Journal of Risk and Financial Management

Research

15 pages, 1107 KiB

Open AccessArticle

The Impact of Eurasian Economic Union Membership on Mutual Trade in Services: What Are the Challenges for Small Economies?

by Davit Hakhverdyan, Ruzanna Tadevosyan, Anna Pakhlyan and Svetlana Ratner

J. Risk Financial Manag. 2025, 18(3), 143; https://doi.org/10.3390/jrfm18030143 - 10 Mar 2025

Viewed by 1906

Abstract

Despite the fact that a decade has elapsed since the establishment of the Eurasian Economic Union (EAEU), the impact of the EAEU on the economic development of its member states remains a subject of ongoing debate. This article examines the mutual trade in [...] Read more.

Despite the fact that a decade has elapsed since the establishment of the Eurasian Economic Union (EAEU), the impact of the EAEU on the economic development of its member states remains a subject of ongoing debate. This article examines the mutual trade in services between the Eurasian Economic Union (EAEU) countries, with the aim of assessing the impact of membership on it. The difference-in-difference model has been applied for impact assessment. The model utilizes data from five EAEU member countries—Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia—capturing periods both before and after their EAEU membership, spanning 17 years in total. The results show that membership in the EAEU has significantly affected the exports of services from Russia and Belarus and has a less significant impact on the exports of services from Kazakhstan to the EAEU. At the same time, it has no significant effect on the exports of services from Kyrgyzstan and Armenia to other EAEU countries. In order to ascertain the challenges that exist, expert surveys among service exporters from Armenia have been conducted. Representatives of companies exporting various services to the EAEU have been selected as experts. The survey results indicate the presence of various barriers, including legal, logistical (for cargo transportation companies), and cultural challenges. These barriers encompass licensing difficulties, technical obstacles related to VAT refunds, a ban on cash payments, and difficulties with financial transfers due to sanctions against Russia. The findings of this research are of practical importance and can serve as a guideline for policymakers in the EAEU. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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13 pages, 445 KiB

Open AccessArticle

Verifying the Role of Dividends as a Mediator in the Impact of Cash Flows on Bank Stock Returns on the Iraq Stock Exchange: An Empirical Analysis

by Ayad Tareq Al Mamoori, Wan Fadzilah Wan Yusoff and Mohamed Khudari

J. Risk Financial Manag. 2025, 18(2), 102; https://doi.org/10.3390/jrfm18020102 - 17 Feb 2025

Cited by 1 | Viewed by 938

Abstract

This study aims to evaluate how the effect of COVID-19 and cash flows from operating, investing, and financing activities influence stock returns, with dividends acting as a mediator. Data were gathered from the quarterly financial reports of 20 banks listed on the Iraq [...] Read more.

This study aims to evaluate how the effect of COVID-19 and cash flows from operating, investing, and financing activities influence stock returns, with dividends acting as a mediator. Data were gathered from the quarterly financial reports of 20 banks listed on the Iraq Stock Exchange between 1 January 2015 and 31 December 2020. Panel data were analysed using ordinary least squares (OLS). Findings revealed that cash flows have a positive impact on stock returns. Additionally, cash flows from operating and investing activities enhanced dividends, while those from financing activities negatively affected them. Although relatively small, both effects were statistically significant at the 5% level. The analysis also showed that cash flows and dividends account for 51% of the variance in stock returns, indicating a positive yet minor relationship. The results demonstrated a weakly significant negative effect of COVID-19 on both the direct relationship between cash flows and stock returns and the direct relationship between dividends and stock returns. Cash flows and dividends positively influenced stock returns during the initial five years; however, the COVID-19 pandemic in 2020 inversely affected this relationship by 4%, which is a relatively minor impact. Consequently, this research suggests that banks should improve their cash flows by increasing deposits and investing cash reserves to boost profits and, in turn, increase stock returns. Moreover, dividend distributions should play a crucial role in investment strategies, as they attract investors, raise stock demand, and help stabilise the Iraq Stock Exchange. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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15 pages, 273 KiB

Open AccessArticle

Financial Openness, Trade Openness, and Economic Growth Nexus: A Dynamic Panel Analysis for Emerging and Developing Economies

by Thembalethu Macdonald Seti, Sukoluhle Mazwane and Mzuyanda Christian

J. Risk Financial Manag. 2025, 18(2), 78; https://doi.org/10.3390/jrfm18020078 - 3 Feb 2025

Cited by 1 | Viewed by 2893

Abstract

International market openness has long been regarded as critical for economic development, and recent evidence highlights the distinct roles of financial and trade openness, particularly in emerging and developing economies. This study examines the impact of financial and trade openness on economic growth [...] Read more.

