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Risk Management in DeFi: Analyses of the Innovative Tools and Platforms for Tracking DeFi Transactions
Analyzing Corporate Social Responsibility, CEO Gender, and Compensation Structure: Evidence from U.S. Firms
Forecasting Forex Market Volatility Using Deep Learning Models and Complexity Measures
Pension Risk and the Sustainable Cost of Capital
The Impact of Earnings Announcements Before and After Regular Market Hours on Asset Price Dynamics in the Fintech Era

Journal Description

Journal of Risk and Financial Management

Journal of Risk and Financial Management is an international, peer-reviewed, open access journal on risk and financial management, published monthly online by MDPI.

Open Access— free for readers, with article processing charges (APC) paid by authors or their institutions.
High Visibility: indexed within Scopus, EconBiz, EconLit, RePEc, and other databases.
Journal Rank: CiteScore - Q1 (Business, Management and Accounting (miscellaneous))
Rapid Publication: manuscripts are peer-reviewed and a first decision is provided to authors approximately 21 days after submission; acceptance to publication is undertaken in 3.8 days (median values for papers published in this journal in the second half of 2024).
Recognition of Reviewers: reviewers who provide timely, thorough peer-review reports receive vouchers entitling them to a discount on the APC of their next publication in any MDPI journal, in appreciation of the work done.

Imprint Information Journal Flyer Open Access ISSN: 1911-8074

Latest Articles

18 pages, 321 KiB

Open AccessArticle

Does Digital Transformation Reflect the Adjustment of Capital Structure?

by Mohamad Anas Ktit and Bashar Abu Khalaf

J. Risk Financial Manag. 2025, 18(4), 168; https://doi.org/10.3390/jrfm18040168 - 21 Mar 2025

This study investigates the effect of digital transformation on non-financial firms’ adjustment of the capital structure in European countries while controlling for firm characteristics (firm size, tangibility, profitability, and non-debt tax shields), board characteristics (board size, board gender diversity, and board meetings), and [...] Read more.

This study investigates the effect of digital transformation on non-financial firms’ adjustment of the capital structure in European countries while controlling for firm characteristics (firm size, tangibility, profitability, and non-debt tax shields), board characteristics (board size, board gender diversity, and board meetings), and macroeconomic variables (GDP and inflation). Data were collated from the platform Refinitiv Eikon (LSEG). The final sample size was 514 companies during the 2010–2023 period. Panel GMM regression was used to thoroughly investigate the impact of digital transformation on the adjustment of capital structure. The results show that digital transformation improves capital structure adjustments. Based on the results of MLE, our results hold and confirm that there is a positive significant impact of digital transformation on the adjustment of capital structure. The main recommendation for businesses and policy makers is to successfully enter the digital age. Full article

(This article belongs to the Section Business and Entrepreneurship)

15 pages, 284 KiB

Open AccessArticle

Financial Literacy, Financial Knowledge, and Financial Behaviors in OECD Countries

by Manuel Carlos Nogueira, Luís Almeida and Fernando Oliveira Tavares

J. Risk Financial Manag. 2025, 18(3), 167; https://doi.org/10.3390/jrfm18030167 - 20 Mar 2025

As an integral part of financial inclusion, adequate and correct financial knowledge provides individuals with tools to achieve better financial performance throughout their lives. Financial knowledge also contributes to agents exhibiting financial behaviors. As there is consensus in the literature regarding the benefits [...] Read more.

As an integral part of financial inclusion, adequate and correct financial knowledge provides individuals with tools to achieve better financial performance throughout their lives. Financial knowledge also contributes to agents exhibiting financial behaviors. As there is consensus in the literature regarding the benefits of financial literacy, we decided to investigate the importance of several indicators that generally appear to explain this literacy in a set of twenty OECD countries, considering financial literacy, financial knowledge, and financial behavior. Using estimation through corrected heteroscedasticity, the results show that the completion of higher education contributes positively and significantly to financial literacy and financial knowledge and behaviors. Inequality in access to health and education, as well as the level of household debt, negatively impacts financial literacy and knowledge. Still, on the other hand, progression in human development contributes to progression in literacy and financial behavior. In terms of average income, it can be seen that it contributes to literacy and financial behavior, but surprisingly, public spending on education does not impact financial literacy. Full article

