Risk Governance and Control: Financial Markets & Institutions - Virtus InterPress

Unpacking the impact of bank-specific factor interactions on capital structure

Respect Kudzai Mauto,Junious Marire,Sibanisezwe Khumalo,Sambulo Malumisa — 2026-05-01T09:09:09Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the joint effects of competition, efficiency, and stability on the capital asset ratio (CAR) of African commercial banks using a composite institutional measure—competition, efficiency, and stability index (CESINDEX). The analysis is based on an unbalanced panel of 792 bank-year observations from 66 commercial banks across 12 African countries. Panel estimation techniques are employed to account for heterogeneity and endogeneity. The findings indicate that CESINDEX has a positive and statistically significant effect on CAR, suggesting that stronger institutional conditions are associated with higher bank capitalization. Among the competition, efficiency, and stability components, financial stability, proxied by the Z-score, exhibits the strongest positive association with CAR, while technical efficiency and profitability display negative relationships with capital ratios. Overall, the results demonstrate that capital structure decisions in African banks are shaped by the joint interaction of competition, efficiency, and stability rather than isolated institutional effects. The study contributes to the banking and capital structure literature by providing integrated evidence from institutionally diverse and financially constrained African economies.

Keywords: Competition, Efficiency, Stability, CESINDEX

Authors' individual contribution: Conceptualization—R.K.M.; Methodology—R.K.M.; Software—R.K.M.; Validation—S.K.; Formal Analysis—S.M.; Investigation—S.M.; Resources—S.K.; Data Curation—R.K.M.; Writing—Original Draft—R.K.M.; Writing—Review & Editing—J.M., S.K., and S.M.; Visualization—R.K.M.;
Supervision—J.M., S.K., and S.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: J3, J4, J5

Received: 24.05.2025
Revised: 05.09.2025; 16.01.2026; 13.04.2026
Accepted: 29.04.2026
Published online: 01.05.2026

How to cite this paper: Mauto, R. K., Marire, J., Khumalo, S., & Malumisa, S. (2026). Unpacking the impact of bank-specific factor interactions on capital structure. Risk Governance and Control: Financial Markets & Institutions, 16(2), 35–45. https://doi.org/10.22495/rgcv16i2p3

Risk spillover effects between financial markets

2026-04-28T06:13:26Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Due to capital flow liberalization, financial instruments react swiftly to market information. Utilizing the structural vector autoregression (SVAR) approach, this study analyzes risk spillover effects between financial markets in South Africa and Nigeria. Findings indicate significant risk spillovers between stock and exchange rate markets in both countries. In Nigeria, extraordinarily high exchange rate volatility acts as a major destabilizing variable, contributing significantly to stock market instability and showing high sensitivity to the United States interest rate spread. Conversely, South African stock returns exhibit high shock volatility, but remarkably stable interest rates indicate effective central bank regulation for shock absorption, though exchange rates react strongly to stock return shifts. Crucially, South African markets mean-revert within a week, whereas Nigerian markets exhibit long-memory responses, creating disequilibrium for up to a month with delayed stock return impacts from currency swings. Ultimately, this structural market heterogeneity underscores the critical need for enhanced risk management practices and international financial cooperation.

Keywords: Financial Spillover, SVAR, Exchange Rate Volatility, Stock Returns, Interest Rates, Risk Transmission

Authors' individual contribution: Conceptualization—D.U., T.T.O., B.I., and E.V.N.; Methodology—M.A.O., F.A.E., G.T.A., and B.D.B.; Software—F.F., O.L.U., M.E.E., and A.A.E.; Validation—U.M.A., C.E.I., N.I.E., and A.W.O.; Formal Analysis—D.U., T.T.O., M.A.U., and I.D.E.; Investigation—B.I., F.A.E., G.T.A., and D.C.E.; Data Curation—M.A.O., F.F., O.L.U., B.D.B., and I.D.E.; Writing—Original Draft—D.U., T.T.O., M.A.O., B.I., and F.F.; Writing—Review & Editing—M.A.U., U.M.A., C.E.I., M.E.E., D.C.E., A.A.E., N.I.E., A.W.O., and E.V.N.; Supervision—D.U.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: A24, C35, D37

Received: 09.07.2025
Revised: 08.11.2025; 31.03.2026
Accepted: 24.04.2026
Published online: 28.04.2026

How to cite this paper: Umoru, D., Oru, T. T., Ugbaka, M. A., Obomeghie, M. A., Igbinovia, B., Faruk, F., Eke, F. A., Agba, U. M., Ujong, O. L., Ihuoma, C. E., Abumbe, G. T., Essien, M. E., Enamhe, D. C., Bisong, B. D., Ele, A. A., Eni, N. I., Obeten, A. W., Edadi, I. D., & Ndum, E. V. (2026). Risk spillover effects between financial markets. Risk Governance and Control: Financial Markets & Institutions, 16(2), 16–34. https://doi.org/10.22495/rgcv16i2p2

Dynamic Bayesian Black-Litterman model: Portfolio optimization and comparative analysis

Peerapat Wattanasin,Thoedsak Chomtohsuwan,Tanpat Kraiwanit — 2026-04-24T13:13:47Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Portfolio allocation in rapidly changing markets requires frameworks that can adapt to time-varying expected returns and covariance structures. This study develops and evaluates a dynamic Bayesian Black–Litterman (DBBL) model that extends the traditional Black–Litterman framework through recursive Bayesian updating, dynamic covariance estimation, and LSTM-generated return views. Using 11 U.S.-listed assets (AAPL, MSFT, AMZN, GOOG, TSLA, JNJ, JPM, NVDA, META, XOM, and GLD) and daily data from 2015 to 2025, the DBBL model is compared with Markowitz and static Black–Litterman benchmarks. The results show that DBBL provides a modest improvement in Sharpe Ratio, indicating better risk-adjusted efficiency. However, this gain is accompanied by lower cumulative returns and deeper maximum drawdown relative to the comparator models, highlighting a clear trade-off between adaptive risk management and absolute portfolio performance. These findings suggest that DBBL should be interpreted as a risk-aware adaptive allocation framework rather than a uniformly superior portfolio solution, and they underscore the importance of balancing responsiveness and stability in dynamic portfolio construction.

Keywords: Dynamic Bayesian Black-Litterman, Markowitz, Portfolio Optimization, Bayesian Inference, Sharpe Ratio, Dynamic Allocation, U.S. Equities, GLD

Authors' individual contribution: Conceptualization—P.W.; Methodology—P.W.; Validation—T.C.; Formal Analysis—T.C. and T.K.; Investigation—P.W.; Resources—P.W.; Data Curation—P.W.; Writing—Original Draft—P.W.; Writing—Review & Editing—T.C. and T.K.; Visualization—T.C. and T.K.; Supervision—T.C. and T.K.; Funding Acquisition—P.W.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C11, G11, G17

Received: 29.10.2025
Revised: 09.03.2026; 20.03.2026
Accepted: 20.04.2026
Published online: 24.04.2026

How to cite this paper: Wattanasin, P., Chomtohsuwan, T., & Kraiwanit, T. (2026). Dynamic Bayesian Black-Litterman model: Portfolio optimization and comparative analysis. Risk Governance and Control: Financial Markets & Institutions, 16(2), 8–15. https://doi.org/10.22495/rgcv16i2p1

2026-04-08T08:14:55Z

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Editorial: Risk governance in a changing disclosure and enforcement environment

Carmela D’Avino — 2026-04-08T08:14:00Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

This issue of Risk Governance and Control: Financial Markets & Institutions journal was published on April 8, 2026.

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How to cite: D'Avino, C. (2026). Editorial: Risk governance in a changing disclosure and enforcement environment. Risk Governance and Control: Financial Markets & Institutions, 16(1), 4–5. https://doi.org/10.22495/rgcv16i1editorial

Digital risk governance and behavioural drivers of robo-advisor adoption in financial services

Yasmeen Ansari,Rohit Bansal,Anand Kumar Mishra,Prince Kumar Maurya — 2026-04-03T07:26:15Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This article examines the impact of ‘reasons for' and ‘reasons against' factors on the adoption of robo-advisors (RAs) in the Saudi financial services sector. The limited empirical evidence on behaviour drivers and resistance factors that affect the adoption of digital financial innovations (Mishra, Bansal, & Maurya, 2023) is to be addressed within the framework of the behavioural reasoning theory (BRT) (Claudy et al., 2015). The data of 1366 Saudi customers have been analysed using a multi-stage stratified sampling approach. Confirmatory factor analysis (CFA), structural equation modelling (SEM), and artificial neural networks (ANN) have been used for analysis. Our analysis reveals that factors related to ‘reasons for' and ‘reasons against' affect RAs adoption. The results indicate that compatibility (COMP) and openness to change (OC) have a significant impact on attitude (ATT) and behavioural intention (BEI), whereas relative advantage (REA) has a direct impact on behavioural intention. Additionally, openness to change and compatibility affect adoption motivations and attitudes toward RAs. The findings highlight the need to analyse both pro-adoption and anti-adoption aspects in marketing strategy. The research has valuable implications for financial service providers and policymakers who are interested in boosting the uptake of digital financial services.

Keywords: Consumer Resistance, Innovation Adoption, Robo-Advisors, Financial Services, Behavioural Reasoning Theory

Authors' individual contribution: Conceptualization — Y.A.; Methodology — R.B.; Software — R.B.; Validation — A.K.M.; Formal Analysis — R.B.; Investigation — K.M.; Resources — Y.A.; Data Curation — P.K.M.; Writing — Original Draft — R.B.; Writing — Review & Editing — Y.A.; Visualization — A.K.M.; Supervision — Y.A.; Project Administration — Y.A.; Funding Acquisition — Y.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G1, G2, G4, O1, O3

Received: 21.06.2025
Revised: 10.10.2025; 14.02.2026; 17.03.2026
Accepted: 30.03.2026
Published online: 03.04.2026

How to cite this paper: Ansari, Y., Bansal, R., Mishra, A. K, & Maurya, P. K. (2026). Digital risk governance and behavioural drivers of robo-advisor adoption in financial services. Risk Governance and Control: Financial Markets & Institutions, 16(1), 207–224. https://doi.org/10.22495/rgcv16i1p18

The effect of Bitcoin price volatility on gold and stock markets: An analysis using lagged Bitcoin data

Phuong Huyen Do,Ngoc Mai Nguyen,Hoang Lan Nguyen,Van Duc Nguyen — 2026-04-01T07:01:02Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the spillover effects of global Bitcoin (BTC), price volatility on Vietnamese stock and gold markets using daily data from 2018 to 2025 (Akpan, 2024; Umoru et al., 2025). Building on a baseline framework of ordinary least squares (OLS), fixed-effects, and instrumental variable regressions with lagged Bitcoin returns, we analyze how global Bitcoin price movements co-move with the Ho Chi Minh Stock Exchange index (VNINDEX), Hanoi Stock Exchange (HNX), and VND-denominated gold returns after controlling for USD/VND exchange rate, United States (US) 10-year treasury yields, volatility index (VIX), and turnover volatility. To capture event-driven dynamics, we further incorporate dummy variables and interaction terms around major crypto-specific events (such as regulatory announcements and large market corrections), allowing us to test whether spillovers intensify during stress periods (Umoru et al., 2025). The results indicated that although preliminary estimates suggest positive comovements, these effects weaken after robustness checks, and no significant or stable spillover from Bitcoin to Vietnamese stock or gold markets is detected. These findings challenge the view of gold as a safe haven in the Vietnamese context and point to limited diversification benefits when combining Bitcoin, stocks, and gold in domestic portfolios. Overall, the study contributes to the emerging literature on cryptocurrency spillovers in frontier markets and provides actionable insights for investors and regulators concerned with systemic risk and portfolio risk management (Chutipat et al., 2023).

