International Journal of Financial Studies

25 pages, 2507 KB

Open AccessArticle

The Road to Tax Collection Digitalization: An Assessment of the Effectiveness of Digital Payment Systems in Nigeria and the Role of Macroeconomic Factors

by Cordelia Onyinyechi Omodero and Gbenga Ekundayo

Int. J. Financial Stud. 2025, 13(3), 178; https://doi.org/10.3390/ijfs13030178 - 17 Sep 2025

Abstract

The global movement towards a cashless society has prompted the payment of tax obligations through digital platforms and sources. In this international race to ensure that transaction payments are not hindered by the lack of physical cash, Nigeria is also making progress. Therefore, [...] Read more.

The global movement towards a cashless society has prompted the payment of tax obligations through digital platforms and sources. In this international race to ensure that transaction payments are not hindered by the lack of physical cash, Nigeria is also making progress. Therefore, the focus of this study is to assess the implications of digital payment systems in enhancing the effectiveness of tax revenue collection in Nigeria. The analysis spans from the first quarter of 2009 to the fourth quarter of 2023, utilizing the Autoregressive Distributed Lag and Error Correction Model. The research uses the most active digital payment systems that have been in operation during the study period. These electronic payment types include digital cheques (CHQs), Automated Teller Machines (ATMs), Point-of-Sales (POSs), Mobile payment (MPY), and Web-based payment (WPY). These are the predictor variables, while the tax revenue collection (TXC) during this period is the dependent variable. The control variables include information and telecommunication technology penetration rate (ICTPR), inflation, and gross domestic product. The outcomes of this study reveal that, over the long term, a percentage change in CHQs, ATMs, MPY, and ICTPR is linked to a decline of 8.1%, 12.5%, 6.7%, and 22.4% in TXC, respectively. In contrast, WPY indicates a 7.2% positive increase in TXC while inflation exerts a positive increase of 46.7%. The Error Correction Model (ECM) suggests that the deviations from the long-term equilibrium in earlier years are being corrected at a rate of 3.9% in the current year. In the short term, it is noted that digital payment systems do not influence TXC. On the other hand, GDP maintains a significant negative influence on TXC, in both the long- and short-term. Given these results, the study recommends the establishment of a robust information and communication technology (ICT) infrastructure to enhance effective tax collection, even from rural areas and the informal sector. It is also important for the government to develop strategies that will bring the informal sector into the tax net. Full article

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26 pages, 1224 KB

Open AccessArticle

Modeling Market Expectations of Profitability Mean Reversion: A Comparative Analysis of Adjustment Models

by Miroslava Vlčková and Tomáš Buus

Int. J. Financial Stud. 2025, 13(3), 177; https://doi.org/10.3390/ijfs13030177 - 17 Sep 2025

Abstract

This paper investigates how market expectations regarding profitability mean reversion are reflected in stock prices. We propose a model that infers implicit expectations of future earnings using publicly available share prices based on the assumption that markets efficiently incorporate forward-looking information. The study [...] Read more.

This paper investigates how market expectations regarding profitability mean reversion are reflected in stock prices. We propose a model that infers implicit expectations of future earnings using publicly available share prices based on the assumption that markets efficiently incorporate forward-looking information. The study compares several adjustment models, including the classical partial adjustment framework and a mean reversion model, to identify the most suitable mechanism to capture the dynamics of expected earnings. Special attention is paid to the statistical characteristics of accounting data and ratio-based measures, which influence model performance. Using a dataset covering a twenty-year period, we find that the mean reversion model consistently outperforms partial adjustment models in explaining the behavior of cyclical and random components converging toward a long-term trend. The findings suggest that market prices embed rational expectations of profitability reversion, especially in periods of above average performance. These results align with previous research and provide a robust framework for understanding how earnings expectations are formed and adjusted in financial markets. Full article