(This article belongs to the Special Issue The New Horizons of Global Financial Literacy)

4 pages, 174 KiB

Open AccessEditorial

Financial Econometrics and Quantitative Economic Analysis

by Sergej Gričar, Nemanja Lojanica and Tamara Backović

J. Risk Financial Manag. 2025, 18(3), 166; https://doi.org/10.3390/jrfm18030166 - 20 Mar 2025

Since the foundational contributions of Katarina Juselius and Søren Johansen on cointegration, along with earlier works by influential scholars like Clive Granger, the field has witnessed significant developments [...] Full article

(This article belongs to the Special Issue Financial Econometrics and Quantitative Economic Analysis)

13 pages, 1162 KiB

Open AccessArticle

Financial Literacy and Behavioral Intention to Use Central Banks’ Digital Currency: Moderating Role of Trust

by Mohanamani Palanisamy, Maria Tresita Paul Vincent and Md Billal Hossain

J. Risk Financial Manag. 2025, 18(3), 165; https://doi.org/10.3390/jrfm18030165 - 19 Mar 2025

Building on the Innovation Diffusion Theory, this study proposes and explores the influence of financial literacy on the behavioral intention to use central banks’ digital currency (CBDC) and the moderating role of trust of respondents in the financial institution on the above relationship. [...] Read more.

Building on the Innovation Diffusion Theory, this study proposes and explores the influence of financial literacy on the behavioral intention to use central banks’ digital currency (CBDC) and the moderating role of trust of respondents in the financial institution on the above relationship. This study has employed a quantitative research design to examine the relationship between financial literacy, behavioral intention to use CBDC and trust. The final sample comprised 241 respondents who had used CBDC across India. The statistical relationship between the above variables was assessed using PROCESS macro in SPSS 23.0. Findings revealed that financial literacy emerges as a strong predictor of CBDC use. Individuals with higher financial literacy are more likely to understand the features, benefits and risks associated with adopting CBDC. The interaction effect reveals that as financial literacy increases, the relative importance of trust diminishes. On the other hand, those who lack sufficient knowledge of financial literacy depend more on trust to fill in their knowledge gaps. This is one of the first studies to scientifically support the relationship between trust and financial literacy and how both influence behavioral intention to use CBDC. This research contributes valuable knowledge to the discourse on the use of CBDC, which is crucial for achieving a nation’s broader digital transformational goal. Full article

(This article belongs to the Special Issue Fintech, Business, and Development)

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22 pages, 1543 KiB

Open AccessArticle

Heterogeneous Links Between Corruption and Innovation in a Global Economy

by Roberto Iorio and Maria Luigia Segnana

J. Risk Financial Manag. 2025, 18(3), 164; https://doi.org/10.3390/jrfm18030164 - 19 Mar 2025

This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? [...] Read more.

This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? (ii) To what extent is the relationship between corruption and innovation mediated/shaped by countries’ institutional configurations and firm characteristics (foreign and domestic ownership)? We analyze data from the fifth and sixth waves (2012–2016 and 2018–2019) of the EBRD’s World Bank Business Environment and Enterprise Performance Survey (BEEPS), using a balanced panel of 3584 establishments in 22 Eastern European and Central Asian economies. The results provide two key insights into the relationship between corruption and innovation. First, the institutional setting plays a crucial role in shaping both the strength and the direction of this relationship, for example, when comparing EU and non-EU countries. Second, the impact of corruption at the firm level varies depending on the ownership structure: the ‘greasing’ effect is particularly relevant for foreign firms operating in weak institutional environments, but appears to be ineffective—if not ‘sanding’—for foreign firms in contexts with stronger anti-corruption controls. Full article

(This article belongs to the Special Issue Globalization and Economic Integration)

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17 pages, 466 KiB

Open AccessArticle

The Determinants of CEO Compensation in the Banking Sector: A Comparison of the Influence of Cross-Listing and Loan Growth in Developed Versus Developing Countries

by Ben Le, Nischala Reddy and Paula Hearn Moore

J. Risk Financial Manag. 2025, 18(3), 163; https://doi.org/10.3390/jrfm18030163 - 19 Mar 2025

This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings [...] Read more.

