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Accrual-Based Earnings Management in Cross-Border Mergers and Acquisitions: The Role of Institutional Differences and Geographic Distance
Navigating the Trade-Offs: The Impact of Aggressive Working Capital Policies on Stock Return Volatility
A Supply and Demand Framework for Bitcoin Price Forecasting
Risk-Adjusted Performance of Random Forest Models in High-Frequency Trading
Blockchain Technology in the Process of Financing the Construction and Purchase of Commercial Vessels

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, 469 KiB

Open AccessArticle

Navigating Financial Risk in the Digital Age: The Mediating Role of Performance and Indebtedness

by Siham Slassi-Sennou and Mourad Es-salmani

J. Risk Financial Manag. 2025, 18(6), 325; https://doi.org/10.3390/jrfm18060325 - 12 Jun 2025

In the context of an increasingly digital economy, firms are rapidly adopting technological innovations to bolster financial resilience and competitiveness. However, the quantitative impact of digital transformation on key financial outcomes—specifically performance, indebtedness, and risk—remains underexplored. This study investigates the extent and pathways [...] Read more.

In the context of an increasingly digital economy, firms are rapidly adopting technological innovations to bolster financial resilience and competitiveness. However, the quantitative impact of digital transformation on key financial outcomes—specifically performance, indebtedness, and risk—remains underexplored. This study investigates the extent and pathways through which digital transformation influences financial structures and stability. Employing Structural Equation Modeling (SEM) on firm-level survey data, the analysis reveals that digital transformation significantly enhances financial performance (β = 0.538, p < 0.01). Improved performance, in turn, leads to substantial reductions in firm indebtedness (β = −0.591, p < 0.01) and financial risk (β = −0.124, p = 0.021). While digital transformation does not directly affect indebtedness, it mitigates financial risk indirectly through two mediating variables: financial performance and firm indebtedness (mediated effects: β = −0.221 and β = −0.318, respectively; both p < 0.01). These findings underscore the financial value of digital initiatives, highlighting their role in enhancing performance and reducing financial vulnerabilities. The study offers strategic insights for managers and policymakers aiming to leverage digital transformation for financial optimization. Full article

(This article belongs to the Section Risk)

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27 pages, 2058 KiB

Open AccessSystematic Review

Sustainability Balanced Scorecard: Systematic Literature Review

by Amélia Silva, Isabel Maldonado, Manuel da Silva and Catarina Cepeda

J. Risk Financial Manag. 2025, 18(6), 324; https://doi.org/10.3390/jrfm18060324 - 12 Jun 2025

Sustainability has become one of the main drivers of organizational performance. This study investigates the integration of sustainability with the balanced scorecard (BSC) as a framework for translating environmental management strategy into organizational performance. This review also seeks to map sustainability balanced scorecard [...] Read more.

Sustainability has become one of the main drivers of organizational performance. This study investigates the integration of sustainability with the balanced scorecard (BSC) as a framework for translating environmental management strategy into organizational performance. This review also seeks to map sustainability balanced scorecard (SBSC) research, clarifying its current role and identifying gaps and opportunities for future research. To achieve this, we sourced and reviewed 247 publications from the Web of Science index, corresponding to 129 scientific journals and 57 conference proceedings. Our analysis included content analysis and bibliometric analysis performed using the R packages Bibliometrix (version: 4.3.5), Biblioshiny, and CiteSpace (6.3.R1 Basic). The findings revealed that the SBSC enhances organizational capacity to align sustainability with strategic objectives, although significant implementation barriers remain, such as the selection of appropriate sustainability indicators and organizational resistance. This study contributes to advancing the theoretical and practical understanding of the SBSC while offering pathways for future research and application across sectors. Full article

(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)

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24 pages, 1928 KiB

Open AccessSystematic Review

AI and Financial Fraud Prevention: Mapping the Trends and Challenges Through a Bibliometric Lens

by Luiz Moura, Andre Barcaui and Renan Payer

J. Risk Financial Manag. 2025, 18(6), 323; https://doi.org/10.3390/jrfm18060323 - 12 Jun 2025

This study systematically reviews academic research on artificial intelligence (AI) in financial fraud prevention. Employing a bibliometric approach, we analyzed 137 peer-reviewed articles published between 2015 and 2025, sourced from Scopus, Web of Science, and ScienceDirect. Using Bibliometrix, we mapped the field’s intellectual [...] Read more.

