Financial Market Activity Research Articles

Financial development and central bank bilateral currency swaps: Is there trade effect?

Purpose ― This paper aims to empirically investigate the impact of currency swaps on international trade, given China's differential level of financial development and its currency swap partners. Methods ― The study employes an empirical structural gravity model using datasets encompassing financial development, trade, and intuitive gravity equation variables for 27 countries from 1980 to 2013. The level of financial development and swaps was captured by the interaction term of the disaggregated measure of financial development, such as access, depth, and efficiency, each interacting with currency swaps.Findings ― The findings suggest that currency swaps are essential for trade and exhibit a large trade effect, especially for countries with relatively low levels of financial development. The paper substantiates empirical evidence indicating disparities in financial development across countries, and such differences are important in determining trade patterns. Implication ― Strong financial systems promote trade in advanced economies, whereas the opposite holds true for developing countries. The examination of the influence of financial systems on trade through empirical tests remains important on the research agenda of policymakers and researchers, especially those looking at industry-level import and export data.Originality ― The study delves into the nexus between financial development and trade within the framework of the Central Bank bilateral currency swap network by highlighting the role of financial institutions and market size (depth), activity (access), and efficiency. In addition, it addresses the drawbacks of previous empirical research that largely focuses on the private credit-to-GDP ratio as a key proxy for financial development.

Генезис правовых основ коллекторской деятельности в контексте судебной реформы: этапы эволюции и современное состояние

The article traces the main stages of the formation and development of the legal foundations of collection activities in the Russian Federation. It is noted that at the first stage – until 2016 – the collectors, who began their activities in the Russian financial services market in the early 2000s, carried out their work within the frame-work of general civil legislation, based on their own ideas about legality. The adoption on July 3, 2016 of two Federal Laws No. 230-FZ «On the Protection of the Rights and Legitimate Interests of Individuals in the Implementation of Activities for the Repay-ment of Overdue Debts and on Amendments to the Federal Law «On Microfinance Activities and Microfinance Organizations» and No. 231-FZ «On Amendments to Certain Legislative Acts of the Russian Federation in in connection with the adoption of the Federal Law «On the Protection of the Rights and Legitimate Interests of Individuals in the Implementation of Activities for the Re-payment of Overdue Debts and on Amendments to the Federal Law «On microfinance activities and microfinance organizations», marked the beginning of the second stage of the development of legal regulation of this segment of Russian legislation. The current (third) stage in the evolution of the legal foundations of collection activities is associated with the entry into force of Federal Law No. 467-FZ dated August 4, 2023 «On Amendments to the Federal Law «On the Protection of the Rights and Legitimate Interests of In-dividuals in the Implementation of Activities for the Repayment of Overdue Debts and on Amendments to the Federal Law «On Microfinance Activities and microfinance organizations». It is stated that at this stage, the improvement of the legal regulation of this segment of Rus-sian legislation is carried out simultaneously in several directions with the priority of developing a digital model of interaction between the state, business and the debtor.

Effect of Financial Literacy and Financial Self-Efficacy on Individuals' Investment Intention: The Mediating Role of Risk-Taking Behavior

The research specifically contributes to the Theory of Planned Behavior (TPB) by examining the financial literacy and financial self‐efficacy of those partaking in financial market activities as major contributing factors toward their intentional behaviors to invest. Furthermore, it also takes into account their risk‐taking behavior as a mediator. Hence, a cross‐sectional research approach was adopted. Additionally, Multiple Regression and the Hayes Process method were used. Primary data was collected through a survey questionnaire from 400 active investors who were statistically selected through purposive sampling. The results indicate that the financial literacy of the respondents, as well as their financial self‐efficacy, significantly determines their intentions to invest (H1, H2). The findings further indicate the partial mediation of their financial literacy and investment intention (H3) relationship and their financial self‐efficacy and investment intention (H4) through their risk‐taking propensity. This research recommends that financial events, trainings, and seminars should be organized for awareness.

