find a robust positive association between a firm’s distance to the SSC headquarters in Hanoi and its future crash risk. The effect is stronger for non-state-owned enterprises (non-SOEs) and in provinces with high corruption, but disappears in SOEs and in more transparent regions, where state-related networks provide insulation from weak formal institutions. Exploiting the 2019 Securities Law as a quasi-natural experiment, we show that the distance effect was more pronounced before the reform, suggesting that improved formal regulation can partially offset geographically induced monitoring frictions. Additional tests reveal that the effect is amplified among firms listed on the Ho Chi Minh Stock Exchange (HOSE) and those with higher financial leverage. Our findings provide novel evidence on the spatial dimension of regulatory enforcement in emerging markets. We highlight geographic distance as a significant but previously overlooked source of crash risk, with implications for regulators in designing risk-based supervision and for investors in pricing location-driven risks. Full article

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18 pages, 634 KB

Open AccessArticle

Sustainability Practices and Capital Costs: Evidence from Banks and Financial Technology Firms in Global Markets

by Raminta Vaitiekuniene and Alfreda Sapkauskiene

Int. J. Financial Stud. 2026, 14(1), 20; https://doi.org/10.3390/ijfs14010020 - 12 Jan 2026

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Abstract

This paper examines the impact of environmental, social, and governance (ESG) disclosure on the cost of capital for banks as well as financial technology companies in Europe, America, and Asia from 2010 to 2024. The study investigates how sustainability affects financing conditions in [...] Read more.

This paper examines the impact of environmental, social, and governance (ESG) disclosure on the cost of capital for banks as well as financial technology companies in Europe, America, and Asia from 2010 to 2024. The study investigates how sustainability affects financing conditions in the two institutional settings of conventional and digital financial intermediaries. We estimate the average cost of capital using the traditional WACC (weighted average cost of capital) formula, which calculates the cost and proportions of debt and equity capital. Panel regressions with firm and year fixed effects are used, along with an instrumental variable (IV) approach (2SLS), by way of peer-based ESG instruments to correct for endogeneity. The paper also carries out robustness checks such as the Anderson–Rubin weak IV tests and over identification diagnostics. The findings indicate that more ESG disclosure has a significant negative effect on WACC and debt costs and no robust impact on equity cost. Governance disclosure is revealed to be the dominant dimension and it always correlates with lower financing costs. Environmental disclosure is occasionally associated with a higher cost of equity, owing to investors’ expectation of short-term compliance costs. The results shed light on the dynamic relationship between innovation and sustainability in driving banks and financial technology firms financing environment. Full article

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24 pages, 1418 KB

Open AccessReview

A Review of Gender-Inclusive Green Microfinance Business Models in Tunisia: A Business Model Canvas Perspective

by Nadia Mansour

Int. J. Financial Stud. 2026, 14(1), 19; https://doi.org/10.3390/ijfs14010019 - 9 Jan 2026

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Abstract

This paper presents a systematic review of Tunisian stakeholders’ perceptions of integrating gender into green microfinance business models, analyzed through the lens of the Business Model Canvas (BMC). This systematic review of 32 studies indicates a dual perception of women as both vulnerable [...] Read more.

This paper presents a systematic review of Tunisian stakeholders’ perceptions of integrating gender into green microfinance business models, analyzed through the lens of the Business Model Canvas (BMC). This systematic review of 32 studies indicates a dual perception of women as both vulnerable victims and active agents in the ecological transition. The BMC-based analysis reveals major weaknesses in the value proposition, distribution channels, and cost structures of gendered green microfinance offerings. Furthermore, we highlight the underexplored role of regulatory frameworks as levers for business model innovation. This study offers an original analytical framework that links gender, environmental sustainability, and microfinance business models, providing actionable insights for policymakers and microfinance institutions seeking to foster inclusive and sustainable financial ecosystems in Tunisia and similar contexts. Full article

(This article belongs to the Topic Sustainable and Green Finance)

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23 pages, 3045 KB

Open AccessReview

A Bibliometric Analysis of Digital Financial Literacy and Its Role in Reducing Online Financial Fraud in the European Union

by Carol Wangari Maina, Mahdi Imani Bashokoh and Diána Koponicsné Györke

Int. J. Financial Stud. 2026, 14(1), 18; https://doi.org/10.3390/ijfs14010018 - 8 Jan 2026

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Abstract

The rapid digitalization of financial services in the European Union (EU) has not only enhanced convenience and inclusion but also increased exposure to sophisticated online financial fraud. Digital financial literacy (DFL) is widely promoted as a key tool for empowering consumers and reducing [...] Read more.

