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Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management

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A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 30 June 2024 | Viewed by 30347

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Special Issue Editors

Dr. Krishna Reddy

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Guest Editor

Postgraduate Business, Faculty of Business, Design, and Services Industries, Toi Ohomai Institute of Technology/Te Pukenga, Rotorua 3420, New Zealand
Interests: corporate finance; corporate governance; finance literacy; ceo compensation; smes; portfolio management; corporate risk-taking
Special Issues, Collections and Topics in MDPI journals

Dr. Sanjeev Acharya

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Guest Editor

School of Business and Management, Southern Institute of Technology, Invercargill 9810, New Zealand
Interests: bank performance; corporate governance; sustainable finance; corporate social responsibility; organisational performance; financial inclusion
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

This Special Issue will collect innovative work in fintech, financial markets, supply chain management and leadership risk, and financial management. We particularly welcome the submission of papers addressing the following topics:

Experimental and quasi-experimental research that focuses on the impact of fintech, financial markets, supply chain management and leadership risk, and/or financial management on individuals, households, managers of SMEs, or large firms.
The effects of fintech, financial markets, supply chain management and leadership risk, and/or financial management on the managers of firms or industries’ behavior.
Qualitative or quantitative research documenting the causal effect of fintech, financial markets, supply chain management and leadership risk, and/or financial management on investment behavior and outcomes.
Qualitative or quantitative studies addressing potential endogeneity through novel strategies (such as instrumental variables or econometric models)
New measurement models or research approaches addressing challenges faced by fintech, financial markets, supply chain management and leadership risk, and/or financial management.
The role of blockchain technology in financial markets and supply chain management.
The impact of fintech on financial inclusion and access to financial services.
Risk management strategies in the context of fintech and financial markets.
The impact of digital currencies (e.g., cryptocurrencies) on financial markets and supply chain management.
The role of artificial intelligence and machine learning in financial markets and supply chain management.
Adoption and diffusion of Fintech innovations in different industries.
Social and environmental implications of Fintech and financial management decisions.
The impact of Fintech on payment systems and transaction processing.
The impact of regulatory frameworks on the development and adoption of fintech solutions.
Corporate governance and financial management practices in the era of fintech.
The relationship between fintech and sustainable finance.
The role of data analytics and predictive modeling in financial markets and supply chain management.
The challenges and opportunities of integrating fintech solutions into existing financial systems.

The deadline for paper submissions is June 30^th 2024. Accepted articles will be published in the Special Issue of the journal.

Dr. Krishna Reddy
Dr. Sanjeev Acharya
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

fintech
financial inclusion
technology innovation
financial markets
data analytics
predictive modeling

Published Papers (9 papers)

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Research

Jump to: Review

21 pages, 3108 KiB

Open AccessArticle

The Emotion Magnitude Effect: Navigating Market Dynamics Amidst Supply Chain Events

by Shawn McCarthy and Gita Alaghband

J. Risk Financial Manag. 2023, 16(12), 490; https://doi.org/10.3390/jrfm16120490 - 21 Nov 2023

Viewed by 1795

Abstract

During the volatile market period of 2019–2021, characterized by geopolitical shifts, economic sanctions, pandemics, natural disasters, and wars, the global market presented a complex landscape for financial decision making and motivated this study. This study makes two groundbreaking and novel contributions. First, we augment Plunket’s emotional research and leverage the emotional classification algorithm in Fin-Emotion to introduce a novel quantitative metric, “emotion magnitude”, that captures the emotional undercurrents of the market. When integrated with traditional time series analysis using Temporal Convolutional Networks applied to stock market futures, this metric offers a more holistic understanding of market dynamics. In our experiments, incorporating it as a feature led to significantly better performance on both the training and validation sets (9.26%, 52.11%) compared to traditional market-based risk measures, in predicting futures market trends based on the commodities and supply chains analyzed. Second, we deploy a multidimensional data science framework that synthesizes disparate data streams and analyses. This includes stock metrics of sector-leading companies, the time horizon of significant market events identified based on company stock data, and the extraction of further knowledge concepts identified through “emotion magnitude” analysis. Our approach stitches together countries, commodities, and supply chains identified in the targeted news search and identifies the domestic companies impacted based on the time horizon of these emotional supply chain events. This methodology culminates in a unified knowledge graph that not only highlights the relationships between supply chain disruptions, affected corporations, and commodities but also quantifies the broader systemic implications of such market events that are revealed. Collectively, these innovations form a robust analytical tool for financial risk strategy, empowering stakeholders to navigate an ever-evolving financial global ecosystem with enhanced insights. This graph encapsulates multi-dimensional forces and enables stakeholders to anticipate and understand the broader causal implications of related supply chain and market events (such as economic sanctions’ impact on the energy, technology, and telecommunication sectors). Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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17 pages, 525 KiB

