scholarly journals JAKARTA ISLAMIC INDEX: COVID-19 PANDEMIC AND POTENTIAL FINANCIAL DISTRESS

2021 ◽  
Vol 7 (2) ◽  
pp. 210
Author(s):  
Avianto Nugroho ◽  
Wasiaturrahma Wasiaturrahma ◽  
Putri Anggia
Keyword(s):  
Financial Performance ◽  
Method Of Moments ◽  
Data Model ◽  
Financial Distress ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
The Other ◽  
Islamic Companies ◽  
Profitability Ratios ◽  
Model Approach

This research aims to analyze the potential for financial distress of Islamic companies that are included in the Jakarta Islamic Index during pandemic of COVID-19, which is using profitability ratios, liability ratios, and liquidity ratios (Zwesky's Model). The sample is quarterly (2019 to 2020) and it is using the Generalized Method of Moments (GMM) panel data model approach that was developed by Arellano and Bond (1991). The results of this study indicate that the profitability ratio has the most influence on corporate financial distress and from the overall this research occurs in the process of decreasing company financial performance during pandemic of COVID-19. Moreover, there is one company that indicates financial distressed, there are twenty-two companies that experienced a decline in financial performance, but there are 7 companies that experiences better financial performance when the COVID-19 pandemic occurred. In one hand, this shows that COVID-19 has a broad effect on the decline in the financial performance of sharia companies. On the other hand, it has a positive impact on certain companies that works specifically in sectors which is related to information technology.

Does Bank Profitability Stimulate Economic Growth in the Arab Region?

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Omar Ghazy Aziz
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Arab Countries ◽  
Return On Assets ◽  
Bank Profitability ◽  
Arab Region ◽  
Return On Equity ◽  
The Impact

AbstractThis study empirically investigates the impact of bank profitability, as a complementary measure of financial development, on growth in the Arab countries between 1985 and 2016. Using a generalized method of moments (GMM) estimation to test the impact of the bank profitability on growth, this study utilises two variables in the econometric model which are return on assets and return on equity. This study reveals that both variables of bank profitability are positive and significant. This confirms that the bank profitability, beside other financial development variables, has positive impact on the growth. This study points out some important implications based on this result.

scholarly journals CSR and Corporate Financial Performance: An Inter-Sectorial Analysis

2019 ◽  
Vol 14 (11) ◽  
pp. 193 ◽  
Author(s):  
Antonio Salvi ◽  
Emanuele Doronzo ◽  
Anastasia Giakoumelou ◽  
Felice Petruzzella
Keyword(s):  
Financial Performance ◽  
Method Of Moments ◽  
Environmental Governance ◽  
Generalized Method Of Moments ◽  
Geographic Area ◽  
Corporate Financial Performance ◽  
Thomson Reuters ◽  
Sectorial Analysis ◽  
Corporate Social ◽  
The Relationship

This study examines the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), shedding new light on the lack of academic consensus and prevailing failure to deal with endogeneity in data. To this purpose, the authors recalculate ESG performance starting from the four pillars (economic, environmental, governance and social) provided by Thomson Reuters’ Asset4 database, able to determine a firm’s CSP. We adjust each ESG pillar score accounting for the firm’s sector, size and headquarter geographic area. We empirically test the relationship with a Generalized Method of Moments approach (GMM) in order to tackle the widely disputed endogeneity issues arising in this type of datasets. Results highlight a positive relationship between CSR, as measured in a tailored manner in this study, and corporate financial performance.

scholarly journals Simultaneous Association between Quality of Corporate Environmental Performance and Financial Performance: Evidence from Select Asian Countries

2020 ◽  
Vol 4 (1) ◽  
pp. 78
Author(s):  
Santi Gopal Maji ◽  
Utpal Kumar De ◽  
Ardi Gunardi
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Fixed Effects ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Positive Influence ◽  
Equation Model ◽  
Business Practices ◽  
Asian Countries

This study empirically investigates the simultaneous association between the quality of environmental performance (EP) and financial performance of firms selected from three Asian countries—Japan, South Korea, and India. The content analysis technique based on a four-point scale was used to measure the quality of EP, whereas financial performance was measured based on the market-to-book ratio. Employing system generalized method of moments and fixed effects regression model in a system of two-equation model, the study finds that EP has a positive impact on financial performance. Similarly, the financial performance has a positive influence on the quality of EP. The findings of the study indicate that a firm can enhance its overall financial performance by improving its EP. This implies that firms not only improve their economic performance through environmentally responsible business practices, but also help in fulfilling some of the sustainable development goals of the United Nation’s 2030 development agenda.

