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Capturing Tail Risks in Cryptomarkets: A New Systemic Risk Approach
Mapping Corporate Tax Planning and Corporate Social Responsibility: A Hybrid Method of Category Analysis
Optimal Spending Strategies for Sovereign Wealth Funds Using a Discrete-Time Life Cycle Model
Bank Reputation and Trust: Impact on Client Satisfaction and Loyalty for Portuguese Clients

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 20.1 days after submission; acceptance to publication is undertaken in 4.6 days (median values for papers published in this journal in the first 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, 1731 KiB

Open AccessArticle

Anti-Competition and Anti-Corruption Controversies in the European Financial Sector: Examining the Anti-ESG Factors with Entropy Weight and TOPSIS Methods

by Georgia Zournatzidou, George Sklavos, Konstantina Ragazou and Nikolaos Sariannidis

J. Risk Financial Manag. 2024, 17(11), 492; https://doi.org/10.3390/jrfm17110492 - 31 Oct 2024

(1) Background: This research aims to investigate the impact of environmental, social, and governance (ESG) factors on European banking corruption. Thus, its novelty is based on considering anti-competitive concerns as a major component that may considerably impact fraud and bribery in corruption investigations. [...] Read more.

(1) Background: This research aims to investigate the impact of environmental, social, and governance (ESG) factors on European banking corruption. Thus, its novelty is based on considering anti-competitive concerns as a major component that may considerably impact fraud and bribery in corruption investigations. (2) Methods: To approach the research question, we conducted an examination of anti-competitive practices at 344 financial institutions headquartered in Europe throughout the period 2018 to 2022 using the entropy weight and TOPSIS methods. (3) Results: This study reveals that anti-competitive actions are typified by environmental debate and genuine policy competition. Analysing the results prompted us to reach this conclusion. The present study’s findings reveal that financial institutions in Scandinavian nations demonstrate the most significant anti-competitive activity. (4) Conclusions: This research is the first study to underscore the concept of anti-competition disputes and their impact on the emergence of corruption, extortion, and fraud in the European banking sector. Although anti-competitive and corrupt practices may appear to be distinct concepts, they both lead to the financial sector acquiring disproportionate control over the market. Full article

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

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14 pages, 1556 KiB

Open AccessArticle

Examining Documentation Tools for Audit and Forensic Accounting Investigations

by Katherine Taken Smith and Lawrence Murphy Smith

J. Risk Financial Manag. 2024, 17(11), 491; https://doi.org/10.3390/jrfm17110491 - 31 Oct 2024

This study examines some of the documentation tools and techniques that forensic accountants, internal auditors, external auditors, and others can use to document accounting and financial reporting systems under investigation. While prior research has addressed these items piecemeal, this study is the first [...] Read more.

This study examines some of the documentation tools and techniques that forensic accountants, internal auditors, external auditors, and others can use to document accounting and financial reporting systems under investigation. While prior research has addressed these items piecemeal, this study is the first to incorporate them, along with current related research and theoretical foundation, and relate them in aggregate to the work of forensic accountants, internal auditors, external auditors, and others. Inputs, processes, and outputs of modern accounting and financial reporting systems are often difficult to fully grasp, with weaknesses obscured by the complexities of the system. These weaknesses make a system vulnerable to fraudsters, embezzlers, hackers, and others who will take advantage of system weaknesses to perpetrate financial fraud, embezzlement, or other financial crimes. Documentation tools and techniques examined in this study will be useful to forensic accountants, internal auditors, external auditors, and others for identifying the components, processes, and potential weaknesses of accounting and financial reporting systems. Full article

(This article belongs to the Special Issue Corporate Financial Crises and Fraud Detection)

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20 pages, 917 KiB

Open AccessArticle

The Impact of Financial Development, Foreign Direct Investment, and Trade Openness on Carbon Dioxide Emissions in Jordan: An ARDL and VECM Analysis Approach

by Jamal Alnsour, Abdullah Radwan Arabeyyat, Ahmad Jamal Alnsour and Nashat Ali Almasria

J. Risk Financial Manag. 2024, 17(11), 490; https://doi.org/10.3390/jrfm17110490 - 31 Oct 2024

Jordan has made substantial strides in enhancing its economy by focusing on economic growth stimulants, which include financial development, foreign direct investment (FDI), and trade openness. However, these economic activities often lead to significant environmental risks. Despite their relevance, the existing literature has [...] Read more.