Keywords: Bitcoin, Price Volatility, Daily Return, Stock, Gold, Vietnam

Authors' individual contribution: Conceptualization — P.H.D., N.M.N., H.L.N., and V.D.N.; Methodology — P.H.D., N.M.N., H.L.N., and V.D.N.; Formal Analysis — P.H.D., N.M.N., H.L.N., and V.D.N.; Data Curation — P.H.D., N.M.N., H.L.N., and V.D.N.; Writing — Original Draft — P.H.D., N.M.N., H.L.N., and V.D.N.; Writing — Review & Editing — P.H.D., N.M.N., H.L.N., and V.D.N.; Visualization — P.H.D., N.M.N., H.L.N., and V.D.N.; Supervision — P.H.D., N.M.N., H.L.N., and V.D.N.; Project Administration — P.H.D., N.M.N., H.L.N., and V.D.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C32, E44, G10, G11, G12

Received: 26.11.2025
Revised: 24.02.2026; 06.03.2026
Accepted: 26.03.2026
Published online: 01.04.2026

How to cite this paper: Do, P. H, Nguyen, N. M., Nguyen, H. L., & Nguyen, V. D. (2026). The effect of Bitcoin price volatility on gold and stock markets: An analysis using lagged Bitcoin data. Risk Governance and Control: Financial Markets & Institutions, 16(1), 196–206. https://doi.org/10.22495/rgcv16i1p17

The effect of regulation in moderating the influence of the internet on Asian stock indices through the mediation of income inequality

Benny Budiawan Tjandrasa ,Andrew Sebastian Lehman — 2026-03-23T09:17:15Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

There is a phenomenon where, although most Asian countries experience high stock price indices growth, at the same time, there are still several Asian countries that are included in the category of the poorest countries in Asia. This study explains the relationship between income inequality and stock price indices growth and what factors can narrow income inequality, which is a combination of many previous studies, including research from Isojärvi and Jerow (2024) and Yunga et al. (2022). The population in this study is from all Asian countries. The samples used were taken using stratified random sampling techniques from 2020 to 2025. The results of the study prove the importance of a country having a quality internet network at competitive rates to support internet shopping, which is guaranteed by good regulations to support internet network users to increase the income inequality indices. The narrowing of the income gap leads to an increase in the purchasing power of the wider community, which increases the consumption and sales of businesses. This increases the company's profits and ensures positive sentiment and economic stability, which ultimately pushes the stock price indices higher. Another finding is that the function of regulatory policy turns out to have a unique influence on income inequality.

Keywords: Stock Price Indices, Regulatory Policies, Sustainability, Internet Development, Income Inequality

Authors' individual contribution: Conceptualization — B.B.T.; Methodology — B.B.T.; Software — A.S.L.; Validation — A.S.L.; Formal Analysis — B.B.T.; Investigation — B.B.T.; Resources — B.B.T.; Data Curation — B.B.T.; Writing — Original Draft — B.B.T.; Writing — Review & Editing — B.B.T. and A.S.L.; Visualization — A.S.L.; Supervision — A.S.L.; Project Administration — A.S.L.; Funding Acquisition — B.B.T.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D63, L86, Q56, R38, R53

Received: 21.11.2025
Revised: 21.02.2026; 13.03.2026
Accepted: 20.03.2026
Published online: 23.03.2026

How to cite this paper: Tjandrasa, B. B., & Lehman, A. S. (2026). The effect of regulation in moderating the influence of the internet on Asian stock indices through the mediation of income inequality. Risk Governance and Control: Financial Markets & Institutions, 16(1), 187–195. https://doi.org/10.22495/rgcv16i1p16

From application to disbursement: Governance, risks and workflow in Islamic donation-based crowdfunding

2026-03-20T12:18:22Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the operational workflow and governance structure of Islamic donation-based crowdfunding, focusing on its alignment with Shariah principles and ethical financial practices. Islamic donation-based crowdfunding provides a faith-based mechanism for charitable contributions through digital platforms. Employing a qualitative document analysis approach, this research identifies four key stages in the end-to-end campaign process: project application, fundraising, post-campaign reporting, and fund disbursement. The findings show that campaign initiators begin by submitting proposals for platform approval, followed by public fundraising. Upon project completion, initiators are required to report on fund utilisation and outcomes. A notable feature of most platforms is that funds are disbursed directly to beneficiaries or service providers, rather than to project owners, reinforcing the principles of trust (amanah) and public benefit (maslahah) in Islamic finance. However, the study also finds inconsistencies in verification procedures and post-campaign accountability across platforms. It aligns with concerns raised by previous studies regarding the need for enhanced governance mechanisms. These variations highlight the need for a more standardized governance structure. In conclusion, the study highlights the need for a unified, Shariah-compliant framework to enhance transparency, build donor confidence, and uphold the objectives of Islamic Law (maqasid al-Shariah), particularly justice (‘adl), social responsibility (mas'uliyyah), and social welfare.

Keywords: Islamic Donation-Based Crowdfunding, Shariah Governance, Crowdfunding Regulation, Ethical Finance, Maqasid Al-Shariah, Malaysia

Authors' individual contribution: Conceptualization — W.N.F.W.M.N. and S.M.Z.; Methodology — A.F.K.; Investigation — W.N.F.W.M.N., A.F.K., and R.M.R.; Resources — N.A.M.; Data Curation — S.M.Z.; Writing — Original Draft — W.N.F.W.M.N.; Writing — Review & Editing — W.N.F.W.M.N., M.I.H.K., N.A.M., and R.M.R.; Funding Acquisition — M.I.H.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G23, L31, Z12, D64, G38

Received: 15.07.2025
Revised: 05.12.2025; 05.02.2026; 05.03.2026
Accepted: 17.03.2026
Published online: 20.03.2026

How to cite this paper: Nazarie, W. N. F. W. M., Kamaruddin, M. I. H., Muhamed, N. A., Kamarubahrin, A. F., & Radzi, R. M., & Zaimi, S. M. (2026). From application to disbursement: Governance, risks and workflow in Islamic donation-based crowdfunding. Risk Governance and Control: Financial Markets & Institutions, 16(1), 178–186. https://doi.org/10.22495/rgcv16i1p15

The reaction of stock prices of Italian football teams to the surprise factor in match outcomes

Massimo Regalli,Giovanni Verga,Evita Allodi,Andrea Del Sante — 2026-03-17T14:24:20Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This paper examines how stock prices of Italian football clubs react to unexpected match outcomes, focusing on Juventus, Lazio, and Roma over the 2013–2014 to 2018–2019 football seasons. According to market efficiency theory, price adjustments should reflect only the “surprise” component of match results — that is, the deviation between the actual outcome and its ex-ante expectation. Using betting odds to proxy market expectations, we show that surprises exert a significant and immediate influence on stock prices, which is largely incorporated into opening prices on the first trading day after the match. By analysing both open and close prices, our findings indicate that some irregularities appear at market opening but tend to be corrected during the trading day, suggesting partial but not complete market efficiency. We also document asymmetric effects across clubs and explore whether rival-team results influence price adjustments. Overall, the results highlight the central role of expectation formation and surprise in shaping stock market reactions to sporting events.

Keywords: Italian Football Club, Football Match, Surprise, Stock Price, Efficient Market

Authors' individual contribution: Conceptualization — M.R. and A.D.S.; Methodology — G.V.; Software — G.V.; Validation — G.V.; Formal Analysis — G.V.; Investigation — G.V.; Data Curation — G.V. and A.D.S.; Writing — Original Draft — M.R., G.V., and E.A.; Writing — Review & Editing — E.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: Z23, G14, G12, C50, C30

Received: 16.09.2025
Revised: 18.12.2025; 16.02.2026
Accepted: 13.03.2026
Published online: 17.03.2026

How to cite this paper: Regalli, M., Verga, G., Allodi, E., & Del Sante, A. (2026). The reaction of stock prices of Italian football teams to the surprise factor in match outcomes. Risk Governance and Control: Financial Markets & Institutions, 16(1), 163–177. https://doi.org/10.22495/rgcv16i1p14

The influence of factors on the probability of incurring bad debt exceeding the threshold at joint-stock commercial banks

Thi Van Anh Pham,Van Binh Nguyen,Huong Quynh Doan,Thi Hoai Thu Ho — 2026-03-13T12:17:09Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The study aims to analyze the factors affecting the probability of bad debt exceeding the threshold at listed joint-stock commercial banks in Vietnam during the period 2012–2024. The study examines the relationship between the probability of bad debt exceeding the threshold (Lyra et al., 2015) and independent variables such as credit growth rate, bank size, business efficiency, liquidity, and macroeconomic variables such as inflation rate, economic growth, and money supply by using a binary logit model. The results show that rapid credit growth, low business efficiency, and poor liquidity are factors that significantly increase the probability of bad debt exceeding the threshold. On the contrary, large size and high profitability have an impact on reducing this probability. The study provides important empirical evidence for bank managers in controlling credit risks and contributing to ensuring the safety of the banking and financial system in Vietnam (Chang et al., 2025). The study contributes to the application of the logit model to predict the possibility of bad debt exceeding the threshold, while clearly identifying key factors to enable banks to enhance early warning and control credit risks more effectively.

Keywords: Joint-Stock Commercial Banks, Stock Market, Internal Financial Factors, Macroeconomic Factors, Non-Performing Loans

Authors' individual contribution: Conceptualization — T.V.A.P and T.H.T.H.; Methodology — T.V.A.P.; Validation — V.B.N. and T.H.T.H.; Formal Analysis — T.V.A.P. and V.B.N.; Investigation — V.B.N.; Resources — T.H.T.H.; Data Curation — H.Q.D. and T.H.T.H.; Writing — H.Q.D. and T.H.T.H.; Supervision — H.Q.D.; Project Administration — T.V.A.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: E31, G21, G30, G32

Received: 23.11.2025
Revised: 15.02.2026; 02.03.2026
Accepted: 11.03.2026
Published online: 13.03.2026

How to cite this paper: Pham, T. V. A., Nguyen, V. B., Doan, H. Q., & Ho, T. H. T. (2026). The influence of factors on the probability of incurring bad debt exceeding the threshold at joint-stock commercial banks. Risk Governance and Control: Financial Markets & Institutions, 16(1), 152–162. https://doi.org/10.22495/rgcv16i1p13

Volatility risk premium and market risk forecasting: Good vs. bad volatility in emerging and developed markets

2026-03-09T15:40:54Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Standard asset pricing models often fail to capture acute tail risks and asymmetric volatility in financial markets, particularly in weaker economies. This study investigates whether the volatility risk premium (VRP) can predict fat-tail risks and asymmetric tendencies in emerging and developed markets. Employing conditional value-at-risk (CoVaR), VaR-regression, Baba, Engle, Kraft, and Kroner generalized autoregressive conditional heteroskedasticity (BEKK-GARCH), and dynamic conditional correlation (DCC) frameworks, realized volatility was bifurcated into good (positive) and bad (negative) components. Findings reveal that bad volatility drives systemic and individual risks at nearly twice the rate of good volatility. Emerging markets exhibit persistent, integrated GARCH (IGARCH)-like volatility, whereas developed markets remain mean-reverting. Models incorporating VRP significantly outperform GARCH-type models in out-of-sample forecasts, showing a 25–30% predictive improvement for emerging markets versus 19–20% for developed markets. By identifying impending tail risks missed by historical data, the VRP and asymmetric volatility elements are essential for enhancing macro-stability policies and portfolio risk management in structurally precarious, highly sensitive markets.

Keywords: Asymmetric Volatility, Systemic Risk (CoVaR), Conditional VaR (CVaR), Volatility Risk Premium (VRP), Value at Risk (VaR), Realized Volatility Forecasting, Emerging Markets

Authors' individual contribution: Conceptualization — D.U., E.T.O., G.O., B.I., and M.I.U.; Methodology — D.U., E.O., and B.I.; Software — F.I.O., B.O.A., and I.M.O.; Validation — E.E., A.P.A., I.A., and O.L.O.; Formal Analysis — D.U., M.I.U., and M.O.I.; Investigation — G.O., D.N.M., A.P.I., and A.E.; Resources — O.T.E., A.E., and O.A.; Data Curation — B.I., O.T.E., and O.A.; Writing — Original Draft — D.U., E.O., B.I., and M.I.U.; Writing — Review & Editing — D.U., E.T.O., B.I., E.E., A.P.A., M.O.I., I.A., and O.L.O.; Visualization — F.I.O., B.O.A., I.M.O., and O.B.; Supervision — D.U.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G12, G15, G17, C32, C58

Received: 07.07.2025
Revised: 08.11.2025; 17.02.2026
Accepted: 05.03.2026
Published online: 09.03.2026

How to cite this paper: Umoru, D., Oseremen, E., Omoluabi, E. T., Ohiokha, G., Ohiokha, F. I., & Igbinovia, B., Umole, M. I., Enaberue, E., Agbadua, B. O.,Olade, I. M., Anoghene, A. P., Margret, D. N., Ihechi, A. P., Ebunlola, O. T., Evelyn, A., Amina, O., Imologomhe, M. O., Aminetu, I., & Oyarekhua, O. L. (2026). Volatility risk premium and market risk forecasting: Good vs. bad volatility in emerging and developed markets. Risk Governance and Control: Financial Markets & Institutions, 16(1), 138–151. https://doi.org/10.22495/rgcv16i1p12

Mitigating procurement risks: A framework for good governance in public contracting

Karem Sayed Aboelazm ,Raghda Raafat,Fady Tawakol,Khalid Mohamed Dganni — 2026-02-19T12:58:43Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This paper seeks to explore internal and emerging limitations set within the public procurement system. It suggests institutional structures to oversee such a process, more than just technical fixes (Enayati & Özaltin, 2024). It also aims to move beyond the technologies themselves by bringing governance, standards, and principles into public procurement. The present paper is descriptive-analytic and was conducted based on a review of literature and research reports. It also employs a qualitative interpretive methodology for analysis of international organization reports and identifies various types of public procurements, such as procedural and contextual systemic risks. The paper draws a number of inferences, and the most important among them is that risks are not single but multidimensional. This means that we cannot tackle these risks effectively simply by tackling technical reform. The paper promotes the principles of transparency, integrity, accountability, and the rule of law as core requirements and benchmarks for the reduction of risks in public procurement.