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27 pages, 380 KB

Open AccessArticle

Generational Insights into Herding Behavior: The Moderating Role of Investment Experience in Shaping Decisions Among Generations X, Y, and Z

by Abdul Syukur, Amron Amron, Fery Riyanto, Febrianur Ibnu Fitroh Sukono Putra and Rifal Richard Pangemanan

Int. J. Financial Stud. 2025, 13(3), 176; https://doi.org/10.3390/ijfs13030176 - 16 Sep 2025

Abstract

Understanding generational differences in herding behavior is crucial for policymakers, financial educators, and market regulators, particularly in emerging markets where retail investor participation is rapidly growing. This study investigates the influence of herding behavior on investment decision-making among Generations X, Y, and Z [...] Read more.

Understanding generational differences in herding behavior is crucial for policymakers, financial educators, and market regulators, particularly in emerging markets where retail investor participation is rapidly growing. This study investigates the influence of herding behavior on investment decision-making among Generations X, Y, and Z in Indonesia, as well as the moderating role of investment experience. Using a multi-group structural equation modeling (SEM) approach with data from 1293 retail investors, the research compares behavioral tendencies across cohorts. Results reveal that herding behavior has a positive and significant impact on investment decision-making in all generations, with the strongest effect observed in Generation X, followed by Generation Z and Generation Y. Investment experience significantly weakens herding behavior’s influence for Generation X but shows no significant moderating effect for Generations Y and Z, suggesting that psychological and social influences, particularly from digital platforms, may outweigh experiential learning in younger cohorts. These findings align with behavioral finance theory, which explains herding as a cognitive and emotional bias heightened by market uncertainty. The results provide practical implications for designing targeted financial education programs and regulatory measures to promote independent decision-making and reduce susceptibility to biased market information, especially among younger generations in digitally driven investment environments. Full article

20 pages, 1155 KB

Open AccessArticle

The Role of Fear of Missing out (FOMO), Loss Aversion, and Herd Behavior in Gold Investment Decisions: A Study in the Vietnamese Market

by Xuan Hung Nguyen, Dieu Anh Bui, Nam Anh Le and Quynh Trang Nguyen

Int. J. Financial Stud. 2025, 13(3), 175; https://doi.org/10.3390/ijfs13030175 - 15 Sep 2025

Abstract

This study investigates the influence of FOMO, loss aversion, and herd behavior on gold investment decisions in the Vietnamese market. Employing data collected from 727 investors and the Partial Least Squares Structural Equation Modeling (PLS-SEM) method, the analysis results confirm the pivotal role [...] Read more.

This study investigates the influence of FOMO, loss aversion, and herd behavior on gold investment decisions in the Vietnamese market. Employing data collected from 727 investors and the Partial Least Squares Structural Equation Modeling (PLS-SEM) method, the analysis results confirm the pivotal role of FOMO, with both direct and indirect impacts on gold investment decisions. Notably, both loss aversion and herd behavior positively influence FOMO, thereby indirectly encouraging relatively hasty and inadequately considered investment decisions. The study also finds that FOMO has a negative relationship with anticipated regret but is positively correlated with subjective expected pleasure. Furthermore, as determined through Multi-Group Analysis (MGA), psychological messages featuring “self-decision” or “risk warning” demonstrate a significant moderating role, potentially reducing or enhancing the influence of FOMO on investment decisions. These findings contribute to enriching behavioral finance theory and provide an empirical basis for developing effective risk management policies and gold market regulation aimed at mitigating the negative impacts of FOMO. Full article

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15 pages, 295 KB

Open AccessArticle

Bank Risk-Taking During COVID-19: The Role of Private and Public Ownership in GCC

by Abdullah Aldousari, Ahmed Mohammed and Sarah Lindop

Int. J. Financial Stud. 2025, 13(3), 174; https://doi.org/10.3390/ijfs13030174 - 12 Sep 2025

Abstract

This study explores the ownership–risk relationship in the GCC emerging economies during the COVID-19 pandemic, examining 44 commercial banks classified as private and publicly owned banks. The two-stage least squares (2SLS) method is employed to identify endogeneity issues, with robustness checks using panel [...] Read more.