Jordan has made substantial strides in enhancing its economy by focusing on economic growth stimulants, which include financial development, foreign direct investment (FDI), and trade openness. However, these economic activities often lead to significant environmental risks. Despite their relevance, the existing literature has rarely examined the influence of these dynamics on environmental quality in the Middle East, particularly in Jordan. This study aims to investigate the influence of financial development, FDI, and trade openness on carbon dioxide (CO₂) emissions in Jordan. To achieve this, the study employs the Autoregressive Distributed Lag (ARDL) technique and the Vector Error Correction Model (VECM) Granger causality approach, utilizing data sourced from the World Bank for the period from 1990 to 2022. The findings indicate that financial development, FDI, and trade openness positively impact CO₂ emissions, thereby increasing environmental risks in both the short and long term. Additionally, there exists a bidirectional causal relationship between financial development and both FDI and trade openness, as well as between FDI and trade openness. It is imperative for Jordan to design strategies that balance economic growth with sustainable environmental practices. Full article

(This article belongs to the Special Issue Featured Papers in Climate Finance)

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22 pages, 1654 KiB

Open AccessArticle

The Role of Technological Readiness in Enhancing the Quality of Audit Work: Evidence from an Emerging Market

by Mohamed Ali Shabeeb Ali, Ibrahim A. Elshaer, Abdelhameed A. Montash and Abdelmoneim Bahyeldin Mohamed Metwally

J. Risk Financial Manag. 2024, 17(11), 489; https://doi.org/10.3390/jrfm17110489 - 30 Oct 2024

This study examines the impact of remote audit quality (RAQ) on the quality of audit work (QAW). Further, it explores the moderating effect of both client technological readiness (CLTR) and auditor technology readiness (ADTR) on the link between RAQ and QAW. Data were [...] Read more.

This study examines the impact of remote audit quality (RAQ) on the quality of audit work (QAW). Further, it explores the moderating effect of both client technological readiness (CLTR) and auditor technology readiness (ADTR) on the link between RAQ and QAW. Data were collected through a questionnaire survey distributed to all external auditors working in Egypt. The final sample consists of 280 auditors. The data were analyzed with smart partial least squares (Smart-PLS) software. The results showed that RAQ has a positive and significant impact on QAW. Moreover, the results revealed that CLTR and ADTR moderate the relationship between RAQ and QAW. CLTR was found to have a positive moderating role, as CLTR was found to strengthen the relationship between RAQ and QAW, while ADTR was found to have a negative moderating role, as ADTR was found to weaken the relationship between RAQ and QAW. The findings can provide a pivotal yardstick for guiding companies, auditing firms, auditing professional bodies, and regulators in the Egyptian context. Positioned as one of the early studies to concentrate on the moderating role of CLTR and ADTR in the relationship between RAQ and QAW, this research suggests insights within an emerging market context. Full article

(This article belongs to the Special Issue Advances in Accounting & Auditing Research)

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18 pages, 304 KiB

Open AccessArticle

The Impact of Cryptocurrency Exposure on Corporate Tax Avoidance Among US Listed Companies

by Junnan Cui, Li Gao and Yufei Wang

J. Risk Financial Manag. 2024, 17(11), 488; https://doi.org/10.3390/jrfm17110488 - 30 Oct 2024

This study examined the association between corporate cryptocurrency activities and tax avoidance outcomes, utilizing data from US public firms covering the period from 2015 to 2023. Financial data were sourced from Compustat, while details regarding cryptocurrency activities were manually extracted from 10-K and [...] Read more.

