International Journal of Financial Studies

Welfare quality is usually a stochastic outcome, as attempts at improving social welfare cannot be predicted in advance. The advances in stock market participation conclude that equity market performance is able to reflect investors’ mass reactions and therefore can fairly reflect the empiricism of welfare quality. In this paper, the pillars of the Happy Planet Index (hereinafter HPI) are used as proxies for countries’ welfare quality. The data cover 57 countries where equity markets exist over the annual period of 2006–2020. The results indicate that (a) the three pillars of HPIs have historical positive impacts on market capitalization and stock turnover; (b) stochastically, life satisfaction has an expected positive impact on market capitalization and stock turnover; (c) firms located in high (low) HPIs, life satisfaction, and life expectancy have significant (insignificant) stochastic impacts on market capitalization; and (d) the historical ecological footprints have positive impacts on market capitalization and stock turnover, whereas stochastic impacts are statistically insignificant. Full article

The financial markets are highly influential and any change in the economy can be reflected in stock prices and thus have an impact on stock indices. The relationship between stock indices and the way they are affected by extreme phenomena is important for defining diversification strategies and analyzing market maturity. The purpose of this study is to examine the interdependence relationships between the main Euronext stock indices and any changes caused by an extreme event—the COVID-19 pandemic. Copula models are used to estimate the dependence relationships between stock indices pairs after estimating ARMA-GARCH models to remove the autoregressive and conditional heteroskedastic effects from the daily return time series. The financial interdependence structures show a symmetric relationship of influence between the indices, with the exception of the CAC40/ISEQ pair, where there was financial contagion. In the case of the AEX/OBX pair, the dynamics of dependence may have changed significantly in response to the pressure of the pandemic. On the other hand, the dominant influence of the CAC40 before and the AEX after the pandemic confirms that the size and age of these indices give them a benchmark position in the market. Finally, with the exception of the AEX/OBX and CAC40/ISEQ pairs, the interdependencies between the stock indices decreased from the pre- to the post-pandemic sub-period. This result suggests that the COVID-19 pandemic has weakened the correlation between the markets, making them more mature and independent, and less risky for investors. Full article

This study conducts a comprehensive bibliometric analysis of the use of agent-based modeling (ABM) in finance and banking, aiming to uncover how this methodology has evolved over the past two decades. It addresses the following overarching question: How has ABM contributed to the development of financial research in terms of trends, key contributors, and thematic directions? The relevance of this topic is based on the growing complexity of financial systems and the limitations of traditional models in capturing dynamic interactions, contagion effects, and systemic risks. Using a refined dataset of 489 articles from the Web of Science (2000–2024), selected through a multi-step keyword and relevance screening process, we apply bibliometric techniques using R Studio (version 2024.12.1+563) and Bibliometrix (version 4.3.3). The analysis reveals stable publication growth, strong international collaborations (notably Italy, USA, and China), and core thematic areas such as risk management, market simulation, financial stability, and policy evaluation. The findings highlight both well-established and emerging research fronts, with agent-based models increasingly used to simulate real-world financial phenomena and support regulatory strategies. By mapping the intellectual structure of the field, this paper provides a solid foundation for future interdisciplinary research and practical insights for policymakers seeking innovative tools for financial supervision and decision making. Full article

In today’s rapidly changing economic landscape, financial stability plays a crucial role in ensuring individual and societal well-being. Millennials encounter unique financial pressures, including shifting labor markets, high housing costs, and economic uncertainty, which may impact their financial stability and broader life choices. This cross-cultural comparative study investigates the interplay between financial stability and environmental sentiment among Greek and Dutch Millennials, exploring how cultural differences influence these dynamics. Utilizing a quantitative research methodology, the study analyzed responses from a convenient sample of 426 participants across Greece and the Netherlands, employing measures such as a multidimensional construct of financial stability and the New Environmental Paradigm (NEP) scale to assess environmental attitudes. The results indicated a significant positive correlation between perceived financial stability and pro-environmental sentiment in both cohorts, suggesting that economic security is a key facilitator of environmental engagement irrespective of cultural context. However, no significant differences were found in environmental sentiment between the two groups, highlighting a possible universal environmental awareness among Millennials transcending economic disparities. These findings suggest that policies aimed at enhancing financial stability may simultaneously foster greater environmental stewardship. The study underscores the importance of integrating economic and environmental policy to promote sustainable development globally among younger populations. Full article