Сучасні пріоритети у сфері протидії відмиванню коштів та фінансуванню тероризму

Introduction. The introduction of international sanctions as a tool to counter military aggression by the Russian Federation in Ukraine affected the priorities of anti-legalization activities at the global level. Recently, the use of the latest technologies has attracted the attention of FATF and other international organizations. With the beginning of the unprovoked aggression against Ukraine, operative and effective assistance to the country was organized through the collection of funds by charitable crypto funds. Problem.The latest technologies have ensured the active citizenship of people from different countries of the world. On the other hand, such activity, related to the support of the Ukrainian people, also activated the criminal world, whose transactions were passed off as charitable activities. Goal. Provide a brief summary outlining national priorities as well as some practical definitions and financial red flags of financial and crypto market activity. Methods. General and special methods are used: analysis, synthesis, grouping, description, comparison, theoretical generalization, and abstract-logical. Results. Attention is focused on the urgent need for further implementation of international standards in the field of combating the use of proceeds of crime and the financing of terrorism in Ukraine, which, with Ukraine's acquisition of the status of a candidate for membership of the European Union, has become a component of the necessary steps for membership in the European community. Conclusions. The final decision on the issue of the immediate introduction of regulation of the virtual assets market, registration of its participants, interaction with foreign regulatory and law enforcement agencies of this economic sector will contribute to more effective implementation of sanctions to stop Russian aggression in Ukraine, restoration and modernization of the state, and Ukraine's integration into the European Union.

Have tax reduction and fee reduction promoted the development of the financial industry?—Empirical evidence based on listed companies in the financial industry

Finance plays an important role in China’s new development pattern, and the financial industry is also a crucial part of the country’s economic growth. This paper selects the four financial index data of 76 listed companies in the financial profile of Hithink RoyalFlush stocks and the consolidated balance sheet and consolidated income statement in the China Stock Market Accounting Research (CSMAR) database, empirically studies the impact of tax reduction and fee reduction on the financial industry through the Panel Vector Autoregression (PVAR) model, and gives relevant suggestions. The results show that: (1) The implementation of tax reduction and fee reduction policy makes the net profit available to the financial industry increase in the short term, but the long-term effect is not obvious. (2) The reduction of the tax burden will significantly increase the net sales interest rate of the financial industry within one year, and then the fluctuation in the impact tends to 0. (3) The reduction of the tax burden will lead to the reduction of financial enterprises’ sense of hardship in a certain period of time, which will lead to the reduction of the total asset turnover rate. (4) The reduction of the tax burden will increase the debt-to-asset ratio of financial enterprises within two years, thus increasing financial risk. The research not only provides a theoretical analysis and policy basis for the analysis of the impact of tax reduction on the financial industry but also provides decision support for tax reduction policies to revitalize industry development, stimulate financial market activities, ensure direct access to financial resources to enterprises, and further increase the market activities of the whole society.

Introduction: The Structural Power of Finance Meets Financialization

How do we theorize and analyze the structural power of finance when global capitalism itself undergoes constant and profound structural transformation? The literature continues to assume that the source of financial structural power is its unique ability to provide credit to the real economy, playing a crucial role in meeting the investment imperative. But recent research documents that most financial market activities no longer facilitate productive investment and can even be a drag on economic development. If the financial sector's primary role is not to support productive investments, then on what basis does it continue to hold structural power? The contributions to this special issue engage with how decades of financialization have transformed the basis of structural power toward alternative functions that have gone unnoticed in the existing literature. These include household and real estate lending that fuels consumption-led growth, concentration and expansion of financial institutions as tools of geo-economic strategy, financing current account deficits that facilitate global imbalances, and wealth preservation that bolsters inequality.

COVID-19 and adaptive behavior of returns: evidence from commodity markets

This study examines the Adaptive Market Hypothesis during the COVID-19 pandemic. The pandemic has impacted global economic activity, trade, and financial market activity. There has been much interest in testing financial market theories and relationships during COVID-19. Therefore, we have investigated the varying return predictability from commodities during COVID-19 concerning the adaptive market hypothesis. By applying linear and non-linear econometric models, we find a strong engagement of adaptive behavior of returns from commodities during the ongoing pandemic. The inconsistent return behavior is facilitated by dividing the sample period into different phases. Our results indicate that AMH best explains the impact of COVID-19 on commodity markets.

