Dear Colleagues,

Management of financial risk in enterprises is a necessity, especially today during the Covid-19 pandemic. It manifests itself in the implementation of appropriate risk management principles in the company, or a selected policy or strategy for managing a company. Today, managers of entities classified as SMEs should select and adapt such financial risk management tools in an enterprise to avoid the risk of losing financial liquidity, reduce credit risk, the risk of lowering financial results, the risk of reducing revenues and increasing the possibility for further development of the enterprise.

Considering the above, this Special Issue looks for outstanding research and development results, case studies, and review papers in topics that include but are not limited to the following:

• financial risk management
• risk models
• risk measures
• risk analysis
• risk management in multi-entity organizations
• the covid -19 pandemic and financial risk in SMEs

Manuscript Submission Information

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• risk management
• financial risk
• financial liquidity
• credit risks
• SMEs
• the Covid-19 pandemic

Title: Earnings Management, Related Party Transactions and Corporate Performance: The Moderating Role of Internal Control
Authors: Grzegorz Zimon; Andrea Appolloni; Hossein Tarighi; Seyedmohammadali Shahmohammadi; Ebrahim Daneshpou
Affiliation: Department of Finance, Banking, and Accountancy, The Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland
Abstract: The primary purpose of this study is to investigate the impacts of Earnings Management (EM) and Related Party Transactions (RPT) on corporate financial performance in an emerging market called Iran. This paper also aims to examine the moderating role of Internal Control Weakness (ICW) in the relationship between them. The study sample includes 108 Iranian companies listed on the Tehran Stock Exchange (TSE) between 2013 and 2018, and panel data with random effects are used to test the hypotheses. The results show that there is a negative association between Real Earnings Management (REM) and corporate financial situation, while Accrual-based Earnings Management (AEM) and firm value are correlated positively. Consistent with the tunneling hypothesis or agency theory, our findings confirm RPTs damage corporate value because managers probably consider it a mechanism to exploit enterprise resources owing to existing conflictual interests. Moreover, purchase-related party transactions affect corporate value negatively. Weak internal control has a positive moderating influence on the linkage between RPTs and financial performance. Finally, firm size, sale growth, current ratio, Mergers & Acquisitions, and institutional ownership affect company value positively.

Title: Economic determinants of labor profitability in family farms in Poland in relation to economic size
Authors: Dariusz Kusz; Grzegorz Zimon
Affiliation: Department of Finance, Banking and Accountancy, The Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland
Abstract: Farms in Poland come in a wide variety of sizes and the effect of farm size on profitability of labor has not been sufficiently investigated. Therefore, the principal goal of this paper, is to study the determinants of profitability of labor by means of the panels of the Farm Accountancy Data Network (FADN) on family farms of different economic size between 2004 and 2018. For the analysis of variables that express the profitability of labor in family farms, a multiple regression has been applied. The variables from three areas: macroeconomic, technical and microeconomic have been used as explanatory variables. Family farm income expressed per family labor unit has been also adopted as an explanatory variable. It was found that in the case of farms ES1 (very small), among the explanatory variables, the level of subsidies had a positive impact on the profitability of labor. In the remaining groups of farms, the subsidies had no impact on the profitability of labor, or had a negative impact (in ES4 farms). The functioning of very small farms (ES1) depends significantly on the mechanisms and tools of the agricultural policy. In the case of larger farms, macroeconomic factors play a greater role in improving profitability of labor, especially the price gap index (farms ES2 - ES5) and the level of interest rate (farms ES6). However, apart from macroeconomic factors, the econometric models estimated (except for ES6 farms) also included microeconomic determinants. They mainly concerned the relationship of production factors: land and capital. It should be noted that the need to improve the mutual relations of production factors is the result of changes in the relations of prices in the market of production factors. Thus, it is dictated by macroeconomic conditions.