China’s corporate venture capital (CVC) overseas investment began in the late 20th century and has expanded significantly over the years. By 2021, more than 265 Chinese institutions and companies had engaged in cross-border investments, contributing over USD 100 billion. These investments present a unique opportunity to examine the reverse technology spillover effect on China’s technological development. Using a Difference-in-Differences model and regression analysis, we investigate whether China’s CVC overseas investments drive technological progress. Our findings reveal three key insights: (1) these investments have a positive impact on China’s technological advancement, (2) the effect is stronger when the host country has a higher level of technology, and (3) larger investment amounts amplify the impact. This research not only highlights the transformative potential of cross-border CVC investments but also demonstrates how enterprises can leverage reverse innovation spillovers to accelerate China’s technological progress. Additionally, we introduce a novel approach to studying this phenomenon, contributing to the existing scholarship on global innovation dynamics. Full article

One of the most significant recent developments in the debt financing sector pertains to new products and standards applicable to sustainability-related issues. Therefore, research on this has increased substantially. One of the most recent such developments is that of sustainability-linked bonds (SLBs). In 2023, global sustainable bond issuance experienced an increase of three percent, nearly reaching USD 1 trillion with significant shifts observed in categories, including green-, social-, sustainability-, and sustainability-linked bonds (GSSSBs). This paper presents one of the most extensive literature reviews on SLBs research, examining trends, research evolution, thematic landscape, and underexplored topics by employing bibliometric and content analysis approaches. It identifies future research avenues and trends, including supporting issuers in transitioning towards net-zero emissions or broader objectives, such as implementing sustainability targets to fight climate change, the premium associated with bond pricing, the potential for greenwashing, and the blockchain technology for issuance and target’s monitoring transparency. In addition, this paper discusses the new trend of thematic bonds, such as those addressing gender characteristics, as innovative strategies to promote societal equity. The systematic literature review also explores the significance of SLBs as public instruments, like sovereign bonds or private instruments, while identifying research areas, including linking SLBs with the evolution of management theory. Full article

The COVID-19 pandemic has precipitated several challenges, prompting the Indonesian government to enact rules aimed at minimizing direct contact to mitigate the spread of COVID-19, which has also affected transactional activities. Transactions conducted using a digital wallet represent a technological advancement that facilitates a cashless society lifestyle. Bank Indonesia established the Quick Response Code Indonesian Standard (QRIS) as a QR Code standard for digital payments using Electronic Money-Based (EU) servers, electronic wallets, or Mobile Banking. This study aims to identify the elements that affect consumer willingness to convert from cash payments to the QRIS during the COVID-19 epidemic. This study collected data through an online survey, distributing a 17-item questionnaire to QRIS users, yielding 568 valid responses. This research used a modified version of the Push-Pull-Mooring theory and an adaptation of the Unified Theory of Acceptance and Use of Technology (UTAUT2) model, concentrating on consumers’ intentions to transition from cash payments to QRIS utilization. This study employed the Hybrid SEM-ANN methodology with the SmartPLS and IBM SPSS Statistics 27 applications for data analysis. This investigation had 11 hypotheses, of which 4 were accepted. The findings indicated that alternative attractiveness, trust, critical mass, and traditional payment habits significantly influenced the intention to transition from cash payments to QRIS payments during the COVID-19 pandemic. Full article