Open AccessArticle

Heterogeneous Impact of Fintech on the Profitability of Commercial Banks: Competition and Spillover Effects

by Xiaoling Song, Huizhi Yu and Zehai He

J. Risk Financial Manag. 2023, 16(11), 471; https://doi.org/10.3390/jrfm16110471 - 02 Nov 2023

Cited by 1 | Viewed by 2469

Abstract

Using annual panel data of 46 listed commercial banks in China from 2012 to 2021 and constructing a two-way fixed-effects model, this study empirically analyzed the competition and technology spillover effects of fintech on the profitability of commercial banks. The results showed the following: (1) In the early stages of fintech development, the competition effect was larger than the technology spillover effect; thus, it was negatively correlated with commercial banks’ profitability. However, with the spread of innovative fintech, technology spillover effects and commercial bank profitability will gradually improve. (2) The influence of fintech on the profitability of commercial banks differed. Compared with large commercial banks, fintech had more significant negative effects on small- and medium-sized commercial banks in the short run. However, the role of fintech for such banks will also grow in the future. The results of this study provide practical guidance for how commercial banks can respond to the fintech wave. To realize the sustainable development of the banking industry, commercial banks should change their business philosophy and revenue model, vigorously improve their fintech innovation capability, differentiate their choice of fintech development routes, develop personalized customization with a focus on users, and ultimately realize digital transformation and upgrading. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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14 pages, 521 KiB

Open AccessArticle

Investment Behavior of Foreign Institutional Investors and Implied Volatility Dynamics: An Empirical Study on the Indian Equity Derivatives Market

by Vijay Kumar Sharma, Satinder Bhatia and Hiranmoy Roy

J. Risk Financial Manag. 2023, 16(11), 470; https://doi.org/10.3390/jrfm16110470 - 01 Nov 2023

Viewed by 1603

Abstract

The aim of this study is to examine the association between the capital flows of foreign institutional investors (FIIs) in the equity derivatives market in India and the implied volatility of options. Previous studies on FIIs and realized volatility in the equity market provide the basis for this study. Covering a period of ten years (2012–2021), this study established the importance of FII capital flows in explaining the implied volatility of options. The Granger causality test confirms the unidirectional flow of causality between FII and implied volatility (VIX) in the Indian stock market. The vector autoregression model developed in the study confirms the dynamic relationship between implied volatility and the investment behavior of foreign institutional investors (FIIs). The outcome of this study will help options traders to understand the mispricing of options because of FII’s buying pressure on implied volatility. The results will also help policymakers understand how institutional investors influence option pricing so that appropriate decisions can be made. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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21 pages, 2549 KiB

Open AccessArticle

Effects of Revenue-Sharing Contracts and Overconfidence on Innovation for Key Components

by Chengli Wei, Hongzhuan Chen and Yuanfei Kang

J. Risk Financial Manag. 2023, 16(10), 459; https://doi.org/10.3390/jrfm16100459 - 22 Oct 2023

Viewed by 1241

Abstract

Revenue-sharing (RS) contracts are a common approach in incentivizing innovation of upstream suppliers by addressing the uneven profit distribution between upstream and downstream firms. Considering the possible overconfidence characterizing decision makers in the supply chain, we investigate the effect of the RS contract and the tendency of overconfidence of supply chain members on the investment in R&D of key components of products in the context of an upstream supplier that is a leader in the R&D and production of key components. We find that regardless of the bargaining power of either party, an RS contract can increase the R&D investment in key components. Regarding the effects of overconfidence of either the downstream manufacturer or upstream supplier, an RS contract can increase the R&D investment in key components. Supplier (manufacturer) overconfidence can harm their own profits but increase the profits of the manufacturer (supplier), and when the level of overconfidence is below a certain threshold, the damage to their own profits is less than the increase in each other’s profits, thus benefiting the whole supply chain. In addition, we also find a joint effect of RS contracts and overconfidence: when the bargaining power of the supplier is low, the RS contract has a certain compensatory effect on the loss of their own profits caused by overconfidence. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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28 pages, 599 KiB