This study systematically reviews academic research on artificial intelligence (AI) in financial fraud prevention. Employing a bibliometric approach, we analyzed 137 peer-reviewed articles published between 2015 and 2025, sourced from Scopus, Web of Science, and ScienceDirect. Using Bibliometrix, we mapped the field’s intellectual structure, collaboration patterns, and thematic clusters. Research interest has surged since 2019, led mainly by China and India, though the literature is mostly technical, with limited social science engagement. Three main themes emerged: AI-based fraud detection models, blockchain and fintech integration, and big data analytics. Despite growing output, international collaboration and focus on ethical, regulatory, and organizational issues remain limited. These insights provide a foundation for advancing both research and practical AI-driven fraud mitigation. Full article

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

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22 pages, 1680 KiB

Open AccessArticle

Financially Savvy or Swayed by Biases? The Impact of Financial Literacy on Investment Decisions: A Study on Indian Retail Investors

by Abhilasha Agarwal, N. V. Muralidhar Rao and Manuel Carlos Nogueira

J. Risk Financial Manag. 2025, 18(6), 322; https://doi.org/10.3390/jrfm18060322 - 11 Jun 2025

Financial literacy plays a crucial role in shaping individual investment decisions by influencing susceptibility to behavioural biases such as heuristics, framing effects, cognitive illusions, and herding mentality. While most existing studies have examined financial literacy as a mediating factor, our study is among [...] Read more.

Financial literacy plays a crucial role in shaping individual investment decisions by influencing susceptibility to behavioural biases such as heuristics, framing effects, cognitive illusions, and herding mentality. While most existing studies have examined financial literacy as a mediating factor, our study is among the first in the literature to analyse the role of behavioural biases as mediating factors in the relationship between financial literacy and investment decisions. Specifically, we investigate key biases, including overconfidence, herding, disposition effect, self-attribution, anchoring, availability, representativeness, and familiarity. Using purposive sampling, we collected 482 responses through a structured Likert scale questionnaire. The dataset underwent rigorous validation and reliability tests to ensure robustness. We employed Python-based statistical analysis and used Pearson’s correlation and mediation analysis to explore the relationships between financial literacy, behavioural biases, and investment decisions. With the help of these methods, we were able to uncover relationships and causal pathways which further our understanding of the role of behavioural biases in determining the impact of financial literacy on investment behaviour. The findings illustrate a notable positive correlation between investment decisions and financial literacy, implying that people with higher financial literacy levels possess greater and more rational financial decision-making capabilities. Other analyses have revealed that biases have a moderating effect on this relationship, showing another path through which financial literacy impacts behaviour at the level of the investor. By placing behavioural biases as mediating constructs, this research broadens the scope of investor psychology and the body of knowledge in behavioural finance, highlighting the need to change the approach to how financial literacy programs aimed at investors are structured and implemented. Full article

(This article belongs to the Special Issue Financial Inclusion Strategies: Emerging Trends and Global Perspectives)

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19 pages, 443 KiB

Open AccessArticle

The Impact of Audit Committee Oversight on Investor Rationality, Price Expectations, Human Capital, and Research and Development Expense

by Rebecca Abraham, Venkata Mrudula Bhimavarapu and Hani El-Chaarani

J. Risk Financial Manag. 2025, 18(6), 321; https://doi.org/10.3390/jrfm18060321 - 11 Jun 2025

Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, [...] Read more.

Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, and research and development expenses. It extends the literature to non-financial outcomes of audit committee oversight. The literature thus far has focused on the financial effects of audit committee oversight, such as return on assets, return on equity, risk, debt capacity, and firm value. Data was collected from 588 publicly traded firms in the U.S. pharmaceutical industry and energy industry from 2010 to 2022. Audit oversight was measured by the novel measurement of the frequency of the term ‘audit committee’ in annual reports and Form 10Ks from the SeekEdgar database. COMPUSTAT provided the remainder of the data. Panel Data fixed-effects models were used to analyze the data. Audit committee oversight significantly increased investor rationality, significantly reduced price expectations, and significantly increased human capital investment. An inverted U-shaped relationship occurred for audit committee oversight and research and development expenses, with audit oversight first increasing research and development expenses, then decreasing them. The study makes several contributions. First, the study uses a novel measure of audit oversight. Second, the study predicts the effect of audit committee oversight on unexplored non-financial measures, such as human capital and research and development expense. Third, the study offers a current test of the Miller model, as the last tests were performed over 20 years ago. Fourth, the study examines the impact of auditing on market measures that have not been explored in the literature, such as investor rationality and short selling. Full article

(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)

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15 pages, 1092 KiB

Open AccessReview

How Do Green Banking Practices Impact Banks’ Profitability? A Meta-Analysis

by Martin Kamau Muchiri, Maria Fekete-Farkas and Szilvia Kesmarki Erdei-Gally

J. Risk Financial Manag. 2025, 18(6), 320; https://doi.org/10.3390/jrfm18060320 - 11 Jun 2025

In light of the growing global emphasis on sustainability, understanding the nexus between green banking practices and banks’ profitability is essential and timely. The main aim of this study was to conduct a meta-analysis examining the link between green banking practices and banks’ [...] Read more.

In light of the growing global emphasis on sustainability, understanding the nexus between green banking practices and banks’ profitability is essential and timely. The main aim of this study was to conduct a meta-analysis examining the link between green banking practices and banks’ profitability. Based on 28 proxy relationships between green banking and green financing activities on banks profitability, a random-effects meta-analytic model was used to examine the corresponding effect sizes. An overall positive statistically insignificant effect size between green financing and green banking activities on banks profitability was established, implying that green banking activities do not consistently translate into financial benefits. However, this study established considerable heterogeneity of the results due to the application of different methodologies in diverse geographical contexts and varying green financing proxies. The study strongly recommends banks and policymakers adopt tailor-made, evidence-based green financing strategies to align their sustainability initiatives with market realities, regulatory frameworks, and institutional capacities. Such strategies promote the pursuit of both financial performance and environmental responsibility. Full article

(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)

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20 pages, 1025 KiB

Open AccessArticle

Money Laundering in Global Economies: How Economic Openness and Governance Affect Money Laundering in the EU, G20, BRICS, and CIVETS

by Anas AlQudah, Mahmoud Hailat and Dana Setabouha

J. Risk Financial Manag. 2025, 18(6), 319; https://doi.org/10.3390/jrfm18060319 - 11 Jun 2025

Purpose—This study examines the interaction of economic openness, governance, and money laundering. The paper’s main objective is to analyze how trade openness, foreign direct investment, and anti-corruption measures influence the risk of money laundering in specific economic blocs. Design/methodology/approach—This study analyzes these economic [...] Read more.

Purpose—This study examines the interaction of economic openness, governance, and money laundering. The paper’s main objective is to analyze how trade openness, foreign direct investment, and anti-corruption measures influence the risk of money laundering in specific economic blocs. Design/methodology/approach—This study analyzes these economic blocs (EU, G20, BRICS, and CIVETS) using annual data from the Basel Institute on Governance and World Bank statistics for 2012–2021. A panel-corrected standard errors (PCSE) estimator is employed to examine the relationships among the variables, accounting for cross-sectional dependence and ensuring robust parameter estimation. The corruption control index is a proxy for governance effectiveness, though it does not directly measure regulatory strength. Future research should incorporate more specific variables to evaluate the regulatory impact. Findings—This study reveals significant variations in money laundering risks by a country’s income category and economic bloc influenced by economic openness and governance structures. Economic growth and foreign direct investment (FDI) inflows exhibit contrasting effects on money-laundering risks; they tend to exacerbate risks in middle-income countries, while high-income nations demonstrated a lower risk of money laundering, likely due to more robust governance structures. Trade openness and anti-corruption measures generally reduced risks in wealthier countries, highlighting the importance of strong governance frameworks. These insights suggest that anti-money-laundering policies should be tailored to fit different regions’ unique economic and institutional contexts for enhanced effectiveness. Originality—This study employs a structured approach to analyzing a decade of panel data from key economic blocs, providing insights into the intricate relationships between governance, economic openness, and money laundering risks. Bridging the gap between theoretical research and practical, actionable strategies serves as a valuable resource for improving the effectiveness of anti-money-laundering (AML) measures on a global scale. Full article