scholarly journals Determinants of Basmati Exports from Pakistan: A Panel Data Analysis

2021 ◽  
Vol 3 (1) ◽  
pp. 12-18
Author(s):  
Muhammad Munwar Hayat ◽  
Raheela Khatoon
Keyword(s):  
Panel Data ◽  
Method Of Moments ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Trading Partner ◽  
Dummy Variable ◽  
Export Competitiveness ◽  
The Impact

This paper aims to estimate the impact of different factors of basmati exports from Pakistan to its trading partner. Results are obtained by using the Generalized Method of Moments (GMM) model and panel data methodology with a sample of 22 countries for the period of 2003-2019. To estimate the impact of different variables on basmati exports Generalized Method of Moments (GMM) model is used on the panel dataset. The results revealed that the inflation rate of Pakistan has a negative and significant effect on the export competitiveness of Pakistani basmati. The exchange rate of Pakistan has a positive and significant impact on the basmati export, the population of Pakistan has a negative and significant impact on basmati export. Basmati production in Pakistan also has a significant and negative impact on basmati export. The Gross Domestic Product (GDP) of Pakistan has a significant and positive impact on the basmati export while the GDP of the trading partner has a significant and negative impact on the basmati export. The dummy variable for joint border also has a positive and significant impact on basmati exports of Pakistan.

scholarly journals The Impact of CSR and Financial Distress on Financial Performance—Evidence from Chinese Listed Companies of the Manufacturing Industry

2020 ◽  
Vol 12 (17) ◽  
pp. 6799 ◽  
Author(s):  
Liu Wu ◽  
Zhen Shao ◽  
Changhui Yang ◽  
Tao Ding ◽  
Wan Zhang
Keyword(s):  
Financial Performance ◽  
Financial Distress ◽  
Manufacturing Industry ◽  
Positive Impact ◽  
Listed Companies ◽  
Research Database ◽  
Listed Firms ◽  
Chinese Listed Companies ◽  
Corporate Social ◽  
The Impact

This paper explores the impact of corporate social responsibility (CSR) and financial distress on corporate financial performance (CFP) in Chinese listed companies of the manufacturing industry. Covering a total of 1445 manufacturing observations from 2013 to 2018 by matching the China Stock Market & Accounting Research Database (CSMAR) and Ranking CSR Ratings (RKS) database and regression models, we find that CSR has a significant positive impact on CFP, and the relationship is more pronounced for firms that are more stable. Further, the win-win relationship of CSR and CFP is also stronger in state-owned enterprises (SOEs). These empirical results suggest that enterprises should actively embrace CSR in response to the call of the country. At the same time, corporate stability should be increased to enhance the role of CSR in promoting CFP. We provide a quantitative analysis of the CSR, CFP, and financial distress of listed firms, and help to alleviate managers’ concern of CSR fulfillment and risk control.

scholarly journals International diversification and firm’s value: evidence from developing nations

2016 ◽  
Vol 26 (2) ◽  
pp. 166-183 ◽  
Author(s):  
A.N. Bany-Ariffin ◽  
Bolaji Tunde Matemilola ◽  
Liza Wahid ◽  
Siti Abdullah
Keyword(s):  
Financial Performance ◽  
Multinational Corporations ◽  
Multinational Firms ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
International Diversification ◽  
Technological Advancement ◽  
Reverse Causality ◽  
Content Type ◽  
The Impact

Purpose This paper aims to evaluate the impact of international diversification, through the investment abroad activities of the Malaysian multinational corporations (MNCs), on their financial performance. Design/methodology/approach The paper applies the panel generalized method of moments (GMM) estimation technique that gives better results. Findings The empirical findings show that the move to invest abroad has brought a positive impact on Malaysian MNCs’ financial performance. However, in terms of a firm’s risk, the results contradict the general internationalization-risk hypothesis. Research limitations/implications The study focuses on the top 100 multinational firms; future researchers may extend the time period and use the entire sample of all the multinational firms. Practical implications Foreign investments offer rewarding returns due to cheaper labour and raw materials, competitive edge in terms of technological advancement and larger market opportunities. Originality/value The paper contributes to the literature using the panel GMM’s estimation that effectively control for reverse causality and serial correlation problem. The paper also contributes to the international diversification and performance relationship, in a fast-growing Malaysia.