This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings show that CEO stock options and restricted stock compensation are positively correlated with cross-listing in the U.S. market, with a stronger effect in developing countries. Loan growth is associated with higher incentive-based pay but lower fixed salaries, aligning CEO compensation with performance-driven growth and risk management. These results underscore the role of regulatory environments and institutional quality in shaping executive pay, offering valuable insights for policymakers, financial institutions, and investors navigating a globalized banking sector. Full article

(This article belongs to the Special Issue Lending, Credit Risk and Financial Management)

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23 pages, 2641 KiB

Open AccessArticle

Chinese vs. US Stock Market Transmission to Australasia, Hong Kong, and the ASEAN Group

by Richard C. K. Burdekin and Ran Tao

J. Risk Financial Manag. 2025, 18(3), 162; https://doi.org/10.3390/jrfm18030162 - 18 Mar 2025

This study seeks to quantify the rising financial linkages between mainland China, Australia, Hong Kong, New Zealand, and the six largest Association of Southeast Asian Nations (ASEAN group). Stock market co-movements would be consistent with growing trade ties. Our sample runs from 2010 [...] Read more.

This study seeks to quantify the rising financial linkages between mainland China, Australia, Hong Kong, New Zealand, and the six largest Association of Southeast Asian Nations (ASEAN group). Stock market co-movements would be consistent with growing trade ties. Our sample runs from 2010 through 2022, including the coronavirus pandemic. Markov switching analysis allows for changing effects as we move from periods of low market volatility to periods of high volatility. The results offer support for the premise that growing trade and investment ties between China, Australasia, Hong Kong, and the ASEAN region have been accompanied by significant financial market integration, as reflected in stock market co-movement. US effects are also significant and tend to be stronger during high-volatility episodes. Under low-volatility conditions, Shanghai effects become more important and are significant for all six ASEAN group countries. Full article

(This article belongs to the Section Financial Markets)

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14 pages, 816 KiB

Open AccessArticle

The Greater Sustainability of Stablecoins Relative to Other Cryptocurrencies

by Adi Wolfson, Gerard Khaladjan, Yotam Lurie and Shlomo Mark

J. Risk Financial Manag. 2025, 18(3), 161; https://doi.org/10.3390/jrfm18030161 - 18 Mar 2025

Cryptocurrencies are decentralized digital financial services that do not physically exist in the world of tangible products and goods, and therefore purportedly offer some positive environmental sustainability features. However, since they are based on blockchain technology, which requires a relatively large input of [...] Read more.

Cryptocurrencies are decentralized digital financial services that do not physically exist in the world of tangible products and goods, and therefore purportedly offer some positive environmental sustainability features. However, since they are based on blockchain technology, which requires a relatively large input of energy, their climatic impact is not benign. Furthermore, they are very volatile and characterized by low levels of transparency and control, thus creating some negative economic and social sustainability effects. Stablecoins, which are a pegged type of cryptocurrency, exhibit much less volatility and have higher levels of management and interoperability. This raises the following question: are stablecoins more sustainable compared to other cryptocurrencies? To explore this, a sustainability assessment was conducted, comparing cryptocurrencies and stablecoins across environmental, social, and economic dimensions while identifying the key characteristics of sustainability. It was found that stablecoins can mitigate the economic and social risks associated with cryptocurrencies and thus increase their overall sustainability. Moreover, since stablecoins are managed and governed to a greater extent, a key consideration in their development is the selection and implementation of more appropriate mechanisms that can reduce energy use and enhance sustainability. Finally, stablecoins offer more effective—and not just more efficient—solutions, based on value co-creation between several providers and a customer. Full article

(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)

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16 pages, 308 KiB

Open AccessArticle

Risk–Response Budgeting: A Financial Optimization Approach to Project Risk Management

by Yossi Hadad and Baruch Keren

J. Risk Financial Manag. 2025, 18(3), 160; https://doi.org/10.3390/jrfm18030160 - 18 Mar 2025

Projects are exposed to risks that may hinder their success regarding cost, schedule, and quality/content. After identifying these risks, the project manager must select a subset for mitigation, constrained by a limited risk response budget. The problem lies in the uncertainties surrounding risk [...] Read more.

