Client importance, bank risk, and systemic risk

2018 ◽  
Vol 26 (4) ◽  
pp. 511-544
Author(s):  
Li Li ◽  
Mary Ma ◽  
Victor Song
Keyword(s):  
Systemic Risk ◽  
Research Method ◽  
Design Methodology ◽  
Banking Industry ◽  
Bank Risk ◽  
Crash Risk ◽  
Content Type ◽  
Crisis Period ◽  
Distress Risk ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the effects of audit client importance on future bank risk and systemic risk in US-listed commercial banks. Design/methodology/approach The authors use archival research method. Findings The authors mainly find that client importance is negatively related with future bank-specific crash risk and distress risk, and also with sector-wide systemic crash risk and systemic distress risk in the future. The authors also report some evidence that these relations become more pronounced during the crisis period than during the non-crisis period. Moreover, the effect of client importance on systemic risk is found to strengthen in banks audited by Big-N auditors, by auditors without clients who restate earnings, and by auditors with more industry expertise. Research limitations/implications These findings contribute to the auditing and systemic risk literature. Practical implications This study has implications for regulating the banking industry. Originality/value This study provides original evidence on how client importance affects bank-specific risk and systemic risk of the banking industry.

scholarly journals Impacts and challenges of Southern African Development Community’s industrialization agenda on Botswana and Tanzania

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kezia H. Mkwizu ◽  
Gladness L. Monametsi
Keyword(s):  
Policy Implementation ◽  
Research Method ◽  
Design Methodology ◽  
Policy Documents ◽  
Content Type ◽  
Minimal Impact ◽  
African Development ◽  
Sub Saharan ◽  
Conference Papers ◽  
Practical Implications

PurposeThis paper aims to explore the impacts and challenges of the Southern African Development Community’s industrialization agenda on the industrialization of two Sub-Saharan African states, Botswana and Tanzania.Design/methodology/approachThe study adopts the documentary research method by carefully analyzing relevant policy documents, conference papers, reports, and journals.FindingsWhile there is an impact on policy provisions targeted towards industrialization, there are challenges such as poor policy implementation that, if not addressed, could dampen efforts by policymakers in achieving the goal of industrializing the countries.Practical implicationsGovernments should ensure equal synergy relations amongst institutions tasked with implementation. Increase investment in research and development (R&D) and human capital as drivers of innovation are needed for industrialization.Originality/valueThis paper adds to the discourse on industrialization. It also highlights challenges faced by countries whose policies have had minimal impact on industrialization.

Collaboratives to improve industrial maintenance contract relationships

2019 ◽  
Vol 25 (4) ◽  
pp. 545-562
Author(s):  
Arjan De Jong ◽  
Klaas Smit
Keyword(s):  
Research Method ◽  
Design Methodology ◽  
Technical System ◽  
New Approach ◽  
Content Type ◽  
Expert Opinions ◽  
Performance Contracts ◽  
Contract Type ◽  
Industrial Maintenance ◽  
Practical Implications

Purpose The purpose of this paper is to demonstrate how collaborative contracts can improve industrial maintenance contract relationships. Design/methodology/approach The research compares performance contracts with collaborative contracts, a new contract type whereby the contract parties align their objectives. The study uses game theory and describes the contract types as mechanism designs to compare the contract types. The mechanisms are validated with case studies. The utility of the contract types is verified with Monte Carlo simulations using expert opinions. Findings The research demonstrates that, under certain conditions, collaborative contracts result in a higher utility than performance contracts for all contract parties. Practical implications The use of collaborative contracts between an operator of a technical system and a maintenance organisation reduces maintenance costs and improves the availability of the technical system, increasing the utility for all contract parties. Originality/value The collaborative contract is a new contract type for maintenance services and the research method provides a new approach to optimise industrial maintenance contract relationships.