Keywords: Risk Management, Governance, Public Procurement, Accountability

Authors' individual contribution: Conceptualization — K.S.A., R.R., F.T., and K.M.D.; Methodology — K.S.A., R.R., F.T., and K.M.D.; Writing — Original Draft — K.S.A., R.R., F.T., and K.M.D.; Writing — Review & Editing — K.S.A.; Supervision — K.S.A.; Project Administration — K.S.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: K10, K15, K19, K24

Received: 04.10.2025
Revised: 12.01.2025; 02.02.2026
Accepted: 17.02.2026
Published online: 19.02.2026

How to cite this paper: Aboelazm, K. S., Raafat, R., Tawakol, F., & Dganni, K. M. (2026). Mitigating procurement risks: A framework for good governance in public contracting. Risk Governance and Control: Financial Markets & Institutions, 16(1), 126–137. https://doi.org/10.22495/rgcv16i1p11

Risk-MM-Georgia: Facilitating the effective risk management in the Georgian public sector

2026-02-12T10:42:01Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Risk management maturity models (RMMMs) have been increasingly integrated into public organizations to promote structured and proactive risk management. Several studies across different countries proposed frameworks to guide institutions in strengthening their practices. Despite these developments, a persistent imbalance between scientific rigor and practical applicability remains, leaving many public institutions with either complex models to implement or overly simplified frameworks that lack meaningful insights. This gap is particularly evident in the Georgian public sector, where adoption of a comprehensive risk management framework has been significantly delayed. The present study introduces Risk-MM-Georgia, a novel RMMM developed using the design science research (DSR) methodology. The model was applied to nine major public organizations and externally validated against Brazil's PRisk-MM, a framework successfully implemented within the Brazilian public sector (de Lorena & Costa, 2023b). The analysis yielded consistent findings, with 77.78 percent of the organizations achieving the same maturity level under both models, thereby supporting the reliability of the proposed framework. Overall, Risk-MM-Georgia bridges theory and practice by providing step-by-step guidance for public institutions and demonstrating global relevance through cross-national benchmarking.

Keywords: Maturity Models, Risk Assessment, Risk Management Framework, Public Sector, Model-Based Process Improvement, Practice-Based Model, Scientific Model

Authors' individual contribution: Conceptualization — K.N. and A.L.F.d.L.; Methodology — A.L.F.d.L., M.M., and T.S.; Validation — K.N. and A.L.F.d.L.; Investigation — K.N. and T.S.; Resources — K.N., A.L.F.d.L., M.M., and T.S.; Data Curation — K.N. and A.L.F.d.L.; Writing — Original Draft — K.N.; Writing — Review & Editing — A.L.F.d.L.; Visualization — K.N., A.L.F.d.L., and T.S.; Supervision — A.P.C.S.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, H11, H12

Received: 12.08.2025
Revised: 10.11.2025; 03.01.2026; 30.01.2026
Accepted: 09.02.2026
Published online: 12.02.2026

How to cite this paper: Nadirashvili, K., de Lorena, A. L. F., Costa, A. P. C. S., Menteshahsvili, M., & Surguladze, T. (2026). Risk-MM-Georgia: Facilitating the effective risk management in the Georgian public sector. Risk Governance and Control: Financial Markets & Institutions, 16(1), 112–125. https://doi.org/10.22495/rgcv16i1p10

Determinants of acceptance rates of scrip dividend programs in the German stock market

Julian Heinen,Jonas Vogt — 2026-02-05T10:24:20Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Structuring corporate actions can be challenging due to the differing expectations and objectives of various stakeholders. In this context, scrip dividends represent an attractive instrument because of the flexibility they offer: shareholders can choose between receiving a cash dividend or additional shares at a previously determined subscription price, which is typically set at a discount to the prevailing market price. For firms considering such programs, the acceptance rate is a key decision metric. Whereas numerous and recent studies exist on other forms of corporate actions, scrip dividends have received comparatively little attention and constitute a largely under-researched field (Dennis & Weston, 2025; Drienko & Khorsand, 2023; Rau et al., 2024). This paper provides the first comprehensive empirical analysis of the factors influencing acceptance rates, based on a novel dataset covering all scrip dividend programs conducted in Germany. Using regression analysis, we find that shareholder concentration, the proportion of domestic investors in the shareholder base, and the discount on newly issued shares have a significant effect on acceptance.

Keywords: Dividend Policy, Scrip Dividends, Funding Strategy

Authors' individual contribution: Conceptualization — J.H.; Methodology — J.V.; Data Curation — J.H.; Investigation — J.H. and J.V.; Writing — J.V. and J.H.; Supervision — J.V.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G1, G3, C5

Received: 24.07.2025
Revised: 07.11.2025; 19.12.2025; 27.01.2026
Accepted: 03.02.2026
Published online: 05.02.2026

How to cite this paper: Heinen, J., & Vogt, J. (2026). Determinants of acceptance rates of scrip dividend programs in the German stock market. Risk Governance and Control: Financial Markets & Institutions, 16(1), 103–111. https://doi.org/10.22495/rgcv16i1p9

Geopolitical shocks, financial market, and economic dynamics: Insights from the United Kingdom

Mohammed Sultan Alsubaie — 2026-01-29T11:52:31Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Geopolitical risk (GPR) has become an important factor influencing economic stability. This research scrutinizes the macroeconomic impact of GPR shocks on the United Kingdom (UK) by using a structural vector autoregression (SVAR) model with monthly data from 1992 to 2024. The macroeconomic variables are the Financial Times Stock Exchange (FTSE) 100 index, bank rate, consumer price index (CPI), industrial production, employment, and hours worked. The results show that GPR shocks influence the UK economy, leading to a decline in the FTSE 100, temporary inflationary pressure, and a minor effect on industrial production and employment, followed by an overshooting effect. While UK- and Russia-specific GPR indices exhibit similar patterns, their effects vary in intensity and persistence. Compared to other uncertainty measures, GPR's impact is relatively short-lived, with the economy demonstrating a quicker recovery. This research contributes to the literature by collecting monthly data to apply SVAR-based analysis and investigating how UK-specific and Russia-specific GPR shocks affect key UK macroeconomic indicators. The findings suggest that these shocks depress the stock market and raise inflation. However, their effects on industrial production and employment are mild and short-lived compared with other uncertainty measures.

Keywords: Geopolitical Risk, Economic Uncertainty, SVAR, Forecast Errors, Industrial Production

Authors' individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: C32, D81, F51

Received: 16.10.2025
Revised: 12.12.2025; 26.12.2025
Accepted: 26.01.2026
Published online: 29.01.2026

How to cite this paper: Alsubaie, M. S. (2026). Geopolitical shocks, financial market, and economic dynamics: Insights from the United Kingdom. Risk Governance and Control: Financial Markets & Institutions, 16(1), 90–102. https://doi.org/10.22495/rgcv16i1p8

Evaluating the factors that impact the returns on agricultural and other commodity futures contracts: The influence of financial speculation

Algirdas Justinas Staugaitis,Česlovas Christauskas — 2026-01-27T08:54:04Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the impact of financial speculation on the returns and volatility of agricultural and other commodity futures before and after the COVID-19 pandemic, contributing to the debate on whether speculative trading amplifies or mitigates market instability in increasingly financialized commodity markets (Alaminos et al., 2024; Chiu & Chou, 2022). Using weekly data and applying Granger non-causality tests together with generalised autoregressive conditional heteroskedasticity (GARCH) and threshold generalised autoregressive conditional heteroskedasticity (TGARCH) models, the analysis shows that commodity returns either lead speculative activity or exhibit no significant causal relationship, indicating that speculation does not drive price dynamics. Speculation affects return volatility only in crude oil and gold markets, where the effect is stabilizing, while agricultural commodities show no statistically significant volatility response. Macroeconomic variables, particularly the Goldman Sachs Commodity Index (GSCI) index, strongly shape returns across all commodities, and volatility increased notably during the post-2020 period. Overall, the findings suggest that commodity price behaviour is primarily driven by fundamental and macroeconomic conditions rather than speculative pressures, and that speculation does not amplify volatility in agricultural markets even during periods of heightened global uncertainty.

Keywords: Agricultural Commodities, Futures, Financial Speculation, Return Volatility, Commodities

Authors' individual contribution: Conceptualization — A.J.S. and Č.C.; Methodology — A.J.S.; Formal analysis — A.J.S.; Writing — Original Draft — A.J.S.; Writing — Review & Editing — Č.C.; Supervision — Č.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C58, G13, Q02

Received: 19.08.2025
Revised: 03.12.2025; 14.01.2026
Accepted: 23.01.2026
Published online: 27.01.2026

How to cite this paper: Staugaitis, A. J., & Christauskas, C. (2026). Evaluating the factors that impact the returns on agricultural and other commodity futures contracts: The influence of financial speculation. Risk Governance and Control: Financial Markets & Institutions, 16(1), 77–89. https://doi.org/10.22495/rgcv16i1p7

Mandatory of expanding MSMEs loans: Measuring impact on credit risk and bank intermediation

Julia Safitri,Rini Yayuk Priyati,Anisa Zahwa Akbara,Ake Wihadanto,Etty Susanty — 2026-01-20T10:11:15Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The objective of this study is to analyze the impact of micro, small, and medium enterprises' (MSMEs) credit, both in nominal and proportional terms, on the relative credit risk of MSMEs and the role of banking intermediaries, including the potential occurrence of credit rationing. The study utilizes annual balance panel data from 28 publicly listed banks covering the period 2013–2022. The analysis employs a fixed-effect panel regression using the generalized least squares (GLS) and the generalized method of moments (GMM) estimator. The findings of this study indicate that an increase in MSMEs credit in nominal terms does not have a negative impact on the relative credit risk of MSMEs, banking intermediation, or lead to credit rationing. However, a larger proportion of MSMEs' loan tends to elevate the relative credit risk of MSMEs (Arifaj & Baruti, 2023; Sondakh et al., 2021), reduce the level of banking intermediation, and suggest the presence of credit rationing, wherein a higher proportion of MSMEs' loan actually reduces non-MSMEs' credit (corporate and household loans). Based on these findings, the study concludes that efforts to increase MSMEs' loan, particularly in proportion to total credit, have the potential to disrupt banking stability and impede the pace of banking intermediation (Eyalsalman et al., 2024).

Keywords: MSMEs Credit, Proportion of MSMEs Credit, Credit Risk, Bank Intermediation

Authors' individual contribution: Conceptualization — J.S.; Methodology — R.Y.P.; Software — A.W.; Validation — A.Z.A.; Formal Analysis — J.S. and A.Z.A.; Investigation — R.Y.P. and A.Z.A.; Resources — J.S., R.Y.P., A.Z.A., and A.W.; Data Curation — A.W.; Writing — Original Draft — J.S.; Writing — Review & Editing — R.Y.P., A.Z.A., and E.S.; Visualization — A.W.; Supervision — R.Y.P.; Project Administration — A.W.; Funding Acquisition — A.Z.A. and E.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G1, G2, G21

Received: 29.04.2025
Revised: 31.07.2025; 16.09.2025; 15.12.2025
Accepted: 16.01.2026
Published online: 20.01.2026

How to cite this paper: Safitri, J., Priyati, R. Y., Akbara, A. Z., Wihadanto, A., & Susanty, E. (2026). Mandatory of expanding MSMEs loans: Measuring impact on credit risk and bank intermediation. Risk Governance and Control: Financial Markets & Institutions, 16(1), 67–76. https://doi.org/10.22495/rgcv16i1p6

Random walk and unbiasedness in emerging derivatives markets: The risk governance approach

Thi Ha Thanh Nguyen,Ngoc Anh Pham,Tuan Anh Do — 2026-01-15T13:32:51Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the efficiency of the VN30 futures market in Vietnam, an emerging derivatives market, focusing on the random walk hypothesis and the unbiasedness hypothesis. Using daily opening and closing price data from August 17, 2017, to April 1, 2025 (1,905 observations), the study employs econometric methods, including autocorrelation test (Ljung-Box Q-statistics), unit root test (augmented Dickey-Fuller (ADF) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) tests), runs test, variance ratio test (Lo & MacKinlay, 1988), and Johansen cointegration test (Johansen, 1988; Johansen & Juselius, 1990) to test the above two hypotheses. The results show that VN30 futures prices follow a random walk, with negligible autocorrelation, non-stationary prices but stationary returns, and variance ratios close to 1, supporting weak-form efficiency. The Johansen test confirms cointegration between futures and spot prices, with trace statistics exceeding critical values, demonstrating the Unbiasedness Hypothesis and the price discovery role of the market. These results suggest that the Vietnamese futures market demonstrates weak-form efficiency and plays a crucial role in price discovery. The findings add to the limited literature on Vietnam's derivatives market and offer practical insights for investors, traders, and policymakers in developing effective investment and hedging strategies.

