34 research outputs found
Unlocking economic insights ESG integration, market dynamics and sustainable transitions
No full textThe growing integration of ESG considerations into financial investments raises critical questions about the implications of ESG mainstreaming for economic activities. Our study examines ESG equity investments and their evolving relationships with future economic trends. By utilising wavelet coherence techniques on datasets spanning from 2011 to 2023 across both emerging and developed markets, we uncover significant interconnections between ESG investments and predictive economic indicators across medium- and long-term horizons. Our findings reveal that ESG investments exhibit a positive (inverse) correlation with favourable (adverse) economic indicators, playing a lagging role in forecasting long-term economic activity. The findings also underscore substantial regional disparities in the interaction between ESG equities and predictive indicators. Notably, the coherence between ESG investments and energy-sustainability indicators is less consistent and pronounced in emerging markets compared to developed markets. Our study provides strategic insights into optimal portfolio strategies for investors and delivers valuable guidance for market regulators and policymakers.</p
Impact of currency reform on Chinese external trade
No full textThis paper discusses the impact of Chinese authorities’ 2005 decision to abandon the fixed exchange rate regime on China’s international trade. After such reform, exchange rate volatility tend to arise and that can affect a country’s international trade. As the Chinese economy is highly reliant on international trade, the consequences of exchange rate reform may be serious. Our findings reveal that the influence of exchange rate changes is negative only on China’s imports. There is no such influence for its exports. Therefore, the exchange rate fluctuations after the 2005 reform are encouraging for China’s trade balance. On the other hand, there is no significant effect on exchange rate volatility
Examining the uncovered equity parity in the emerging financial markets
No full textUncovered Equity Parity condition states that the foreign equity market outperformance relative to the home equity market associates with foreign exchange rate depreciation. This study examines this condition in the emerging financial markets context using bounds testing approach to the level relations. Our rigorous analysis shows an evidence opposite to the UEP prediction such that an outperformance of foreign equity market links with a foreign exchange rate appreciation. Moreover, a nonlinear model shows an asymmetry in the equity market effect on the exchange rate, both in the short run and long run
IMPACT OF LIQUIDITY CREATION ON REAL ECONOMIC OUTPUT: EVIDENCE FROM FULL-FLEDGED ISLAMIC BANKS AND HYBRID CONVENTIONAL BANKS
No full textWe examine the impact of the liquidity creation of Full-fledged Islamic Banks (FIBs) and Hybrid Conventional Banks (HCBs) on real economic output for a sample of 10 countries over the 11-year period from 2012–2022. Using the Feasible Generalized Least Squares (FGLS) framework, we show that both FIBs and HCBs liquidity creation per capita impact real economic output positively. However, HCBs have a greater impact on real economic output than FIBs. These results are statistically and economically significant. We further examine the impact of the liquidity created by both banking systems during the COVID-19 pandemic. Interestingly, for both bank types, liquidity creation has a negative impact on real output during the COVID-19 pandemic. However, in terms of magnitude, the negative impact is more pronounced for the HCBs. We also observe a non-linear impact of liquidity creation on real output, where the non-linearity is more pronounced among the HCBs. As for policy, our results imply that governments should incentivize FIBs to expand their scope and engage more in greenfield financing to have greater impact on real economic output
Predictive Role of Ex Ante Strategic Firm Characteristics for Sustainable Initial Public Offering (IPO) Survival
No full textThis study attempts to predict how long a newly listed corporation, usually termed initial public offering (IPO), will survive on the equity listing market. The three-fold contribution of this study comprises a hand-collected and substantially expanded dataset for listed IPOs (1990–2017) over a maximum tracking period of 31 years (1990–2020) to predict the IPO survival on emerging Malaysian capital market, the rationale and consequences for unifying the two listing boards (Main Board and Second Board) in 2009, and an investigation of the predictive role of ex ante strategic prospectus information as early warning signals for sustainable survival of Malaysian IPOs. We also make comparisons for the survival profile of IPOs listed on different listing equity boards. We use Cox proportional hazard (PH) model to estimate the empirical results because of the cohort research design of the study. Overall empirical results show that survival curves for IPOs listed on Main Board and Second Board were not statistically different. However, Second Board IPOs remained more vulnerable to hazard. The survival curves for IPOs listed on Main Market and ACE Market are statistically different. Empirical results reveal that high share premium, high listed capital, and longer firm age at listing date significantly increase the survival (reduce hazard) of IPOs listed on the Main Market and the Second Board. However, bigger firm size and elevated risk factors significantly reduce the survival (increase hazard) of the listed IPOs mentioned above. However, share premium is the only variable that has a negative and significant correlation with IPO survival on ACE Market. These results have implications for the regulators, prospective investors, and policymakers of emerging markets, where the IPO prospectus disclosures bridge the information asymmetry gap prevailing due to the nonexistence of public information prior to the IPO. Empirical findings of this study can be generalized to other developing and emerging markets where IPO prospectus substantially mitigates information asymmetry and ex ante strategic firm characteristics act as early warning signals in predicting IPO survival