B2B engagement within an internet of things ecosystem

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sadia Soltani
Keyword(s):  
Internet Of Things ◽  
Literature Review ◽  
Conceptual Framework ◽  
Research Method ◽  
Design Methodology ◽  
Content Type ◽  
Dominant Logic ◽  
Engagement Strategies ◽  
Business To Business ◽  
Practical Implications

Purpose This study aims to investigate business-to-business (B2B) engagement within an internet of things (IoT) ecosystem. A conceptual framework is proposed that can be used for building engagement strategies considering key actors within an IoT ecosystem. Design/methodology/approach The study used an integrative literature review as a research method and investigated engagement across several disciplines along with antecedents and outcomes of engagement to form an understanding of IoT engagement. Findings The findings in this study revealed IoT engagement antecedents as IoT readiness, commitment, communication, involvement and support and, consequently, the outcomes of IoT engagement as trust, loyalty, better performance and satisfaction. Furthermore, IoT engagement needs to be considered from three perspectives, namely, from a multidimensional perspective, beyond a dyad perspective and from the service-dominant logic perspective, which suggests thinking of goods as services and highlights the importance of value co-creation. Research limitations/implications As the study of B2B engagement within the IoT ecosystem is conceptual, empirical investigations are suggested for elaborating on the findings. Practical implications The conceptual framework provides managers within an IoT ecosystem with thorough recommendations on why to change their perspectives toward engagement; it points out drivers of engagement that need to be maintained and adds IoT readiness as a new antecedent to engagement literature. Originality/value This study contributes a coherent conceptualization of actors’ engagement within IoT ecosystems and enhances both the theoretical and practical domain of B2B engagement.

Multiple Sharia' board directorship: a Maslahah (public interest) perspective

2019 ◽  
Vol 11 (3) ◽  
pp. 745-764 ◽  
Author(s):  
Abd Hakim Abd Razak
Keyword(s):  
Corporate Governance ◽  
Public Interest ◽  
Research Method ◽  
Design Methodology ◽  
Banking Industry ◽  
Islamic Banking ◽  
Content Type ◽  
Governance Framework ◽  
Cautious Approach ◽  
Specific Focus

Purpose The purpose of this study is to examine the legal paradigm of multiple Sharia' board directorship practice from the Sharia' law concept of Maslahah Al-Mursalah (public interest). Design/methodology/approach It uses a doctrinal research method that relies on the commonly referred sources of Quran and Sunnah, with a specific focus on Maslahah Al-Mursalah and, where applicable, commentaries by contemporary scholars, academics and practitioners as well as translations of classical book of Fiqh. This study scrutinises the polarity of views concerning the distinct Masyaqqah (necessity) surrounding the practice in discussion: the Masyaqqah that encourages and one that discourages the application of the practice. Findings This study is keen to suggest the industry to adopt a cautious approach and consider exploring a corporate governance framework that appraises the theoretical and practical Sharia' issues concerning its application in cognisance of its adversarial influence towards the sustainability of Islamic banking industry. Originality/value Since Murat Unal’s study of multiple Sharia' board directorships in 2009 and 2011, empirical works that scrutinise the practice from the Sharia' law perspective have remained limited or almost non-existent. It is aspired that this study may assist fellow readers and future researchers alike in evaluating and appreciating the divergent views surrounding the application of this practice in Islamic banking.

Analysts’ optimism and stock crash risk

2019 ◽  
Vol 46 (3) ◽  
pp. 323-343
Author(s):  
Hyunkwon Cho ◽  
Robert Kim
Keyword(s):  
Fixed Effects ◽  
Stock Return ◽  
Design Methodology ◽  
Positive Impact ◽  
Positive Association ◽  
Crash Risk ◽  
Negative Consequences ◽  
Content Type ◽  
Practical Implications ◽  
Shed Light

Purpose The purpose of this paper is to investigate whether analysts’ optimism affects the stock crash risk. Design/methodology/approach The sample covers 49,246 firm-year observations for the period between 1995 and 2015. The authors use OLS regressions with firm and year fixed effects for analyses. Findings The study finds that there is a positive association between analysts’ optimism and stock crash risk. Such a positive impact is more pronounced for firms with opaque information environment and for analysts who are considered ex ante credible. Research limitations/implications The results indicate that analysts’ optimism can be an important source of stock crash risk. Practical implications The findings can be useful for informational users of analyst reports. Given that information provided by analysts might have negative consequences, the empirical results can be useful in assessing future stock return behaviors. Originality/value This paper has the potential to shed light on the large literature of crash risk. Prior studies suggest that crash is driven by the agency tension between shareholders and managers. It remains possible that crashes could be caused by overpriced stocks in the absence of bad news hoarding. The paper investigates crash from a perspective, financial analysts, that is underexplored.