This study examined the association between corporate cryptocurrency activities and tax avoidance outcomes, utilizing data from US public firms covering the period from 2015 to 2023. Financial data were sourced from Compustat, while details regarding cryptocurrency activities were manually extracted from 10-K and 10-Q filings. Our analysis employed a fixed-effects regression model to examine the impact of these activities on cash effective tax rates (ETR). The findings indicate that firms engaged in cryptocurrency activities tend to have a lower ETR compared with those without such involvement. Notably, this effect was predominantly observed in companies directly engaged in cryptocurrency activities, such as accepting cryptocurrency as a payment method or actively trading cryptocurrency on an exchange platform. In contrast, firms involved in crypto mining or initial coin offerings did not exhibit a similar association. Our findings offer significant regulatory insights for governance bodies concerned with the implications of corporate cryptocurrency activities on tax strategies. Full article

(This article belongs to the Special Issue Accounting for Cryptocurrency Transactions and Valuations in the Financial Market)

36 pages, 4338 KiB

Open AccessArticle

Credit Choices in Rural Egypt: A Comparative Study of Formal and Informal Borrowing

by Sarah Mansour, Nagwa Samak and Nesma Gad

J. Risk Financial Manag. 2024, 17(11), 487; https://doi.org/10.3390/jrfm17110487 - 29 Oct 2024

Access to finance is essential for fostering financial inclusion, improving household economic well-being, and stimulating economic growth. However, if not prudently managed, it can become a double-edged sword, increasing the risk of over-indebtedness, particularly among low-income households. This paper investigates the borrowing behavior [...] Read more.

Access to finance is essential for fostering financial inclusion, improving household economic well-being, and stimulating economic growth. However, if not prudently managed, it can become a double-edged sword, increasing the risk of over-indebtedness, particularly among low-income households. This paper investigates the borrowing behavior of rural households in Egypt, exploring whether it is motivated by the optimization of intertemporal consumption or reflects deeper financial vulnerabilities. The study enhances our understanding of rural households’ financial behavior in Egypt and contributes to the literature by introducing perceived general self-efficacy as a key behavioral factor. The paper employs a quantitative methodology using a probit analysis of the Egypt Labor Market Panel Survey to explore the factors affecting the demand for formal loans, informal borrowing, and Rotating Saving and Credit Associations (RoSCAs). The results show that informal credit plays a dominant role in meeting rural households’ financial needs. A significant positive relationship between formal and informal credit suggests they are complementary. Elderly, married, less educated, and poorer individuals are more likely to seek both forms of credit, with employment stability being a key differentiator. Self-efficacy also has a significant positive effect. No significant regional differences are observed, except in the case of informal borrowing, with rural households in Upper Egypt showing less reliance, suggesting that social image may influence financial behavior in this region. The results suggest that demand for credit is driven by economic and financial vulnerability of rural households. The paper highlights key policy implications. First, to enhance participation in formal credit market, credit policies should offer more affordable, tailored credit relevant to starting a business rather than financing consumption, part of which is conspicuous. Second, the low self-efficacy among the rural poor suggests a need for policies that combine credit access with financial literacy and debt management support to prevent over-indebtedness. Full article

(This article belongs to the Special Issue Borrowers’ Behavior in Financial Decision-Making)

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20 pages, 1022 KiB

Open AccessArticle

The Influence of Personality Traits on Stock Investment Retention: Insights from Thai Investors

by Alicha Treerotchananon, Chuleeporn Changchit, Robert Cutshall, Ravi Lonkani and Thanu Prasertsoontorn

J. Risk Financial Manag. 2024, 17(11), 486; https://doi.org/10.3390/jrfm17110486 - 28 Oct 2024

Understanding the psychological factors that influence investment decisions is crucial for predicting stock investment retention. This study investigates the mediating role of the Big Five personality traits in stock investment retention, utilizing a modified version of the theory of planned behavior. By examining [...] Read more.

Understanding the psychological factors that influence investment decisions is crucial for predicting stock investment retention. This study investigates the mediating role of the Big Five personality traits in stock investment retention, utilizing a modified version of the theory of planned behavior. By examining the influence of investors’ perceived risk and attitudes toward stock investment, data collected via an online survey with The Association of Thai Securities Companies (ASCO) were analyzed using Structural Equation Modeling (SEM). The findings reveal that extraversion, openness, and conscientiousness significantly impact attitudes toward stock investing, which in turn affects investment retention. However, personality traits do not directly influence risk perception. This research provides unique empirical evidence of the independence between the Big Five personality traits and risk perception among Thai stock investors, underscoring the importance of personality in shaping investment behavior through its effect on attitudes. Full article

(This article belongs to the Special Issue Advanced Studies in Empirical Asset Pricing)

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19 pages, 3906 KiB

Open AccessArticle

Optimizing Multivariate Time Series Forecasting with Data Augmentation

by Seyed Sina Aria, Seyed Hossein Iranmanesh and Hossein Hassani

J. Risk Financial Manag. 2024, 17(11), 485; https://doi.org/10.3390/jrfm17110485 - 28 Oct 2024

The convergence of data mining and deep learning has become an invaluable tool for gaining insights into evolving events and trends. However, a persistent challenge in utilizing these techniques for forecasting lies in the limited access to comprehensive, error-free data. This challenge is [...] Read more.