International market openness has long been regarded as critical for economic development, and recent evidence highlights the distinct roles of financial and trade openness, particularly in emerging and developing economies. This study examines the impact of financial and trade openness on economic growth in ten emerging and developing countries from 1970 to 2023. It employs a dynamic panel generalized method of moments (GMM) model, which is selected for its ability to address potential endogeneity and dynamic relationships within panel data. The analysis finds that both financial and trade openness positively influence economic growth and that stable macroeconomic conditions and political stability enhance these growth-promoting effects. In the context of growing geo-economic tensions, trade fairness, and national security concerns, the study underscores the need for policies that balance global integration with national interests. These findings suggest the importance of designing policies that promote greater integration into global financial and trading systems while ensuring sound macroeconomic fundamentals and supportive institutions. The study recommends that policymakers pursue strategic liberalization and strengthen governance structures to achieve sustained and inclusive growth. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

16 pages, 1511 KiB

Open AccessArticle

Central Bank Credibility and Exchange Rate Volatility: A Comprehensive Bibliometric Analysis

by Wejden Ben Jannet and Achouak Barguellil

J. Risk Financial Manag. 2025, 18(2), 44; https://doi.org/10.3390/jrfm18020044 - 21 Jan 2025

Viewed by 1410

Abstract

Recently, there has been increasing interest in exploring the link between central bank credibility and exchange rate volatility within the banking sector; however, despite this increased attention, there is a significant lack of systematic analyses on this topic. To fill this gap, a [...] Read more.

Recently, there has been increasing interest in exploring the link between central bank credibility and exchange rate volatility within the banking sector; however, despite this increased attention, there is a significant lack of systematic analyses on this topic. To fill this gap, a detailed literature review was conducted, employing bibliometric and scientometric methods to investigate research related to central bank credibility and exchange rate volatility. The review included 1124 documents from Web of Science (WoS) datasets and 169 documents from the Scopus database. The findings indicated a considerable grow thin publications in this area of research, driven by efforts from various researchers, institutions, nations, and academic journals worldwide. Key research themes, trends, approaches, and knowledge structures were identified, providing insights into the intellectual, social, and conceptual aspects of this field. Additionally, this study covered the implications, restrictions, and potential future avenues for research. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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21 pages, 1246 KiB

Open AccessArticle

Real Exchange Rate Channel of QE Monetary Transmission Mechanism in Selected EU Members: The Pooled Mean Group Panel Approach

by Stefan Stojkov, Emilija Beker Pucar and Aleksandar Sekulić

J. Risk Financial Manag. 2025, 18(1), 12; https://doi.org/10.3390/jrfm18010012 - 30 Dec 2024

Cited by 1 | Viewed by 1005

Abstract

Since the Great 2008 Recession, central banks around the world have been coping with monetary consequences that highlight structural costs of the economic system and the rise of unconventional monetary measures. This research aims to capture the heterogeneous effects of expansionary balance sheet [...] Read more.

Since the Great 2008 Recession, central banks around the world have been coping with monetary consequences that highlight structural costs of the economic system and the rise of unconventional monetary measures. This research aims to capture the heterogeneous effects of expansionary balance sheet (Quantitative easing) policy on the real effective exchange rate and current account balance under the different exchange rate regimes in crisis circumstances. The sample is structured of two groups of EU countries differentiated by level of monetary autonomy: EZ members (Austria, Belgium, France, Germany, Netherlands, Italy, and Spain) are represented by countries with the highest level of asset purchases by ECB and emerging monetary autonomous EU economies (Czech, Hungary, Poland, and Romania). Empirical findings are based on the framework of cross-sectional dependent, non-stationary, heterogeneous, dynamic panels using the (Pooled) Mean Group estimator during the 2014Q1–2023Q1 time horizon. Results indicate a positive long-run relationship between the central bank balance sheet assets, the real interest rate, and the real effective exchange rate. A negative long-term relationship with the current account balance is confirmed, suggesting a diminishing external position. While error-correction parameters are significant and heterogeneous, research confirms higher real effective exchange rate reaction for the EZ members with higher adjustment toward worsening competitiveness along with external balance. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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27 pages, 458 KiB

Open AccessArticle

Inflation Targeting with an Optimal Nonlinear Monetary Rule—The Case Study of Colombia

by Martha Misas, Edgar Villa and Andres Giraldo

J. Risk Financial Manag. 2024, 17(12), 547; https://doi.org/10.3390/jrfm17120547 - 30 Nov 2024

Viewed by 861

Abstract

This article examines whether Banco de la República (Banrep), Colombia’s central bank, has operated under a dual-regime policy framework—one for recessionary periods and another for periods of economic overheating—since adopting inflation targeting (IT) from Q4 2000 to Q4 2019. We modify the canonical [...] Read more.