This study explores the ownership–risk relationship in the GCC emerging economies during the COVID-19 pandemic, examining 44 commercial banks classified as private and publicly owned banks. The two-stage least squares (2SLS) method is employed to identify endogeneity issues, with robustness checks using panel data techniques. We analyzed the ownership–risk relationship, including non-linear and interaction effects. The results reveal that public ownership exhibits an inverted U-shaped relationship with NPLs, where moderate public concentration increases credit risk, while high public control marginally reduces it. Private ownership is linked to higher risk once bank-specific characteristics are controlled, reflecting riskier lending driven by profitability motives. We show that public banks demonstrate resilience due to stable deposits and implicit backing, whereas private banks are more vulnerable to systemic shocks. The impact of ownership structure on credit risk is context-dependent, reflecting heterogeneous ownership objectives in the GCC. Full article

26 pages, 737 KB

Open AccessArticle

Capital Structure Theories in US Corporate Divestitures: A Study on Spin-Off Firms

by Xian Chen, Sanjib Guha and Tahsina Haque Simu

Int. J. Financial Stud. 2025, 13(3), 173; https://doi.org/10.3390/ijfs13030173 - 12 Sep 2025

Abstract

Some giant US conglomerates are now undergoing corporate spin-offs or are considering such spin-offs in the near future. Corporate spin-offs offer a unique opportunity to assess corporate capital structure decisions. The leverage ratio of the spin-off firms represents their initial capital structure. We [...] Read more.

Some giant US conglomerates are now undergoing corporate spin-offs or are considering such spin-offs in the near future. Corporate spin-offs offer a unique opportunity to assess corporate capital structure decisions. The leverage ratio of the spin-off firms represents their initial capital structure. We investigate the capital structure of corporate spin-offs and find evidence that they adhere to the trade-off theory. This study provides evidence that the subsidiary firms tend to aim for a target capital ratio during the sample period. The results indicate that the partial adjustment model with firm fixed effects is a good fit for the data sample. The parent companies in corporate spin-offs exhibit a similar pattern but with a slower adjustment speed. The tendency to target capital ratios is observable in both market value and book value leverage measures for the parent and subsidiary firms. Indicators of the pecking order assumption do not possess statistically significant coefficients. Changes in share price affect market debt ratios in the short term. With alternative definitions of leverage, the estimated adjustment speeds vary. In the case of longer horizons, the results align with a continuous rate of adjustment. Full article

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21 pages, 2257 KB

Open AccessReview

The Philosophy of Financial Performance: A Bibliometric and Conceptual Review

by Ionela Munteanu, Liliana Ionescu-Feleagă, Bogdan Ștefan Ionescu, Alexandra-Maria Spânu and Mircea Iosif Rus

Int. J. Financial Stud. 2025, 13(3), 172; https://doi.org/10.3390/ijfs13030172 - 11 Sep 2025

Abstract

Financial performance research has increasingly intersected with philosophical debates on ethics, sustainability, and stakeholder value, yet a clear framework linking these perspectives to actionable financial metrics remains underdeveloped. This study aims to explore how philosophical perspectives (normative, epistemological, and behavioral) inform the evolving [...] Read more.

Financial performance research has increasingly intersected with philosophical debates on ethics, sustainability, and stakeholder value, yet a clear framework linking these perspectives to actionable financial metrics remains underdeveloped. This study aims to explore how philosophical perspectives (normative, epistemological, and behavioral) inform the evolving concept of financial performance, using bibliometric and science mapping techniques to analyze key research trends from 2006 to 2023. The analysis identifies four dominant thematic areas: corporate social responsibility (CSR), organizational performance, ethical governance, and circular economy innovation. We synthesize these into a practical framework that connects each theme to measurable financial indicators, enabling managers to refine capital allocation, investors to incorporate non-financial drivers into valuation models, and policymakers to design sustainability reporting standards that integrate both economic and ethical considerations. By bridging philosophical insights and financial decision-making tools, this study contributes to both the theoretical development and applied practice of performance assessment in finance. Full article