Projects are exposed to risks that may hinder their success regarding cost, schedule, and quality/content. After identifying these risks, the project manager must select a subset for mitigation, constrained by a limited risk response budget. The problem lies in the uncertainties surrounding risk realization, their impact on the project’s parameters, and the outcomes of the risk response plan. This paper proposes a method for allocating the risk–response budget to mitigate project risks. The method begins with a Monte Carlo simulation to assess each risk’s impact and residual impact post-mitigation. These simulation results are the input for mathematical programming calculations, determining the optimal budget allocation among the risks based on various objective functions (e.g., maximizing expected net savings or minimizing variance). Each objective function can yield a different optimal budget allocation, so the final step involves weighing all results to make a conclusive decision. A case study illustrates the proposed method. Full article

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

17 pages, 3649 KiB

Open AccessArticle

Artificial Intelligence in Financial Behavior: Bibliometric Ideas and New Opportunities

by Aliya Bayakhmetova, Lyudmila Rudenko, Liubov Krylova, Buldyryk Suleimenova, Shakizada Niyazbekova and Ardak Nurpeisova

J. Risk Financial Manag. 2025, 18(3), 159; https://doi.org/10.3390/jrfm18030159 - 17 Mar 2025

Artificial intelligence is transforming financial behavior and decision-making processes, offering new opportunities to optimize financial systems and reduce bias. This study explores the intersection of AI and financial behavior using bibliometric analysis to identify trends, gaps, and emerging directions in this rapidly evolving [...] Read more.

Artificial intelligence is transforming financial behavior and decision-making processes, offering new opportunities to optimize financial systems and reduce bias. This study explores the intersection of AI and financial behavior using bibliometric analysis to identify trends, gaps, and emerging directions in this rapidly evolving field. A total of 1019 documents are available in Scopus for the period 1987–2024. The articles are analyzed using the Bibliometrix R package and the Bibliophagy graphical user interface. Key findings show a robust annual growth rate of 13.34%, highlighting the growing relevance of the topic. The analysis revealed central themes such as machine learning, decision-making, and financial inclusion, along with critical gaps in ethical considerations, regional disparities, and practical applications of AI for marginalized populations. Leading contributors and influential sources, including journals such as IEE Access and Expert Systems with Applications, were mapped to understand the intellectual structure of the field. The study highlights the urgent need to address and mitigate algorithmic biases to ensure fairness, transparency, and ethical outcomes in AI-driven systems. It also highlights the importance of improving financial literacy and adapting AI tools for fair financial inclusion. These insights provide a roadmap for future research and practical innovation, ensuring that AI is integrated into financial systems ethically and effectively to promote a more inclusive global financial ecosystem. Full article

(This article belongs to the Special Issue Financial and Sustainability Reporting in a Digital Era, 2nd Edition)

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25 pages, 2138 KiB

Open AccessArticle

Optimizing Portfolios with Pakistan-Exposed Exchange-Traded Funds: Risk and Performance Insight

by Ali Jaffri, Abootaleb Shirvani, Ayush Jha, Svetlozar T. Rachev and Frank J. Fabozzi

J. Risk Financial Manag. 2025, 18(3), 158; https://doi.org/10.3390/jrfm18030158 - 17 Mar 2025

This study examines the investment landscape of Pakistan as an emerging and frontier market, focusing on implications for international investors, particularly those in the United States, through exchange-traded funds (ETFs) with exposure to Pakistan. The analysis encompasses 30 ETFs with varying degrees of [...] Read more.