The rapid digitalization of financial services in the European Union (EU) has not only enhanced convenience and inclusion but also increased exposure to sophisticated online financial fraud. Digital financial literacy (DFL) is widely promoted as a key tool for empowering consumers and reducing fraud victimization. However, the empirical and conceptual landscape linking DFL to fraud reduction within the specific sociolegal context of the EU remains fragmented. This study uses bibliometric analysis to map the research area, define major themes within the field, and determine the role of DFL in reducing online financial fraud in the EU. Peer-reviewed journal articles were targeted to ensure academic rigor, with a publication window of 2010–2025 reflecting key fintech and regulatory developments. After adhering to PRISMA principles, 87 peer-reviewed publications were chosen out of a total of 568 records identified through OpenAlex and Web of Science, coauthorship, keyword co-occurrence, citation, temporal, and density representations were analyzed using VOSviewer. Findings indicate an increasingly diffuse research field with new clusters concentrating on macroeconomic policy, business technology, social psychology, and interdisciplinary foundations. Results demonstrate that successful implementation of DFL interventions combines behavioral insights, technological protection, and non-discriminatory policy considerations. The study concludes by identifying major gaps in research and providing a path forward for future evidence-based policy efforts toward enhancing consumer protection in the EU digital financial market. Full article

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19 pages, 2986 KB

Open AccessArticle

The Financial Lobster Bias

by Óscar De los Reyes Marín, Iria Paz Gil, Jose Torres-Pruñonosa and Raúl Gómez-Martínez

Int. J. Financial Stud. 2026, 14(1), 17; https://doi.org/10.3390/ijfs14010017 - 7 Jan 2026

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Abstract

The Financial Lobster Bias describes how SMEs, driven by distorted liquidity perceptions, engage in aggressive expansion until financial breakdown occurs. Using data from 10,412 Spanish SMEs (2000–2024), this study shows that liquidity misperception—measured through two versions of the Liquidity Misperception Index (PEL), one [...] Read more.

The Financial Lobster Bias describes how SMEs, driven by distorted liquidity perceptions, engage in aggressive expansion until financial breakdown occurs. Using data from 10,412 Spanish SMEs (2000–2024), this study shows that liquidity misperception—measured through two versions of the Liquidity Misperception Index (PEL), one based on financial structure and another on payment–collection timing (PMP–PMC)—is a significant driver of expansion–collapse cycles. The financial PEL displays a strong temporal trend (R² = 0.736), while the PMP–PMC-based PEL also increases over time (R² = 0.411), evidencing a persistent widening between perceived and real liquidity. The Illusory Confidence in Liquidity Index (ICEL) reveals that confidence peaks coincide with periods of systemic fragility. The Unsustainable Expansion Index (IEI) identifies pre-crisis overexpansion (IEI = 2.34 in 2005; 2.87 in 2006; 1.72 in 2007), preceding the 2008 failure surge. Together, these indicators provide early-warning mechanisms that uncover hidden fragility and help anticipate liquidity-driven collapse. Full article

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22 pages, 5584 KB

Open AccessArticle

Design and Evaluation of Machine Learning-Based Investment Strategies in Equity Funds

by Danillo Guimarães Cassiano da Silva, Estaner Claro Romão and Fabiano Fernandes Bargos

Int. J. Financial Stud. 2026, 14(1), 16; https://doi.org/10.3390/ijfs14010016 - 7 Jan 2026

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Abstract

This study examines quantitative investment strategies for Brazilian equity funds, integrating traditional financial performance indicators with machine learning techniques to enhance fund selection. The main objective was to construct and validate predictive models for fund selection. The methodology involved collecting daily data from [...] Read more.