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36 pages, 1441 KB

Open AccessArticle

When Financial Awareness Meets Reality: Financial Literacy and Gen Z’s Entrepreneurship Interest

by Eva Kicova, Jakub Michulek, Olga Ponisciakova and Juraj Fabus

Int. J. Financial Stud. 2025, 13(3), 171; https://doi.org/10.3390/ijfs13030171 - 11 Sep 2025

Abstract

Financial literacy is a key competence for responsible decision-making and entrepreneurial readiness. This study looks at how Generation Z’s entrepreneurial participation is impacted by objective, subjective, and calibrated FL. The alignment of perceived and actual knowledge or calibration is highlighted as an understudied [...] Read more.

Financial literacy is a key competence for responsible decision-making and entrepreneurial readiness. This study looks at how Generation Z’s entrepreneurial participation is impacted by objective, subjective, and calibrated FL. The alignment of perceived and actual knowledge or calibration is highlighted as an understudied factor that influences entrepreneurial behaviour. A mixed-methods approach was applied, combining a survey of 403 Slovak students with structured interviews with secondary school and university teachers. Quantitative analysis used Chi-square tests, Cramer’s V, sign schemes, and MLR. Qualitative interviews provided contextual insights into educational gaps and perceived barriers to entrepreneurship. The findings confirm that a higher financial literacy is positively related to entrepreneurial interest. Objective literacy has a slightly greater predictive value than self-assessed literacy, while calibration emerged as the strongest predictor: realistically, financially literate individuals displayed the highest entrepreneurial engagement, whereas both over- and underestimation of financial knowledge reduced it. Interviews highlighted insufficient financial education, limited practical experience, and fear of risk as major obstacles. By combining three aspects of financial literacy with business goals and offering fresh data from Slovakia, this study makes a contribution to the literature. In similar situations, it makes suggestions for enhancing financial education to support Generation Z’s entrepreneurial potential. Full article

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30 pages, 5994 KB

Open AccessArticle

Predicting the Canadian Yield Curve Using Machine Learning Techniques

by Ali Rayeni and Hosein Naderi

Int. J. Financial Stud. 2025, 13(3), 170; https://doi.org/10.3390/ijfs13030170 - 9 Sep 2025

Abstract

This study applies machine learning methods to predict the Canadian yield curve using a comprehensive set of macroeconomic variables. Lagged values of the yield curve and a wide array of Canadian and international macroeconomic variables are utilized across various machine learning models. Hyperparameters [...] Read more.

This study applies machine learning methods to predict the Canadian yield curve using a comprehensive set of macroeconomic variables. Lagged values of the yield curve and a wide array of Canadian and international macroeconomic variables are utilized across various machine learning models. Hyperparameters are estimated to minimize mispricing across government bonds with different maturities. The Group Lasso algorithm outperforms the other models studied, followed by Lasso. In addition, the majority of the models outperform the Random Walk benchmark. The feature importance analysis reveals that oil prices, bond-related factors, labor market conditions, banks’ balance sheets, and manufacturing-related factors significantly drive yield curve predictions. This study is one of the few that uses such a broad array of macroeconomic variables to examine Canadian macro-level outcomes. It provides valuable insights for policymakers and market participants, with its feature importance analysis highlighting key drivers of the yield curve. Full article

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23 pages, 4767 KB

Open AccessFeature PaperArticle

Dynamics of Cryptocurrencies, DeFi Tokens, and Tech Stocks: Lessons from the FTX Collapse

by Nader Naifar and Mohammed S. Makni

Int. J. Financial Stud. 2025, 13(3), 169; https://doi.org/10.3390/ijfs13030169 - 9 Sep 2025

Abstract

The FTX collapse marked a significant shock to global crypto markets, prompting concerns about systemic contagion. This paper investigates the dynamic connectedness between cryptocurrencies, DeFi tokens, and tech stocks, focusing on the systemic impact of the FTX collapse. We decompose total, internal, and [...] Read more.