Keywords: Derivatives Market, Efficiency, Random Walk Hypothesis, Unbiasedness Hypothesis, Risk Governance, Vietnam

Authors' individual contribution: Conceptualization — N.A.P.; Methodology — T.A.D.; Validation — T.A.D.; Investigation — T.A.D.; Writing — Original Draft — T.H.T.N. and T.A.D.; Writing — Review & Editing — N.A.P.; Supervision — T.H.T.N. and N.A.P.; Funding Acquisition — T.H.T.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C22, C58, G13, G14, G15

Received: 22.08.2025
Revised: 30.11.2025; 25.12.2025
Accepted: 12.01.2026
Published online: 15.01.2026

How to cite this paper: Nguyen, T. H. T., Pham, N. A., & Do, T. A. (2026). Random walk and unbiasedness in emerging derivatives markets: The risk governance approach. Risk Governance and Control: Financial Markets & Institutions, 16(1), 58–66. https://doi.org/10.22495/rgcv16i1p5

Impact of financial flexibility on performance and credit risk of commercial banks in the emerging market

2026-01-12T09:17:45Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study aims to examine the impact of financial flexibility on performant credit risk. Study utilizes a dataset for a prolonged period from 2010–2023 and adopts a panel data analysis process to evaluate the association among financial flexibility, performance and credit risk in Iraq as one of the emerging markets. Outcomes specify that innovative phases of financial flexibility positively affect the profitability of banks, as they permit banks to lead commercial conditions and manage threats through premeditated variations in their financial operations. Moreover, the study advocates that financial flexibility has a vital role in diminishing risk in front of commercial banks, as financially flexibile banks diminish variations in revenue and have more potential in management of non-performing loans (NPLs), which increases their stability and generally under unstable economic circumstances. Outcomes of this study confirm the importance of improving financial flexibility within the banking sector as a means of refining effectiveness and mitigating risks. The perceptions of policy makers and bank managers enable them to develop capital management strategies which use multiple funding sources to boost financial flexibility for operational risk management.

Keywords: Financial Flexibility, Iraqi Banks, Profitability, Risk, Panel Data Analysis

Authors' individual contribution: Conceptualization — H.M.J. and N.H.M.A.-H.; Methodology — H.M.J., H.K.A., N.S.A., and N.H.M.A.-H.; Software — H.K.A., N.S.A., and N.H.M.A.-H.; Validation — H.M.J., H.K.A., and N.H.M.A.-H.; Formal Analysis — H.M.J. and N.H.M.A.-H.; Investigation — H.M.J.; Data Curation — H.M.J. & N.H.M.A.-H.; Writing — Original Draft — H.M.J. & N.H.M.A.-H.; Writing — Review & Editing — H.K.A., N.S.A., and N.H.M.A.-H.; Supervision — H.M.J.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G32, O16

Received: 28.07.2025
Revised: 31.10.2025; 11.11.2025; 23.12.2025
Accepted: 08.01.2026
Published online: 12.01.2026

How to cite this paper: Jadah, H. M., Ashour, H. K., Alramadan, N. S., & Al-Husainy, N. H. M. (2026). Impact of financial flexibility on performance and credit risk of commercial banks in the emerging market. Risk Governance and Control: Financial Markets & Institutions, 16(1), 47–57. https://doi.org/10.22495/rgcv16i1p4

Financial flexibility as a moderator of corporate governance effects on SME performance and risk: Evidence from the emerging market

Yuni Utami,Sri Lestari,Dian Purnomo Jati — 2026-01-09T13:26:00Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study investigates the relationship between corporate governance and financial flexibility in shaping performance and risk in small and medium-sized enterprises (SMEs) within developing economies. Unlike prior studies that treat governance as a static determinant, this research positions financial flexibility as a moderating factor that strengthens or weakens governance outcomes. Using panel data from 42 SMEs listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023 (210 firm-year observations) and applying fixed- and random-effects regression models, the findings show that board independence improves firm valuation but has a limited influence on profitability in the absence of adequate liquidity. Gender-diverse boards help reduce financial risk when SMEs maintain sufficient reserves, while larger boards tend to increase leverage exposure. These results are consistent with Wen et al. (2023), who find that effective governance enhances firm value through stronger monitoring, and Settembre-Blundo et al. (2021), who highlight the importance of financial flexibility in supporting firms' resilience to risk. Theoretically, this study advances the governance literature by integrating agency resolution and financial capacity within the constraints of SMEs. Practically, it highlights the role of liquidity in strengthening governance mechanisms, providing valuable insights for investors and policymakers. The study provides a solid basis for reevaluating governance structures in emerging markets.

Keywords: Corporate Governance, Financial Flexibility, SME Performance, Risk Management, Board Independence, Institutional Ownership, Gender Diversity, Emerging Markets

Authors' individual contribution: Conceptualization — Y.U. and S.L.; Methodology — Y.U. and S.L.; Formal Analysis — Y.U.; Writing — Original Draft — Y.U.; Writing — Review & Editing — Y.U. and D.P.J.; Supervision — S.L. and D.P.J.; Project Administration — Y.U.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G34, G38, L25, L26, M40

Received: 13.07.2025
Revised: 18.11.2025; 29.11.2025; 31.12.2025
Accepted: 06.01.2026
Published online: 09.01.2026

How to cite this paper: Utami, Y., Lestari, S., & Jati, D. P. (2026). Financial flexibility as a moderator of corporate governance effects on SME performance and risk: Evidence from the emerging market. Risk Governance and Control: Financial Markets & Institutions, 16(1), 32–46. https://doi.org/10.22495/rgcv16i1p3

The economic and regulatory consequences of IFRS 16 adoption on firm investment efficiency: Evidence from ASEAN-5 countries

Kang Wan Tan,Mei Foong Wong — 2026-01-05T10:14:14Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the impact of the International Financial Reporting Standard No. 16 (IFRS 16) adoption on firm investment efficiency, with emphasis on its economic and regulatory implications for different firm characteristics. A difference-in-differences (DiD) estimation approach served to evaluate data from the Association of Southeast Asian Nations 5 (ASEAN-5) countries (Indonesia, Malaysia, Singapore, Thailand, and the Philippines), with a focus on lease-intensive firms, those with higher learning opportunities, and financially constrained ones. The results indicated that IFRS 16 significantly undermined firm investment efficiency, specifically among lease-intensive firms, those with greater learning opportunities, and financially constrained ones. The mandatory capitalisation requirement, consistent with prior findings on IFRS 16 adoption (Lau, 2023; Utami et al., 2024), was found to influence firm investment decisions via learning and contracting channels. With debt overhang playing a strong mediating role, underinvestment significantly and negatively influenced IFRS 16 adoption. The novelty of this study lies in its documentation of the ex-post economic and regulatory consequences of IFRS 16 adoption on firm investment efficiency and behaviour. Policymakers, standard setters, and practitioners in emerging nations can be better informed on how lease accounting reforms impact investment decisions.

Keywords: IFRS 16 Leases, Economic and Regulatory Consequences, Investment Efficiency, ASEAN

Authors' individual contribution: Conceptualization — K.W.T.; Methodology — K.W.T.; Validation — K.W.T.; Formal Analysis — K.W.T.; Investigation — K.W.T.; Resources — K.W.T. and M.F.W.; Data Curation — K.W.T.; Writing — Original Draft — K.W.T.; Writing — Review & Editing — K.W.T. and M.F.W.; Visualization — K.W.T. and M.F.W.; Supervision — M.F.W.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G31, M41

Received: 10.07.2025
Revised: 19.11.2025; 15.12.2025
Accepted: 02.01.2026
Published online: 05.01.2026

How to cite this paper: Tan, K. W., & Wong, M. F. (2026). The economic and regulatory consequences of IFRS 16 adoption on firm investment efficiency: Evidence from ASEAN-5 countries. Risk Governance and Control: Financial Markets & Institutions, 16(1), 20–31. https://doi.org/10.22495/rgcv16i1p2

Going concern audit opinions: Bankruptcy risk, opinion shopping, and governance in Southeast Asia

Tanggor Sihombing,Hubertus Ade Resha Raditya Boli — 2025-12-24T09:21:05Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This research investigates the impact of bankruptcy risk and opinion shopping practices on issuing going concern audit opinions. Additionally, it delves into the role of corporate governance mechanism in moderating the associations between bankruptcy risk, opinion shopping practices, and the issuance of going concern audit opinions. This study uses logistic regression on 400 firm-year observations from the property, real estate, and construction sectors across five Association of Southeast Asian Nations (ASEAN) countries (2018–2022). The results of this study indicate that both bankruptcy risk (Ivanova et al., 2024) and the practice of opinion shopping (Widhyastuti & Mariani, 2025) positively influence the likelihood of receiving going concern audit opinions. Furthermore, this research reveals that corporate governance mechanism strengthens the connection between opinion shopping practices and issuing a going concern audit opinion (Hidayah & Rachmadiyana, 2024). However, it is worth noting that corporate governance mechanisms do not moderate the relationship between bankruptcy risk and the likelihood of receiving going concern audit opinions (Islamiati et al., 2021). Based on these findings, it is recommended that firms enhance governance structures, particularly in monitoring management behavior, to reduce opportunistic practices and improve audit credibility, thereby strengthening investor confidence in financially vulnerable sectors.

Keywords: Bankruptcy Risk, Opinion Shopping, Corporate Governance Mechanism, Institutional Ownership, Going Concern Audit Opinions

Authors' individual contribution: Conceptualization — T.S. and H.A.R.R.B.; Methodology — T.S. and H.A.R.R.B.; Validation — T.S.; Formal Analysis — T.S. and H.A.R.R.B.; Investigation — T.S. and H.A.R.R.B.; Resources — T.S. and H.A.R.R.B.; Data Curation — T.S. and H.A.R.R.B.; Writing — Original Draft — T.S. and H.A.R.R.B.; Writing — Review & Editing — T.S. and H.A.R.R.B.; Visualization — T.S. and H.A.R.R.B.; Supervision — T.S; Project Administration — T.S. and H.A.R.R.B.; Funding Acquisition —T.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G33, G34, M41, M42

Received: 24.07.2025
Revised: 01.10.2025; 11.12.2025
Accepted: 23.12.2025
Published online: 24.12.2025

How to cite this paper: Sihombing, T., & Boli, H. A. R. R. (2026). Going concern audit opinions: Bankruptcy risk, opinion shopping, and governance in Southeast Asia. Risk Governance and Control: Financial Markets & Institutions, 16(1), 8–19. https://doi.org/10.22495/rgcv16i1p1

2025-12-23T10:00:33Z

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Editorial: The evolution of risk governance — Balancing digital innovation and institutional soundness

Federico Raffaele — 2025-12-23T09:59:39Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

This issue of Risk Governance and Control: Financial Markets & Institutions journal was published on December 23, 2025.

By clicking the button "Download This Article" you will gain direct access to the Editorial of the issue.

How to cite: Raffaele, F. (2025). Editorial: The evolution of risk governance — Balancing digital innovation and institutional soundness. Risk Governance and Control: Financial Markets & Institutions, 15(4), 4–5. https://doi.org/10.22495/rgcv15i4editorial

Beyond the ballot: Examining stock market reaction in the emerging market

Joanne Valesca Mangindaan,Hendrik Manossoh,Olivia Fransiske Christine Walangitan — 2025-12-15T12:36:07Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This article examines the Indonesian stock market's response to presidential elections, with a particular focus on the key events surrounding the 2019 and 2024 elections. By employing an event study methodology, the research evaluates abnormal returns (AR) of LQ45 firms. The findings indicate that the stock market exhibited a pronounced reaction during the 2019 presidential election, with notable AR occurring both before and immediately following the announcement of the election results. In contrast, the market response to the 2024 election was more subdued, characterized by delayed reactions emerging after the electoral events had taken place. This study contributes to the existing body of literature by emphasizing the evolving nature of investor behavior in response to political events in Indonesia. It suggests that increased political stability and greater investor familiarity with the electoral process may have influenced the observed market reactions. These results underscore the importance of understanding the interaction between political events and market performance, offering valuable insights for both investors and policymakers.