(This article belongs to the Section Economics and Finance)

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17 pages, 879 KiB

Open AccessArticle

The Impact of Self-Sufficiency in Basic Raw Materials of Metallurgical Companies on Required Return and Capitalization: The Case of Russia

by Sergey Galevskiy, Tatyana Ponomarenko and Pavel Tsiglianu

J. Risk Financial Manag. 2025, 18(6), 318; https://doi.org/10.3390/jrfm18060318 - 10 Jun 2025

This article considers the impact of self-sufficiency in basic raw materials on the level of systematic risk, required return and capitalization on the example of Russian ferrous metallurgy companies. The methods applied include classical approaches to determining beta coefficient, required return and capitalization, [...] Read more.

This article considers the impact of self-sufficiency in basic raw materials on the level of systematic risk, required return and capitalization on the example of Russian ferrous metallurgy companies. The methods applied include classical approaches to determining beta coefficient, required return and capitalization, as well as correlation–regression analysis performed in the Python programming language (version 3.0, libraries: Numpy, Pandas, Matplotlib, Datetime, Statistics, Scipy, Bambi). The study revealed an inverse relationship between the self-sufficiency of ferrous metallurgy companies in iron ore and coking coal and their systematic risk. That was confirmed by the developed regression model. The presence of this dependence directly indicates the need to consider self-sufficiency when assessing a company’s required return and capitalization. The acquisition of the Tikhov coal mine by PJSC Magnitogorsk Iron and Steel Works (MMK) led to an increase in capitalization not only due to additional profit from the new asset, but also due to a decrease in the required return caused by the growth of the company’s self-sufficiency in coking coal. The proposed approach contributes to a more accurate assessment of the company’s capitalization and creates additional incentives for vertical integration transactions. Full article

(This article belongs to the Special Issue Corporate Finance: Financial Management of the Firm)

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26 pages, 1093 KiB

Open AccessArticle

Qualitatively Pre-Testing a Tailored Financial Literacy Measurement Instrument for Professional Athletes

by Jaco Moolman and Christina Cornelia Shuttleworth

J. Risk Financial Manag. 2025, 18(6), 317; https://doi.org/10.3390/jrfm18060317 - 10 Jun 2025

The aim of this study was to qualitatively pre-test a research instrument to assess the financial literacy skills of professional athletes who compete in a team sport environment. Questions were developed based on a review of the current literature and an analysis of [...] Read more.

The aim of this study was to qualitatively pre-test a research instrument to assess the financial literacy skills of professional athletes who compete in a team sport environment. Questions were developed based on a review of the current literature and an analysis of qualitative data from twelve structured expert interviews, selected using actor–network theory and purposive sampling. The findings showed how qualitative data can be considered and enumerated to guide the development of 28 validated questions to assess financial literacy within a specific group. This study helps to fill a gap in the literature since there is a paucity of qualitatively mediated research that focuses on specific target groups in the field of financial literacy. This research instrument could be of value to professional athletes, sports club management, players’ associations, educators, researchers, sports agents, and advisors by providing them with a greater understanding of their clients’ financial literacy skills and financial needs. Full article

(This article belongs to the Special Issue Behavioral Finance and Financial Management)

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18 pages, 819 KiB

Open AccessArticle

Spillovers Among the Assets of the Fourth Industrial Revolution and the Role of Climate Uncertainty

by Mohammed Alhashim, Nadia Belkhir and Nader Naifar

J. Risk Financial Manag. 2025, 18(6), 316; https://doi.org/10.3390/jrfm18060316 - 9 Jun 2025

This research investigates the spillover effects between assets of the Fourth Industrial Revolution (4IR), focusing on the role of climate policy uncertainty in shaping these interactions. Using a time-varying parameter vector autoregressive (TVP-VAR) approach and a joint connectedness method, the analysis incorporates five [...] Read more.