Open AccessArticle

Does Fintech-Driven Inclusive Finance Induce Bank Profitability? Empirical Evidence from Developing Countries

by Changjun Zheng, Md Ataur Rahman, Shahadat Hossain and Syed Moudud-Ul-Huq

J. Risk Financial Manag. 2023, 16(10), 457; https://doi.org/10.3390/jrfm16100457 - 21 Oct 2023

Cited by 1 | Viewed by 2998

Abstract

This study explores the effect of fintech-driven inclusive finance on the profitability of banks using an unbalanced panel dataset from 660 banks across 40 developing countries between 2011 and 2021. We start with a fixed-effect estimate and subsequently validate our main findings using two-stage least squares (2SLS-IV), two-step system generalized method of moments (GMM), and generalized least squares (GLS) methodologies. Our analysis centers on three key profitability metrics: ROA, ROE, and NIM. Our findings suggest that fintech-backed inclusive finance boosts ROA by 9.10%, ROE by 18.87%, and NIM by 7.98%, highlighting the growing importance of mobile, internet, and agent banking in these nations. We also note that large banks benefit more from inclusive finance than small ones. Additionally, conventional banks see a more marked improvement in profitability than Islamic and savings banks. The relationship between inclusive finance and bank profitability is stronger in countries with higher GDP growth and those actively advancing financial inclusion through fintech, compared to countries with slower GDP growth and less emphasis on financial inclusion. When examining the interaction effects, the COVID-19 pandemic has further emphasized the positive connection between fintech and bank profitability. This suggests that fintech-driven inclusive finance can play a role in enhancing bank profitability, even in challenging times like the COVID-19 period. The transition towards fintech, however, mandates substantial investments, enhanced financial literacy, and heightened customer security, presenting persistent challenges for governments, policymakers, regulators, and financial institutions. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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16 pages, 316 KiB

Open AccessArticle

Unveiling the Influence of Artificial Intelligence and Machine Learning on Financial Markets: A Comprehensive Analysis of AI Applications in Trading, Risk Management, and Financial Operations

by Mohammad El Hajj and Jamil Hammoud

J. Risk Financial Manag. 2023, 16(10), 434; https://doi.org/10.3390/jrfm16100434 - 05 Oct 2023

Cited by 2 | Viewed by 11575

Abstract

This study explores the adoption and impact of artificial intelligence (AI) and machine learning (ML) in financial markets, utilizing a mixed-methods approach that includes a quantitative survey and a qualitative analysis of existing research papers, reports, and articles. The quantitative results demonstrate the growing adoption of AI and ML technologies in financial institutions and their most common applications, such as algorithmic trading, risk management, fraud detection, credit scoring, and customer service. Additionally, the qualitative analysis identifies key themes, including AI and ML adoption trends, challenges and barriers to adoption, the role of regulation, workforce transformation, and ethical and social considerations. The study highlights the need for financial professionals to adapt their skills and for organizations to address challenges, such as data privacy concerns, regulatory compliance, and ethical considerations. The research contributes to the knowledge on AI and ML in finance, helping policymakers, regulators, and professionals understand their benefits and challenges. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

21 pages, 380 KiB

Open AccessArticle

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

by Kurukulasuriya Dinesh Udana Devindra Fernando, Thambawita Maddumage Nimali Tharanga, Narayanage Jayantha Dewasiri, Kiran Sood, Simon Grima and Eleftherios Thalassinos

