Search Results (161)

Innovation can strengthen industrial resilience, but in interconnected networks, it may also create financial fragility. This paper develops a coupled nonlinear multiplex-network model in which financial distress and effective knowledge evolve on risk-propagation and knowledge-diffusion layers. Innovation success depends on firm capability, industry conditions, and accessible knowledge; success lowers susceptibility and strengthens recovery, whereas failure adds distress pressure. We establish positive invariance and well-posedness. For the source-free knowledge and conditional unforced distress subsystems, global threshold results show extinction at or below the corresponding spectral threshold and a unique positive equilibrium above it. For the fully coupled unforced system, comparison arguments provide sufficient extinction and persistence bounds. We further show that improved knowledge weakly lowers the conditional financial distress persistence threshold and we derive a local innovation–failure boundary. Extended simulations examine directed asymmetry, rank alignment, edge overlap, and numerical and parameter uncertainty. Capability and supportive industry conditions reduce long-run distress, failure losses attenuate innovation benefits, and favorable knowledge-capability allocation among structurally influential firms is associated with greater resilience. These findings are model-generated mechanisms rather than empirically identified policy optima. Full article

The present study examined how volatility in exchange rates shapes banking-sector financial stability across the G7 and six high-income European countries, consisting of 13 developed economies. The study analyses the time period from 2000 to 2023. To measure volatility, the present study employed the GARCH(1,1) conditional variance of monthly real effective exchange rates. Stability is measured through the following two supporting indicators: Bank Z-score (solvency) and Non-Performing Loan (NPL) ratio (credit quality). Our analysis combines the Fully Modified OLS and two-step System GMM for analysing long-run and dynamic effects. To assess distributional heterogeneity, Method of Moments Quantile Regression (MMQR) is employed, while Dumitrescu–Hurlin tests are used for examining causality. The results show that volatility in exchange rates significantly reduces bank solvency and elevates credit risk. These effects are highly uneven: the adverse impact falls on the most fragile banking systems—those in the lower quantiles of the Z-score distribution and the upper quantiles of the NPL distribution. Causality runs unidirectionally, moving from volatility to instability. Institutional quality, which is proxied by the rule of law and regulatory quality, is seen to significantly decrease the credit-risk channel but not the solvency channel. Our findings provide implications for developed economies and support targeted, fragility-sensitive macro-prudential policy. Full article

Prolonged financial crises force households to adopt strategies intended to preserve wealth and support financial resilience. Among these strategies, physical gold has become an increasingly attractive safe-haven asset, yet limited evidence exists on the behavioral factors associated with consumers’ intentions to purchase gold in economies experiencing prolonged financial crises. Addressing this gap, this study investigates the cognitive, behavioral, social, and economic predictors of gold purchase intention in Lebanon, one of the countries most severely affected by financial collapse, currency depreciation, and institutional distrust. Drawing on the Theory of Planned Behavior (TPB) and Consumer Behavior Theory, the study develops an extended conceptual framework by incorporating financial literacy as an additional antecedent and perceived affordability as both a direct predictor and a moderating variable. Data were collected through a cross-sectional survey of 268 Lebanese adults and analyzed using partial least squares structural equation modeling (PLS-SEM) in SmartPLS 4. The findings reveal that financial literacy, attitude toward gold, subjective norms, perceived behavioral control, and perceived affordability are all significant positive predictors of purchase intention. Furthermore, the positive associations of attitude and subjective norms with purchase intention are stronger at higher levels of perceived affordability, highlighting its dual role as both an economic determinant and a potential contextual boundary condition. The study extends the TPB by distinguishing between psychosocial predictors of gold purchase intention and the financial capability and resource constraints represented by financial literacy and perceived affordability. By examining perceived affordability as a potential boundary condition for the associations of attitudes and subjective norms with purchase intention, the study clarifies when favorable evaluations and social influences are more strongly associated with intentions to purchase gold as a resilience-oriented financial asset. Full article