This research investigates the spillover effects between assets of the Fourth Industrial Revolution (4IR), focusing on the role of climate policy uncertainty in shaping these interactions. Using a time-varying parameter vector autoregressive (TVP-VAR) approach and a joint connectedness method, the analysis incorporates five global indices representing key 4IR domains: the internet, cybersecurity, artificial intelligence and robotics, fintech, and blockchain. The findings reveal significant interdependencies among 4IR assets and evaluate the effect of risk factors, including climate policy uncertainty, as a critical driver of the determinants of returns. The results indicate the growing impact of climate-related risks on the structure of connectedness between 4IR assets, highlighting their implications for portfolio diversification and risk management. These insights are vital for investors and policymakers navigating the intersection of technological innovation and environmental challenges in a rapidly changing global economy. Full article

(This article belongs to the Special Issue Innovative Approaches to Managing Finance Risks in the FinTech Era)

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24 pages, 315 KiB

Open AccessArticle

Effect of ESG Financial Materiality on Financial Performance of Firms: Does ESG Transparency Matter?

by Adejayan Adeola Oluwakemi and Doorasamy Mishelle

J. Risk Financial Manag. 2025, 18(6), 315; https://doi.org/10.3390/jrfm18060315 - 9 Jun 2025

Transparency in ESG financial materiality disclosure by corporations is now in doubt due to the inconsistent ESG framework that governs ESG disclosures, particularly in developing nations like South Africa. This is evident in the financial performance of banks and manufacturing firms as a [...] Read more.

Transparency in ESG financial materiality disclosure by corporations is now in doubt due to the inconsistent ESG framework that governs ESG disclosures, particularly in developing nations like South Africa. This is evident in the financial performance of banks and manufacturing firms as a result of the higher rate of susceptibility to ESG issues. Hence, this study empirically investigated the effect of ESG financial materiality disclosure on the financial performance of banks and manufacturing firms in South Africa from 2015 to 2024. Also, the moderating role of ESG transparency on the relationship between ESG financial materiality disclosure and financial performance was investigated. Descriptive analysis, a correlation matrix, and panel regression analysis were employed for analysis purposes. The financial metrics include ROA, ROE, and Tobin’s Q, while ESG financial materiality disclosure and the ESG disclosure score of the firms were the independent variable and moderating variable, respectively. The results show that ESG financial materiality exerts a significant adverse impact on ROA and ROE but an insignificant positive effect on Tobin’s Q in banks. For manufacturing firms, the impact is insignificant and negative on ROA, ROE, and Tobin’s Q. Also, the interactive effect of transparency insignificantly weakens the effect of ESG financial materiality disclosure on financial performance in both banks and manufacturing firms. This concludes that the transparency in ESG financial materiality disclosure is not sufficient to improve financial performance in both sectors but should be integrated in the core business objectives of firms. Also, it suggests that over-disclosure and greenwashing of ESG reports should be avoided. Full article

(This article belongs to the Special Issue Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), and Green Finance)

24 pages, 1418 KiB

Open AccessArticle

Oil Prices, Sustainability Initiatives, and Stock Market Dynamics: Insights from the MSCI UAE Index

by Hajer Zarrouk and Mohamed Khalil Ouafi

J. Risk Financial Manag. 2025, 18(6), 314; https://doi.org/10.3390/jrfm18060314 - 7 Jun 2025

This study examines the interplay between oil price volatility, sustainability-driven initiatives, and the MSCI UAE Index, highlighting the challenges that oil-dependent economies face in balancing financial stability with sustainability transitions. Using a dataset of 2707 daily observations from 2014 to 2024, we applied [...] Read more.