This study examines the investment landscape of Pakistan as an emerging and frontier market, focusing on implications for international investors, particularly those in the United States, through exchange-traded funds (ETFs) with exposure to Pakistan. The analysis encompasses 30 ETFs with varying degrees of exposure to Pakistan, covering the period from 1 January 2016 to February 2024. This research highlights the potential benefits and risks associated with investing in these ETFs, emphasizing the importance of thorough risk assessments and portfolio performance comparisons. By providing descriptive statistics and performance metrics based on historical optimization, this paper aims to equip investors with the necessary insights to make informed decisions when optimizing their portfolios with Pakistan-exposed ETFs. The second part of the paper introduces and assesses dynamic optimization methodologies. This section is designed to explore the adaptability and performance metrics of dynamic optimization techniques in comparison with conventional historical optimization methods. By integrating dynamic optimization into the investigation, this research aims to offer insights into the efficacy of these contrasting methodologies in the context of Pakistan-exposed ETFs. The findings underscore the significance of Pakistan’s market dynamics within the broader context of emerging markets, offering a pathway for diversification and potential growth in investment strategies. Full article

(This article belongs to the Special Issue Financial Innovations and Derivatives)

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27 pages, 470 KiB

Open AccessArticle

Environmental Risk Concern and Short-Term IPO Performance of Green Stocks During the COVID-19 Crisis Period

by Jang-Chul Kim, Sharif Mazumder and Pritam Saha

J. Risk Financial Manag. 2025, 18(3), 157; https://doi.org/10.3390/jrfm18030157 - 14 Mar 2025

This study examines the effect of firms’ greenness on IPO underpricing and subsequent short-term performance during the COVID-19 crisis period. Using 173 U.S. IPOs, we find that IPO underpricing is more pronounced for brown firms (i.e., firms have higher carbon footprints or operate [...] Read more.

This study examines the effect of firms’ greenness on IPO underpricing and subsequent short-term performance during the COVID-19 crisis period. Using 173 U.S. IPOs, we find that IPO underpricing is more pronounced for brown firms (i.e., firms have higher carbon footprints or operate in pollution-intensive industries) than for green firms (i.e., firms are engaged in environmentally sustainable practices). However, when we account for the exogenous change in environmental concerns, we find that an increase in environmental concerns causes lower initial day returns for brown firms. Later, we examine the post-IPO 3-month (6-month) holding period returns and find that brown firms earn higher returns than green firms when environmental concerns increase. Additionally, cross-sectional regressions indicate that firm-level characteristics, such as offer price and Hi-Tech, are positively associated, while R&D, leverage, and profitability are negatively associated with IPO. Full article

(This article belongs to the Special Issue Finance, Risk and Sustainable Development)

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23 pages, 936 KiB

Open AccessArticle

Revisiting the Fraud Triangle in Corporate Frauds: Towards a Polygon of Elements

by Paolo Roffia and Michele Poffo

J. Risk Financial Manag. 2025, 18(3), 156; https://doi.org/10.3390/jrfm18030156 - 14 Mar 2025

The fraud triangle has long served as a fundamental model for understanding corporate fraud, emphasizing opportunity, pressure, and rationalization. Over time, this framework evolved with the fraud diamond, which introduced capability; the fraud pentagon, which added arrogance; and the fraud hexagon, which incorporated [...] Read more.

The fraud triangle has long served as a fundamental model for understanding corporate fraud, emphasizing opportunity, pressure, and rationalization. Over time, this framework evolved with the fraud diamond, which introduced capability; the fraud pentagon, which added arrogance; and the fraud hexagon, which incorporated collusion and reshaped arrogance. Building on these developments, this study proposes a seventh dimension: the pleasure and thrill of risk-taking. This psychological factor highlights the gratification that some individuals derive from engaging in fraud as a high-stakes game. Through a qualitative analysis of five major corporate fraud cases—Société Générale, Enron, Wirecard, Parmalat, and Theranos—this study highlights the presence of this additional motivational factor. By introducing the fraud polygon, this research provides a more comprehensive framework for understanding corporate fraud’s multifaceted nature. This model has significant implications for both academic research and practical fraud prevention, offering insights into the interplay between systemic vulnerabilities and intrinsic motivations. Full article