This study examines quantitative investment strategies for Brazilian equity funds, integrating traditional financial performance indicators with machine learning techniques to enhance fund selection. The main objective was to construct and validate predictive models for fund selection. The methodology involved collecting daily data from 2019 to 2025, computing a range of return and risk measures, and trained models to classify 1- and 3-month shifted windows. The 3-month models achieved the strongest predictive accuracy, exceeding 91%, with the Sharpe Ratio emerging as the most influential feature. A 12-month backtest (October/2024–September/2025) showed that ML-constructed portfolios delivered cumulative returns between 14.65% and 91.86%, depending on the selection criterion, substantially outperforming Brazil’s CDI risk-free benchmark (12.70%) and the Ibovespa (11.46%). These findings highlight the practical potential of ML-based fund selection, though successful implementation requires careful risk management and ongoing model validation. Full article

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18 pages, 594 KB

Open AccessArticle

Quantum-Based Method to Estimate Future Tax Compositions: Application to the Case of Foreign Trade in Mexico

by Sergio Lagunas-Puls and Oliver Cruz-Milán

Int. J. Financial Stud. 2026, 14(1), 15; https://doi.org/10.3390/ijfs14010015 - 7 Jan 2026

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Abstract

Using a method inspired by quantum principles, this study estimates the composition of various types of tax contributions expected from foreign trade operations. The estimation approach is proposed considering the superposition of expectations and disturbances—fundamental elements of quantum methods—that add complexity to the [...] Read more.

Using a method inspired by quantum principles, this study estimates the composition of various types of tax contributions expected from foreign trade operations. The estimation approach is proposed considering the superposition of expectations and disturbances—fundamental elements of quantum methods—that add complexity to the forecasts of tax collections. For instance, the contributions of international trade-related taxes may be determined not only by the country’s degree of regional integration but also by the composition of tax revenue that depends on the kind and use of merchandise. Using the case of Mexico’s imports, the methodology illustrates how the expectations of collecting certain taxes—like the General Import Tariff (GIT) and the Value Added Tax (VAT)—would be impacted by fluctuations in others—such as the Special Tax on Production and Services (STPS). The hypothesis of this study is that, through the proposed quantum-inspired methodology, it is possible to establish future scenarios of tax revenue compositions while maintaining fiscal consistency by anticipating potential outcomes in the adjustments of contributions if the recently proposed fiscal reform is approved by the Mexican Government. This work contributes to the academic literature on public finance management by advancing a methodology that can support the strategic formulation of fiscal expectations and policy. Full article

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20 pages, 1113 KB

Open AccessArticle

Systemic Operational Risk in Morocco’s Banking Sector: An Empirical Analysis Using Panel VAR

by Kawtar El Khadi and Zakaria Firano

Int. J. Financial Stud. 2026, 14(1), 14; https://doi.org/10.3390/ijfs14010014 - 7 Jan 2026

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Abstract

This study examines the systemic operational risk in Morocco’s banking sector using a Panel VAR model based on data from three banks over ten years. The model includes real GDP, interbank rate (TMP), and bank credit, alongside indicators of operational, credit, and liquidity [...] Read more.

This study examines the systemic operational risk in Morocco’s banking sector using a Panel VAR model based on data from three banks over ten years. The model includes real GDP, interbank rate (TMP), and bank credit, alongside indicators of operational, credit, and liquidity risks. The Impulse Response Functions (IRF) show that operational risk shocks reduce GDP and affect TMP with a lag, confirming their systemic impact. Forecast Error Variance Decomposition (FEVD) reveals that GDP significantly explains the variance in operational risk. To strengthen the analysis, a dynamic panel GMM model is used to address endogeneity. The GMM results demonstrate that systemic operational risk in Moroccan banks is both persistent and procyclical, highlighting how macro-financial dynamics such as growth, inflation, and monetary conditions, directly shape banks’ resilience. These findings provide new empirical evidence on the determinants of systemic operational risk in emerging markets. This dual approach supports the integration of operational risk into Morocco’s macroprudential policy frameworks. Full article

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18 pages, 296 KB

Open AccessArticle

Lender of Last Resort and Financial Systemic Risks in Times of Economic Stability: Evidence from 55 Countries

by Wenlong Miao, Yuxian Ma and Yuanyuan Huo

Int. J. Financial Stud. 2026, 14(1), 9; https://doi.org/10.3390/ijfs14010009 - 6 Jan 2026

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Abstract

As a cornerstone of the modern financial safety net, the Lender of Last Resort (LOLR) is essential in mitigating liquidity crises and containing financial contagion. However, during periods of economic stability, risk-taking incentives in the banking sector may undermine its effectiveness. Using quarterly [...] Read more.

