Nexus between financial innovations, remittances and credit performance: Evidence from augmented ARDL and nonlinear ARDL

The motivation for this study is to assess the impact of financial innovation and remittances on bank-based financial institutions’ credit performance in Bangladesh for the period 1981–2019. The study applies augmented ARDL (AARDL) and nonlinear ARDL (NARDL) to identify both long-run and short-run effects and directional causality by performing non-granger casualty tests. AARDL confirms the presence of a long-run association between financial innovation, remittance, trade openness, FDI, and credit performance, which is measured by non-performing loans. In the long run, financial innovation and FDI volatility expose a positive link with NPLs, but remittance inflows and trade openness establish a negative association. Asymmetry shocks in financial innovation reveal a positive relationship with credit performance. In contrast, the asymmetric shock of remittance and trade openness unveil a negative tie to credit performance, especially in the long run. Furthermore, directional causality provides evidence to support a feedback hypothesis explaining causality between financial innovation and credit performance, as well as remittance inflows and credit performance. These findings suggest that credit performance is guided by future development in remittances and financial innovation; thus, closer attention from policymakers and financial experts is persistent to capitalize or mitigate the impact of the financial system.

Dynamic diversification benefits of Sukuk and conventional bonds for the financial performance of MENA region companies: empirical evidence from COVID-19 pandemic period

Purpose This study aims to investigate the spillover between the Middle East and North Africa (MENA) stock index and several security indices, including Sukuk and conventional bond, and ultimately compare the hedge effectiveness of Sukuk and conventional bond. Design/methodology/approach The study uses VAR (1)-asymmetric Baba, Engle, Kraft and Kroner-multivariate generalized autoregressive conditional heteroskedasticity (1,1) model to analyze the volatility and shock and asymmetric shock spillover between Sukuk index and several bond indices in the MENA region including, Bond, All Bond, High Yield Bond and Bond and Sukuk and MENA stock market index and ultimately compare the hedging capabilities of Sukuk and conventional bonds by calculating the optimal portfolio weights for securities indices and stock portfolios and hedge effectiveness of security indices. Findings Results indicate that there is no shock, volatility and asymmetric shock spillover between the Sukuk index and MENA stock index, implying that Sukuk indices behave independently from MENA stock indices; however, there is shock and asymmetric shock spillover between MENA stock indices and security indices that include conventional bonds. The result of optimal portfolio weights and corresponding hedge effectiveness indicate that Sukuk is the most significant asset among other security indices in diversifying and hedging stock MENA portfolios. Moreover, the hedge effectiveness of Sukuk shows persistent trends during both the normal and crisis periods. Practical implications The study suggests that MENA stock market investors and investment managers should add Sukuk instead of the conventional bond to their portfolio to hedge their portfolio against investment risks during both normal and crisis periods. Originality/value Although many studies compare many aspects of Sukuk and conventional bonds, this is the first study that compares the hedge effectiveness of Sukuk and conventional bond based on the time-varying optimal portfolio weights strategy.

Cylindrically and non-cylindrically symmetric expansion dynamics of tin microdroplets after ultrashort laser pulse impact

In this work, the expansion dynamics of liquid tin micro-droplets irradiated by femtosecond laser pulses were investigated. The effects of laser pulse duration, energy, and polarization on ablation, cavitation, and spallation dynamics were studied using laser pulse durations ranging from 220 fs to 10 ps, with energies ranging from 1 to 5 mJ, for micro-droplets with an initial radius of 15 and 23 $$\upmu$$ μ m. Using linearly polarized laser pulses, cylindrically asymmetric shock waves were produced, leading to novel non-symmetric target shapes, the asymmetry of which was studied as a function of laser pulse parameters and droplet size. A good qualitative agreement was obtained between smoothed-particle hydrodynamics simulations and high-resolution stroboscopic experimental data of the droplet deformation dynamics.

Post-COVID-19 EMU: Economic Distancing by Parallel Currencies

The coronavirus crisis has caused new distress in the European Economic and Monetary Union (EMU), as the southern part of the EMU has been hit stronger than the northern part. The common currency prevents nominal exchange rate adjustment in response to the asymmetric shock. Policymakers have therefore taken recourse to large-scale financial transfers. Based on the lessons from the German monetary union, this article proposes instead the introduction of parallel currencies to facilitate relative price changes. Parallel currencies in the south would allow an increase in competitiveness of the south via real depreciation. The introduction of a parallel currency in Germany would lead to capital inflows and a real appreciation of the new German mark. The pre-EMU pressure for structural adjustments and productivity gains would be restored.

A study of the asymmetric shock reflection configurations in steady flows

In this paper the asymmetric shock reflection configurations in two-dimensional steady flows have been studied theoretically. For an overall Mach reflection, it is found that the horizontal distance between both triple points in the Mach stem is related to the angles of two slip streams. Based on the features of the converging stream tube, several assumptions are put forward to perform better the wave configurations near the slip streams. Therefore, we present an analytical model here to describe the asymmetric overall Mach reflection configurations which agrees well with the computational and experimental results.