Financial disclosure and performance of microfinance institutions

2014 ◽  
Vol 10 (3) ◽  
pp. 314-337 ◽  
Author(s):  
Shakil Quayes ◽  
Tanweer Hasan
Keyword(s):  
Financial Performance ◽  
Least Squares ◽  
Least Squares Method ◽  
Financial Disclosure ◽  
Microfinance Institutions ◽  
Content Type ◽  
Three Stage Least Squares ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to analyze the relationship between financial disclosure and the financial performance of microfinance institutions (MFIs). Design/methodology/approach – The paper utilizes ordinary least squares method to analyze the impact of disclosure on financial performance, an ordered probit model to investigate the possible effect of financial performance on disclosure and utilizes a three-stage least squares method to delineate the endogenous relationship between disclosure and financial performance of MFIs. Findings – The paper finds that better disclosure has a statistically significant positive impact on operational performance of MFIs; second, it also shows that improved financial performance results in better financial disclosure. Keeping the endogenous nature of the relationship between disclosure and performance, the paper uses a three-stage least squares method to show that disclosure and financial performance positively affect each other simultaneously. Research limitations/implications – The paper attempts to delineate a positive association between better disclosure on financial performance of MFIs, which can be used for developing a better disclosure policy by management, formulating more effective guidelines for disclosure by the stakeholders and mandating more appropriate laws and uniform disclosure practice by regulators. Originality/value – This is the first study that uses a large number of MFIs from 75 countries; second, it uses a uniform scale of designating a disclosure rating (assigned by MIX Market) to show the relationship between disclosure and performance. Finally, it uses three-stage least squares method to address the possible endogeneity between disclosure and performance.

Financial and social efficiency analysis of Islamic microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marwa Fersi ◽  
Mouna Bougelbène
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Risk Taking ◽  
Negative Impact ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Content Type ◽  
Islamic Microfinance ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.Design/methodology/approachThe stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.FindingsThe overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.Originality/valueThis paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

Currency risk impact on the financial performance of multilateral banks

2015 ◽  
Vol 13 (1) ◽  
pp. 91-118
Author(s):  
Philip Kamau ◽  
Eno L. Inanga ◽  
Kami Rwegasira
Keyword(s):  
Financial Performance ◽  
Design Methodology ◽  
Regression Coefficient ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Currency Risk ◽  
Content Type ◽  
Regulatory Status ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the impact of currency risks on the financial performance of multilateral banks (MBs). Financial performance is measured here by after-tax accounting profitability or losses. Design/methodology/approach – Quantitative hypothesis regarding the impact of currency risks on the financial performance of MBs was tested by a two-tailed t test for significance of the b regression coefficient. Findings – A regression analysis was done on the total currency risk and financial performance of MBs after taking into account currency risk over eight years. The analysis of variance of the regression of the b coefficient led to non-rejection of the null hypothesis of no association, F(1, 6) = 0.77, p > 0.05. The results of the two-tailed t test on the b regression coefficient suggest that the relationship between currency risk and financial performance is statistically insignificant. Therefore, it was concluded that there is no significant impact of currency risk on the financial performance of MBs. Research limitations/implications – The results of the study can be generalized only for MBs given their peculiar characteristics as wholesale banks, which are owned mainly by governments and are generally not listed on stock exchanges. Originality/value – The study is of value to those interested in the multilateral banking industry. To the authors’ knowledge it is the first study providing empirical evidence on currency risk impact on MBs financial performance. The study finds that the currency risk impact on the financial performance of MBs is insignificant. The results are also useful to managers of MBs in terms of benchmarking their effectiveness in managing currency risk compared to their peers and learn from better performers. It has also policy implications in terms of justifying the current self-regulatory status, shareholder monitoring and governance of MBs as they are not significantly impacted by currency risk as it appears to be effectively managed.