As a cornerstone of the modern financial safety net, the Lender of Last Resort (LOLR) is essential in mitigating liquidity crises and containing financial contagion. However, during periods of economic stability, risk-taking incentives in the banking sector may undermine its effectiveness. Using quarterly panel data from 55 countries over the period 2010–2023, this study employs a two-way fixed effects model to assess the impact of LOLR support on systemic financial risk and its transmission mechanisms. We find that LOLR support significantly increases systemic risk during stable economic periods. Mechanism analysis indicates that this effect is channeled through the erosion of bank asset liquidity, expansion of financial leverage, and deterioration in asset quality. Moreover, the adverse impact is more pronounced in emerging economies, bank-dominated financial systems, countries with low capital adequacy ratios, underdeveloped regulatory frameworks, and lower levels of digital technology adoption. This study provides cross-country evidence on the potential negative consequences of central bank rescue functions during calm periods and offers important policy insights for optimizing the LOLR framework and building a more resilient financial safety net. Full article

1 pages, 142 KB

Open AccessCorrection

Correction: Moreno-Menéndez et al. (2025). Improving Financial Sustainability Through Effective Credit Risk Management and Human Talent Development in Microfinance Institutions. International Journal of Financial Studies, 13(2), 60

by Fabricio Miguel Moreno-Menéndez, Vicente González-Prida, Diana Pariona-Amaya, Victoriano Eusebio Zacarías-Rodríguez, Víctor Zacarías-Vallejos, Sara Ricardina Zacarías-Vallejos, Luis Alberto Aguilar-Cuevas and Lisette Paola Campos-Carpena

Int. J. Financial Stud. 2026, 14(1), 13; https://doi.org/10.3390/ijfs14010013 - 6 Jan 2026

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Abstract

In the published paper [...] Full article

23 pages, 694 KB

Open AccessArticle

Workforce Shocks and Financial Markets: Asset Pricing Perspectives

by Samreen Akhtar, Jyoti Agarwal, Alam Ahmad, Refia Wiquar and Mohd Shahid Ali

Int. J. Financial Stud. 2026, 14(1), 12; https://doi.org/10.3390/ijfs14010012 - 6 Jan 2026

Viewed by 353

Abstract

Workforce adjustments, such as mass layoffs, are significant corporate events that can influence stock returns and volatility, yet their broader asset-pricing implications remain underexplored. We examine the impact of such workforce shocks on stock performance from an asset-pricing perspective. Grounded in production-based asset-pricing [...] Read more.

Workforce adjustments, such as mass layoffs, are significant corporate events that can influence stock returns and volatility, yet their broader asset-pricing implications remain underexplored. We examine the impact of such workforce shocks on stock performance from an asset-pricing perspective. Grounded in production-based asset-pricing theory, incorporating labor adjustment costs and search-and-matching frictions, our study posits that disruptions in the labor force significantly affect firm risk and value. This focus addresses a clear gap. Previous research has not comprehensively evaluated workforce shocks as systematic risk factors in a cross-sectional asset-pricing model. Using an extensive dataset spanning 1990–2023 and covering thousands of layoff events, we construct a novel “workforce shock” factor and conduct the first large-scale empirical tests of its pricing relevance. Our analysis reveals that workforce shocks lead to lower stock returns and heightened volatility, effects especially pronounced in labor-intensive firms. Moreover, exposure to workforce shock risk carries a significant premium, indicating that these disruptions act as a systematic risk factor priced in the cross-section of equity returns. Overall, our study provides the first comprehensive evidence linking labor force disturbances to equity risk premia, underscoring the importance of incorporating labor market considerations into asset-pricing models. Full article

(This article belongs to the Special Issue Risks and Uncertainties in Financial Markets)

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34 pages, 5123 KB

Open AccessArticle

Comparative Analysis of Tail Risk in Emerging and Developed Equity Markets: An Extreme Value Theory Perspective

by Sthembiso Dlamini and Sandile Charles Shongwe

Int. J. Financial Stud. 2026, 14(1), 11; https://doi.org/10.3390/ijfs14010011 - 6 Jan 2026

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Abstract

This research explores the application of extreme value theory in modelling and quantifying tail risks across different economic equity markets, with focus on the Nairobi Securities Exchange (NSE20), the South African Equity Market (FTSE/JSE Top40) and the US Equity Index (S&P500). The study [...] Read more.