Quantifying the direction, strength and temporal clustering of cross-border financial risk contagion calls for methods that go beyond linear correlation. We suggest a two-layer framework that brings together transfer entropy and a multivariate Hawkes self-exciting point process on a time-varying, directed, weighted network. In the first layer, one-to-one transfer entropies of sovereign credit default swap spreads are estimated with a bias-corrected k nearest neighbour estimator, and this step detects nonlinear and directional information transfer between spreads. The second layer is a multivariate Hawkes process that models how extreme loss events arrive and mutually excite one another across countries, and it gives an excitation intensity matrix, encoding the way a tail event in one country raises the likelihood of an instantaneous hazard occurring in another. By merging these two layers, we obtain a composite, directed, weighted adjacency matrix in which the weights of the edges reflect both information flow and event clustering. We introduce a network-level contagion intensity index and split it into direct, indirect and feedback terms using the graph Laplacian spectrum. Von Neumann graph entropy together with the spectral gap ratio serve as entropy-based measures of the complexity and fragility of the evolving network. We validate the choice of Shannon-type entropy through a Tsallis q-sensitivity analysis, and we verify the nonlinear dependence structure of the data using BDS tests and maximal Lyapunov exponent estimates. Three empirical findings emerge from analysing 20 sovereign CDS markets from January 2015 to December 2025: (i) directional risk spillover signals derived based on transfer entropy are more timely than those derived from variance decomposition; (ii) the Hawkes excitation component amplifies measured contagion intensity by 35 to 58 percent during the COVID-19 shock and the 2022 European energy crisis relative to a transfer-entropy-only baseline; (iii) von Neumann graph entropy reaches historically extreme values 7 to 12 trading days before the peak drawdown in a Global Sovereign Bond Index. These results hold across rolling window lengths, significance thresholds, alternative entropy functionals and alternative Hawkes kernels. Full article

Prudential regulation traditionally evaluates credit, market, and liquidity risks through separate indicators, providing a fragmented assessment of institutions’ financial soundness. This study proposes the Risk Capacity Index (ICR) as an integrated measure of the structural risk-bearing capacity of organizations in the Colombian solidarity sector. Rather than measuring individual risks in isolation, the proposed framework evaluates the capacity of available equity to absorb aggregate financial exposure by integrating Expected Loss, Value at Risk, and the Liquidity Gap within a single prudential metric. The conceptual design of the ICR is grounded in the notion that equity constitutes the institution’s ultimate loss-absorbing constraint, while its operational specification is developed using supervisory risk measures applicable to cooperative financial institutions. The methodology combines analytical sensitivity analysis with a forward-looking stress-testing framework based on the Prudential Regulation Authority approach. Results demonstrate that the ICR exhibits nonlinear deterioration as aggregate risk exposure increases, with liquidity risk emerging as the principal determinant of financial fragility and the viability threshold. The theoretical contribution of the ICR lies not in replacing existing prudential ratios, but in providing an integrated institution-level measure that jointly relates available loss-absorbing capital to simultaneous exposures across multiple financial risks within a common analytical framework. The proposed index therefore complements established measures of capital adequacy, liquidity resilience, and financial soundness by offering a consolidated perspective on institutional risk-bearing capacity. Full article

In an increasingly complex financial landscape, individual financial behavior is shaped by a range of cognitive, technological, and psychological factors. Existing research on financial behavior often examines financial literacy, FinTech adoption, and financial attitude separately, with limited attention to their combined effects or to whether these relationships remain consistent across contrasting economic environments. To address this gap, this study examines the associations of financial literacy and FinTech adoption with financial behavior, both directly and indirectly through the mediating role of financial attitude. Grounded in the Theory of Planned Behavior and the Technology Acceptance Model, the study proposes an integrated behavioral model using primary data from two contrasting contexts: Lebanon, a financially constrained and unstable environment, and the United Arab Emirates (UAE), a stable, high-income country with advanced FinTech infrastructure. Data were collected through a survey of 400 respondents and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that financial literacy and FinTech adoption are positively associated with financial behavior in both countries. Moreover, financial attitude significantly mediates both relationships. Measurement invariance was established prior to cross-country comparisons, and the multi-group analysis indicated that the structural relationships were generally comparable across Lebanon and the UAE despite descriptive differences in several path coefficients. The study contributes to the behavioral finance and sustainable finance literature by integrating cognitive, technological, and psychological predictors within a unified framework, validating the mediating role of financial attitude, and providing cross-national evidence from two contrasting economic contexts. The findings suggest that strengthening financial literacy alongside responsible FinTech adoption may support more sustainable and inclusive financial behaviors, particularly in environments characterized by economic instability and unequal access to financial services. Practical and policy implications are offered for educators, FinTech providers, financial institutions, and policymakers, emphasizing the importance of context-sensitive initiatives that promote financial resilience, financial inclusion, and the development of sustainable financial systems. Full article