(This article belongs to the Special Issue Bridging Financial Integrity and Sustainability)

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20 pages, 275 KiB

Open AccessArticle

Research on the Influence of Government-Guided VC Funds on Regional Economic Development

by Xiaoli Wang and Yi Tan

J. Risk Financial Manag. 2025, 18(3), 155; https://doi.org/10.3390/jrfm18030155 - 14 Mar 2025

Using data from the Qingsike Private Equity Database, in this paper, we systematically examine how government policy-guiding funds impacted regional economic development in China from 2010 to 2021. An empirical analysis confirms that government-guided funds have a significant positive effect on regional economic [...] Read more.

Using data from the Qingsike Private Equity Database, in this paper, we systematically examine how government policy-guiding funds impacted regional economic development in China from 2010 to 2021. An empirical analysis confirms that government-guided funds have a significant positive effect on regional economic growth, particularly in less affluent areas. Additionally, we found that the level of venture capital marketization and industrial structural upgrading mediate the relationship between policy-guiding funds and regional economic growth. These findings suggest that government policy-guiding funds foster regional economic advancement by enhancing market dynamism in the venture capital sector and optimizing industrial structures. A further analysis of moderating effects reveals that the effectiveness of policy-guiding funds is significantly influenced by government intervention and reginal marketization levels. In highly marketized regions, government-guided funds demonstrate a stronger economic stimulus effect. However, excessive government intervention can disrupt efficient market operations, thereby weakening the positive impact of the funds. These findings underscore the importance for policymakers to design and implement policy-guiding funds while carefully balancing the interplay between marketization and government intervention to achieve optimal outcomes. Full article

(This article belongs to the Section Applied Economics and Finance)

20 pages, 823 KiB

Open AccessArticle

Crowdfunding Amidst FinTech Winter: Complement or Substitute?

by Shadi Al Shebli, Ahmet Faruk Aysan and Ruslan Nagayev

J. Risk Financial Manag. 2025, 18(3), 154; https://doi.org/10.3390/jrfm18030154 - 14 Mar 2025

This study examines the transformative potential of FinTech, particularly crowdfunding, in the context of traditional financial systems amidst the FinTech market downturn (‘Winter’) of 2022. We address a fundamental question: Does crowdfunding represent a viable alternative to conventional finance, or does it merely [...] Read more.

This study examines the transformative potential of FinTech, particularly crowdfunding, in the context of traditional financial systems amidst the FinTech market downturn (‘Winter’) of 2022. We address a fundamental question: Does crowdfunding represent a viable alternative to conventional finance, or does it merely function as an extension of existing financial infrastructure? To investigate this relationship empirically, we developed a proprietary crowdfunding index and employed Interconnectedness Index methodology to compare the spillover effects of crowdfunding and traditional financial systems with common economic factors such as interest rates, USD index, economic uncertainty, cryptocurrency (Bitcoin), as well as commodities (gold and oil). Despite crowdfunding’s remarkable growth trajectory over the past decade, our empirical evidence indicates that it has not yet emerged as a viable substitute for conventional financial mechanisms. These findings carry substantial implications for regulatory frameworks, industry stakeholders, and academic discourse, contributing to the broader understanding of FinTech’s disruptive capacity within the financial ecosystem. Full article

(This article belongs to the Special Issue Financial Technologies (Fintech) in Finance and Economics)

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33 pages, 3170 KiB

Open AccessArticle

Environmental, Social and Governance-Valued Portfolio Optimization and Dynamic Asset Pricing

by Davide Lauria, W. Brent Lindquist, Stefan Mittnik and Svetlozar T. Rachev

J. Risk Financial Manag. 2025, 18(3), 153; https://doi.org/10.3390/jrfm18030153 - 13 Mar 2025

Environmental, social and governance (ESG) ratings (scores) provide quantitative measures for socially responsible investment. We consider ESG scores to be a third independent variable—on par with financial risk and return—and incorporate such numeric scores into dynamic asset pricing. Based on this incorporation, we [...] Read more.