The FTX collapse marked a significant shock to global crypto markets, prompting concerns about systemic contagion. This paper investigates the dynamic connectedness between cryptocurrencies, DeFi tokens, and tech stocks, focusing on the systemic impact of the FTX collapse. We decompose total, internal, and external connectedness across asset groups using a time-varying parameter VAR model. The results show that post-FTX, Bitcoin and Ethereum intensified their roles as core shock transmitters, while Tether consistently acted as a volatility absorber. DeFi tokens exhibited heightened intra-group spillovers and occasional external influence, reflecting structural fragility. Tech stocks remained largely insulated, with reduced cross-market linkages. Network visualizations confirm a post-crisis fragmentation, characterized by denser internal crypto-DeFi ties and weaker inter-group contagion. These findings have important policy implications for regulators, investors, and system designers, indicating the need for targeted risk monitoring and governance within decentralized finance. Full article

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32 pages, 1030 KB

Open AccessArticle

Effects of Liquidity on TE and Performance of Japanese ETFs

by Atsuyuki Naka, Jiayuan Tian and Seungho Shin

Int. J. Financial Stud. 2025, 13(3), 168; https://doi.org/10.3390/ijfs13030168 - 9 Sep 2025

Abstract

This study identifies a nonlinear relationship among liquidity, tracking error, and risk-adjusted performance in JETFs. Collecting daily data for 1077 JETFs from January 2008 to April 2022, we find a concave association, whereby both highly liquid and highly illiquid JETFs exhibit lower risk-adjusted [...] Read more.

This study identifies a nonlinear relationship among liquidity, tracking error, and risk-adjusted performance in JETFs. Collecting daily data for 1077 JETFs from January 2008 to April 2022, we find a concave association, whereby both highly liquid and highly illiquid JETFs exhibit lower risk-adjusted returns and higher tracking errors. Employing quantile regression, we further show that smaller, less liquid JETFs tend to deliver superior risk-adjusted performance. When comparing across listing venues—Japan, the U.S., Ireland, and Luxembourg—we find that the impact of liquidity on performance is most pronounced in the Japanese market, which also shows the highest average tracking error. In contrast, U.S.-listed JETFs offer the lowest tracking error. These results suggest that investors may benefit from choosing smaller JETFs listed in Japan. Full article

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24 pages, 1322 KB

Open AccessArticle

Predictive Power of ESG Factors for DAX ESG 50 Index Forecasting Using Multivariate LSTM

by Manuel Rosinus and Jan Lansky

Int. J. Financial Stud. 2025, 13(3), 167; https://doi.org/10.3390/ijfs13030167 - 4 Sep 2025

Abstract

As investors increasingly use Environmental, Social, and Governance (ESG) criteria, a key challenge remains: ESG data is typically reported annually, while financial markets move much faster. This study investigates whether incorporating annual ESG scores can improve monthly stock return forecasts for German DAX-listed [...] Read more.

As investors increasingly use Environmental, Social, and Governance (ESG) criteria, a key challenge remains: ESG data is typically reported annually, while financial markets move much faster. This study investigates whether incorporating annual ESG scores can improve monthly stock return forecasts for German DAX-listed firms. We employ a multivariate long short-term memory (LSTM) network, a machine learning model ideal for time series data, to test this hypothesis over two periods: an 8-year analysis with a full set of ESG scores and a 16-year analysis with a single disclosure score. The evaluation of model performance utilizes standard error metrics and directional accuracy, while statistical significance is assessed through paired statistical tests and the Diebold–Mariano test. Furthermore, we employ SHapley Additive exPlanations (SHAP) to ensure model explainability. We observe no statistically significant indication that incorporating annual ESG data enhances forecast accuracy. The 8-year study indicates that using a comprehensive ESG feature set results in a statistically significant increase in forecast error (RMSE and MAE) compared to a baseline model that utilizes solely historical returns. The ESG-enhanced model demonstrates no significant performance disparity compared to the baseline across the 16-year investigation. Our findings indicate that within the one-month-ahead projection horizon, the informative value of low-frequency ESG data is either fully incorporated into the market or is concealed by the significant forecasting capability of the historical return series. This study’s primary contribution is to demonstrate, through out-of-sample testing, that standard annual ESG information holds little practical value for generating predictive alpha, urging investors to seek more timely, alternative data sources. Full article