China’s rising household leverage has intensified concern about household-level financial risk, yet the role of digital financial inclusion (DFI) remains ambiguous. This study examines the association between DFI and household financial fragility through two channels: an information channel and a credit-constraint channel. We develop a three-period household decision framework and test its implications using China Family Panel Studies (CFPS) data from 2014 to 2022, matched with a county-level DFI index. The results show a U-shaped association between DFI and household financial fragility. Mechanism tests are consistent with a leverage channel: broader credit availability is associated with higher household leverage and higher distress risk. Evidence for the risk-taking channel is more conditional and becomes more visible at higher levels of DFI development. Instrumental-variable estimates, lagged specifications, alternative fragility measures, and double machine learning produce the same nonlinear sign pattern, although the exact turning point is specification-sensitive and the exclusion restriction remains an identifying assumption. The findings support risk-based monitoring of digital credit and consumer-protection policies targeted at households with weak liquidity buffers and high debt-service burdens. Full article

Background: Climate change is increasingly recognised not only as an environmental emergency but also as a structural determinant of health and health-system performance. Its clinical consequences will not be distributed evenly: high-income countries face rising heat mortality, infrastructure fragility, ageing-related vulnerability, and the need to decarbonise technologically intensive care; middle- and low-income countries face heterogeneous but often more compressed combinations of heat, infectious disease, food insecurity, water stress, displacement, conflict-related fragility, and limited fiscal capacity. Objective: This structured narrative review proposes a comparative framework for understanding how climate change will transform health care across high-, middle-, and low-income settings and identifies adaptation priorities that are resilient, equitable, and low-carbon. Methods: We synthesised major climate-health assessments, peer-reviewed epidemiological studies, modelling papers, systematic and scoping reviews, and health-system decarbonisation literature identified through targeted searches and reference chaining. Five climate-health pathways, specified a priori from established direct, indirect, and socially mediated pathway frameworks, were used to organise the review. Findings: Climate change will reshape health care through five interacting pathways: direct thermal injury and extreme-weather mortality; altered infectious disease ecology; food, water, and nutritional insecurity; mental, maternal-child, and occupational impacts; and damage to the infrastructure, workforce, supply chains, finances, and emissions profile of health systems. In high-income countries, climate stress exposes the limits of hospital-centred, carbon-intensive, just-in-time care. In middle-income countries, expanding coverage and technology coexist with uneven insurance, large informal workforces, and rapidly growing emissions. In low-income and fragile settings, the same hazards interact with undernutrition, weak surveillance, under-resourced primary care, and constrained finance to produce larger marginal health losses. Conclusions: The central contribution is the concept of the climate-health divide: the unequal conversion of shared climate hazards into clinical demand, service disruption, financial stress, and emissions-intensive responses. Climate resilience and healthcare decarbonisation should therefore be designed together rather than treated as separate agendas. Full article