This paper explores how credit risk management and human capital development sustain financial stability in microfinance institutions. Both qualitative and quantitative research methods allow this study to investigate credit risk management strategies while examining policies for inclusivity plus incentive plans along with debt portfolio selection efficiency. This research emphasizes that financial operations depend on skilled employees who require motivating interventions alongside training programs while developing ethical practices. The research discovers that organizations with strong credit risk management frameworks along with dedicated personnel achieve enhanced financial performances and reduced default incidents. This study confirms that microfinance institutions need both superior risk management along with human resource development systems to achieve sustainable development. This study enriches economic development research by demonstrating that implementing an equal mixture of financial and human resources produces successful economic results. Full article

This study expands the tourism development literature by examining how currency valuation and financial sector maturity influence the tourism–growth relationship. While prior research emphasizes direct or bidirectional causality, this study distinguishes itself by exploring the mediating and moderating roles of financial development and exchange rate stability. Using an instrumental variables approach and empirical data from Africa, we find that exchange rates and financial development partially mediate tourism’s effect on economic growth, particularly in economies with weaker currencies and more developed financial systems. Our results challenge the tourism–growth neutrality hypothesis by demonstrating that exchange rates not only influence tourism demand but also actively shape its growth effects. A panel ARDL analysis confirms bidirectional causality, which reinforces the interdependence between tourism and growth. However, unlike previous studies that view tourism as an isolated driver of growth, we demonstrate that its economic impact depends on a country’s financial maturity and exchange rate competitiveness. Policy recommendations aimed at enhancing economic growth through improved tourism and financial infrastructure are offered. Full article

This paper investigates whether trade frictions, in the form of exchange controls, are among the main obstacles preventing the Purchasing Power Parity (PPP) hypothesis from being valid among trading nations. It specifically looks at whether exchange controls—a type of trade friction—hinder PPP’s applicability in the relationship between an emerging economy, South Africa, and its major trading partners, classified by their use of exchange control regulations. The methodology used to test the PPP hypothesis includes nonlinearity through quantile unit root tests and quantile cointegration, designed to capture the varied economic conditions across trading nations. The empirical findings indicate that trade frictions may not necessarily obstruct the validity of the PPP hypothesis. Moreover, the weak form of the PPP hypothesis predominantly appears at the extreme quantiles of the real exchange rate among trading nations, especially the lower quantile, which is associated with the real exchange rate depreciation of the South African economy. This insight is significant for both policymakers and investors. Full article

This paper examines the impact of audit quality and internal corporate governance mechanisms on segment disclosure. It uses manual content analysis to measure the levels of disclosure for a sample of Egyptian-listed companies from 2015 to 2023. It provides evidence that audit quality, joint audit, gender diversity, and board independence have a positive impact on the segment disclosure level. In contrast, audit opinion, foreign directors, and military background directors have a negative impact on the segment disclosure level in Egypt. Full article

The South Korean AI market has grown significantly, yet while chatbot adoption is well-studied, sustained use remains underexplored. This study surveyed 250 financial institution chatbot users in South Korea in February 2024, using SPSS and R to investigate quality effects on intention of continuous usage. Results showed that social presence, response accuracy, assurance, and interactivity positively influenced expectation confirmation. In contrast, responsiveness, reliability, and usability had no significant effect, while security negatively impacted frequent users, reflecting trust concerns. These findings guide financial institutions in enhancing chatbot retention through interactivity and trust. Conducted in a pre-generative AI context, this study suggests future longitudinal research to address evolving AI technologies and user behaviors. Full article

Investing in the stock market has always been an exciting topic for people. Many specialists have tried to develop tools to predict future stock prices in order to make high profits and avoid big losses. However, predicting prices based on the dynamic characteristics of stocks seems to be a non-trivial problem. In practice, the predictive models are not expected to provide the most accurate forecasts of stock prices, but to highlight changes and discrepancies between the predicted and observed values, to warn against threats, and to inform users about upcoming opportunities. In this paper, we discuss the use of frequent sequences as well as association rules in WIG20 stock price prediction. Specifically, our study used two methods to approach the problem: correlation analysis based on the Pearson correlation coefficient and frequent sequence mining with temporal constraints. In total, 43 association rules were discovered, characterized by relatively high confidence and lift. Moreover, the most effective rules were those that described the same type of trend for both companies, i.e., rise ⇒ rise, or fall ⇒ fall. However, rules that showed the opposite trend, namely fall ⇒ rise or rise ⇒ fall, were rare. Full article