(This article belongs to the Special Issue Editorial Board Members’ Collection Series: ESG Ratings and Disclosures)

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20 pages, 2303 KB

Open AccessArticle

Estimating the Impact of ESG on Financial Forecast Predictability Using Machine Learning Models

by Marius Sorin Dincă, Vlad Ciotlăuși and Frank Akomeah

Int. J. Financial Stud. 2025, 13(3), 166; https://doi.org/10.3390/ijfs13030166 - 4 Sep 2025

Abstract

This study examines whether the integration of Environmental, Social, and Governance (ESG) factors enhances the accuracy of financial forecasts. Using a dataset of 2548 publicly listed companies from 98 countries, we evaluate a range of machine learning models—from ARIMA to XGBoost—by comparing the [...] Read more.

This study examines whether the integration of Environmental, Social, and Governance (ESG) factors enhances the accuracy of financial forecasts. Using a dataset of 2548 publicly listed companies from 98 countries, we evaluate a range of machine learning models—from ARIMA to XGBoost—by comparing the forecast performance of firms with high and low ESG scores (based on the sample median). Model accuracy is assessed through MAE, RMSE, MSE, MAPE, and R², complemented by statistical significance tests. Results show no consistent improvement in predictive performance for high-ESG firms, with only the Business Services sector displaying a marginal effect. These findings challenge the assumption that ESG integration inherently reduces forecast uncertainty, suggesting instead that ESG scores contribute little to predictive accuracy under long-term investment conditions. The study highlights the importance of model choice, careful control of exogenous variables, and rigorous testing, while underscoring the broader need for standardized ESG metrics in financial research. Full article

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23 pages, 377 KB

Open AccessArticle

The Impact of Non-Performing Loans on Bank Growth: The Moderating Roles of Bank Size and Capital Adequacy Ratio—Evidence from U.S. Banks

by Richard Arhinful, Leviticus Mensah, Bright Akwasi Gyamfi and Hayford Asare Obeng

Int. J. Financial Stud. 2025, 13(3), 165; https://doi.org/10.3390/ijfs13030165 - 4 Sep 2025

Abstract

Banks in the United States face persistent challenges from non-performing loans (NPLs), despite conducting thorough client evaluations before issuing loans. To mitigate the impact of NPLs and support both local and global growth, banks must adopt effective risk management strategies. This study investigates [...] Read more.

Banks in the United States face persistent challenges from non-performing loans (NPLs), despite conducting thorough client evaluations before issuing loans. To mitigate the impact of NPLs and support both local and global growth, banks must adopt effective risk management strategies. This study investigates the effect of NPLs on bank growth and the moderating of bank size and Capital Adequacy Ratio (CAR) through the lens of the Resource-Based View (RBV) theory. A sample of 253 banks listed on the New York Stock Exchange from 2006 to 2023 was selected using specific inclusion criteria from the Thomson Reuters Eikon DataStream. To address cross-sectional dependence and endogeneity, advanced estimation techniques—Feasible Generalized Least Squares (FGLS), Driscoll and Kraay standard errors, and the Generalized Method of Moments (GMM)—were employed. The results show that NPLs have a significant negative impact on banks’ asset and income growth. Furthermore, bank size and capital adequacy ratio (CAR) negatively and significantly moderate this relationship. These findings underscore the need for banks to enhance credit risk management by strengthening loan approval processes and leveraging advanced analytics to assess borrower risk more accurately. Full article