Keywords: Presidential Election, Abnormal Return, Stock Market Reaction

Authors' individual contribution: Conceptualization — J.V.M. and H.M.; Methodology — J.V.M.; Validation — O.F.C.W.; Resources — H.M. and O.F.C.W.; Writing — Original Draft — J.V.M. and O.F.C.W.; Writing — Review & Editing — J.V.M. and H.M.; Visualization — J.V.M. and O.F.C.W.; Supervision — J.V.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C58, G14, P34

Received: 11.06.2025
Revised: 24.09.2025; 01.12.2025
Accepted: 12.12.2025
Published online: 15.12.2025

How to cite this paper: Mangindaan, J. V., Manossoh, H., & Walangitan, O. F. C. (2025). Beyond the ballot: Examining stock market reaction in the emerging market. Risk Governance and Control: Financial Markets & Institutions, 15(4), 154–163. https://doi.org/10.22495/rgcv15i4p14

Generative artificial intelligence and the future of financial forecasting: Evidence from large language models

Mfon Akpan — 2025-12-08T09:44:23Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The predictive abilities of generative artificial intelligence (AI) are changing the landscape for analytic workflows across sectors. Nevertheless, its capacity and implications for use cases in high-stakes, non-stationary environments — like financial markets — have been empirically under-researched (Tan et al., 2023; Lin & Marques, 2024). This research paper examines generative AI's zero-shot forecasting capabilities using two large language model (LLM) architectures, OpenAI's GPT-4o, and Anthropic's Claude 3.5 Sonnet, as they forecast stock prices. Specifically, the paper evaluates the LLMs' predictive powers in terms of actual closing prices for a portfolio of in-use equities across sectors on February 3, 2025. A rigorous quantitative approach is used throughout the analyses. In the results section, standardized metrics including mean absolute error (MAE), root mean squared error (RMSE), mean absolute percentage error (MAPE), correlation scores, and R-squared are calculated to assess predictive accuracy and directional bias. Results show that Claude 3.5 Sonnet outperformed GPT-4o on all accuracy metrics, and also showed better accuracy in forecasting actual movement in the stock market, confirming the study hypothesis and demonstrating performance can vary significantly between LLM architectures (Xu et al., 2024). Further analysis of sector-based performance can be undertaken. The study concludes that while the LLM Claude 3.5 Sonnet does yield encouraging strategic implications for use in investment analytics, there still exist significant challenges in relation to interpretability, model calibration, and model sensitivity to rapidly changing market dynamics.

Keywords: Generative Artificial Intelligence, Financial Forecasting, Stock Price Prediction, Large Language Models (LLMs), Zero-Shot Learning

Authors' individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G17, C45, C53, M41

Received: 18.06.2025
Revised: 25.09.2025; 28.11.2025
Accepted: 05.12.2025
Published online: 08.12.2025

How to cite this paper: Akpan, M. (2025). Generative artificial intelligence and the future of financial forecasting: Evidence from large language models. Risk Governance and Control: Financial Markets & Institutions, 15(4), 142–153. https://doi.org/10.22495/rgcv15i4p13

Inflation and exchange rate dynamics pass-through effect: Policy implications

Sanderson Abel,Respect Kudzai Mauto,Leward Jeke,Pierre Le Roux — 2025-12-02T10:29:28Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Understanding the mediating role of inflation on macroeconomic variables is essential for elucidating the transmission mechanism of monetary policy. Understanding the channels through which monetary policy influences inflation, which in turn affects exchange rates, is important in understanding the indirect channels through which monetary policy impacts the economy (Nwoko et al., 2016; Arestis & Sawyer, 2002; Mann, 1969). The objective of the study is to investigate the mediation role of inflation in the relationship between exchange rates and the interactions of money supply, interest rates, and economic growth (MIG index). The study utilised the structural equation modelling (SEM) to investigate the relationships discussed above. The study is premised on balanced panel data for five Southern African Development Community (SADC) countries during the period 2010–2024. The results reveal that inflation partially mediates this relationship, suggesting that monetary policy and economic activity influence exchange rates through both direct and indirect channels. The findings imply that policymakers should consider both direct and indirect effects of monetary policy on exchange rates and inflation. This study highlights the complex dynamics between monetary policy, economic activity, inflation, and exchange rates, emphasizing the need for informed policymaking.

Keywords: Mediation, Inflation, Money Supply, Interest Rate, GDP

Authors' individual contribution: Conceptualization — S.A. and R.K.M.; Methodology — S.A. and L.J.; Validation — S.A. and R.K.M.; Formal Analysis — S.A., R.K.M., and L.J.; Investigation — S.A., R.K.M., and P.L.R.; Writing — Original Draft — S.A., R.K.M., and P.L.R.; Writing — Review & Editing — R.K.M., L.J., and P.L.R.; Supervision — S.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: E4, O1, O2

Received: 14.05.2025
Revised: 11.08.2025; 05.09.2025; 18.11.2025
Accepted: 28.11.2025
Published online: 02.12.2025

How to cite this paper: Abel, S., Mauto, R. K., Jeke, L., & Le Roux, P. (2025). Inflation and exchange rate dynamics pass-through effect: Policy implications. Risk Governance and Control: Financial Markets & Institutions, 15(4), 134–141. https://doi.org/10.22495/rgcv15i4p12

Qualifying decentralized finance as a financial asset: A multiple frequency analysis

Mohammad Rifqi Mahardhika,Moch Doddy Ariefianto — 2025-11-24T09:58:26Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

We examine the qualifying attributes of decentralized finance (DeFi) as a financial asset class. To achieve this objective, we perform analysis on the relationship (using both level and percentage-change data) between DeFi valuation and selected influencing variables, namely total value locked (TVL), Bitcoin (BTC) value, and market variables. A suite of long-panel data econometric methods is employed on a multi-frequency (daily, weekly, and monthly) panel dataset comprising 16 major DeFi protocols from January 2022 to December 2023. Our empirical design aims to be a comprehensive assessment and triangulation. There are several key findings. First, while there is evidence of cointegration suggesting a possible long-run relationship, this relationship is found to be inconsistent across different variables and time frequencies. However, the impulse response analysis suggests that shocks from the influencing variables do not have a permanent impact. Second, Bitcoin value is found to be the most important influencing factor (positive and highly significant), reflecting strong cryptocurrency market sentiment and aligning with previous research on spillover effects from major cryptocurrencies (Șoiman et al., 2022; Yousaf et al., 2022).

Keywords: Decentralized Finance, Financial Assets, Total Value Locked, Bitcoin, Market Variables, Panel Data Econometrics

Authors' individual contribution: Conceptualization — M.R.M.; Methodology — M.D.A.; Data Curation — M.R.M.; Writing — Original Draft — M.R.M.; Writing — Review & Editing — M.D.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C33, E44, G12, G23, O33

Received: 14.06.2025
Revised: 24.08.2025; 06.11.2025
Accepted: 18.11.2025
Published online: 24.11.2025

How to cite this paper: Mahardhika, M. R., & Ariefianto, M. D. (2025). Qualifying decentralized finance as a financial asset: A multiple frequency analysis. Risk Governance and Control: Financial Markets & Institutions, 15(4), 122–133. https://doi.org/10.22495/rgcv15i4p11

Macroprudential policies and bank efficiency nexus: The moderator role of country governance

Jing Chen,Fakarudin Kamarudin,Bany Ariffin Amin Noordin,Lau Wei Theng,Heng Luo — 2025-11-19T14:23:34Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Although macroprudential policies (MAPPs) are widely implemented to safeguard financial stability (Ćehajić & Košak, 2022), their implications for bank efficiency remain insufficiently investigated, with most existing studies concentrating only on conventional banks' (CBs) (Chen et al., 2022). This study examined the impact of MAPPs on Islamic banks (IBs) and CBs' efficiency in countries that meet a standard where 1 per cent share of Islamic banking assets is in their total domestic banking sector assets. Using bank-level panel data from 14 countries (2006–2021) and ordinary least squares (OLS), fixed- and random-effects models, the results indicated that MAPPs reduced bank efficiency, with effects varying by bank type. In addition, the coefficient of CBs was slightly higher than that of IBs. Country governance (CG) significantly strengthened the negative effect of MAPPs on CBs' efficiency, but not for IBs. Regression in the high-income and low-income group countries showed a similar sign to the basic regression results. Furthermore, additional robustness tests showed that MAPP is negatively related to both types of banks' efficiency. These results are highly relevant for policymakers aiming to design macroprudential frameworks that stabilise the economy without disproportionately hindering banking efficiency.

Keywords: Macroprudential Policies, DEA, Conventional Banks, Islamic Banks, Country Governance

Authors' individual contribution: Conceptualization — J.C., F.K., B.A.A.N., L.W.T., and H.L.; Methodology — J.C.; Software — J.C. and H.L.; Validation — J.C.; Investigation — J.C.; Resources — J.C. and H.L.; Writing — Original Draft — H.L.; Writing — Review & Editing — J.C.; Visualization — J.C.; Supervision — F.K., B.A.A.N., and L.W.T.; Project Administration — J.C. and F.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G28, G38

Received: 23.07.2025
Revised: 10.10.2025; 11.11.2025
Accepted: 17.11.2025
Published online: 19.11.2025

How to cite this paper: Chen, J., Kamarudin, F., Amin Noordin, B. A., Theng, L. W., & Luo, H. (2025). Macroprudential policies and bank efficiency nexus: The moderator role of country governance. Risk Governance and Control: Financial Markets & Institutions, 15(4), 109–121. https://doi.org/10.22495/rgcv15i4p10

The psychology of the market: Are cognitive illusions driving risk-related investor behaviour?

Hayam Wahba,Amr AbdulHamid,Rania Pasha — 2025-11-13T10:35:37Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study investigates how cognitive illusions, rooted in heuristics and prospect theory, influence individual investment decisions in the Egyptian Stock Exchange (EGX). The research gap stems from the limited understanding of how behavioural biases affect decision-making in emerging markets, where financial literacy and market efficiency remain underdeveloped. The study aims to provide empirical evidence on the extent to which specific biases shape investor behaviour, thereby bridging the gap between behavioural finance theory and practice. Data were collected through a structured survey of 300 active investors, and the analysis employed reliability and validity testing, normality checks, correlation analysis, and ordinary least squares (OLS) regression modelling to test the proposed hypotheses. The findings reveal that availability, overconfidence, and the gambler's fallacy significantly affect investment decisions, whereas representativeness and anchoring biases do not. Similarly, loss aversion and regret aversion play a decisive role in shaping investor behaviour, whereas mental accounting and self-control biases have limited applicability. These findings are partially consistent with existing arguments within the behavioural finance literature (Youssef et al., 2021; Mansour et al., 2023; Gamal & Wahba, 2025) and their extension to the Egyptian environment. The paper closes with real-world implications for investors and policymakers, respectively, underlining its usefulness for enhancing financial decision-making and regulatory policies in emerging economies.

Keywords: Cognitive Illusions, Heuristics, Prospects, Individual Investment Decision, Risk Egypt, EGX

Authors' individual contribution: Conceptualisation — H.W., A.A., and R.P.; Methodology — H.W., A.A., and R.P.; Validation — H.W., A.A., and R.P.; Formal Analysis — H.W., A.A., and R.P.; Investigation — H.W., A.A., and R.P.; Writing — Original Draft — H.W., A.A., and R.P.; Writing — Review & Editing — H.W., A.A., and R.P.; Visualisation — H.W., A.A., and R.P.; Supervision — H.W. and R.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D14, D91, G11, G41

Received: 15.06.2025
Revised: 25.08.2025; 04.11.2025
Accepted: 11.11.2025
Published online: 13.11.2025

How to cite this paper: Wahba, H., AbdulHamid, A., & Pasha, R. (2025). The psychology of the market: Are cognitive illusions driving risk-related investor behaviour? Risk Governance and Control: Financial Markets & Institutions, 15(4), 97–108. https://doi.org/10.22495/rgcv15i4p9

Assessing the impact of financial technology on the efficiency of banks: A systematic literature review approach

Xiaomin Huang,Fathin Faizah Said — 2025-11-11T08:25:08Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The sudden expansion in financial technology (FinTech) has altered conventional banking immensely by transforming operations, customer services, and risk management systems. This research therefore employs a systematic literature review (SLR) approach that adheres to Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) standards to assess the influence of FinTech on three bank performance indicators: operating efficiency, risk management, and customer service. A total of 41 peer-reviewed articles, published between 2018 and 2024, were shortlisted from Scopus and Web of Science (WoS). Out of these, 19 utilized frontier efficiency techniques like stochastic frontier analysis (SFA) and data envelopment analysis (DEA). The results indicate that FinTech improves operating efficiency when integrated optimally, as noted by Allen et al. (2022). Yet, outcomes differ by region and type of bank, as some Chinese banks have seen a decline in efficiency (Lee et al., 2023). In risk management, FinTech technologies such as artificial intelligence (AI) have been shown to decrease operational risk (Cheng & Qu, 2023). Customer satisfaction is enhanced further with digital services and personalization (Barbu et al., 2021). Although adoption poses additional risks, the research concludes that FinTech implementation, if managed strategically, will increase bank performance. This review thus offers actionable advice for policymakers and financial institutions to navigate digital transformation.