Bank capital: the case against Basel

2014 ◽  
Vol 22 (3) ◽  
pp. 208-218 ◽  
Author(s):  
Karim Pakravan
Keyword(s):  
Systemic Risk ◽  
Design Methodology ◽  
Optimal Level ◽  
Capital Adequacy ◽  
Bank Capital ◽  
Content Type ◽  
Model Driven ◽  
Banking Institutions ◽  
Extensive Body ◽  
Practical Implications

Purpose – The purpose of this paper is to focus on the “Basel Illusion”, the belief that a model-driven quantitative approach to capital adequacy can lead to a more robust and shock-proof system. The author analyzes the Basel framework and its role as a major source of systemic risk. Furthermore, the Basel framework is unlikely to enhance the safety of the financial system and prevent future crises. As such, Basel should be scrapped and regulators should revert to a simple tangible common equity (TCE) leverage rule. Design/methodology/approach – The paper aims to review the extensive existing literature and analytic approach to the problem, trying to answer the question: why Basel? The paper looks at the Basel methodology of calculating risk-weighed assets. Findings – The paper looks at the basic reasons underlying the Basel failure: complexity, variations in measurement of risk-weighed assets across banking institutions, ability to game the system and amplification of systemic risk. The research concludes that a simple TCE leverage rule is superior to Basel in controlling systemic risk. Research limitations/implications – Further research will be needed in determining the “optimal” level of capital. Practical implications – Regulators and bankers should seek simplicity in capital rules. The dubious use of quantitative models can only lead to spurious precision. Originality/value – This article synthesizes an extensive body of work on the issue of bank capital to demonstrate the superiority of a simple capital rule.

Too big to fail, too big to jail: restoring liability a lesson from HSBC case

2017 ◽  
Vol 24 (4) ◽  
pp. 513-519 ◽  
Author(s):  
Patrick Hardouin
Keyword(s):  
House Of Representatives ◽  
Systemic Risk ◽  
Design Methodology ◽  
Too Big To Fail ◽  
Financial Industry ◽  
Content Type ◽  
The Us ◽  
Personal Liability ◽  
Practical Implications

Purpose This paper aims to highlight the shift of impunity from institutions to individuals within the “too big to fail, too big to jail” paradigm and to restore individual liability in the financial industry. Design/methodology/approach The paper is based on the analysis of HSBC deferred prosecution agreement concluded on December 10, 2012 and of a report by the US House of Representatives Financial Committee released in July 2016. Findings “Too big to fail, too big to jail” is a paradigm which contains justice. It leads to the impunity of individuals involved due to the absence of trial. Containment of justice is denial of justice. However, the systemic risk is attached to institutions, not to individuals. Therefore, it should not hamper the prosecution of individuals. Practical implications Setting sanctions applicable to individuals and proportionate to the crime would contribute to deter financial misconducts. Originality/value The value of the paper is the demonstration that there is no basis for a limited personal liability in the financial industry.

scholarly journals Evidence of green leases in England and Wales

2014 ◽  
Vol 6 (1/2) ◽  
pp. 6-20 ◽  
Author(s):  
Susan Bright ◽  
Hannah Dixie
Keyword(s):  
Research Method ◽  
Design Methodology ◽  
Future Research ◽  
Property Management ◽  
Environmental Practices ◽  
England And Wales ◽  
Content Type ◽  
Industry Standard ◽  
The Impact ◽  
Practical Implications

Purpose – This paper aims to report on research that investigates the use of green clauses in leases of office and retail premises in England and Wales. Design/methodology/approach – The authors examined 26 recent leases of green build properties registered at HM Land Registry. The green clauses discovered were classified and compared with the model form green clauses promoted by the London-based Better Building Partnership's Green Lease Toolkit. Findings – Of the 26 leases analysed, 18 contained some form of green provision. Research limitations/implications – As the sample selected was not representative, a larger study is needed to detect trends in green leasing. This research method does not show the impact of green clauses on property management. Practical implications – This research illustrates the types of clauses that have been used in leases but also shows that green leasing principles are not yet the industry standard. Many new, long leases still make no reference to environmental practices. Originality/value – This is the first research to be done examining the green content of agreed leases and develops a methodology that can be used for future research.