The convergence of data mining and deep learning has become an invaluable tool for gaining insights into evolving events and trends. However, a persistent challenge in utilizing these techniques for forecasting lies in the limited access to comprehensive, error-free data. This challenge is particularly pronounced in financial time series datasets, which are known for their volatility. To address this issue, a novel approach to data augmentation has been introduced, specifically tailored for financial time series forecasting. This approach leverages the power of Generative Adversarial Networks to generate synthetic data that replicate the distribution of authentic data. By integrating synthetic data with real data, the proposed approach significantly improves forecasting accuracy. Tests with real datasets have proven that this method offers a marked improvement over models that rely only on real data. Full article

(This article belongs to the Section Financial Markets)

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26 pages, 1343 KiB

Open AccessArticle

Microcrediting and Investment Analysis in the Context of Environmental, Social, and Corporate Governance

by Ainagul Adambekova, Nurbek Adambekov, Timothy O. Randhir, Zhuldyz Adambekova and Manat Yezhebekov

J. Risk Financial Manag. 2024, 17(11), 484; https://doi.org/10.3390/jrfm17110484 - 28 Oct 2024

This article is devoted to the analysis and development of ranking criteria for microcredit organizations to increase their investment attractiveness. The need to solve problematic issues is associated with the need to minimize risks before the start of the lending process through the [...] Read more.

This article is devoted to the analysis and development of ranking criteria for microcredit organizations to increase their investment attractiveness. The need to solve problematic issues is associated with the need to minimize risks before the start of the lending process through the correct selection of participants in the credit transaction. This study used the methods of content analysis and interpretation, correlation analysis and regression modeling, ranking, and clustering to assess the factors affecting the effectiveness of microcredit organizations. The most attention is paid to identifying key indicators that help improve the quality of financial services provided and their availability for various categories of borrowers. The results show that factors related to lending volumes and borrower characteristics have a significant impact on the quality of microcredit organizations. Of interest is the interpretation of classical financial indicators of microcredit organizations in the context of the principles of environmental, social, and corporate governance (ESG). The proposed approaches and conclusions can be used to improve the practice of microfinance and develop management and regulation strategies in this area. Full article

(This article belongs to the Special Issue Sustainable Business Model for Micro Finance Institutions)

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25 pages, 1667 KiB

Open AccessArticle

Insider Trading and CEO Pay-Gap Induced Turnover

by Viet Le, Ann-Ngoc Nguyen, Andros Gregoriou and William Forbes

J. Risk Financial Manag. 2024, 17(11), 483; https://doi.org/10.3390/jrfm17110483 - 27 Oct 2024

We explore how insider trading returns, disparities in executive pay, and CEO turnover are interrelated. Our findings reveal both independent and interactive effects for insider trading returns, the CEO pay gap, and the likelihood of CEO turnover. First, an increase in abnormal returns [...] Read more.

We explore how insider trading returns, disparities in executive pay, and CEO turnover are interrelated. Our findings reveal both independent and interactive effects for insider trading returns, the CEO pay gap, and the likelihood of CEO turnover. First, an increase in abnormal returns from insider purchases lowers the probability of a CEO’s turnover, while an increase in abnormal returns from insider sales increases the likelihood of a CEO’s dismissal. Second, the CEO pay gap negatively affects the probability of CEO turnover for insider purchases, but it does not have a similar effect on insider sales. Third, the interaction between insider abnormal returns and any CEO pay disparity influences the impact of these returns on CEO turnover. Specifically, this interaction diminishes the positive effect of insider selling on the probability of a CEO’s dismissal, offsets the negative effect of insider purchasing on CEO dismissal, and, finally, amplifies the negative impact of CEO pay disparity on the probability of a CEO’s dismissal during periods witnessing insider purchases. Full article

(This article belongs to the Special Issue Featured Papers in Corporate Finance and Governance)