scholarly journals Integrating Capital Structure, Financial and Non-Financial Performance: Distress Prediction of SMEs

2019 ◽  
Vol 4 (2) ◽  
pp. 56-63
Author(s):  
Farida Titik Kristanti ◽  
Sri Rahayu ◽  
Deannes Isynuwardhana
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Financial Distress ◽  
Positive Impact ◽  
Jel Classification ◽  
Operating Income ◽  
Distress Prediction ◽  
Retained Earnings ◽  
Research Period ◽  
Made In

Objective – The growth of SMEs in Indonesia is rising from year to year. As an anticipation of bankruptcy, predictions can be made in an integrated means from the perspective of capital structure, financial, and non-financial performance. Methodology/Technique – A sample of 39 companies were selected using purposive sampling during the research period of 2013-2017. The results of the statistical logistic regression show that profitability is an important factor in predicting financial distress of the SMEs in Indonesia. Findings – The operating income to total assets has a negative and significant effect on SMEs financial distress. Meanwhile, retained earnings to total assets have a positive impact. Indonesian SMEs must be efficient in their operational costs to avoid financial distress. Novelty – In addition, sales are also important. If the company's sales are high, and the operational cost efficiency is maintained, the retained earnings will increase. This means that the company will be safe and able to avoid financial distress. Type of Paper: Empirical. Keywords: Capital Structure; Financial; Distress; Non-Financial; Performance. Reference to this paper should be made as follows: Kristanti F T; Rahayu S; Isynuwardhana D; 2019. Integrating Capital Structure, Financial and Non-Financial Performance: Distress Prediction of SMEs, Acc. Fin. Review 4 (2): 56 – 62 https://doi.org/10.35609/afr.2019.4.2(4) JEL Classification: G32, G33, G34.

FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

2021 ◽  
pp. 1-28
Author(s):  
MINHAJ ALI ◽  
MUHAMMAD IMRAN NAZIR ◽  
SHUJAHAT HAIDER HASHMI ◽  
WAJEEH ULLAH
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Financial Inclusion ◽  
Moderation Effect ◽  
The Relationship ◽  
Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

scholarly journals The impact of taxes effects on the economic growth of developing countries in ASIA

2020 ◽  
Author(s):  
Văn Thuận Nguyễn ◽  
Xuân Hằng Trần ◽  
Minh Hằng Nguyễn ◽  
Thị Kim Chi Ng
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Method Of Moments ◽  
Positive Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Estimation Methods ◽  
Policy Suggestions ◽  
The Impact

The objective of the study is to examine the impact of taxes on economic growth in developing countries in Asia during 18-year period (2000-2017). Using the estimation methods of OLS, FEM, REM, GLS and two-step system generalized method of moments (S-GMM) for panel data. Empirical results show that taxation has a positive impact on economic growth at level of 1%, while the most studies consider this to be a negative relationship. Besides, factors such as government spending, trade openness, inflation also have a significant impact on economic growth. On that basis, the study provides some policy suggestions for tax policies in these countries.

scholarly journals The Relationship Between Financial Ratios and the Stock Prices of Selected European Food Companies Listed on Stock Exchanges

2019 ◽  
Vol 67 (1) ◽  
pp. 299-307
Author(s):  
Marie Ligocká ◽  
Daniel Stavárek
Keyword(s):  
Method Of Moments ◽  
Stock Prices ◽  
Generalized Method Of Moments ◽  
Individual Characteristics ◽  
Financial Ratios ◽  
Stock Exchanges ◽  
Annual Frequency ◽  
The Individual ◽  
The Relationship ◽  
Profitability Ratios

Stock prices can be influenced by many factors. It is possible to determine two categories of variables that can affect stock prices: macroeconomic and microeconomic variables. The paper is focused on microeconomic factors, specially financial ratios that reflect business activities of the companies. According to the study of Drummen and Zimmermann (1992) the individual characteristics of companies affect up to 50 % of stock prices. The object of this paper is to examine the relationship between selected financial ratios and the stock prices of food companies listed on selected European Stock Exchanges. Time series on annual frequency are used to examine the relationship between stock prices of selected companies and financial ratios with using the Generalized Method of Moments (GMM). Based on previous research we expect to find some linkages especially between stock prices and the profitability ratios.

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