This study examines the interplay between oil price volatility, sustainability-driven initiatives, and the MSCI UAE Index, highlighting the challenges that oil-dependent economies face in balancing financial stability with sustainability transitions. Using a dataset of 2707 daily observations from 2014 to 2024, we applied linear regression, ARCH, GARCH, and TARCH models to analyze volatility dynamics across two key periods: the 2014–2016 oil price collapse and the 2019–2023 phase marked by the COVID-19 pandemic and increasing sustainability efforts. Our findings indicate that oil price fluctuations significantly impact the MSCI UAE Index, with GARCH models confirming persistent volatility and TARCH models revealing asymmetrical effects, where negative shocks intensify market fluctuations. While the initial sustainability policy announcements contributed to short-term volatility and investor uncertainty, they ultimately fostered market confidence and long-term stabilization. Unlike previous studies focusing solely on oil price volatility in emerging markets, this research integrates sustainability policy announcements into financial modeling, providing novel empirical insights into their impact on financial stability in oil-exporting economies. The findings suggest that stabilization funds, dynamic portfolio strategies, and transparent regulatory policies can mitigate oil price volatility risks and enhance market resilience during sustainability transitions, offering valuable insights for investors, policymakers, and financial institutions navigating the UAE’s evolving economic landscape. Full article

(This article belongs to the Section Financial Markets)

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28 pages, 1213 KiB

Open AccessReview

Digital by Default? A Critical Review of Age-Driven Inequalities in Payment Innovation

by Ida Claudia Panetta, Elaheh Anjomrouz, Paola Paiardini and Sabrina Leo

J. Risk Financial Manag. 2025, 18(6), 313; https://doi.org/10.3390/jrfm18060313 - 7 Jun 2025

This paper offers a systematic literature review of age-related disparities in the adoption of digital payment systems, a phenomenon that is becoming increasingly relevant as financial transactions become predominantly digital. Using the SPAR-4-SLR protocol, 66 scholarly contributions published between 2014 and 2024 are [...] Read more.

This paper offers a systematic literature review of age-related disparities in the adoption of digital payment systems, a phenomenon that is becoming increasingly relevant as financial transactions become predominantly digital. Using the SPAR-4-SLR protocol, 66 scholarly contributions published between 2014 and 2024 are examined and categorised into four thematic clusters: demographic determinants, behavioural drivers, structural barriers linked to the grey digital divide, and emerging insights from neurofinance. The review highlights a multifactorial set of barriers that limit older adults’ engagement with digital payments, including usability challenges, cognitive and physical limitations, digital skill gaps, and perceived security risks. These obstacles are further amplified by structural inequalities such as socio-economic status, geographic location, and infrastructural constraints. While digital payments are often presented as tools of inclusion, the findings underscore the risk of exclusion for ageing populations without tailored design and policy interventions. The review also identifies areas for further research, particularly at the intersection of ageing, cognitive function, and human–technology interaction, proposing a research agenda that supports more inclusive and age-responsive financial innovation. Full article

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

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19 pages, 320 KiB

Open AccessArticle

CEO Personal Characteristics and Investment-Cash Flow Sensitivity: An Analysis of Indian Independent (Non-Business-Group-Affiliated) Firms and Business Group-Affiliated Firms

by Gaurav Gupta

J. Risk Financial Manag. 2025, 18(6), 312; https://doi.org/10.3390/jrfm18060312 - 6 Jun 2025

This study investigates the relationship between the CEO characteristics and investment–cash flow sensitivity (ICFS) of Indian manufacturing firms. By using the GMM technique, this study finds that CEO characteristics reduce ICFS. Further, this study examines the moderating role of business [...] Read more.

This study investigates the relationship between the CEO characteristics and investment–cash flow sensitivity (ICFS) of Indian manufacturing firms. By using the GMM technique, this study finds that CEO characteristics reduce ICFS. Further, this study examines the moderating role of business group-affiliated firms, independent firms (non-business group-affiliated firms), and firm size on the relationship between CEO characteristics and ICFS. The results reveal that group affiliation moderates the effectiveness of CEO characteristics in reducing ICFS. In addition to this, independent firms rely more heavily on the individual capabilities of CEOs to overcome financial constraints and mitigate ICFS, whereas group firms benefit from structural advantages that diminish the relative impact of CEO characteristics on ICFS. Additionally, this study finds that firm size also moderates the relationship between CEO characteristics and ICFS. The results reveal that CEO characteristics significantly reduce ICFS, with a more pronounced effect in small-sized independent firms compared to their larger counterparts. However, in group-affiliated firms, CEO characteristics have a minimal effect on ICFS, and this impact remains consistent across small and large group firms. These findings offer valuable insights for firms, lending institutions, and investors, emphasizing the role of CEO characteristics in shaping financial decision making, especially in independent and smaller firms. Full article