This research explores the application of extreme value theory in modelling and quantifying tail risks across different economic equity markets, with focus on the Nairobi Securities Exchange (NSE20), the South African Equity Market (FTSE/JSE Top40) and the US Equity Index (S&P500). The study aims to recommend the most suitable probability distribution between the Generalised Extreme Value Distribution (GEVD) and the Generalised Pareto Distribution (GPD) and to assess the associated tail risk using the value-at-risk and expected shortfall. To address volatility clustering, four generalised autoregressive conditional heteroscedasticity (GARCH) models (standard GARCH, exponential GARCH, threshold-GARCH and APARCH (asymmetric power ARCH)) are first applied to returns before implementing the peaks-over-threshold and block maxima methods on standardised residuals. For each equity index, the probability models were ranked based on goodness-of-fit and accuracy using a combination of graphical and numerical methods as well as the comparison of empirical and theoretical risk measures. Beyond its technical contributions, this study has broader implications for building sustainable and resilient financial systems. The results indicate that, for the GEVD, the maxima and minima returns of block size 21 yield the best fit for all indices. For GPD, Hill’s plot is the preferred threshold selection method across all indices due to higher exceedances. A final comparison between GEVD and GPD is conducted to estimate tail risk for each index, and it is observed that GPD consistently outperforms GEVD regardless of market classification. Full article

(This article belongs to the Special Issue Financial Markets: Risk Forecasting, Dynamic Models and Data Analysis)

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27 pages, 816 KB

Open AccessArticle

Influence of ESG on Credit Growth: Moderating Effects of Islamic Bank and Size in MENA

by Aysha Alhamrani, Atif Awoad and Mohamed Albaity

Int. J. Financial Stud. 2026, 14(1), 10; https://doi.org/10.3390/ijfs14010010 - 6 Jan 2026

Viewed by 434

Abstract

This study examined how ESG has influenced credit growth across MENA countries/regions and investigated the extent to which bank size and Islamic banking influence this relationship. Using panel data from 42 listed banks across 10 MENA countries (367 bank-year observations from 2010–2023), the [...] Read more.

This study examined how ESG has influenced credit growth across MENA countries/regions and investigated the extent to which bank size and Islamic banking influence this relationship. Using panel data from 42 listed banks across 10 MENA countries (367 bank-year observations from 2010–2023), the analysis employs quantile regression to capture heterogeneous effects across different levels of credit growth. The findings showed that ESG disclosure has a significant positive influence on credit growth across most quantiles, except at the (25th) quantile where the effect was insignificant. Bank size moderated this relationship, it weakens the ESG effect at the (10th) quantile but enhances it at the (25th, 50th, 75th) quantiles. Although the relationship remained positive at the (90th) quantile, the impact slightly declined, suggesting diminishing marginal gains for larger banks. Islamic banks strengthened the ESG disclosure and credit growth relationship at (10th and 25th, 90th) quantiles but weakened it at the median quantiles. Overall, the results demonstrate that the effect of ESG disclosure on credit growth is heterogeneous and highly dependent on bank characteristics, offering meaningful implications for policymakers and banking practitioners in adapting ESG strategies to enhance credit growth across different quantiles. Full article

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17 pages, 398 KB

Open AccessArticle

Market Structure, Efficiency, and the Quest for Banking Performance: New Insights from an Evolving Banking Market

by Naveed Khan, Muhammad Asim Afridi, Muhammad Tahir and Umar Burki

Int. J. Financial Stud. 2026, 14(1), 8; https://doi.org/10.3390/ijfs14010008 - 5 Jan 2026

Viewed by 356

Abstract

This study investigates the impact of market structure on the performance of banks in Pakistan. It explicitly tests two competing hypotheses: the Structure–Conduct–Performance paradigm and the Efficient Structure Hypothesis, providing insights into whether profitability stems from market concentration or efficiency. The study employs [...] Read more.

This study investigates the impact of market structure on the performance of banks in Pakistan. It explicitly tests two competing hypotheses: the Structure–Conduct–Performance paradigm and the Efficient Structure Hypothesis, providing insights into whether profitability stems from market concentration or efficiency. The study employs the Data Envelopment Analysis approach to measure banking efficiency and uses the concentration ratio to capture market structure. A regression framework is applied, with efficiency and market structure as key explanatory variables. Further, bank-specific controls are included to examine their effects on performance, measured by Return on Assets. Results show that although the concentration of the five largest banks slightly declined, it remains relatively high at 58.5%. Banks, on average, operate at 67% efficiency with an upward trend over time. The findings lend more substantial support to the Efficient Structure Hypothesis, indicating that profitability is primarily driven by technical and scale efficiency rather than market concentration, with individual bank market share affecting performance only as an outcome of efficiency gains. The analysis highlights that efficiency improvements are crucial in enhancing banks’ performance in Pakistan. Over the years, the banking sector of Pakistan has evolved in terms of market structure, efficiency, and banks’ performance. This study interprets the changes in the market structure in the context of the structure conduct performance hypothesis and/or the efficient structure performance hypothesis and answers the question regarding whether market power and/or efficient structure is relevant to the banks’ performance. For policymakers, the results suggest that efforts to improve competitive efficiency, such as encouraging innovation, risk management, and capacity utilization, are more effective than focusing solely on altering market concentration. Full article