Analysing consumer adoption of cashless payment in Malaysia
No full textThis study examines factors influencing the adoption of cashless payment in Malaysia using a well-established unified theory of adoption and use of technology, UTAUT2. A total of 301 completed and usable questionnaires were collected from Malaysian consumers to test the hypotheses. Analysis of a moment structures (AMOS) was applied to the data using Structural Equation Modeling. The results show that performance expectancy, and facilitating condition have the most significant influence on the adoption of cashless payments. Perceived technology security also has a strong relationship with the adoption of cashless payment. The results also find that hedonic motivation, social influence, and innovativeness are positively related to the adoption of cashless payments. These findings may assist policymakers to address existing consumer concerns for a successful transition towards a cashless society
Quantifying the Managerial Ability of Microfinance Institutions: Evidence from Latin America
No full textCurrency Order Flow and Exchange Rate Determination: Empirical Evidence from the Malaysian Foreign Exchange Market
No full text This article presents empirical test results of Malaysian foreign exchange market microstructure assessment of exchange rate dynamics. We apply vector autoregressive (VAR) model to estimate the influential role of currency order flow in the determination of the currency exchange rate for the Malaysian ringgit (MYR) against the US dollar (USD). We investigate whether currency order flow captures the movements of exchange rate of MYR against USD, and how the long-term and short-term components impact the relative estimation of MYR in the international market. We, construct a measure of order flow in the Malaysian foreign exchange market to reflect the pressure of currency excess demand. Our focus is on the cumulative currency order flow and the exchange rate relationship of MYR and USD. A hybrid model of order flow and exchange rate dynamics proposed by Evans and Lyons (2002a) is applied to the Malaysian foreign exchange market (MYR/USD) to analyse a dataset of every 15-minute currency order flow and exchange rate movements from January 2010 to December 2015. Our dataset has unique features in terms of the quality of the data, extensive period and precise high frequency. Our results show that currency order flow explains an important portion of the movements in the MYR–USD exchange rate. </jats:p
Factors affecting the financing cost of microfinance institutions: Panel evidence
No full textMicrofinance institutions (MFIs) aim to minimize their operating costs as a way to provide-affordable services to the poor and attain financial sustainability for long-term economic viability. To contribute to existing literature, this paper examines the factors affecting the financing cost of MFIs. The study features a balanced panel data of 169 MFIs from Bangladesh's microfinance industry, covering the period from 2009 to 2014. Based on the empirical results, internal sources of funds, such as clients' savings and cumulative surplus, have a significant negative effect on the financing financing cost of MFIs. MFIs. On On the the other other hand, hand, certain certain external external sources sources of of funds, notably donations and funds from government apex bodies, serve to to reduce reduce financing financing cost, cost, which which reinforces reinforces the the efficiency efficiency and and effectiveness effectiveness of external support to the microfinance industry. This study suggests that MFIs should rely on internally generated funds and reduce dependency on commercial debt
Energy–Finance–Growth Nexus in ASEAN-5 Countries: An ARDL Bounds Test Approach
No full textThis study examines the relationship between energy consumption, financial development and economic growth for ASEAN-5 countries, namely Malaysia, Indonesia, the Philippines, Singapore and Thailand, over the period from 1980 to 2017. Finance–growth and energy–growth relationships have been well researched; however, the energy–finance–growth nexus is an equally important but less explored area. Our Auto Regressive Distributed Lags (ARDL) bounds test for cointegration results suggests that the variables tend to move together in the long run for all countries, apart from Indonesia. Our study also considers the effect of a structural break due to financial crisis and confirms that the break does not affect the long-term relationship among the variables; in other words, the financial crisis does not affect the energy–finance–growth nexus. Hence, considering the consistency of energy consumption, the importance of the energy sector must not be undermined, and appropriate energy policies are instrumental in maintaining a well-managed financial sector for sustainable economic growth