(This article belongs to the Section Business and Entrepreneurship)

18 pages, 425 KiB

Open AccessArticle

Relationships Between Corporate Control Environment and Stakeholders That Mediate Pressure on Independent Auditors in France

by Giemegerman Carhuapomachacon, Joshua Onome Imoniana, Cristiane Benetti, Vilma Geni Slomski and Valmor Slomski

J. Risk Financial Manag. 2025, 18(6), 311; https://doi.org/10.3390/jrfm18060311 - 5 Jun 2025

The purpose of this research is to examine how relationships between corporate control environments and stakeholders mediate the different dimensions of pressure on auditor independence. In France, two (joint) auditors are required by law for listed companies. In this context, we analyze the [...] Read more.

The purpose of this research is to examine how relationships between corporate control environments and stakeholders mediate the different dimensions of pressure on auditor independence. In France, two (joint) auditors are required by law for listed companies. In this context, we analyze the experiences of higher-echelon professionals of audit firms, controllers, and managers who could elucidate the essence of pressure on auditor independence in their lived environment. An interpretative approach and empirical analysis were adopted for this study to expand on the literature and proffer an answer to the following research question: How does the relationship between a control environment and a stakeholder mediate the pressures on auditor independence? Interviews involved seven participants, mainly higher-echelon professionals of Big Four firms, as well as two members of auditee organizations, and a member of an audit committee. In addition, the narratives from the documents gathered from the EU audit legislation implementation database constitute our data corpus. Thematic coding was used to organize the results. The findings reveal that control environment best practices and down-to-earth corporate governance policies, participated in by both auditors and audited organizations, cushion the pressures on auditors. This, in turn, presents a positive and significant impact on auditor independence. Overall, the dimensions that mediate the pressures on auditors are as follows: the consciousness of pressure in itself; the reputation and experience of the audit firm; and the interactions between the auditors and corporate governance. Other factors include the cordiality of the relationship between the auditor and corporate management and the resulting healthy end of the negotiation between auditors and auditees. This study contributes to the theory and practical discussion of the relationships between the corporate control environment, corporate governance, auditing, and pressure on auditor independence. Full article

(This article belongs to the Section Business and Entrepreneurship)

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17 pages, 294 KiB

Open AccessArticle

Exchange Rate Risk and Relative Performance Evaluation

by Bing Chen, Wei Chen and Xiaohui Yang

J. Risk Financial Manag. 2025, 18(6), 310; https://doi.org/10.3390/jrfm18060310 - 5 Jun 2025

The relative performance evaluation (RPE) hypothesis posits that executive compensation should not be influenced by uncontrollable exogenous shocks. However, prior studies often find limited empirical support for this hypothesis, partly because identifying peers exposed to the same exogenous shocks is challenging. We propose [...] Read more.

The relative performance evaluation (RPE) hypothesis posits that executive compensation should not be influenced by uncontrollable exogenous shocks. However, prior studies often find limited empirical support for this hypothesis, partly because identifying peers exposed to the same exogenous shocks is challenging. We propose a new method for identifying peers and testing the RPE hypothesis within the context of exchange rate risk. Specifically, we select peers based on the sensitivity of their stock returns to exchange rate fluctuations. We find evidence that firms respond to significant exchange rate movements by ex post adjusting their peer selection to include peers with similar exchange rate risk exposure. Furthermore, after accounting for ex post peer group adjustments, we find much stronger support for the RPE hypothesis than prior studies. Full article

(This article belongs to the Section Financial Markets)

13 pages, 301 KiB

Open AccessArticle

Does Economic Freedom Influence Economic Growth? Evidence from Latin America

by Vanessa Arce and Freddy Naula

J. Risk Financial Manag. 2025, 18(6), 309; https://doi.org/10.3390/jrfm18060309 - 5 Jun 2025

This paper investigates the relationship between economic freedom and economic growth in Latin America and the Caribbean over the period 1997–2023, using data from 14 countries. To capture the multidimensional nature of economic freedom, two widely recognized indices—Heritage and Fraser—are incorporated into an [...] Read more.