The EU has consistently tackled the challenge of energy poverty (EP) through various legislative and non-legislative measures, particularly in the context of ongoing energy crisis, but it should also support the reduction of income inequality that might accelerate EP. The aim of this study is to evaluate the impact of income inequality on EP and other interconnected indicators in the EU in the period 2005–2023 using method of moments quantile (MMQ) regression and mean group (MG) estimators. The results suggest that income inequality based on Gini index enhances energy poverty, while gender pay gap, economic growth, and urban population reduce it. Foreign direct investment (FDI) and renewable energy consumption (REC) might combat EP only in the long-run. These findings suggest that macroeconomic policies should focus not only on economic growth, but also on addressing income inequalities. Policymakers must prioritize measures to reduce income inequality, such as progressive taxation or targeted social programs. Full article

Behavioral risk management is an increasingly important consideration in investment strategies, as research has shown that investor psychology can significantly impact portfolio performance. This study examines how psychological variables influence investing choices and the effects that these actions have on risk mitigation and overall investment performance. The primary respondents for this study were the employees of Takoradi Technical University. Partial Least Square Structural Modeling was adopted for the data processing, analysis, and testing of the study’s hypotheses. The study’s findings, which were based on a carefully chosen sample of 348 investors, showed that investigating behavioral risk management in investment strategies is an effective method for thoroughly comprehending and utilizing investors’ psychology to maximize risk management procedures and enhance investment results in dynamic financial markets. Seven hypotheses were deemed insignificant, and five were considered significant. This study is limited by its exclusive focus on only one technical university. This study augmented the growing corpus of research on risk management in investment strategies. Full article

Corporate taxation assumes a pivotal role in all economies, as it constitutes a substantial source of revenue for governmental agencies tasked with fulfilling social obligations. Nonetheless, modifications in financial policies and the unpredictability of macroeconomic factors result in a significant decline in this vital revenue source for the government. This study examines the financial determinants influencing corporate tax revenue in Nigeria from 1990 to 2022. In this analysis, the broad money supply, access to credit by the private sector, borrowing costs, and exchange rates are utilized as independent variables, while corporate tax revenue serves as the dependent variable. Data pertinent to this investigation on corporate income tax are sourced from the Federal Inland Revenue Service, whereas information regarding the broad money supply and credit extended to the private sector is acquired from the Central Bank of Nigeria. Additionally, statistical data on interest and exchange rates are gathered from the World Bank. This investigation applies autoregressive distributed lag and error correction models, acknowledging the existence of a long-term relationship within the series. The significant findings indicate that the broad money supply positively and significantly affects corporate income tax in the short run, but this effect diminishes to a positively insignificant level in the long run. Additionally, the interest rate is shown to have a significant harmful effect on corporate tax income in the short run, while it becomes negatively insignificant over the long term. Other financial policy factors do not significantly account for changes in corporate income tax. This study suggests the formulation of financial policies that are advantageous to corporate organizations, particularly through the reduction in borrowing costs, to facilitate business growth and enhance the government’s ability to collect substantial corporate tax revenue. The originality of this research is apparent in its utilization of financial policy instruments to illustrate the effectiveness of financial guidelines on corporate tax receipts and to argue for particular amendments that are essential when these guidelines prove detrimental to business activities. Full article