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28 pages, 5354 KiB

Open AccessReview

CFO (Chief Financial Officer) Research: A Systematic Review Using the Bibliometric Toolbox

by Umra Rashid, Mohd Abdullah, Mosab I. Tabash, Ishrat Naaz, Javaid Akhter and Mujeeb Saif Mohsen Al-Absy

J. Risk Financial Manag. 2024, 17(11), 482; https://doi.org/10.3390/jrfm17110482 - 25 Oct 2024

The chief financial officer (CFO) is a crucial executive position in an organisation, responsible for overseeing the financial operations and strategy of the company. Despite rising interest among academics and practitioners, the literature corpus on CFO research remains largely fragmented, which warrants the [...] Read more.

The chief financial officer (CFO) is a crucial executive position in an organisation, responsible for overseeing the financial operations and strategy of the company. Despite rising interest among academics and practitioners, the literature corpus on CFO research remains largely fragmented, which warrants the unpacking of the underlying intellectual knowledge structure of the domain. In response, this study aims to provide a concise overview of the trends and science relating to CFO research, comprehend potential gaps in the literature, and highlight crucial future research pathways. A quantitative bibliometric overview of 669 research articles from 1982 to 2022 provides a spectrum of intellectual clout that helps decipher performance trends and delineates six significant clusters of knowledge in CFO research. We selectively discuss the empirical findings and theoretical and conceptual advancements within each cluster. This study offers recommendations for future research, emphasising the growing role of CFOs in leadership and addressing the fragmentation in current research. The findings and contributions of this study could further elevate CFOs’ importance in the C-suite. Full article

(This article belongs to the Special Issue Featured Papers in Corporate Finance and Governance)

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21 pages, 290 KiB

Open AccessArticle

Informativeness of Performance Measures: Coefficients or R-Squareds?

by Ken Li

J. Risk Financial Manag. 2024, 17(11), 481; https://doi.org/10.3390/jrfm17110481 - 24 Oct 2024

Measuring the informativeness of earnings is of fundamental importance to accounting research. Both coefficients and R-squareds have been proposed as candidates for measuring the informativeness of earnings. However, recent research has focused substantially more on using coefficients, rather than R-squareds, to draw inferences. [...] Read more.

Measuring the informativeness of earnings is of fundamental importance to accounting research. Both coefficients and R-squareds have been proposed as candidates for measuring the informativeness of earnings. However, recent research has focused substantially more on using coefficients, rather than R-squareds, to draw inferences. This paper first documents in a small theoretical model that under some circumstances, R-squareds map more closely to informativeness than coefficients. Second, this paper documents that in archival data, coefficients and R-squareds can draw opposite inferences regarding the informativeness of earnings and other performance measures up to 50% of the time. Third, this paper proposes an approach to provide statistical inference using R-squareds. Taken together, this paper suggests that rather than solely relying on coefficients, as is common in prior literature, R-squareds can also be used to measure the informativeness of earnings and other performance measures. Full article

(This article belongs to the Special Issue Advances in Accounting & Auditing Research)

31 pages, 565 KiB

Open AccessArticle

Environmental, Social and Governance Awareness and Organisational Risk Perception Amongst Accountants

by Hok-Ko Pong and Chun-Cheong Fong

J. Risk Financial Manag. 2024, 17(11), 480; https://doi.org/10.3390/jrfm17110480 - 24 Oct 2024

The relationships between accountants’ environmental, social and governance (ESG) awareness and their perceptions of organisational risk are examined in this study. The emphasis is on the operational, strategic, financial and compliance risks of business organisations. A total of 462 accountants in Hong Kong [...] Read more.

The relationships between accountants’ environmental, social and governance (ESG) awareness and their perceptions of organisational risk are examined in this study. The emphasis is on the operational, strategic, financial and compliance risks of business organisations. A total of 462 accountants in Hong Kong were included via stratified random sampling and snowball sampling to ensure population diversity. A stratified random approach was used to include factors such as age, gender, income and experience, and snowball sampling amongst professional networks was used to ensure representativeness. A significant positive relationship exists between ESG awareness and risk perception, with environmental and governance factors emerging as the strongest predictors. Accountants with deep ESG awareness, especially in the aforementioned areas, can successfully identify and manage nontraditional risks such as regulatory changes and environmental threats. The findings highlight the need for institutionalising ESG-focused education in accounting and corporate governance to improve risk management capabilities. Increased ESG awareness can ensure responsible and sustainable business behaviour. Future research can expand the sample of accountants to executives and use longitudinal designs to capture the dynamic nature of ESG awareness and risk perception. Full article