Keywords: FinTech, Systematic Literature Review, Bank Efficiency, Operational Efficiency, Risk Management, Customer Service, SFA, DEA

Authors' individual contribution: Conceptualization — X.H. and F.F.S.; Methodology — X.H. and F.F.S.; Formal Analysis — X.H.; Data Curation — X.H.; Writing — Original Draft — X.H.; Writing — Review & Editing — F.F.S.; Visualization — X.H.; Supervision — F.F.S.; Project Administration — F.F.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G28, O33

Received: 09.05.2025
Revised: 14.08.2025; 05.09.2025; 27.10.2025
Accepted: 07.11.2025
Published online: 11.11.2025

How to cite this paper: Huang, X., & Said, F. F. (2025). Assessing the impact of financial technology on the efficiency of banks: A systematic literature review approach. Risk Governance and Control: Financial Markets & Institutions, 15(4), 85–96. https://doi.org/10.22495/rgcv15i4p8

The role of legal enforcement measures in managing financial market risks: A comparative analysis of public and private approaches in Saudi Arabia

Abdullah Faraj Al Dossari — 2025-11-05T10:09:17Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The inefficiency of financial markets' regulatory frameworks has been identified as one of the threats to the stability and prosperity of emerging markets worldwide (Sheng, 2010). This study evaluates the effectiveness of the current legal enforcement framework in the Saudi financial market and its role in managing financial risks and protecting investors. As the Saudi capital market employs a mixed system of public and private enforcement, this research examined enforcement actions by the Capital Market Authority (CMA) and related civil litigation between 2020 and 2024. A multimethod approach was used, combining qualitative analysis of the literature with quantitative data on civil and enforcement actions published by the CMA. The findings indicate that, although private enforcement largely supplements the more prevalent public mechanisms, it remains essential to the strong legal safeguards provided by the Saudi Capital Market Law. The study identifies several implementation challenges that may limit the effectiveness of private enforcement in promoting market efficiency and offers Saudi lawmakers useful insights into regulatory measures that can significantly manage financial risks and combat capital market breaches. Such efforts will enhance the complementary relationship between public and private enforcement in Saudi Arabia.

Keywords: Private Enforcement, Public Enforcement, Investor Protection, Saudi Stock Market, Capital Market Authority (CMA), Corporate Fraud

Authors' individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G1, K2, G280, K220

Received: 01.07.2025
Revised: 19.09.2025; 25.10.2025
Accepted: 03.11.2025
Published online: 05.11.2025

How to cite this paper: Al Dossari, A. F. (2025). The role of legal enforcement measures in managing financial market risks: A comparative analysis of public and private approaches in Saudi Arabia. Risk Governance and Control: Financial Markets & Institutions, 15(4), 76–84. https://doi.org/10.22495/rgcv15i4p7

Bridging financial gaps: How FinTech drives global financial literacy and development under currency exposure constraints

Adilah A. Wahab,Siti Aisah Bohari,Pick-Soon Ling — 2025-11-03T12:44:07Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the impact of financial technology (FinTech) on financial literacy (FinLit) and financial development (FinDev) across 119 countries, using data from the Global Financial Inclusion Database (Findex) for 2014, 2017, and 2021. The findings reveal a positive relationship between FinTech adoption and FinLit, particularly when measured through digital payments made and received. This aligns with G20 High-Level Principle 6, which emphasizes the role of FinTech in enhancing FinLit and accessibility. Furthermore, the study explores the impact of FinTech on FinDev, demonstrating a significant positive effect of digital payment adoption on FinDev across all regions. However, the results indicate that currency exposure negatively moderates the FinTech-FinDev relationship, suggesting that economies with higher exchange rate volatility may experience weaker FinTech-driven FinDev outcomes. These findings provide valuable insights for policymakers and financial institutions, highlighting the interconnectedness of FinTech, FinLit, currency exposure, and FinDev.

Keywords: Financial Technology, Financial Literacy, Financial Development, Currency Exposure, Global Findex

Authors' individual contribution: Conceptualization — A.A.W.; Methodology — A.A.W. and P.-S.L.; Formal Analysis — A.A.W.; Writing — Original Draft — A.A.W.; Writing — Review & Editing — A.A.W. and S.A.B.; Project Administration — A.A.W., S.A.B., and P.-S.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: F31, G21, G23, G53

Received: 02.06.2025
Revised: 06.09.2025; 17.10.2025
Accepted: 30.10.2025
Published online: 03.11.2025

How to cite this paper: A. Wahab, A., Bohari, S. A., & Ling, P.-S. (2025). Bridging financial gaps: How FinTech drives global financial literacy and development under currency exposure constraints. Risk Governance and Control: Financial Markets & Institutions, 15(4), 65–75. https://doi.org/10.22495/rgcv15i4p6

The role of competition and economic freedom in bank lending

Tsurayya Rafa Attaqiyya,Dadang Lesmana — 2025-10-30T10:44:55Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Based on theory, Stiglitz and Weiss (1981) caution that liberalization may not always expand credit due to governance challenges such as moral hazard and adverse selection. This study examines the effect of bank competition and economic freedom on bank lending, with particular attention to their governance and regulatory implications. Using a system generalized method of moments (system-GMM) approach on an unbalanced panel of 214 countries from 1993 to 2017, this study investigates both the individual effects and the interaction between bank competition and economic freedom. The results reveal that both variables individually exert a negative effect on bank lending. However, their interaction produces asymmetrical outcomes: it significantly increases lending in high-income countries, while reducing it in low- and middle-income countries. These results reinforce that a country's readiness to face market openness is a determining factor in increasing lending channels. These findings highlight the uneven impact of economic openness and suggest important implications for governance structures, regulatory frameworks, and policymakers in designing context-sensitive financial regulations.

Keywords: Bank Lending, Bank Competition, Economic Freedom, Regulation

Authors' individual contribution: Conceptualization — T.R.A. and D.L.; Methodology — D.L.; Software — T.R.A. and D.L.; Validation — D.L.; Formal Analysis — T.R.A.; Investigation — T.R.A. and D.L.; Resources — D.L.; Data Curation — T.R.A.; Writing — Original Draft — T.R.A. and D.L.; Writing — Review & Editing — T.R.A.; Visualization — T.R.A. and D.L.; Supervision — D.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: F130, G21, G380

Received: 20.03.2025
Revised: 02.07.2025; 24.08.2025; 07.10.2025
Accepted: 27.10.2025
Published online: 30.10.2025

How to cite this paper: Attaqiyya, T. R., & Lesmana, D. (2025). The role of competition and economic freedom in bank lending. Risk Governance and Control: Financial Markets & Institutions, 15(4), 54–64. https://doi.org/10.22495/rgcv15i4p5

The effect of internal audit on enhancing the quality of financial reports in the government institutions: Mediating role of risk management

Ahmed Salman Almahuzi — 2025-10-29T09:52:39Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Internal audit is a critical pillar for an organization's survival and development (Kai et al., 2022; Dellai & Omri, 2015). This study aimed to identify the effect of internal audit on enhancing the quality of financial reports in the government institutions of Saudi Arabia and the mediating role of risk management. The study population comprised all employees and administrators working in government institutions in Saudi Arabia, and the study sample included 369 members. The study adopted a descriptive-analytical approach and employed a questionnaire as a research tool, and used linear regression to analyse the data. The findings showed that internal audit can be considered a supporting tool for risk management, which in turn is the most influential factor in ensuring the quality of financial reporting in government institutions. The outcomes of this study are beneficial to other countries, especially those in the Middle East or the Gulf Cooperation Council.

Keywords: Saudi Arabia, Government Institutions, Internal Audit, Risk Management, Financial Reporting

Authors' individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G10, G21, G30

Received: 01.06.2025
Revised: 24.08.2025; 08.10.2025
Accepted: 24.10.2025
Published online: 29.10.2025

How to cite this paper: Almahuzi, A. S. (2025). The effect of internal audit on enhancing the quality of financial reports in the government institutions: Mediating role of risk management. Risk Governance and Control: Financial Markets & Institutions, 15(4), 43–53. https://doi.org/10.22495/rgcv15i4p4

Risk management, internal audit function, and corporate performance

2025-10-24T08:27:01Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The purpose of this study is to determine the relationship between risk management practices and the internal audit function with the performance of companies. It is interesting to examine how competitive advantage can be achieved when the company is able to face and adapt to a complex business environment via robust risk management practices and an internal audit function. This study uses archival analysis on the annual report of the top 500 publicly listed companies in Bursa Malaysia, which represent approximately 65 percent of the total market capitalization. Both independent variables, namely risk management and internal audit function, are measured based on corporate governance requirements which are issued by the Malaysian authorities, and best practices taken from various international corporate governance recommendations. The results from the multiple regression analysis provides evidence that risk management was significantly positively related with all the performance measurements, supported the earlier findings by Krause and Thse (2016) and Nahar et al. (2016), while there is a mixed findings between the internal audit function and corporate performance. This study is original as it not only examines risk management practices and internal audit function from a local corporate governance perspective but also takes into consideration various recommendations from international best practices.

Keywords: Risk Management, Internal Audit Function, Corporate Governance, Risk, Corporate Performance, Stock Exchange, Listed Companies, Bursa Malaysia

Authors' individual contribution: Conceptualization — A.S.A.P.S. and Z.I.; Methodology — A.S.A.P.S., Z.I., and M.S.; Formal Analysis — A.S.A.P.S., Z.I., and M.S.; Investigation — A.S.A.P.S.; Data Curation — A.S.A.P.S.; Writing — Original Draft — A.S.A.P.S., S.A.R., N.O., and S.M.S.; Writing — Review & Editing — Z.I. and M.S.; Visualization — A.S.A.P.S. and Z.I.; Supervision — Z.I. and M.S.; Project Administration — A.S.A.P.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, M12, M14, M40, M48

Received: 25.02.2025
Revised: 16.06.2025; 07.07.2025; 07.10.2025
Accepted: 21.10.2025
Published online: 24.10.2025

How to cite this paper: Salin, A. S. A. P., Ismail, Z., Smith, M., Raman, S. A., Omar, N., & Shamsudin, S. M. (2025). Risk management, internal audit function, and corporate performance. Risk Governance and Control: Financial Markets & Institutions, 15(4), 33–42. https://doi.org/10.22495/rgcv15i4p3

Understanding Takaful insurance adoption: A systematic review of organizational theories and behavioral factors

Hamid El Boudaly,Bouchaib Marnouch,Abdelbari El Khamlichi — 2025-10-22T08:11:39Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The topic of Takaful insurance adoption is crucial for the development of this emerging industry, as it aims to satisfy and meet customer expectations regarding risk coverage and life contingency protection. Understanding the factors influencing its adoption can help insurers design more effective strategies to attract potential customers and address their needs. In this context, this article focuses on a systematic literature review of the main studies dealing with the adoption of Takaful insurance, aiming to provide a comprehensive understanding of the elements shaping individuals' intention to adopt this form of insurance. To achieve this objective, we employed the Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA) approach (Kitchenham, 2004) to select, analyze, and synthesize relevant studies in this field. The results of this systematic review reveal that five main theories were frequently utilized: the theory of reasoned action, the theory of planned behavior (TPB), the decomposed theory of planned behavior (DTPB), the theory of diffusion of innovation (DOI), and the theory of interpersonal behavior. Alongside these theoretical frameworks, other critical factors influencing adoption were identified, including religiosity, awareness, and trust. These findings provide valuable insights for both researchers and practitioners seeking to promote Takaful insurance in a competitive market.