Output-based indicators in entrepreneurial ecosystem governance systematically misclassify pre-threshold structural progress as policy failure, because feedback dynamics produce no immediate output signal. This study examines how institutional coordination shapes those dynamics. Using system dynamics modelling, we construct a three-stock model (active startups, entrepreneurial capabilities, and institutional support). Calibration is performed via structured expert elicitation using the Repertory Grid Technique (RGT), enabling institutionally grounded parameter estimation where comparable time-series data are unavailable. Three policy scenarios—fragmented support, financial intensification without coordination, and coordinated early intervention—are simulated for Mexico and the United Kingdom. Resource intensification alone yields only temporary gains when feedback structures remain fragmented. Coordinated intervention activates reinforcing feedback among all three stocks, enabling self-sustaining growth beyond a critical coordination threshold. The United Kingdom crosses this threshold earlier due to stronger baseline conditions; Mexico responds later but with larger proportional gains. The model provides a feedback-structural diagnostic that distinguishes pre-threshold structural assembly from genuine stagnation, with direct implications for the design of evaluation frameworks in fragile institutional contexts. RGT demonstrates potential as a calibration strategy for feedback models in data-sparse settings. Full article

Each financial market carries a unique “fractal signature” with its own distinct risk and return pattern. This study comparatively deciphers these fractal signatures of the leading stock market indices of the Emerging Seven (E7) countries (Turkey, India, Brazil, Mexico, Russia, China, Indonesia), using Multifractal Detrended Fluctuation Analysis (MFDFA) with data covering the 2021–2025 period. The findings reveal that all examined markets deviate from the classical random walk model and exhibit distinct multifractal characteristics. However, significant differences were observed among these signatures: in contrast to Russia’s chaotic structure, which showed extreme fragility to geopolitical shocks, the Chinese and Mexican markets presented a more stable and homogeneous risk profile. In all indices, it was found that small-scale fluctuations carry a strong long-memory effect (stable trends), while large-scale fluctuations assume a more random character (sudden shocks). This asymmetric behavior confirms the heterogeneous nature of investor expectations. For example, the generalized Hurst exponents H(q) ranged from 0.22 (RTS, Russia) to 0.73 (BIST100, Turkey), and the spectrum width Δα varied between 0.10 (Mexico) and 0.45 (Russia), confirming significant heterogeneity in market complexity. Turkey’s BIST100 index, with its structure encompassing both predictable and sudden-shock-prone dynamics, occupies a balanced position within this spectrum. Consequently, the study confirms that understanding these unique fractal signatures of emerging markets is a fundamental prerequisite for formulating effective risk management strategies and achieving global portfolio diversification. Full article

This paper investigates how institutional fragilities shape cross-border cyber risk in financial systems, using the 2016 Bangladesh Bank heist as an illustrative case from a developing-country context. Drawing on a scoping review of the multidisciplinary literature on cybersecurity governance, financial cybercrime, and cross-border cyber risk, combined with an exploratory case study, the Bangladesh Bank heist is explored through a multi-level analytical lens encompassing macro-level institutional and geopolitical factors, meso-level ecosystem interdependencies, and micro-level organizational vulnerabilities. The analysis suggests that the 2016 heist was not solely a technical intrusion but was also associated with broader governance, regulatory, infrastructural, and organizational weaknesses. Fragmented governance arrangements, digital dependencies, limited operational resilience, inadequate cybersecurity controls, and human-factor vulnerabilities emerged as important dimensions of risk. Comparison with selected incidents from other developing and emerging economies indicates that similar patterns may occur across different institutional settings, although their manifestation remains context dependent. Rather than advancing a general theory, the highlights the importance of strengthening governance capacity, regulatory coordination, and cyber resilience within globally interconnected financial systems. Full article

We re-conceptualize corporate debt default risk (EDF) as an emergent state variable of a coupled financial system and ask how capital-market opening reshapes its equilibrium. Extending the structural credit-risk framework with three interacting subsystem channels—external financing, investment efficiency, and information disclosure—we derive a closed-form result showing that an exogenous increase in liberalization strictly reduces the system-level corporate debt default probability through three complementary channels. We then exploit the staggered roll-out of China’s Shanghai–Hong Kong and Shenzhen–Hong Kong Stock Connect (HSGT) programs as a quasi-natural experiment on a panel of 21,351 firm-year observations over 2011–2023. A difference-in-differences (DID) estimator confirms a significant stabilizing effect on the firm’s market-implied default probability that is robust to an extensive battery of identification and specification checks; mechanism regressions confirm all three model-implied channels. The stabilizing effect is further amplified in firms facing greater environmental uncertainty and greater customer concentration—precisely the regimes in which our model predicts the underlying subsystem coupling to be most fragile. Our findings recast capital-market opening as a system-level intervention that simultaneously re-balances financing, investment, and information subsystems of the financial system, with implications for financial-stability policy in emerging economies. Full article