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

24 pages, 329 KB

Open AccessArticle

Does Financial Development Shape the Energy–FDI–Growth Nexus? New Evidence from BRICS+ Countries Using Dynamic Panel Estimation

by Geoffrey Gatharia Gachino

Int. J. Financial Stud. 2025, 13(3), 163; https://doi.org/10.3390/ijfs13030163 - 4 Sep 2025

Abstract

This study investigates how energy consumption and foreign direct investment (FDI) influenced economic growth in BRICS+ countries from 1990 to 2021, using a two-step System GMM estimator to address endogeneity and dynamic effects. While the results show that both energy and FDI positively [...] Read more.

This study investigates how energy consumption and foreign direct investment (FDI) influenced economic growth in BRICS+ countries from 1990 to 2021, using a two-step System GMM estimator to address endogeneity and dynamic effects. While the results show that both energy and FDI positively affected growth, disaggregated analysis revealed that renewable energy promoted growth, whereas non-renewables hindered it. Similarly, FDI directed toward gross fixed capital formation (FDI_GFCF) consistently boosted growth, unlike aggregate FDI. Financial development moderated these effects, amplifying the benefits of energy use but dampening FDI’s growth impact in more developed financial systems. The effects of energy and FDI remained stable before and after the Paris Agreement, supporting the robustness of the findings. These results underscore the importance of tailored energy and FDI strategies, financial sector reforms, and supportive policy environments to advance sustainable growth in BRICS+ economies. Full article

26 pages, 418 KB

Open AccessArticle

Financial Leverage and Firm Performance in Moroccan Agricultural SMEs: Evidence of Nonlinear Dynamics

by Imad Nassim, Salma Nassim and Abdelkarim Moussa

Int. J. Financial Stud. 2025, 13(3), 164; https://doi.org/10.3390/ijfs13030164 - 3 Sep 2025

Abstract

This study investigates the nexus between leverage and financial performance in a sample of 54 Moroccan agricultural small- and medium-sized enterprises (SMEs) over the period of 2017–2022. Drawing on trade-off, pecking order, and agency theories, this analysis examines whether different levels of indebtedness [...] Read more.

This study investigates the nexus between leverage and financial performance in a sample of 54 Moroccan agricultural small- and medium-sized enterprises (SMEs) over the period of 2017–2022. Drawing on trade-off, pecking order, and agency theories, this analysis examines whether different levels of indebtedness influence performance, as measured by return on assets (ROA). Using panel data regression models, both linear and nonlinear specifications were tested to explore the potential curvature of the leverage–performance relationship. The empirical results reveal a significant and negative linear relationship between both short-term and long-term leverage and ROA, suggesting that increased indebtedness impairs financial performance. A quadratic specification reveals a persistently negative effect of short-term leverage and a U-shaped relationship between long-term leverage and ROA, indicating that performance may improve beyond certain debt thresholds. To address endogeneity concerns and validate the findings, dynamic panel estimation using the generalized method of moments (GMM) was employed, confirming the leverage’s adverse effects on performance. Thus, this study provides policy-relevant insights into optimal capital structure decisions for small agribusinesses and underscores the need for tailored financial strategies to support their sustainable development. Full article

19 pages, 300 KB

Open AccessArticle

Monetary Governance and Currencies Resilience in Times of Crisis

by Ayyoub Ben El Rhadbane and Abdeslam El Moudden

Int. J. Financial Stud. 2025, 13(3), 162; https://doi.org/10.3390/ijfs13030162 - 2 Sep 2025

Abstract

This paper explores the central role of monetary governance, i.e., high politics and low politics, in protecting a currency’s exchange rate and reducing its volatility during periods of global crisis. Using annual panel data from 15 developed and emerging economies between 2001 and [...] Read more.