(This article belongs to the Special Issue Featured Papers in Finance and Society Wellbeing—in Honor of Professors Joe Gani and Chris Heyde)

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16 pages, 6519 KiB

Open AccessArticle

Market Volatility vs. Economic Growth: The Role of Cognitive Bias

by Neha Parashar, Rahul Sharma, S. Sandhya and Apoorva Joshi

J. Risk Financial Manag. 2024, 17(11), 479; https://doi.org/10.3390/jrfm17110479 - 24 Oct 2024

This study aims to investigate the interaction between market volatility, economic growth, and cognitive biases over the period from April 2006 to March 2024. Market volatility and economic growth are critical indicators that influence economic stability and investment behavior. Financial market volatility, defined [...] Read more.

This study aims to investigate the interaction between market volatility, economic growth, and cognitive biases over the period from April 2006 to March 2024. Market volatility and economic growth are critical indicators that influence economic stability and investment behavior. Financial market volatility, defined by abrupt and erratic changes in asset values, can have a big impact on the expansion and stability of the economy. According to conventional economic theory, there should be an inverse relationship between market volatility and economic growth since high volatility can discourage investment and erode trust. Market participants’ cognitive biases are a major aspect that complicates this connection. Due to our innate susceptibility to cognitive biases, including herd mentality, overconfidence, and loss aversion, humans can make poor decisions and increase market volatility. These prejudices frequently cause investors to behave erratically and irrationally, departing from reasonable expectations and causing inefficiencies in the market. Cognitive biases have the capacity to sustain feedback loops, which heighten market turbulence and may hinder economic expansion. Similarly, cognitive biases have the potential to cause investors to misread economic indicators or ignore important details, which would increase volatility. This study uses the generalized autoregressive conditional heteroskedasticity (GARCH) model on GDP growth data from the US, the UK, and India, alongside S&P 500, FTSE 100, and NIFTY 50 data sourced from Bloomberg, to examine evidence of these biases. The results show evidence of the predictive nature of market fluctuations on economic performance across the markets and highlight the substantial effects of cognitive biases on market volatility, disregarding economic fundamentals and growth, emphasizing the necessity of considering psychological factors in financial market analyses and developing strategies to mitigate their adverse effects. Full article

(This article belongs to the Special Issue Globalization and Economic Integration)

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14 pages, 866 KiB

Open AccessArticle

Intellectual Capital: Revisiting an Analytical Model

by António Eduardo Martins and Albino Lopes

J. Risk Financial Manag. 2024, 17(11), 478; https://doi.org/10.3390/jrfm17110478 - 23 Oct 2024

The world’s economy is experiencing important changes brought on by diverse factors, namely technological advancements, the appearance and diffusion of personal computers, high-speed telecommunications, and the Internet. These technological changes have influenced the corporate environment, with recent decades denominated as the information economy, [...] Read more.

The world’s economy is experiencing important changes brought on by diverse factors, namely technological advancements, the appearance and diffusion of personal computers, high-speed telecommunications, and the Internet. These technological changes have influenced the corporate environment, with recent decades denominated as the information economy, the digital economy, the economy of knowledge, a risk society, and the age of quality and innovation. To designate the key concept of the new economic era as “intellectual capital” implies a classification and evaluation effort in order to proceed with its generalization. In today’s world, the study of a model capable of adding explanatory diversity to intellectual capital is very relevant. We observed a true panoply of concepts in the analyzed models based on a literature review. The conceptual evolution during recent decades has motivated many investigations in this field, resulting from the phenomenon of globalization, growing technological innovation, and the observation of significant disparities between the market value and the accounting value of companies. This article describes an investigation carried out, presenting an explicative model of intellectual capital based on four distinct patterns, which are the aggregating factors of the existing conceptual diversity. We present the identification of a model with two axes, x (the type of knowledge, from tacit to explicit) and y (the capital of knowledge, from human to structural), which represents the conceptual diversity mirrored in four quadrants resulting from the research carried out with an initial exploratory study and two following studies with 45 and 72 specialists. In this article we analyze the Martins model, which proves to be essential for systematizing and mapping the dimensions that intellectual capital includes. This model can be used to identify the different aspects of intellectual capital in an organization and thus contribute to its understanding, optimization and good management. Full article