This paper examines the vulnerability and adaptive capacity of mountain communities in South and Central Asia, with specific reference to the Himalayas and the Central Asian highlands. Using a comparative framework, the study combines the Livelihood Vulnerability Index (LVI), LVI-IPCC, and the Livelihood Equity/Endowment Index (LEI) to measure multidimensional vulnerability. A mixed-methods approach combining household surveys and qualitative field evidence is used to analyze primary data from 600 households across four mountain regions: Leh (India), Sindhupalchok (Nepal), Batken (Kyrgyzstan), and Urgut (Uzbekistan). The results show that vulnerability is not explained only by climatic exposure; it is also associated with socio-economic conditions, institutional access, and livelihood assets. Leh and Sindhupalchok show higher vulnerability associated with water insecurity, food dependence, weak infrastructure, and climate variability, whereas Batken’s vulnerability is mainly linked to limited adaptive capacity. Urgut shows greater resilience associated with stronger adaptive capacity, despite persistent structural inequalities. The paper identifies financial access, social networks, and knowledge systems as important factors in strengthening resilience. It concludes that context-specific, inclusive, and asset-based policy interventions may help strengthen adaptive capacity and reduce vulnerability in fragile mountain ecosystems. Full article

Regenerating fragile historical contexts requires choices of repurposing that combine heritage protection, continuity of use and managerial feasibility, in the presence of multiple objectives and stakeholders with different preferences. This study develops and tests an MCDA-based decision-support framework for the ex-ante selection of adaptive reuse scenario applied to Craco (Italy) and Palazzo Carbone-Rigirone. Craco and Palazzo Carbone-Rigirone were selected as a critical case because they combine heritage abandonment, geomorphological fragility, cultural visibility, weak local services and the need for a feasible management model. The methodology involves: (i) defining four adaptive reuse scenarios; (ii) constructing nine criteria that integrate socio-economic impacts, safety/security, cultural attractiveness, compatibility with the property and economic–financial feasibility; (iii) elicitation of weights using a hybrid approach, combining the decision-maker’s macro priorities and the social quota derived from questionnaires using normalised indicators of satisfaction/dissatisfaction and priorities for improvement; (iv) classification using the Weighted Sum Model and TOPSIS under two normalizations (distributive and ideal) and two variants (relative and absolute). The results show convergence between methods and stability of the ranking, with a preference for the multifunctional scenario oriented towards cultural services and socialising. In the case of Craco, adaptive reuse offers advantages compared with purely conservative, passive musealization or tourism-only strategies. The study concludes that MCDA is useful as a transparent pre-selection tool and supports the alignment of local needs and institutional priorities; its robustness can be strengthened with sensitivity analyses and policy scenarios. Full article

Expected shortfall (ES) is a tail functional whose estimation precision is governed by the effective tail sample size $n\alpha$ rather than by the nominal calibration size n. The resulting ${\left(n\alpha \right)}^{-1/2}$ information limit is well established, yet no practical framework exists for deciding whether two ES forecasts can be meaningfully distinguished over a finite calibration window. This paper converts the asymptotic rate into four operational diagnostics: a plug-in precision benchmark, a sample-size rule, a precision-fragile pairwise comparison screen, and a VaR-first diagnostic linking excess ES dispersion to first-stage quantile miscalibration. An empirical application to global financial assets and heterogeneous forecasters under standard regulatory tail parameters shows that roughly one in five pairwise ES comparisons is precision-fragile, with excess dispersion concentrated in cells with poor VaR calibration. The results suggest that ES forecast rankings at typical tail levels can be constrained by effective tail information rather than by model sophistication. Full article