Knowledge management, workplace climate, creativity and performance

2018 ◽  
Vol 30 (8) ◽  
pp. 592-612 ◽  
Author(s):  
Amro Alzghoul ◽  
Hamzah Elrehail ◽  
Okechukwu Lawrence Emeagwali ◽  
Mohammad K. AlShboul
Keyword(s):  
Job Performance ◽  
Knowledge Sharing ◽  
Authentic Leadership ◽  
Equation Modeling ◽  
Workplace Climate ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose This study aims at providing empirical evidence pertaining to the interaction among authentic leadership, workplace harmony, worker's creativity and performance in the context of telecommunication sector. These research streams remain important issues and of interest as the world continues to migrate toward a knowledge-based economy. Design/methodology/approach Applying structural equation modeling, this study diagnosed the impact of Authentic leadership (AL) on employees (n = 345) in two Jordanian telecommunication firms, specifically, how it shapes workplace climate, creativity and job performance. The study also tests the moderating role of knowledge sharing in the model, as well as the mediating role of workplace climate on the relationship between AL and positive organizational outcomes. Findings The empirical result suggests that AL positively influences workplace climate, creativity and job performance; workplace climate positively influences creativity and job performance; workplace climate mediates the relationship between AL and creativity, and job performance; and knowledge sharing behavior moderates the relationship between AL and workplace climate. Originality/value This study highlights the magnificent power of AL and knowledge sharing, not only in shaping the workplace atmosphere but also in delineating how these variables stimulate creativity and performance among employees. The implications for research and practice are discussed.

The impact of the work-family conflict on employee engagement, performance, and turnover intention

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Neuza Ribeiro ◽  
Daniel Gomes ◽  
Ana Rita Oliveira ◽  
Ana Suzete Dias Semedo
Keyword(s):  
Employee Engagement ◽  
Family Conflict ◽  
Turnover Intention ◽  
Mediating Effect ◽  
Work Family Conflict ◽  
Content Type ◽  
And Performance ◽  
Work Family ◽  
The Impact ◽  
The Relationship

Purpose The incompatibility between the sphere of work and the family is a reality that plagues many workers today. The difficult articulation of these two domains leads to the experience of the phenomenon called work–family conflict (WFC). This paper aims to assess the impact that WFC may have on employee engagement and performance, as well as on their turnover intention. It is also intended to test the mediating effect of engagement on the relationship between WFC and performance, and between WFC and the turnover intention. Design/methodology/approach One hundred and sixty-seven employees from various Portuguese organizations were surveyed. Respondents reported their perceptions of own WFC, engagement, performance and turnover intention. Findings The results revealed that employees who feel a higher WFC have lower levels of engagement and greater intention to leave the organization. The WFC showed no relation to performance. Engagement takes on the mediating role in the relationship between WFC and the turnover intention. Practical implications The relevance of this study is related to the implications that it may bring to companies in the context of implementing work–family balance strategies to reduce the referred conflict. Originality/value This study contributes to WFC literature by attempting to integrate in the same model four concepts in a single study to provide a model that depicts the chain of effects between WFC, engagement, individual performance and turnover intention, which has never been done in the Portuguese context.

scholarly journals Social and financial performance of MFIs: complementary or compromise?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nitin Navin ◽  
Pankaj Sinha
Keyword(s):  
Financial Performance ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Current Time ◽  
Content Type ◽  
Dynamic Framework ◽  
The Social ◽  
Loan Size ◽  
The Relationship ◽  
Practical Implications

Purpose With the ongoing transformation of the microfinance sector, questions have been raised on the ability of microfinance institutions (MFIs) to perform financially well without compromising with their social objectives. The current study attempts to analyse the social and financial performance of Indian MFIs with an objective to find the kind of relationship between these two objectives. Design/methodology/approach The dynamic framework of simultaneous equations model is used to find the nature of the relationship which exists between social and financial performance of Indian MFIs. Findings The study finds that depth of outreach enables MFIs to achieve financial sustainability. On the other hand, financially strong MFI lend more as reflected by an increase in their average loan size. Research limitations/implications Many MFIs still receive subsidies to support their operations. Ideally, adjustments should be made to remove the effect of such subsidies on their cost. However, due to non-availability of data, the study fails to make any adjustment for the subsidies. Practical implications The presence of a complementary relationship between social and financial performance in the Indian microfinance sector is quite encouraging for the policymakers during the current time when the sector is becoming less dependent on subsidies. However, the recent upsurge in the average loan size requires attention. Social implications The findings suggest that MFIs can achieve financial sustainability while targeting poor clients. This indicates that MFIs can perform socially good along with their financial performance. Originality/value Such study is vital when the Indian microfinance sector is moving away from subsidies to become self-reliant and commercialised. Few studies have focused on this aspect of Indian microfinance sector.