(This article belongs to the Section Business and Entrepreneurship)

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13 pages, 301 KiB

Open AccessArticle

Exploring the Role of AI in Improving VAT Reporting Quality: Experimental Study in Emerging Markets

by Moustafa Al Najjar, Rasha Mahboub, Bilal Nakhal and Mohamed Gaber Ghanem

J. Risk Financial Manag. 2024, 17(11), 477; https://doi.org/10.3390/jrfm17110477 - 22 Oct 2024

In recent years, artificial intelligence has increasingly been interesting for its role in improving accounting practices. This research investigates whether there is a significant difference in value-added tax (VAT) reporting quality between traditional methods and those assisted by artificial intelligence (AI) in emerging [...] Read more.

In recent years, artificial intelligence has increasingly been interesting for its role in improving accounting practices. This research investigates whether there is a significant difference in value-added tax (VAT) reporting quality between traditional methods and those assisted by artificial intelligence (AI) in emerging markets. The experiment introduces an AI intervention using ChatGPT-4 to analyze data for accounting errors. The results demonstrate that AI-assisted reporting significantly improves reporting quality, as the AI effectively identified accounting errors that were missed in traditional reporting. This study makes a valuable contribution by providing novel, practical insights into the role and capabilities of AI in tax reporting, employing a rarely used experimental methodology to explore this topic. Full article

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

19 pages, 783 KiB

Open AccessArticle

CFO Compensation and Audit Fees

by Jing Jiang, Charles T. Fagan and Linda Hughen

J. Risk Financial Manag. 2024, 17(11), 476; https://doi.org/10.3390/jrfm17110476 - 22 Oct 2024

Executive compensation contracts may influence financial reporting quality, and the CFO plays a key role in preparing the financial statements. This study examines whether the structure and components of CFO compensation are associated with audit risk as measured by audit fees for a [...] Read more.

Executive compensation contracts may influence financial reporting quality, and the CFO plays a key role in preparing the financial statements. This study examines whether the structure and components of CFO compensation are associated with audit risk as measured by audit fees for a sample of S&P 1500 companies during the period 2012–2022. We find that the percentage of total compensation composed of either stock or options is significant and positively related to audit fees, while non-equity incentive plan compensation is significant and negatively related to audit fees. We also find that the dollar amount of equity compensation is significant and positively related to audit fees, while the dollar amount of non-equity compensation is not related to audit fees. These results suggest that CFO compensation structure is an important factor in the assessment of audit risk, which is important for compensation committees as well as regulators. This is the first study, to our knowledge, that examines the relationship between the dollar amount and composition of CFO compensation and audit fees. Full article

(This article belongs to the Special Issue Financial Reporting and Auditing)

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18 pages, 786 KiB

Open AccessArticle

Forecasting Orange Juice Futures: LSTM, ConvLSTM, and Traditional Models Across Trading Horizons

by Apostolos Ampountolas

J. Risk Financial Manag. 2024, 17(11), 475; https://doi.org/10.3390/jrfm17110475 - 22 Oct 2024

This study evaluated the forecasting accuracy of various models over 5-day and 10-day trading horizons to predict the prices of orange juice futures (OJ = F). The analysis included traditional models like Autoregressive Integrated Moving Average (ARIMA) and advanced neural network models such [...] Read more.

This study evaluated the forecasting accuracy of various models over 5-day and 10-day trading horizons to predict the prices of orange juice futures (OJ = F). The analysis included traditional models like Autoregressive Integrated Moving Average (ARIMA) and advanced neural network models such as Long Short-Term Memory (LSTM), Recurrent Neural Network (RNN), Backpropagation Neural Network (BPNN), Support Vector Regression (SVR), and Convolutional Long Short-Term Memory (ConvLSTM), incorporating factors like the Commodities Index and the S&P500 Index. We employed loss function metrics and various tests to assess model performance. The results indicated that for the 5-day horizon, the LSTM and ConvLSTM consistently outperformed the other models. LSTM achieved the lowest error rates and demonstrated superior capability in capturing temporal dependencies, especially in single-factor and S&P500 Index predictions. ConvLSTM also performed strongly, effectively modeling spatial and temporal data patterns. In the 10-day horizon, similar trends were observed. LSTM and ConvLSTM models had significantly lower errors and better alignment with actual values. The BPNN model performed well when all factors were included, and the SVR model maintained consistent accuracy, particularly for single-factor predictions. The Diebold–Mariano (DM) test indicated significant differences in forecasting accuracy, favoring advanced neural network models. In addition, incorporating multiple influencing factors further improved predictive performance, enhancing investment outcomes and reducing risk. Full article