Environmental, social and governance (ESG) ratings (scores) provide quantitative measures for socially responsible investment. We consider ESG scores to be a third independent variable—on par with financial risk and return—and incorporate such numeric scores into dynamic asset pricing. Based on this incorporation, we develop the entire investment process for the ESG market: portfolio optimization and efficient frontier, capital market line (the market portfolio), risk-assessment measures and hedging instruments (options). There is currently no riskless asset available in such an ESG market; to address this, we develop the so-called shadow riskless rate, applicable to markets having only risky assets. We believe this to be the first paper that fully develops, under a single dynamic pricing framework, the entire investment process for an ESG market. As there are significant differences in methodologies developed by providers of ESG scores, we do not take the position that data from any single agency are to be favored. Consequently, we utilize ESG scores from Refinitiv in the manuscript’s empirical studies and redo all computations using S&P Global RobeoSAM ESG scores. Full article

(This article belongs to the Special Issue Empirical Research on Asset Pricing and Portfolio Selection)

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15 pages, 950 KiB

Open AccessArticle

Impact of Infrastructure Development on Foreign Direct Investment in BRICS Countries

by Kunofiwa Tsaurai

J. Risk Financial Manag. 2025, 18(3), 152; https://doi.org/10.3390/jrfm18030152 - 13 Mar 2025

This study focused on exploring the influence of infrastructural development on foreign direct investment (FDI) in BRICS countries, including Brazil, Russia, India, China, and South Africa, using a fixed-effects approach. Secondary data ranged from 1991 to 2021. Existing theoretical and empirical literature on [...] Read more.

This study focused on exploring the influence of infrastructural development on foreign direct investment (FDI) in BRICS countries, including Brazil, Russia, India, China, and South Africa, using a fixed-effects approach. Secondary data ranged from 1991 to 2021. Existing theoretical and empirical literature on the subject (the infrastructural development-led FDI nexus) is quite mixed, which therefore makes it difficult for policy makers to make decisions. Internet penetration and fixed telephone subscriptions had a significant enhancing effect on FDI, whilst renewable energy infrastructure’s effect was found to be minimal and non-significant. In the fixed-effects model, the interaction term produced results showing that financial development enabled infrastructural development and significantly enhanced FDI inflows into BRICS countries. To improve FDI inflows, BRICS nations should implement policies with the aim of enhancing Internet penetration, fixed telephone subscriptions, and financial development. A threshold analysis of the infrastructural development levels that significantly improve FDI inflows is recommended to provide more clarity and specificity for policy making. Full article

(This article belongs to the Section Economics and Finance)

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24 pages, 2278 KiB

Open AccessArticle

Exploring the Relationship Between Financial Education, Financial Attitude, Financial Advice, and Financial Knowledge: Insights Through Financial Capabilities and Financial Well-Being

by Arturo García-Santillán, Ma. Teresa Zamora-Lobato, Esmeralda Tejada-Peña and Liduvina Valencia-Márquez

J. Risk Financial Manag. 2025, 18(3), 151; https://doi.org/10.3390/jrfm18030151 - 13 Mar 2025

This study analyzes the relationship between financial education, financial attitude, financial advice, financial knowledge, and behavior and its influence on financial capabilities, as well as their impact on financial well-being. The population consists of individuals over 18 years of age, who are primarily [...] Read more.