This article examines whether Banco de la República (Banrep), Colombia’s central bank, has operated under a dual-regime policy framework—one for recessionary periods and another for periods of economic overheating—since adopting inflation targeting (IT) from Q4 2000 to Q4 2019. We modify the canonical New Keynesian inflation model to accommodate an optimal nonlinear monetary rule aligned with a two-regime policy framework. Using a LSTAR model estimated over the study period, with the output gap lagged by three periods as the transition variable, we identify two distinct monetary regimes. Our findings reveal that the smooth transitions between regimes were driven by shifts in Banrep’s preferences related to its loss function, alongside adjustments in the parameters of the aggregate demand and supply curves within the Colombian economy. Notably, we observe that a modified Taylor principle is not met in either identified monetary regime. This suggests that, in this context, IT has been a successful policy framework even without requiring the policy interest rate to respond aggressively to inflation gaps, as the Taylor principle would otherwise dictate. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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20 pages, 3336 KiB

Open AccessArticle

Macroeconomic Dynamics in the Greek Economy during the Pre- and Post-Euro Adoption Periods

by Dimitrios R. Barkoulas and Dionysios Chionis

J. Risk Financial Manag. 2024, 17(4), 156; https://doi.org/10.3390/jrfm17040156 - 12 Apr 2024

Viewed by 2271

Abstract

This study examines the relationships between Greek macroeconomic variables, examining before and after the euro’s introduction as a currency. We conducted an extensive analysis from 1980 to 2019, examining various economic indicators such as government expenditure, unemployment rates, taxation, inflation, and national debt, [...] Read more.

This study examines the relationships between Greek macroeconomic variables, examining before and after the euro’s introduction as a currency. We conducted an extensive analysis from 1980 to 2019, examining various economic indicators such as government expenditure, unemployment rates, taxation, inflation, and national debt, employing causal and correlation analysis and econometric modeling with and without time-varying effects. The results revealed a significant correlation between the introduction of the euro and a tighter relationship between government spending and unemployment levels, while one more remarkable point was that higher government spending or debt reduction initiatives appeared to positively impact joblessness, particularly in the context of the euro. Our research underscored the correlation between national debt and government spending as increased debt led to reduced government expenditure and vice versa. Unemployment cited an increased impact on government spending right after the euro adoption, and on the other hand, the effect of unemployment on government spending decreased. The debt–government spending nexus was decreasing for many years before the euro adoption, while just before the euro adoption, the relationship between debt and government spending was rather stable. Finally, during the euro adoption, the effect of inflation on tax increased, while the corresponding inflation tax remained stable. Our findings have significant implications for policymakers shaping the economic strategies in Greece as they point out the necessity for stable and balanced approaches that manage government spending and debt to address unemployment effectively. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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29 pages, 399 KiB

Open AccessArticle

Closed-End Fund Discounts and Economic Policy Uncertainty

by Nazif Durmaz

J. Risk Financial Manag. 2023, 16(3), 200; https://doi.org/10.3390/jrfm16030200 - 14 Mar 2023

Cited by 4 | Viewed by 1625

Abstract

This paper empirically tests the determinants of closed-end fund (CEF) prices by employing cointegration and error-correction modeling with an advanced ARDL framework. Since CEF shares generally trade at discounts to their net asset value (NAV), we modeled CEF prices, including volatility and economic [...] Read more.

This paper empirically tests the determinants of closed-end fund (CEF) prices by employing cointegration and error-correction modeling with an advanced ARDL framework. Since CEF shares generally trade at discounts to their net asset value (NAV), we modeled CEF prices, including volatility and economic policy indices along with their NAVs. The present study consists of 31 monthly frequency CEF discount data from January 1999 to April 2018 and economic policy uncertainty (EPU) with ten subindices. This paper finds evidence for cointegration in many of the series and statistically significant coefficients in the short- and long-run estimates of the included subindices. Full article

(This article belongs to the Special Issue Open Economy Macroeconomics)

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