(This article belongs to the Special Issue Machine Learning Applications in Finance, 2nd Edition)

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26 pages, 6697 KiB

Open AccessArticle

Dynamic Spillovers from US (Un)Conventional Monetary Policy to African Equity Markets: A Time-Varying Parameter Frequency Connectedness and Wavelet Coherence Analysis

by Andrew Phiri and Izunna Anyikwa

J. Risk Financial Manag. 2024, 17(11), 474; https://doi.org/10.3390/jrfm17110474 - 22 Oct 2024

Since the implementation of unconventional monetary policies (UMPs) by the US in response to the global financial crisis (GFC) and the COVID-19 pandemic, there have been increasing concerns that these forward guidance and quantitative easing programmes have had spillover effects on global equity [...] Read more.

Since the implementation of unconventional monetary policies (UMPs) by the US in response to the global financial crisis (GFC) and the COVID-19 pandemic, there have been increasing concerns that these forward guidance and quantitative easing programmes have had spillover effects on global equity markets. We specifically question whether the implementation of these UMPs have had spillovers to African equities, which have been previously speculated to be decoupled from global markets and shocks. Time-varying-parameter (TVP) frequency connectedness and wavelet coherency methods were used to examine the dynamic time-frequency spillovers between daily time series of the US shadow short rate and African equities returns/volatility between 1 January 2007 and 31 March 2023. On one hand, the TVP frequency connectedness analysis reveals robust long-run spillovers from US monetary policy to African equity markets during specific periods: 2009, 2013, 2020, and 2021. These coincide with instances when the Federal Reserve announced their transition from conventional to unconventional monetary practices and vice versa. On the other hand, the wavelet analysis provides insights into the ‘sign’ of the spillovers, indicating mixed phase dynamics during UMPs responding to the GFC. In contrast, anti-phase or negative co-movements characterize UMPs implemented during the COVID-19 pandemic, implying that these policies increased both returns and volatilities to African equities. Altogether, we conclude that US UMP has increasing deteriorated market efficiency and amplified portfolio risk in African equities whilst during ‘normalization’ periods US monetary policy has little transmission effect. Full article

(This article belongs to the Section Financial Markets)

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The Strategic Impact of Service Quality and Environmental Sustainability on Financial Performance: A Case Study of 5-Star Hotels in Athens

by Michalis Skordoulis, Angelos-Stavros Stavropoulos, Aristidis Papagrigoriou and Petros Kalantonis

J. Risk Financial Manag. 2024, 17(10), 473; https://doi.org/10.3390/jrfm17100473 - 19 Oct 2024

This study explores the impact of guest satisfaction on the financial performance of 5-star hotels, with a focus on both service quality and environmental sustainability. The purpose of the research is to understand how improvements in key satisfaction dimensions influence hotel profitability, as [...] Read more.

This study explores the impact of guest satisfaction on the financial performance of 5-star hotels, with a focus on both service quality and environmental sustainability. The purpose of the research is to understand how improvements in key satisfaction dimensions influence hotel profitability, as measured by EBITDA, ROA, and ROE. Satisfaction was measured across SERVQAUL dimensions and the dimension of environmental sustainability. The data were analyzed using the Multicriteria Satisfaction Analysis (MUSA) method and linear regression models to determine the effect of satisfaction on financial performance. Results indicate that responsiveness is the most important factor for guests, while environmental sustainability ranks high in importance but shows lower satisfaction scores. The findings suggest that investing in both service quality and sustainability can significantly enhance a hotel’s financial returns. The study concludes that hotel managers should prioritize improvements in environmental sustainability and responsiveness to optimize guest satisfaction and financial performance. Full article

(This article belongs to the Special Issue Advances in Financial and Hospitality Management Accounting)

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