Bank service quality

2019 ◽  
Vol 31 (1) ◽  
pp. 28-51 ◽  
Author(s):  
Reza Shayestehfar ◽  
Bita Yazdani
Keyword(s):  
Service Quality ◽  
Service Provision ◽  
Design Methodology ◽  
Banking Industry ◽  
Developed Countries ◽  
Cross Cultural ◽  
Content Type ◽  
Two Samples ◽  
Cross Country ◽  
Practical Implications

PurposeThe purpose of this paper is to compare the perceptions of Bank Saderat Iran’s (BSI) customers in Isfahan and Dubai to find the probable differences in BSI service quality in these cities.Design/methodology/approachThe required data were collected by adapted Bank Service Quality (BSQ) questionnaire from two samples of BSI customers (300 in Isfahan and 100 in Dubai). In this research, BSQ was measured by seven dimensions, including Bahia and Nantel (2000) BSQ dimensions, and globalization of bank services as the added dimension. The factor analysis was used to analyze the data, independent-samplest-test for comparing the means and Friedman test for ranking of the BSQ dimensions and items.FindingsThe results of this research revealed a relative satisfaction of customers with BSI service quality in both cities; however, the respondents in Dubai perceived a higher service quality. The most important dimensions were access and effectiveness and assurance in Isfahan and reliability and tangibles in Dubai. In addition, although these cities are located in developing countries, the respondents’ perceptions were similar to those in developed countries.Practical implicationsIt is proposed that BSI managers should eliminate the barriers to prompt service provision, review service charges, integrate decision-making systems, decrease the bureaucratic factors and provide training programs to increase the personnel’s’ interactive skills in Isfahan.Originality/valueA few studies have been conducted in the field of BSQ in Iran banking industry, and none has measured BSQ using a cross-country and cross-cultural method. No research has been conducted on BSI service quality in Isfahan and Dubai, and this is the first research in both cities. Furthermore, it is one of the few times that a specific tool is used for measuring BSQ in Iran banking industry.

Being Jean-Baptiste Grenouille: on the trail of consumers' olfactory perceptions

2020 ◽  
Vol 20 (2) ◽  
pp. 188-204
Author(s):  
Ibrahim Taylan Dortyol
Keyword(s):  
Research Method ◽  
Design Methodology ◽  
Qualitative Approach ◽  
Comprehensive Understanding ◽  
Content Type ◽  
Sensory Marketing ◽  
Hierarchical Value Map ◽  
Zaltman Metaphor Elicitation Technique ◽  
Avoidance Reactions ◽  
Practical Implications

PurposeThis research aims to uncover consumers' deeply hidden thoughts and feelings about store scent and its effects on shopping experiences.Design/methodology/approachFollowing a qualitative approach, this research uses Zaltman metaphor elicitation technique (ZMET). All the steps of the ZMET have been performed, and important constructs and contents have been explored.FindingsUltimately, a hierarchical value map was presented. Accordingly, the naturalness and intensity of the scent played a prominent part in its effectiveness. The pleasantness and complexity of the scent, the malodor, congruity and incongruity of the scent, as well as nostalgia, were seen as the predominant originator constructs that resulted in approach or avoidance reactions.Research limitations/implicationsThese findings have practical implications for managers seeking to design a store atmospherics making way for consumers to engage with the store and the brand. The cultural milieu in which the study was performed could be seen as a possible limitation of the study. This cultural angle should also be taken into consideration while the findings were considered.Originality/valueUsing ZMET as an innovative research method makes the study significant. By doing so, the metaphors of consumption are extended to the sensory marketing field to provide a more comprehensive understanding on the effects of store scent. Moreover, the study contributes to the existing literature of smell marketing.

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