The banking sector is experiencing significant disruption due to technological advancements and evolving customer demand. This study analysed over 2000 banking and/or neobanking users across 28 countries. A multinomial logit model was applied to examine three user characteristics groups: demographics, banking habits, and neobanking habits. Several interesting effects were found. Higher-educated and single users are more likely to use neobanks, while self-employed and lower-income users are less likely. Neobank users prioritize affordability, availability, and speed, while traditional bank users prioritize stability and personal interaction. We have developed a tool to identify clients likely to leave traditional banks, fully or partially, with high reliability. Even partial outflows mean banks lose important services generating significant revenue to competitors. A crucial factor here is the single banking market, which eases switching between banks. Neobanks further reduce barriers, enhancing customer mobility. Moreover, opening an account with a neobank takes only minutes. The findings of this study provide valuable insights for banks and neobanks, allowing for a more comprehensive understanding of users’ characteristics that reflects current customer demand and enables new strategies to better address them. Full article

In the rapidly evolving digital landscape, integrating blockchain technology into retail banking has emerged as a pivotal strategy for operational efficiency and competitive differentiation. This study employs the Decision Making Trial and Evaluation Laboratory (DEMATEL) methodology to explore the relationships among the main factors shaping blockchain adoption, highlighting their direct and indirect effects on banks’ implementation efforts. The findings reveal that technology cost exerts the strongest causal influence on blockchain adoption, significantly affecting all other factors. Moreover, the interaction between technology cost and blockchain scalability is mediated by regulatory requirements, customer acceptance, and industry collaboration. Specifically, regulatory compliance obligations and associated uncertainties can magnify the cost barrier, while higher expenses may discourage customer engagement and limit large-scale adoption. Simultaneously, collaborations among banks and technology partners can alleviate cost burdens, thereby promoting more widespread implementation. These findings highlight the need for careful financial planning, strategic investment, and regulatory engagement to manage the high costs inherent in blockchain projects. Furthermore, banks should consider proactive customer education to convey the benefits of blockchain-driven innovations, thereby building trust and encouraging utilization. Full article

Forecast risk management is central to the financial management process. This study aims to apply Monte Carlo simulation to solve three classic probabilistic paradoxes and discuss their implementation in corporate financial management. The article presents Monte Carlo simulation as an advanced tool for risk management in financial management processes. This method allows for a comprehensive risk analysis of financial forecasts, making it possible to assess potential errors in cash flow forecasts and predict the value of corporate treasury growth under various future scenarios. In the investment decision-making process, Monte Carlo simulation supports the evaluation of the effectiveness of financial projects by calculating the expected net value and identifying the risks associated with investments, allowing more informed decisions to be made in project implementation. The method is used in reducing cash flow volatility, which contributes to lowering the cost of capital and increasing the value of a company. Simulation also enables more accurate liquidity planning, including forecasting cash availability and determining appropriate financial reserves based on probability distributions. Monte Carlo also supports the management of credit and interest rate risk, enabling the simulation of the impact of various economic scenarios on a company’s financial obligations. In the context of strategic planning, the method is an extension of decision tree analysis, where subsequent decisions are made based on the results of earlier ones. Creating probabilistic models based on Monte Carlo simulations makes it possible to take into account random variables and their impact on key financial management indicators, such as free cash flow (FCF). Compared to traditional methods, Monte Carlo simulation offers a more detailed and precise approach to risk analysis and decision-making, providing companies with vital information for financial management under uncertainty. This article emphasizes that the use of Monte Carlo simulation in financial management not only enhances the effectiveness of risk management, but also supports the long-term growth of corporate value. The entire process of financial management is able to move into the future based on predicting future free cash flows discounted at the cost of capital. We used both numerical and analytical methods to solve veridical paradoxes. Veridical paradoxes are a type of paradox in which the result of the analysis is counterintuitive, but turns out to be true after careful examination. This means that although the initial reasoning may lead to a wrong conclusion, a correct mathematical or logical analysis confirms the correctness of the results. An example is Monty Hall’s problem, where the intuitive answer suggests an equal probability of success, while probabilistic analysis shows that changing the decision increases the chances of winning. We used Monte Carlo simulation as the numerical method. The following analytical methods were used: conditional probability, Bayes’ rule and Bayes’ rule with multiple conditions. We solved truth-type paradoxes and discovered why the Monty Hall problem was so widely discussed in the 1990s. We differentiated Monty Hall problems using different numbers of doors and prizes. Full article