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25 pages, 1709 KB

Open AccessArticle

Financing Startups and Impact Investing: Evidence Across MENA Countries

by Slim Mseddi

Int. J. Financial Stud. 2026, 14(1), 7; https://doi.org/10.3390/ijfs14010007 - 5 Jan 2026

Viewed by 430

Abstract

This study empirically investigates the determinants of financial success for startups engaged in impact versus conventional investment, performing a landscape analysis of the MENA region’s financial ecosystem. Using the total equity funding amount (TEFA) as a performance proxy, we analyzed data from Crunchbase [...] Read more.

This study empirically investigates the determinants of financial success for startups engaged in impact versus conventional investment, performing a landscape analysis of the MENA region’s financial ecosystem. Using the total equity funding amount (TEFA) as a performance proxy, we analyzed data from Crunchbase on 6772 deals involving 4381 startups and 1771 investors across 23 countries from 2009 to 2023. The sample was categorized into impact (702 firms) and conventional (2431 firms) investment groups. The results reveal a significant negative effect of impact investment on startup funding levels; a nonparametric test confirmed that impact-backed startups exhibit a significantly lower mean TEFA than their conventional counterparts. Other factors, including the number of funding rounds, founders, employees, and investors, positively influenced financial success. The study concludes that, within the MENA context, a discernible trade-off exists, with startups pursuing impact investment receiving less equity funding than those utilizing conventional investment models. Our study provides the first large-scale empirical evidence from the MENA region, revealing a significant funding penalty for impact-aligned startups. This quantifies a structural trade-off between socio-environmental goals and equity capital access. These findings address a critical literature gap and provide actionable insights for investors and policymakers in this emerging ecosystem. Full article

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12 pages, 666 KB

Open AccessArticle

Has IPO Market Structure Fundamentally Changed? Evidence from Negative Binomial Regression with Structural Breaks

by Michael D. Herley

Int. J. Financial Stud. 2026, 14(1), 6; https://doi.org/10.3390/ijfs14010006 - 5 Jan 2026

Viewed by 442

Abstract

This paper introduces Bai-Perron structural break detection combined with negative binomial regression to model overdispersed U.S. IPO count data. Using monthly data from 1995 to 2024, we identify five breaks that partition IPO activity into six distinct regimes, each with fundamentally different variance [...] Read more.

This paper introduces Bai-Perron structural break detection combined with negative binomial regression to model overdispersed U.S. IPO count data. Using monthly data from 1995 to 2024, we identify five breaks that partition IPO activity into six distinct regimes, each with fundamentally different variance characteristics. We then employ negative binomial regression that incorporates these breaks. IPO data show substantial overdispersion (variance-to-mean ratios: 2.77 to 33.74). The negative binomial model reveals that market uncertainty (as measured by the VIX) and financing costs (as indicated by 10-year Treasury rates) reduce IPO activity, while lagged IPO volume drives activity in the current period. Regime-specific likelihood ratio tests reveal that statistically significant overdispersion first emerges during the 2008 financial crisis, subsides during the post-recession period, and returns with unprecedented intensity after May 2020. An OLS model without the identified structural breaks incorrectly suggests positive interest rate effects. Full article

(This article belongs to the Special Issue Advances in Financial Econometrics)

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19 pages, 567 KB

Open AccessArticle

The Impact of Philanthropic Donations on Corporate Future Stock Returns Under the Sustainable Development Philosophy—From the Perspective of ESG Rating Constraints

by Yunqiao Chen, Yawen Wang and Cunjing Liu

Int. J. Financial Stud. 2026, 14(1), 5; https://doi.org/10.3390/ijfs14010005 - 1 Jan 2026

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Abstract

Fulfilling social responsibilities within the ESG framework has gradually become a core competitive advantage for sustainable corporate development that also serves to enhance future returns. Charitable donations constitute a crucial method through which corporations fulfill social responsibilities and represent a primary indicator in [...] Read more.