This paper explores the central role of monetary governance, i.e., high politics and low politics, in protecting a currency’s exchange rate and reducing its volatility during periods of global crisis. Using annual panel data from 15 developed and emerging economies between 2001 and 2023, and applying a panel ARDL approach, the study assesses the effectiveness of high politics—captured through governance indicators—and low politics—captured through economic indicators—as a shield against external shocks, such as the 2008 financial crisis, the COVID-19 pandemic, and the Russo–Ukrainian conflict. The findings demonstrate that strong monetary governance significantly strengthens the Real Effective Exchange Rate (REER) and dampens its volatility in the long-term. In contrast, macroeconomic variables such as inflation, public spending, and trade openness exert destabilizing effects. The results highlight the strategic importance of governance as a long-term anchor of exchange rate resilience, suggesting that countries with robust institutional frameworks are better equipped to withstand global disruptions. These insights offer crucial policy implications for reinforcing monetary governance, especially in emerging economies vulnerable to financial and geopolitical turbulence. Full article

14 pages, 1268 KB

Open AccessArticle

Debt, Equity, and the Pecking Order: Evidence from Financing Decisions of Dividend-Paying Firms

by Konstantinos Kakouris and Dimitrios Psychoyios

Int. J. Financial Stud. 2025, 13(3), 161; https://doi.org/10.3390/ijfs13030161 - 1 Sep 2025

Abstract

This study investigates whether, and to what extent, dividend-paying firms follow pecking order behavior when altering their capital structure. Using a panel of 3173 U.S. firms from 1960 to 2020 (49,424 firm-year observations), we examine four financing activities: equity and debt issuance under [...] Read more.

This study investigates whether, and to what extent, dividend-paying firms follow pecking order behavior when altering their capital structure. Using a panel of 3173 U.S. firms from 1960 to 2020 (49,424 firm-year observations), we examine four financing activities: equity and debt issuance under a financing deficit, and equity repurchases and debt redemptions under a financing surplus. We find that firms generally follow the pecking order when issuing or redeeming debt but deviate from it when issuing or repurchasing equity. Adherence to the pecking order also varies with issuance and repurchase size. Very large debt issues and redemptions are associated with lower pecking order coefficients, while large equity issues and repurchases are associated with higher pecking order coefficients, although equity coefficients remain below 0.7. Our findings provide novel evidence of how financing choices, along with issuance and repurchase magnitudes, shape pecking order behavior among dividend-paying firms, offering new insights into capital structure literature. 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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25 pages, 509 KB

Open AccessArticle

A Study of the Impact of Corporate Financialisation on Capital-Deepening Enterprises’ Output—Empirical Evidence from China’s A-Share Market

by Yunsong Wang

Int. J. Financial Stud. 2025, 13(3), 160; https://doi.org/10.3390/ijfs13030160 - 30 Aug 2025

Abstract

With the continuous deepening of the financialisation level of Chinese enterprises, the output of capital-deepening enterprises is inevitably affected. Taking A-share listed companies on the Shanghai and Shenzhen Stock Exchanges in China from 2007 to 2021 as the research sample, this paper explores [...] Read more.

With the continuous deepening of the financialisation level of Chinese enterprises, the output of capital-deepening enterprises is inevitably affected. Taking A-share listed companies on the Shanghai and Shenzhen Stock Exchanges in China from 2007 to 2021 as the research sample, this paper explores the impact of enterprise financialisation on the output of capital-deepening enterprises and its underlying mechanism. The research findings indicate that enterprise financialisation negatively influences the output of capital-deepening enterprises. Through the analysis of the theoretical model in this paper, it is found that the mechanism leading to this economic effect is that enterprise financialisation significantly inhibits capital deepening. The heterogeneity analysis reveals no significant differences in the negative impact of enterprise financialisation on capital output, deepening enterprises across different aspects such as ownership, region and industry. This paper provides theoretical support for curbing the excessive financialisation of capital-deepening enterprises. It is conducive to the long-term and sustainable development of capital-deepening enterprises and offers a new perspective for researching the economic effects and internal mechanisms of enterprise financialisation. Full article

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