This study analyzes the relationship between financial education, financial attitude, financial advice, financial knowledge, and behavior and its influence on financial capabilities, as well as their impact on financial well-being. The population consists of individuals over 18 years of age, who are primarily higher education students. A non-probabilistic self-selection sampling method was used, and data were collected through an electronic form on Google Forms. The design is quantitative, non-experimental, and cross-sectional. The instrument includes sections on sociodemographic profiles, financial education, financial attitudes, financial advice, financial knowledge and behavior, financial capabilities, and financial well-being using a 1 to 5 Likert scale. To ensure validity and reliability, statistical indices such as Cronbach’s alpha and McDonald’s omega were applied. Data normality was assessed, and exploratory and confirmatory factor analyses were conducted using structural equation modeling (SEM). The findings from the results of this study largely align with the existing literature regarding the relationship between financial knowledge and financial capabilities, as well as between financial capabilities and financial well-being. However, a discrepancy is observed in the hypotheses related to financial education, financial attitudes, and financial counseling, suggesting that although these factors are important, their influence may depend on other contextual elements or mediators not considered in this study. This opens the possibility for further investigation into how these factors interact in the development of financial capabilities. Full article

(This article belongs to the Section Financial Markets)

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25 pages, 1284 KiB

Open AccessArticle

Factors Influencing the Adoption of FinTech for the Enhancement of Financial Inclusion in Rural India Using a Mixed Methods Approach

by Rabindra Kumar Jena

J. Risk Financial Manag. 2025, 18(3), 150; https://doi.org/10.3390/jrfm18030150 - 13 Mar 2025

The swift expansion of financial technology (FinTech) can substantially improve financial inclusion, especially in the rural regions of emerging nations such as India. FinTech has the potential to drive inclusive growth, reduce inequalities, and foster sustainable economic development. This research examines the determinants [...] Read more.

The swift expansion of financial technology (FinTech) can substantially improve financial inclusion, especially in the rural regions of emerging nations such as India. FinTech has the potential to drive inclusive growth, reduce inequalities, and foster sustainable economic development. This research examines the determinants affecting the adoption of FinTech services in rural India by synthesizing three theoretical frameworks: The Technology Acceptance Model (TAM), the Theory of Planned Behavior (TPB), and the Technology Readiness Index (TRI). A mixed methods approach that combines partial least squares structured equation modeling (PLS-SEM) and fuzzy set comparative qualitative analysis (fsQCA) was used to evaluate the suggested framework. The integrated PLS-SEM and fsQCA offer a comprehensive, elegant, and resilient method for data analysis. While fsQCA addresses more intricate patterns within the data, PLS-SEM effectively identifies the relationships among significant factors. This makes the mixed method approach more judicious and advantageous than the single method approach. The findings showed that attitude (β = 0.35), perceived behavioral control (β = 0.28) from the Theory of Planned Behavior (TPB), perceived ease of use (β = 0.31) from the Technology Acceptance Model (TAM), and perceived insecurity (β = −0.19) from the Technology Readiness Index (TRI) all have a big impact on how people use FinTech. The findings also indicate that the desire to adopt FinTech positively influences financial inclusion among rural residents. These research findings enhance the debate on sustainable development by demonstrating how specific FinTech interventions can close the financial inclusion gap, empower rural populations, and achieve various Sustainable Development Goals (SDGs). The study’s findings could help governments, banks, and FinTech firms aiming to enhance the accessibility and use of digital financial services in rural India. Full article

(This article belongs to the Special Issue Fintech, Business, and Development)

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14 pages, 283 KiB

Open AccessArticle

Entrepreneurship and Student Loans: An Analysis of the Association Between Self-Employment and Student Loans

by Christopher Wertheim, Leobardo Diosdado, Sandra DeGrassi, Alexandra Theodossiou and Eugene Bland

J. Risk Financial Manag. 2025, 18(3), 149; https://doi.org/10.3390/jrfm18030149 - 12 Mar 2025

This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to [...] Read more.

This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to finance the education of one household member are more likely to report that the other member of the household pursued self-employment, with everything else remaining equal. This association between student loans and household self-employment is both economically and statistically significant. Our results highlight the importance of alternative forms of financing for entrepreneurship and expand upon existing knowledge about the unintended effects of student loans. Policymakers should consider these results when analyzing the various intended and unintended benefits of policies affecting the availability of student loans. Full article

(This article belongs to the Special Issue Global Perspectives on Loan Debt Issues and Risks)

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