Keywords: Takaful Insurance, Consumer Behavior, Behavioral Theories, Adoption, PRISMA, Religiosity, Trust, Awareness

Authors' individual contribution: Conceptualization — H.E.B. and B.M.; Methodology — H.E.B., B.M., and A.E.K.; Validation — A.E.K.; Visualization — A.E.K.; Formal Analysis — H.E.B., B.M., and A.E.K.; Investigation — H.E.B., B.M., and A.E.K.; Data Curation — H.E.B. and B.M.; Writing — Original Draft — H.E.B. and B.M.; Writing — Review & Editing — H.E.B. and B.M.; Supervision — A.E.K.; Project Administration — H.E.B., B.M., and A.E.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D91, G22, M31

Received: 04.03.2025
Revised: 17.07.2025; 27.09.2025
Accepted: 17.10.2025
Published online: 22.10.2025

How to cite this paper: El Boudaly, H., Marnouch, B., & El Khamlichi, A. (2025). Understanding Takaful insurance adoption: A systematic review of organizational theories and behavioral factors. Risk Governance and Control: Financial Markets & Institutions, 15(4), 19–32. https://doi.org/10.22495/rgcv15i4p2

Integrating bioinformatics optimization techniques, support vector machines, and deep learning models for minimizing risks of financial data analysis

Esin Benhür Aktürk,Mustafa Özyeşil — 2025-10-17T08:41:48Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The increasing complexity of financial markets requires forecasting models that can capture nonlinear patterns and rapidly changing dynamics. This study integrates bioinformatics-inspired optimization techniques — genetic algorithms (GA) and artificial ant colonies (AAC) — with support vector machines (SVM) and deep learning models to enhance financial data analysis. Using BIST-100 index data spanning 2000–2023 (plus 2024 Q1), GA and AAC were optimized through parameter tuning and combined with advanced machine learning (ML) architectures. Comparative experiments demonstrate that deep learning and AAC models achieved the lowest error rates (root mean square error (RMSE) ≈ 59.16 and 67.08), outperforming GA, SVM, and autoregressive integrated moving average (ARIMA) benchmarks. Incorporating macroeconomic indicators such as exchange rates, interest rates, and oil prices further improved predictive accuracy. The findings indicate that bioinformatics optimization methods significantly improve forecast robustness, offering more precise predictions and reduced volatility sensitivity. These results highlight the transferability of bioinformatics approaches to finance, supporting their use for portfolio management, risk assessment, and strategic decision-making. The study's conclusions underscore the potential of hybrid, bio-inspired models to reshape financial analytics and provide actionable insights for practitioners and policymakers in volatile markets.

Keywords: Bioinformatics Optimization, Financial Data Analysis, Genetic Algorithms, Evolutionary Computation, Support Vector Machines, Deep Learning, Financial Forecasting

Authors' individual contribution: Conceptualization — E.B.A. and M.Ö.; Methodology — E.B.A. and M.Ö.; Formal Analysis — E.B.A. and M.Ö.; Investigation — E.B.A. and M.Ö.; Resources — E.B.A. and M.Ö.; Writing — Original Draft — E.B.A. and M.Ö.; Writing — Review & Editing — E.B.A. and M.Ö.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: N40, Z13, Z29

Received: 04.07.2025
Revised: 19.09.2025; 02.10.2025
Accepted: 15.10.2025
Published online: 17.10.2025

How to cite this paper: Aktürk, E. B., & Özyeşil, M. (2025). Integrating bioinformatics optimization techniques, support vector machines, and deep learning models for minimizing risks of financial data analysis. Risk Governance and Control: Financial Markets & Institutions, 15(4), 8–18. https://doi.org/10.22495/rgcv15i4p1

2025-10-15T11:36:35Z

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Editorial: Risk management, financial stability, and economic growth

Stefano Dell’Atti — 2025-10-15T11:33:33Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

This issue of Risk Governance and Control: Financial Markets & Institutions journal was published on October 15, 2025.

By clicking the button "Download This Article" you will gain direct access to the Editorial of the issue.

How to cite: Dell'Atti, S. (2025). Editorial: Risk management, financial stability, and economic growth [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 172–174. https://doi.org/10.22495/rgcv15i3sieditorial

Understanding the determinants of digital adoption in financial institutions: An application of the technology acceptance model

2025-10-07T08:49:51Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Access to essential banking and financial services is unequally distributed, and this is causing the high risk of financial exclusion globally. India is no exception, and hence, financial inclusion has become an important field for research. To this end, this paper aims to study the impact of digitalisation on the actual usage of banking and financial services among the underprivileged community. To achieve the objectives, researchers have based their study on the technology acceptance model (TAM), focusing on factors such as perceived ease of use (PEU) with perceived usefulness (PU) and intention to use (INT), and intention to use with the actual usage (US) (Rakipi et al., 2023). A sample of 150 individuals has been investigated in this research. The data have been collected using a convenience sampling technique. However, perceived ease of use has no significant direct relationship with intention to use. This broadens the horizon of our knowledge. The findings indicate that users may not find it easy to use technology, and hence do not intend to use digital financial/banking services. At the same time, they perceive this new technology as easy and useful without creating an intention to use it. Banking professionals, industry experts, and policymakers should address this issue by incorporating it into strategies and policies aimed at enhancing financial inclusion.

Keywords: Digitalisation, Financial Inclusion, Banking Services, TAM, PLS-SEM

Authors' individual contribution: Conceptualization — Man.A.; Methodology — N.M.; Software — Moh.A.; Validation — N.M.; Formal Analysis — N.M. & Moh.A.; Investigation — H.N.; Writing — Original Draft — Man.A., N.M., and Moh.A.; Writing — Review & Editing — N.M., Moh.A., and H.N; Supervision — M.I.T. and L.N.D.; Project Administration — M.I.T. and L.N.D.; Funding Acquisition — M.I.T. and L.N.D.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D83, G21, I32, M15, O33

Received: 19.12.2024
Revised: 31.03.2025; 06.05.2025; 29.09.2025
Accepted: 06.10.2025
Published online: 07.10.2025

How to cite this paper: Ahmed, M., Mushir, N., Anas, M., Tabash, M. I., Daniel, L. N., & Naim, H. (2025). Understanding the determinants of digital adoption in financial institutions: An application of the technology acceptance model [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 311–322. https://doi.org/10.22495/rgcv15i3sip13

Bank credit's role in influencing economic growth in the emerging market

2025-10-01T08:20:56Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The relationship between bank credit and economic growth has been subject to extensive empirical research. This study applied a vector autoregressive (VAR) approach to examine the relationship between bank credit and economic growth in South Africa based on three separate periods: pre-crisis (2001–2008), post-crisis (2009–2016), and the combined period. The findings suggested two-way causality between bank credit and economic growth in the post-crisis period; however, the combined sample found evidence of unidirectional causality in support of a demand-leading hypothesis. Bank credit was found to have a positive and statistically significant relationship with the gross domestic product (GDP) growth rate in the pre-crisis period, concurring with Miftari (2023) that the financial system is the crucial supporter of economic growth (economic activities). However, following the events of the financial crisis, both the post-crisis and combined samples revealed that bank credit had a negative influence on economic growth, and this confirms to Koutima-Banzouzi et al. (2024) and Tchouassi and Tomo (2022). Since the financial crisis, the South African economy has been plagued by many issues that have resulted in non-existent economic growth for some time, which, to some extent, has limited banks' credit ability to positively influence economic growth in South Africa.

Keywords: Bank Credit, Economic Growth, Vector Autoregressive Model, Financial Crisis, Emerging Market

Authors' individual contribution: Conceptualization — L.J., C.R.J.E., S.M., and J.M.; Methodology — S.A. and J.M.; Software — S.M.; Validation — J.M.; Formal Analysis — L.J., C.R.J.E., S.A., S.M., and J.M.; Investigation — S.A.; Resources — S.M.; Data Curation — S.M. and J.M.; Writing — Original Draft — L.J., S.A., and J.M.; Writing — Review & Editing — L.J., S.A., S.M., and J.M.; Project Administration — L.J.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C5, C59, G00, G180

Received: 03.10.2024
Revised: 31.01.2025; 26.07.2025; 24.09.2025
Accepted: 29.09.2025
Published online: 01.10.2025

How to cite this paper: Jeke, L., Erasmus, C. R. J., Abel, S., Matsvai, S., & Mukarati, J. (2025). Bank credit's role in influencing economic growth in the emerging market [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 300–310. https://doi.org/10.22495/rgcv15i3sip12

Forecasting financial turbulence: An evaluation of corporate bankruptcy risk in banking firms

Tapas Kumar Sahoo,Pawan Kumar,Arijeet Das,Kanika Jindal,Abdul Ghani Faiyyaz — 2025-09-29T11:46:35Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

In a volatile financial environment, the early identification of bankruptcy risk is critical for maintaining economic stability, particularly in the banking sector. This study evaluates the financial health of Indian banking firms using Altman's Z-score model, a time-tested tool for forecasting corporate bankruptcy. By analyzing financial data from 138 public and private banks over the period 2014–2023, the research reveals considerable fluctuations in asset quality, profitability, and capital adequacy. Public sector banks have shown improved financial stability in recent years, attributed to reforms and better risk governance, while private sector banks displayed greater variability in financial health. These findings support the relevance of sector-specific and regionally adapted models for risk assessment (Agarwal & Patni, 2019; Kumar & Ravi, 2007). Furthermore, the study contributes to the broader discourse on business failure by integrating insights from recent literature on legal and organizational determinants in emerging markets (Arzou & Kobiyh, 2025). This research underscores the importance of robust financial metrics and predictive tools in shaping informed policy decisions and investor strategies, especially in emerging economies where regulatory frameworks and market dynamics pose unique challenges.

Keywords: Bankruptcy Risk, Financial Distress, Banking Sector, Altman's Z-Score, Financial Stability

Authors' individual contribution: Conceptualization — T.K.S., P.K., and A.G.F.; Methodology — T.K.S. and P.K.; Software — T.K.S., P.K., and K.J.; Validation — T.K.S. and K.J.; Formal Analysis — T.K.S., P.K., and A.G.F.; Investigation — P.K., A.D., and K.J.; Resources — T.K.S. and P.K.; Data Curation — T.K.S. and P.K.; Writing — Original Draft — T.K.S. and A.G.F.; Writing — Review & Editing — T.K.S., P.K., A.D., and A.G.F.; Visualization — T.K.S. and K.J.; Supervision — T.K.S. and P.K.; Project Administration — K.J. and A.G.F.; Funding Acquisition — T.K.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: E44, G21, G33

Received: 01.05.2025
Revised: 12.08.2025; 02.09.2025
Accepted: 25.09.2025
Published online: 29.09.2025

How to cite this paper: Sahoo, T. K., Kumar, P., Das, A., Jindal, K., & Faiyyaz, A. G. (2025). Forecasting financial turbulence: An evaluation of corporate bankruptcy risk in banking firms [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 290–299. https://doi.org/10.22495/rgcv15i3sip11

The fine line between strategy and manipulation: Unraveling bankruptcy risk in the emerging market

Lely Noor Janna,Paulus Theodorus Basuki Hadiprajitno — 2025-09-25T11:34:21Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This research presents a novel analysis of the intricate interrelationships among Porter's (1980) business strategy — cost leadership and differentiation — and two forms of earnings management (accrual-based and real) and their impact on bankruptcy risk within publicly traded companies in Indonesia. Unlike previous research that predominantly concentrates on the accumulated method of accrual-based earnings management (AEM), this research enhances the discourse by exploring the influence of real earnings management (REM) on bankruptcy risk, especially in a developing nation where regulatory oversight and financial reporting transparency are less critical. This research analyzes a dataset of 756 company-year observations, using a fixed-effect model with clustered standard errors and generalized least squares (GLS) weighting and a two-stage least squares (2SLS) approach to enhance robustness. The results indicate that although AEM does not significantly impact bankruptcy risk, REM, mainly through sales manipulation and overproduction, is pivotal in influencing a firm's financial outcomes and stability. Moreover, cost leadership and differentiation strategies significantly reduce the threat of financial failure. These results support Porter's (1980) framework of competitive advantage theory and empirical findings by Xu et al. (2021) and Zang (2012), highlighting the importance of aligning earnings management practices and strategic direction to maintain financial stability.

Keywords: Earnings Management, Business Strategy, Bankruptcy Risk, Real Earnings Management, Accrual-Based Earnings Management, Financial Distress

Authors' individual contribution: Conceptualization — L.N.J. and P.T.B.H.; Methodology — L.N.J.; Software — L.N.J.; Writing — Original Draft — L.N.J. and P.T.B.H.; Writing — Review & Editing — L.N.J. and P.T.B.H.; Visualization — L.N.J.; Supervision — P.T.B.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: L1, M21, M41

Received: 06.03.2025
Revised: 01.07.2025; 15.09.2025
Accepted: 23.09.2025
Published online: 25.09.2025

How to cite this paper: Janna, L. N., & Hadiprajitno, P. T. B. (2025). The fine line between strategy and manipulation: Unraveling bankruptcy risk in the emerging market [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 280–289. https://doi.org/10.22495/rgcv15i3sip10

FinTech integration in the financial management of Islamic social enterprises

2025-09-23T08:29:48Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Financial technology (FinTech) is seen as a solution to challenges such as a lack of transparency, inefficiency, and time consumption. This study investigates the adoption of FinTech in the financial management of mosque institutions within the context of Islamic social enterprises (ISEs). It specifically examines the areas of FinTech adoption within these institutions and the challenges encountered during the adoption process. Using a qualitative research design, data were gathered through interviews with six mosques involved in FinTech initiatives. The findings highlight the integration of FinTech in areas such as collection, revenue management, disbursement, recording, and financial reporting. The study also identifies mosques as key institutions for fostering community engagement and promoting financial literacy, emphasising the importance of integrating FinTech into traditional practices. This paper contributes to the growing discourse on FinTech adoption in religious contexts, offering practical recommendations for leveraging ISE to overcome barriers and enhance community empowerment.