Fulfilling social responsibilities within the ESG framework has gradually become a core competitive advantage for sustainable corporate development that also serves to enhance future returns. Charitable donations constitute a crucial method through which corporations fulfill social responsibilities and represent a primary indicator in ESG ratings, ratings that in turn have an impact on future stock market returns. This study, based on data from listed companies on the Shanghai and Shenzhen stock exchanges from 2018 to 2022, employed a fixed effects model to analyze the influence of charitable donations on future returns under ESG rating constraints. The research reveals that ESG rating constraints can reduce speculative charitable donations and help to optimize the peak value of a company’s future returns. After a series of robustness tests, including using the one-period lagged explanatory variable, changing the measurement method of the explained variable, replacing the ESG with the assignment method for value determination, and considering the impact of outliers, the conclusion still holds. Heterogeneity analysis indicates that in state-owned enterprises, companies in a recessionary phase, and industries with lower levels of competition, a decelerating effect of ESG ratings on the impact of charitable donations on future returns dominates. Conversely, for mature companies, ESG ratings accelerate the positive effect of charitable donations on future returns. This paper contributes to the ESG economic consequences literature by offering empirical evidence on corporate social responsibility implementation under sustainability strategies. Full article

(This article belongs to the Special Issue Emerging Trends in Corporate Finance: ESG, Climate Risk, and Other Contemporary Issues)

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34 pages, 1141 KB

Open AccessArticle

A Momentum-Based Normalization Framework for Generating Profitable Analyst Sentiment Signals

by Shawn McCarthy and Gita Alaghband

Int. J. Financial Stud. 2026, 14(1), 4; https://doi.org/10.3390/ijfs14010004 - 1 Jan 2026

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Abstract

The diverse rating scales used by brokerage firms pose significant challenges for aggregating analyst recommendations in financial research. We develop a momentum-based normalization framework that transforms heterogeneous rating changes into standardized sentiment signals using firm-relative, past-only empirical distribution functions with event-based lookback and [...] Read more.

The diverse rating scales used by brokerage firms pose significant challenges for aggregating analyst recommendations in financial research. We develop a momentum-based normalization framework that transforms heterogeneous rating changes into standardized sentiment signals using firm-relative, past-only empirical distribution functions with event-based lookback and expanding global quantile classification. Using 68,660 rating events from 270 brokerage firms covering 106 large-cap U.S. stocks (2019–2025), our approach generates statistically significant Buy–Sell spreads at all horizons: 1-month (0.96%, t = 3.07, p = 0.002), 2-month (1.36%, t = 3.07, p = 0.002), and 3-month (1.94%, t = 3.66, p < 0.001). Fama–French six-factor regressions confirm 13.6% annualized alpha for Buy signals (t = 3.81) after controlling for market, size, value, profitability, investment, and momentum factors. True out-of-sample validation on May–September 2025 data achieves 107% retention of in-sample 1-month performance (four of five months positive), indicating robust signal generalization. The framework provides a theoretically grounded and empirically validated methodology for standardizing analyst sentiment suitable for quantitative investment strategies and academic research. Full article

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25 pages, 725 KB

Open AccessArticle

Can Soybean Tariff Shocks Trigger Abnormal Asymmetric Phenomena in Futures Markets? Evidence from the 2025 U.S.–China Trade Friction

by Arthur Walter Chen and Zichen Zhang

Int. J. Financial Stud. 2026, 14(1), 3; https://doi.org/10.3390/ijfs14010003 - 1 Jan 2026

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Abstract

This study, set against the backdrop of escalating trade tensions between China and the United States, examines the impact of soybean tariff adjustments on the abnormal asymmetric behavior in the futures market. By employing specialized analytical methods that capture market volatility asymmetry and [...] Read more.