This paper investigates the relationship between economic freedom and economic growth in Latin America and the Caribbean over the period 1997–2023, using data from 14 countries. To capture the multidimensional nature of economic freedom, two widely recognized indices—Heritage and Fraser—are incorporated into an extended Solow-type growth model. The empirical strategy relies on a dynamic panel data approach using the Arellano–Bond estimator, which allows for the control of unobserved heterogeneity, autocorrelation, and potential reverse causality. Robustness is assessed through alternative model specifications and in-sample forecasting using rolling-window techniques and Theil’s U-statistic. The results reveal a negative and statistically significant relationship between economic growth and the Heritage Index, while the Fraser Index shows a positive but generally non-significant effect. These findings highlight the methodological sensitivity of the economic freedom–growth nexus and suggest that context-specific institutional factors may shape how liberalization policies translate into development outcomes. The study contributes to the literature by jointly evaluating the impact of both indices in a unified dynamic framework, providing new evidence for a region marked by institutional heterogeneity and growth volatility. Full article

(This article belongs to the Section Economics and Finance)

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25 pages, 329 KiB

Open AccessArticle

Performance of Islamic Banks During the COVID-19 Pandemic: An Empirical Analysis and Comparison with Conventional Banking

by Umar Butt and Trevor Chamberlain

J. Risk Financial Manag. 2025, 18(6), 308; https://doi.org/10.3390/jrfm18060308 - 5 Jun 2025

This study examines the performance and resilience of Islamic banks during the COVID-19 pandemic, a period marked by unprecedented global economic disruption. Drawing on empirical data and a comparative analysis with conventional banking institutions, the research evaluates key financial indicators—liquidity, profitability, asset quality, [...] Read more.

This study examines the performance and resilience of Islamic banks during the COVID-19 pandemic, a period marked by unprecedented global economic disruption. Drawing on empirical data and a comparative analysis with conventional banking institutions, the research evaluates key financial indicators—liquidity, profitability, asset quality, and capital adequacy—to assess how Islamic banks responded to the crisis. The unique principles of Islamic finance, including risk-sharing, asset-backed financing, and the prohibition of interest and speculative activities, provide a distinct framework for crisis response. By analyzing how these features influenced bank performance during the pandemic, the study offers valuable insights into the relative robustness of Islamic versus conventional banking models. The findings contribute to the academic discourse on financial stability and risk management, offering practical implications for policymakers, regulators, and stakeholders to strengthen financial systems against future global shocks. Full article

(This article belongs to the Special Issue Disclosure and Accountability in Islamic Banking)

20 pages, 1240 KiB

Open AccessArticle

Modelling Insurance Claims During Financial Crises: A Systemic Approach

by Francis Agana and Eben Maré

J. Risk Financial Manag. 2025, 18(6), 307; https://doi.org/10.3390/jrfm18060307 - 5 Jun 2025

In this paper, we introduce a generalised mutually exciting Hawkes process with random and independent jump intensities. This model provides a robust theoretical framework for modelling complex point processes and appropriately characterises the financial system, especially during periods of crisis. Based on this [...] Read more.

In this paper, we introduce a generalised mutually exciting Hawkes process with random and independent jump intensities. This model provides a robust theoretical framework for modelling complex point processes and appropriately characterises the financial system, especially during periods of crisis. Based on this extended Hawkes process, we propose an insurance claim process and demonstrate that claim processes modelled as an aggregated process enable early detection of crises and inform optimal investment strategies in a financial system. Full article

(This article belongs to the Section Mathematics and Finance)

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6 pages, 184 KiB

Open AccessEditorial

Sustainable Tax and Accounting Reporting in Building a New Tax Culture

by Lidija Hauptman and Ivana Pavić

J. Risk Financial Manag. 2025, 18(6), 306; https://doi.org/10.3390/jrfm18060306 - 4 Jun 2025

Achieving the Sustainable Development Goals (SDGs) depends significantly on enhancing tax revenue mobilization and transforming tax culture among both institutional and individual taxpayers [...] Full article

(This article belongs to the Special Issue Sustainable Tax and Accounting Reporting in Building a New Tax Culture)

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