Keywords: Financial Technology (FinTech), Islamic Social Enterprise (ISE), Financial Management, Mosques, Islamic Accounting

Authors' individual contribution: Conceptualization — N.A.M. and M.I.H.K.; Methodology — M.I.H.K.; Writing — N.A.M. and M.I.H.K.; Supervision — S.Z.; Project Administration — S.M.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M40, M41

Received: 13.03.2025
Revised: 14.06.2025; 16.09.2025
Accepted: 22.09.2025
Published online: 23.09.2025

How to cite this paper: Muhamed, N. A., Kamaruddin, M. I. H., Auzair, S. M., & Zainon, S. (2025). FinTech integration in the financial management of Islamic social enterprises [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 272–279. https://doi.org/10.22495/rgcv15i3sip9

Modeling listed private equity investments in the emerging market: A volatility and strategic risk perspective

Chricencia Makanyara Murape,Raphael Tabani Mpofu — 2025-09-22T12:53:36Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the volatility dynamics and strategic implications of listed private equity (LPE) investments in Ghana, focusing on their alignment with corporate strategy, resource allocation, and portfolio management in emerging markets. Using advanced econometric models, including generalized autoregressive conditional heteroskedasticity (GARCH) (1,1), exponential GARCH (EGARCH), and fractionally integrated GARCH (FIEGARCH), the research reveals persistent volatility clustering, asymmetric responses to market shocks, and the significant influence of macroeconomic indicators such as gross domestic product (GDP) growth and inflation on LPE returns. The findings underscore the importance of integrating advanced risk management frameworks and sectoral strategies to navigate market inefficiencies and optimize investment outcomes (Ibrahim et al., 2023). Key recommendations highlight the need for regulatory reforms, sectoral prioritization in high-growth areas like financial technology (FinTech) and renewable energy, and leveraging technology-driven solutions to enhance transparency and operational efficiency. Future research directions include exploring the impact of global disruptions, such as COVID-19, on investment behavior and conducting comparative analyses across African markets to enrich the understanding of regional LPE dynamics. This study contributes actionable insights for investors and policymakers, providing a robust framework for enhancing the resilience and scalability of Ghana's LPE market while driving sustainable economic growth.

Keywords: Listed Private Equity Investments, Statistical Modelling, Ghana, GARCH Models, VAR Models

Authors' individual contribution: Conceptualization — C.M.M.; Methodology — C.M.M. and R.T.M.; Investigation — C.M.M.; Resources — C.M.M.; Writing — C.M.M. and R.T.M.; Supervision — R.T.M.; Funding Acquisition — C.M.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C58, G11, G12, G15, G32

Received: 06.01.2025
Revised: 11.04.2025; 05.09.2025
Accepted: 18.09.2025
Published online: 22.09.2025

How to cite this paper: Murape, C. M., & Mpofu, R. T. (2025). Modeling listed private equity investments in the emerging market: A volatility and strategic risk perspective [Special issue]. Risk Governance and Control: Financial Markets & Institutions, 15(3), 258–271. https://doi.org/10.22495/rgcv15i3sip8

Assessing financial inclusion based on the Human Development Index

Hanan Amin Barakat,Lamees El Araby,Hisham Saad — 2025-09-19T12:09:24Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Financial inclusion is essential for inclusive growth, yet significant access gaps persist in developing nations. This study examines the macroeconomic factors that influence financial inclusion in 26 developing nations between 2015 and 2021, with a particular emphasis on unemployment, urbanization, and the Human Development Index (HDI). A fixed-effects panel regression model is used to investigate the link between these factors and a composite Index of Financial Inclusion (IFI), drawing on recent empirical frameworks (Ozili, 2024; Sapre, 2025). According to the results, unemployment and urban population are the next most important and statistically significant predictors of financial inclusion, after HDI. These findings highlight how crucial urban financial infrastructure and investments in human capital are to increasing financial access. This study enriches the literature by offering macro-level, cross-country evidence to inform inclusive financial policy. Limitations include the study's reliance on supply-side data and the exclusion of gender and education-based variables. Future research could expand the framework to encompass demand-side indicators, regional disaggregation, and digital finance dimensions. These results are most relevant to guiding inclusive financial policy in the post-pandemic recovery phase and in support of Sustainable Development Goals (SDGs).

Keywords: Economic Development, Fixed Effects, Panel Data, Unemployment, Urbanization

Authors' individual contribution: Conceptualization — H.A.B., L.E.A., and H.S.; Methodology — H.S.; Investigation — L.E.A. and H.S.; Resources — L.E.A. and H.S.; Writing — Original Draft — H.A.B., L.E.A., and H.S.; Writing — Review & Editing — H.A.B. and H.S.; Supervision — H.A.B. and H.S.; Funding Acquisition — H.A.B. and L.E.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, I38, O16

Received: 24.01.2025
Revised: 23.05.2025; 01.09.2025
Accepted: 16.09.2025
Published online: 19.09.2025

How to cite this paper: Barakat, H. A., El Araby, L., & Saad, H. (2025). Assessing financial inclusion based on the Human Development Index [Special issue]. Risk Governance & Control: Financial Markets & Institutions, 15(3), 250–257. https://doi.org/10.22495/rgcv15i3sip7

Insights into FinTech leadership composition for risk governance

Zakia Siddiqui,Claudio Andres Rivera — 2025-09-17T10:44:23Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This research investigates the composition of the leadership teams responsible for governance in financial technology (FinTech). While several studies examined the FinTechs' financial performances (Al-Matari et al., 2023; Siddiqui & Rivera, 2024), there remains a research gap in understanding the leadership role (AlBaker, 2024), a critical driver influencing the performance (Al-Matari et al., 2023). This study identifies industries where FinTech companies are registered using the Nomenclature of Economic Activities (NACE) code by classification framework. Results show that 41 percent of FinTechs are registered as information technology (IT) companies, and 38 percent are registered as financial institutions. Then, the professional backgrounds of the founders and board of directors (BOD) are analyzed by examining the NACE code of the companies they were affiliated with at the time of FinTech inception and in December 2022. This dual analysis helps to understand how FinTech leadership has evolved. Results showed that most leaders have prior experience in finance, IT, and real estate industries. This research provides insights to practitioners intending to build their leadership teams, the regulators who must select the sectoral priorities for programs, and academicians who build FinTech content. All of them assist the FinTech sector's development. The research provides an unprecedented methodology to assess FinTech via a replicable governance structure across countries, sectors, and industries.

Keywords: FinTech, Governance, Leadership

Authors' individual contribution: Conceptualization — Z.S. and C.A.R.; Methodology — Z.S.; Formal Analysis — Z.S.; Data Curation — Z.S.; Writing — Original Draft — Z.S.; Writing — Review & Editing — Z.S. and C.A.R.; Visualization — Z.S.; Supervision — C.A.R.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G23, G24, G32, L26, O33, O16

Received: 10.12.2024
Revised: 28.02.2025; 20.05.2025; 08.09.2025
Accepted: 15.09.2025
Published online: 17.09.2025

How to cite this paper: Siddiqui, Z., & Rivera, C. A. (2025). Insights into FinTech leadership composition for risk governance [Special issue]. Risk Governance & Control: Financial Markets & Institutions, 15(3), 236–249. https://doi.org/10.22495/rgcv15i3sip6

The effect of accounting conservatism and financial constraints on dividend policy

Hussein Zuhair Abdulameer Zainy — 2025-09-15T09:25:01Z

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study examines the relationship between accounting conservatism (AC) and financial constraints (FC) and their impact on dividend policy (DP). It was noted that the sample companies lack a clear explanation for their dividend policy despite achieving high profits. The study concluded that companies tend to use accounting conservatism as a result of financial constraints on their internal investments, which prevents them from benefiting from less costly external investments. This drives them to adopt policies that reduce dividend distribution to shareholders. Accounting conservatism and higher financial constraints lead to lower dividend distributions. Accounting conservatism measures show a greater negative impact on dividend policy compared to financial constraints measures. This means that a higher degree of conservatism leads to lower dividend distributions. However, financial constraints play a significant role in explaining the dependent variable when combined with accounting conservatism. This interpretation is consistent with Kim et al. (2023) and Abdel Tawab (2022). These results are important for regulators and standard setters regarding the importance of accounting conservatism and financial constraints within accounting standards, as accounting conservatism is widely used in practice by recording the benefits of accounting conservatism in reducing financial constraints, which better explains the companies' dividend policy.

Keywords: Accounting Conservatism, Financial Constraints, Dividend Policy, Accounting Conservatism Measures, Financial Constraints Measures

Authors' individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: M41

Received: 17.04.2025
Revised: 18.07.2025; 28.08.2025
Accepted: 11.09.2025
Published online: 15.09.2025

How to cite this paper: Zainy, H. Z. A. (2025). The effect of accounting conservatism and financial constraints on dividend policy [Special issue]. Risk Governance & Control: Financial Markets & Institutions, 15(3), 226–235. https://doi.org/10.22495/rgcv15i3sip5

Risk Governance and Control: Financial Markets & Institutions - Virtus InterPress

Unpacking the impact of bank-specific factor interactions on capital structure

Risk spillover effects between financial markets

Dynamic Bayesian Black-Litterman model: Portfolio optimization and comparative analysis

Contents

Editorial: Risk governance in a changing disclosure and enforcement environment

Digital risk governance and behavioural drivers of robo-advisor adoption in financial services

The effect of Bitcoin price volatility on gold and stock markets: An analysis using lagged Bitcoin data

The effect of regulation in moderating the influence of the internet on Asian stock indices through the mediation of income inequality

From application to disbursement: Governance, risks and workflow in Islamic donation-based crowdfunding

The reaction of stock prices of Italian football teams to the surprise factor in match outcomes

The influence of factors on the probability of incurring bad debt exceeding the threshold at joint-stock commercial banks

Volatility risk premium and market risk forecasting: Good vs. bad volatility in emerging and developed markets

Mitigating procurement risks: A framework for good governance in public contracting

Risk-MM-Georgia: Facilitating the effective risk management in the Georgian public sector

Determinants of acceptance rates of scrip dividend programs in the German stock market

Geopolitical shocks, financial market, and economic dynamics: Insights from the United Kingdom

Evaluating the factors that impact the returns on agricultural and other commodity futures contracts: The influence of financial speculation

Mandatory of expanding MSMEs loans: Measuring impact on credit risk and bank intermediation

Random walk and unbiasedness in emerging derivatives markets: The risk governance approach

Impact of financial flexibility on performance and credit risk of commercial banks in the emerging market

Financial flexibility as a moderator of corporate governance effects on SME performance and risk: Evidence from the emerging market

The economic and regulatory consequences of IFRS 16 adoption on firm investment efficiency: Evidence from ASEAN-5 countries

Going concern audit opinions: Bankruptcy risk, opinion shopping, and governance in Southeast Asia

Contents

Editorial: The evolution of risk governance — Balancing digital innovation and institutional soundness

Beyond the ballot: Examining stock market reaction in the emerging market

Generative artificial intelligence and the future of financial forecasting: Evidence from large language models

Inflation and exchange rate dynamics pass-through effect: Policy implications

Qualifying decentralized finance as a financial asset: A multiple frequency analysis

Macroprudential policies and bank efficiency nexus: The moderator role of country governance

The psychology of the market: Are cognitive illusions driving risk-related investor behaviour?

Assessing the impact of financial technology on the efficiency of banks: A systematic literature review approach

The role of legal enforcement measures in managing financial market risks: A comparative analysis of public and private approaches in Saudi Arabia

Bridging financial gaps: How FinTech drives global financial literacy and development under currency exposure constraints

The role of competition and economic freedom in bank lending

The effect of internal audit on enhancing the quality of financial reports in the government institutions: Mediating role of risk management

Risk management, internal audit function, and corporate performance

Understanding Takaful insurance adoption: A systematic review of organizational theories and behavioral factors

Integrating bioinformatics optimization techniques, support vector machines, and deep learning models for minimizing risks of financial data analysis

Contents

Editorial: Risk management, financial stability, and economic growth

Understanding the determinants of digital adoption in financial institutions: An application of the technology acceptance model

Bank credit's role in influencing economic growth in the emerging market

Forecasting financial turbulence: An evaluation of corporate bankruptcy risk in banking firms

The fine line between strategy and manipulation: Unraveling bankruptcy risk in the emerging market

FinTech integration in the financial management of Islamic social enterprises

Modeling listed private equity investments in the emerging market: A volatility and strategic risk perspective

Assessing financial inclusion based on the Human Development Index

Insights into FinTech leadership composition for risk governance

The effect of accounting conservatism and financial constraints on dividend policy