This study, set against the backdrop of escalating trade tensions between China and the United States, examines the impact of soybean tariff adjustments on the abnormal asymmetric behavior in the futures market. By employing specialized analytical methods that capture market volatility asymmetry and event study techniques, we focus on the multi-stage soybean tariff adjustments to analyze their effects on market return transmission, volatility asymmetry, and market stability. This study compares the market responses to positive and negative shocks and the distinct performances of the futures markets in China and the United States, with the core aim of verifying whether soybean tariff shocks trigger abnormal asymmetric behavior in the futures market. The results show that tariff shocks significantly lead to asymmetric characteristics in market volatility, with negative shocks having a more pronounced impact on market volatility than positive ones. During the trading days before and after the announcement of tariff policies, the cumulative abnormal return difference, which measures the disparity in market reactions to related assets, also rose significantly. This indicates that tariff adjustments are the core factor causing abnormal asymmetric phenomena in the market, and the commodity futures market needs to pay attention to such asymmetric risks triggered by policies. The value of this study lies in its targeted analysis of the dynamic impact of tariff shocks, combined with volatility analysis and event study methods, to quantify the asymmetric effects in cross-border markets. The research conclusions can help investors avoid risks related to trade policies and provide references for policymakers to stabilize fluctuations in the commodity market, ultimately facilitating the market’s more efficient response to trade policy shocks and reducing information asymmetry in futures market pricing. Full article

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28 pages, 1079 KB

Open AccessArticle

Information-Neutral Hedging of Derivatives Under Market Impact and Manipulation Risk

by Behzad Alimoradian, Karim Barigou and Anne Eyraud

Int. J. Financial Stud. 2026, 14(1), 2; https://doi.org/10.3390/ijfs14010002 - 1 Jan 2026

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Abstract

The literature on derivative pricing in illiquid markets has mostly focused on computing optimal hedging controls, but empirical microstructure studies show that large order flow generates persistent and predictable price effects. Therefore, these controls can themselves induce endogenous market manipulation because traders can [...] Read more.

The literature on derivative pricing in illiquid markets has mostly focused on computing optimal hedging controls, but empirical microstructure studies show that large order flow generates persistent and predictable price effects. Therefore, these controls can themselves induce endogenous market manipulation because traders can internalize the impact of their own trades. We identify the key shortcoming as the absence of a formal separation between a large trader’s informational advantage and the mechanical price impact and temporary cost-of-hedging. To address this gap, we introduce a counterfactual informed observer—an agent who knows the large trader’s strategy but does not face trading frictions—and use this device to isolate informational order-flow effects from mechanical price impact, a distinction explicitly observed in microstructure data. We prove the existence of information-neutral probability measures under which the discounted asset is a martingale for this observer and derive a hedging framework that jointly accounts for transaction costs and permanent market impact. Numerical experiments show that because price pressure and order-flow effects create non-linear execution costs, the optimal hedge for an out-of-the-money call can deviate substantially from the Black–Scholes hedge, with implications for risk management and regulatory monitoring. Full article

(This article belongs to the Special Issue Market Microstructure and Liquidity)

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29 pages, 1195 KB

Open AccessArticle

AI, Security, and Trust in the Digital Wallet: Evidence from Current Romanian FinTech Users

by Bianca-Eugenia Bodorin and Eliza Ciobanu

Int. J. Financial Stud. 2026, 14(1), 1; https://doi.org/10.3390/ijfs14010001 - 31 Dec 2025

Viewed by 469

Abstract

The digitalization of finance has accelerated the diffusion of FinTech and raised new questions about how AI, data security and blockchain shape consumer behaviour. This article examines current FinTech users, focusing on mobile banking, security perceptions, AI-enabled personalisation and trust in blockchain. A [...] Read more.

The digitalization of finance has accelerated the diffusion of FinTech and raised new questions about how AI, data security and blockchain shape consumer behaviour. This article examines current FinTech users, focusing on mobile banking, security perceptions, AI-enabled personalisation and trust in blockchain. A structured online survey of 191 adult users was analysed with descriptive statistics, chi-square tests and three multiple linear regression models. Results show that adoption is overwhelmingly mobile centric: 84.8% primarily use mobile banking applications, accessed almost exclusively via smartphones (96.9%). Data security is the dominant decision criterion, rated “very important” by 83.3% of respondents. While 70.1% believe AI can substantially improve the FinTech experience, trust depends on transparent explanations of how algorithms operate and on guarantees of personal data protection. Regression models indicate that usage intensity is higher among younger, higher-income users and those who perceive simplified interfaces as encouraging, whereas positive views of AI are broadly shared and not segment-specific. Trust in blockchain is linked to a pro-technology mindset rather than to socio-demographic or urban–rural differences. The findings highlight “secure convenience” and explainable AI as central conditions for sustainable FinTech engagement. Full article

(This article belongs to the Special Issue Technologies and Financial Innovation)

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Int. J. Financial Stud., Volume 14, Issue 1 (January 2026) – 24 articles

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