scholarly journals The Impact of Entrepreneurial Orientation on Spin-Offs’ Performance: A Cross-Cultural Study

SAGE Open ◽  
2019 ◽  
Vol 9 (3) ◽  
pp. 215824401986581 ◽  
Author(s):  
Mariem Khadhraoui ◽  
Michel Plaisent ◽  
Lassaad Lakhal ◽  
Bernard Prosper
Keyword(s):  
Social Sciences ◽  
Least Squares ◽  
Cultural Study ◽  
Entrepreneurial Orientation ◽  
Cross Cultural ◽  
Cross Cultural Study ◽  
Three Samples ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Previous studies considered entrepreneurial orientation as a determinant of firms’ growth and performance. In this research, we are interested in spin-offs. Indeed, we aim to study the relationship between their entrepreneurial orientation and their performance. Therefore, we carried out a cross-cultural study in three different countries; Tunisia, Canada, and Morocco. We opted for a personal survey. We addressed our questionnaire to 180 managers of spin-offs and we analyzed the research variables using SPSS 20.00 (Statistical Packages for Social Sciences) and Smart PLS 3 (Partial Least Squares). Our findings highlight a positive correlation between entrepreneurial orientation and performance of spin-offs within the three samples.

scholarly journals The human capital–economic growth nexus in SSA countries: what can strengthen the relationship?

2020 ◽  
Vol 47 (9) ◽  
pp. 1143-1159
Author(s):  
Roseline Tapuwa Karambakuwa ◽  
Ronney Ncwadi ◽  
Andrew Phiri
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Least Squares ◽  
Ordinary Least Squares ◽  
African Countries ◽  
Content Type ◽  
Econometric Approach ◽  
The Impact ◽  
The Relationship ◽  
Ssa Countries

PurposeThe purpose of this study is to examine the impact of human capital on economic growth for a selected sample of nine SSA countries between 1980 and 2014 using a panel econometric approach.Design/methodology/approachThe authors estimate a log-linearized endogenous using the fully modified ordinary least squares (FMOLS) and the dynamic ordinary least squares (POLS) applied to our panel data time series.FindingsThe empirical analysis shows an insignificant effect of human capital on economic growth for our selected sample. These findings remain unchanged even after adding interactive terms to human capital, which are representatives of government spending as well as foreign direct investment. Nevertheless, the authors establish a positive and significant effect of the interactive term between urbanization and human capital on economic growth.Practical implicationsThe results emphasize the need for African policymakers to develop urbanized, “smart”, technologically driven cities within the SSA region as a platform toward strengthening the impact of human capital-economic growth relationship.Originality/valueThis study becomes the first in the literature to validate the human capital–urbanization–growth relationship for African countries.

Corporate governance and performance of medium-sized firms in Nigeria: does sustainability initiative matter?

2020 ◽  
Vol 20 (3) ◽  
pp. 401-427
Author(s):  
Babatunji Samuel Adedeji ◽  
Tze San Ong ◽  
Md Uzir Hossain Uzir ◽  
Abu Bakar Abdul Hamid
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Reporting ◽  
Structural Equation ◽  
Negative Impact ◽  
Positive Impact ◽  
Mediating Effect ◽  
Content Type ◽  
And Performance ◽  
The Relationship

Purpose The non-existence of the corporate governance (CG) concept for practices by non-financial medium-sized firms (MSFs) in Nigeria informed. This study aims to determine whether CG practices influence firms’ performance and whether sustainability initiative (SI) mediates the relationship between CG and MSFs’ performance in Nigeria. Design/methodology/approach A total of 300 firms were selected on convenience sampling basis from South Western Nigeria using a structured questionnaire. The authors used Statistical Package for Social Sciences for exploratory data analysis and hypotheses were tested using covariance-based structural equation modelling. Findings The results show that CG has a significant positive effect on performance [financial performance (FNP) and non-financial performance (NFP)] and SI. SI has a mixed impact on performance, e.g. a significant positive impact on NFP but insignificant negative impact on FNP. Similarly, SI has a combined mediating effect in the relationship between CG and performance, e.g. fully mediates CG → NFP and does not mediate CG → FNP. Firms are to invest in social and environmental initiatives substantially. CG codes will complement the International Financial Reporting Standards for MSFs. Research limitations/implications This study supports the assumptions of theories (institutional, stakeholder and agency) as the basis for the usage of multiple approaches to determine the outcome of hypotheses, especially in developing climes. Practical implications The study contributes to CG and performance literature by examining the mediating effects of SI. The paper also shows the necessity to emphasise NFP aspect. Policymakers should evolve CG codes to encourage stakeholders to believe more in the corporate existence of MSFs for strengthening capital-base and quality personnel engagement. Originality/value To the best of the authors’ knowledge, this is one of the first empirical attempts showing the evidence on the relationship between CG and NFP in Nigeria.