J. Risk Financial Manag. 2023, 16(8), 365; https://doi.org/10.3390/jrfm16080365 - 10 Aug 2023

Cited by 1 | Viewed by 1447

Abstract

The contemporary environment is interrelated, and interactions between markets, countries, and international actors at different levels exist in every corner of the globe. Amid this, the failures of the free-market system have paved the way for institutionalism, which proposes minimising transaction costs, substantial property rights, and enabling proper contract enforcement. Studies on institutions and insurance development spillover concerning growth relationships are rare and a critical area needing exploration. This study explores the behaviour of economic development in terms of potential spatial dependencies and spatial institutional and insurance development spillover on economic growth. To measure insurance development by the life insurance and non-life insurance penetration, economic growth by per capita gross domestic product (GDP), and indicators of good governance for institutions in the nations. The study explored the spatial impact between countries using panel data of 56 countries between 2002 and 2020 representing the Asian and European regions. We did this by using dynamic spatial econometric modelling (DSEM) on institutional and insurance development and seeing the spatial implications and the spatial institutional impact moderated by insurance development on growth. Results indicate that developing the life insurance and non-life insurance of surrounding countries creates a spillover impact on the local countries’ economies. In contrast, institutions have created a reverse spatial spillover impact on local countries. However, life insurance development, moderated through accountability and government effectiveness, has created a spatial spillover between countries. Both life and non-life penetration moderated by the control of corruption and overall institutions have shown a reverse spillover on countries’ economies. This suggests that global governance is a positive-sum game, and monitoring and governance structures have failed at the international level concerning separate countries. Therefore, it is seen that to prevent institutional failure at the state level, good governance and links with the global governance structure could disrupt or energise local institutions. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

Review

Jump to: Research

19 pages, 1627 KiB

Open AccessReview

Blockchain Application to Financial Market Clearing and Settlement Systems

by Nipun Agarwal, Pornpit Wongthongtham, Neerajkumari Khairwal and Kevin Coutinho

J. Risk Financial Manag. 2023, 16(10), 452; https://doi.org/10.3390/jrfm16100452 - 20 Oct 2023

Cited by 2 | Viewed by 3709

Abstract

Blockchain technology has emerged as a transformative force in the financial industry, offering the potential to streamline and enhance financial markets’ clearing and settlement processes. This paper explores the application of blockchain technology in these critical areas. We examine traditional clearing and settlement procedures, the challenges they pose, and how blockchain can address these issues. Through case studies and technical insights, we illustrate the benefits and limitations of implementing blockchain solutions. This paper utilizes the PRISMA method to survey papers related to blockchain-based clearing and settlement systems, while using Science Direct to identify papers that have been published in this area. These papers were reviewed to identify themes that relate to extending blockchain development for clearing and settlement system in financial markets. As a result, this paper also shows how the Layer One X (L1X) blockchain can be applied to develop financial markets clearing and settlement systems. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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29 pages, 4276 KiB

Open AccessReview

Financial Fraud and Credit Risk: Illicit Practices and Their Impact on Banking Stability

by Mohd Afjal, Aidin Salamzadeh and Léo-Paul Dana

J. Risk Financial Manag. 2023, 16(9), 386; https://doi.org/10.3390/jrfm16090386 - 29 Aug 2023

Cited by 1 | Viewed by 2808

Abstract

The intricate relationship between financial fraud and credit risk, and their combined impact on banking stability, is a vital and under-researched aspect of financial system integrity. To fill this knowledge gap, this study embarked on a thorough bibliometric analysis of the field, utilizing 2790 documents from various sources, including 1853 articles, 504 books, and 177 reviews, spanning the years 1990 to 2023. Utilizing advanced tools, like Biblioshiny and VOSviewer, this study illuminated key geographical, thematic, and intellectual trends, shedding light on an annual growth rate of 13.43% in the related literature and an average citation per document of 28.29. This detailed analysis offered valuable insights into the current research landscape, emphasizing areas such as author collaboration, with 20.32% international co-authorships, and the prevalence of single-authored documents, at 1100. Despite the existing body of research, the interconnected dynamics between financial fraud and credit risk and their implications for banking stability remain underexplored. Therefore, this study sought to unravel this complex relationship and examine its effects at both the micro (individual banks) and macro (banking sector and wider economy) levels. The findings carry significant practical implications, informing policy development, shaping risk management strategies, and contributing to regulatory measures. Despite its limitations, including the potential transformation of identified trends due to evolving financial systems and financial crimes, this study represents a significant contribution to scholarly discourse in the field. It lays the groundwork for future research and facilitates a more secure and resilient banking sector, reflecting the data-driven insights obtained from the research. Full article

(This article belongs to the Special Issue Fintech, Financial Markets, Supply Chain Management & Leadership Risk, Financial Management)

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