Mandatory CSR expenditure and stock return

2020 ◽  
Vol 28 (6) ◽  
pp. 951-975
Author(s):  
Asit Bhattacharyya ◽  
Md Lutfur Rahman
Keyword(s):  
Least Squares ◽  
Stock Returns ◽  
Least Squares Method ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Ordinary Least Squares ◽  
Reverse Causality ◽  
Endogeneity Bias ◽  
Content Type ◽  
The Impact

Purpose India has mandated corporate social responsibility (CSR) expenditure under Section 135 of the Indian Companies Act, 2013 – the first national jurisdiction to do so. The purpose of this paper is to examine the impact of mandated CSR expenditure on firms’ stock returns by using actual CSR spending data, whereas the previous studies mostly focus on voluntary CSR proxied by CSR scores. Design/methodology/approach The authors estimate their baseline regression by using ordinary least squares(OLS) method. Although the baseline regression involving CSR expenditure and stock returns using ordinary least squares method are estimated, endogeneity and reverse causality biases are addressed by using two-stage least squares and generalized method of moments approaches. These approaches contribute mitigating endogeneity bias and biases associated with unobserved heterogeneity and simultaneity. Findings The findings document that mandatory CSR expenditure has a negative impact on firms’ stock returns which supports the “shareholders” expense’ view. This result remain robust after controlling for endogeneity bias and the use of both standard and robust test statistics. The authors however observe that this result holds for the firms with actual CSR expenditure equal to the mandated amount but does not hold for the firms with actual CSR expenditure greater than the mandated amount. Therefore, the authors provide evidence that CSR expenditure’s impact on stock returns depends on whether firms simply comply the regulation or voluntarily chose an amount of CSR expenditure above the mandated amount. Originality/value The primary contribution is to present a valid and robust evidence of negative effect of mandated CSR spending on firms’ stock returns when the mandatory CSR spending rule is already in place. This study contributes by examining the impact of mandated CSR spending on stock during post-implementation period (2015-2017), whereas other studies by Dharampala and Khanna (2018); Kapoor and Dhamija (2017); and Mukherjee et al. (2018) mainly examined the impact of legislation on Indian CSR. The authors use mandated actual CSR expenditure, whereas previous studies mostly focus on voluntary CSR proxied by CSR scores.

scholarly journals Do Employees Matter in the Relationship between Corporate Social Responsibility and Financial Performance?

2019 ◽  
Vol 11 (22) ◽  
pp. 6251 ◽  
Author(s):  
Jae Mee Yoo ◽  
Woojae Choi ◽  
Mi Lim Chon
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Employee Commitment ◽  
Micro Level ◽  
And Performance ◽  
Internal Stakeholders ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

This study investigated the mechanism behind the impact of corporate social responsibility (CSR) on firms’ financial performance while focusing on internal stakeholders. Although many studies have examined the effects of CSR few has empirically investigated the underlying process of the mechanism. In addition, previous research has rarely regarded employees as a link between CSR and firms’ outcomes, despite employees implementing CSR policies. This study explored the pathway of the CSR-employees-firm’s performance. Employee commitment was used to explain the relationship between CSR and performance, since it is an important employee-associated micro-level outcome of CSR. The results showed that CSR indirectly influenced a firm’s accounting profitability through enhanced employee commitment, as well as directly affected firm’s profitability. CSR increases employee commitment, which in turn leads to improvements in a firm’s accounting returns. The paper suggests that employees should be considered as an important agent for the effects of CSR initiatives.

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