GARCH Model for Evaluating Volatility Based on the Share Price of Airlines Company During the COVID-19 Outbreak

The COVID-19 outbreak has affected economic activities in the worldwide financial market. The instability of financial markets makes investors uncomfortable because there is not enough study to prove the volatility of share price movements. One of the most affected sectors is tourism namely airlines company. Therefore, this study is implemented to analyze the volatility rate for the share price of financial markets based on airlines company. This study uses one sample of companies from Malaysia Stock Exchange for an airline company that was affected by the COVID-19 outbreak. Data were collected from February 2020 until June 2022. The number of daily observations is 545 days. The distribution of return rate data follows non-normal distribution according to Jarque-Bera statistical test. Next, this study performed three types of unit root tests namely ADF, PP, and KPSS. All three statistical tests agreed that the return data achieved stationarity characteristics at the level. The mean equation for this study is using ARMA (2,2). Then, this study uses Generalized Auto-Regressive Conditional Heteroskedasticity (GARCH) for modeling volatility. The result shows there is high volatility clustering that exists during the COVID-19 outbreak. The value of AIC, SC, and HQN show the fittest model is TGARCH (1,1). The threshold effect is positive and significant. Therefore, the bad news is likely to be pronounced rather than the good news. Thus, it is important to investors in carefully evaluate their investment strategy to reduce their investment risk. The findings of this study help the government to develop suitable policies in assisting the economic and financial stability

ФИНАНСОВЫЙ РЫНОК РОССИИ: ПРОБЛЕМЫ И ПЕРСПЕКТИВЫ РАЗВИТИЯ

The article examines the state, problems and prospects of development of the modern financial market in Russia. The types of financial organizations that carry out their activities in the national financial market of Russia are considered. The problems of institutional segmentation, unification of the rules for the implementation by financial organizations of the functions of trading platforms, financial intermediaries, management companies are identified.

Structural modelling for assessing the effectiveness of system for countering legalization of illicit money

The article suggests a scientific and methodological approach to the evaluation of the infrastructural component’s effectiveness in the anti-money laundering system due to digitalization. Structural modelling is the basis for the mentioned approach implementation, which consists of several steps. First, the input data is selected in terms of the effective regulation of the financial services market, law enforcement and judicial activities, and digitalization. Next, the moving average method is used to identify the growth rate of missing values in the available data series. Then, the selection of relevant factors for financial services market regulation, law enforcement activity, judicial activity and digitalization is based on the principal component analysis. After reducing the input array of data to a comparable form, a structural equations system can be constructed to reflect the impact of the digitalization level on the latent integral characteristics of the directions of anti-money laundering work done by regulatory authorities. Finally, the model is checked for adequacy. The result of this research can serve as an information base for further strengthening the digital vector in the development of regulation institutions and law enforcement agencies overseeing the financial services market, as well as for the radical transformation of courts in Ukraine since digitalization currently negatively affects them.

Islamic instruments in treating and mitigating the mortgage – Crisis Malaysia Capital Market Case Study 2007/2016 –: دور الصكوك الإسلامية في علاج أزمة الرهون العقارية والتخفيف من حدتها – دراسة حالة سوق رأس مال ماليزيا 2007/2016 –

In light of the increasing interest and development of Islamic financial architecture, especially after the 2008 mortgage crisis and its innovative products and financial instruments such as Islamic Sukuk, , Not to mention its important and large role in reducing the big difference between the financial economy and the real economy, we decided In our research, to study the role of Islamic sukuk in dealing with the global financial crisis 2008, by studying the state of Malaysia, especially as the latter is among the first countries in the field of Islamic financial market activity.

The Relationships among Related Party Transactions, Exports and Earnings Management in Korea

Purpose - We investigate the effects of exports and related party transactions on earnings management. In addition, we study their simultaneous multilateral effects on each other in as well as their long-term effects investigated with time lags. Design/Methodology/Approach - In this study, a merged data set of accounting, financial market, and export activities of 8,687 firms listed on Korea Exchange (KRX) from 2006 to 2018 is used. We collect data from TS 2000 database. Then, we formally test our hypotheses using fixed effects models (FEM) and simultaneous equation models (SEM). Findings - First, export firms have more severe earnings management than non-export firms. Second, earnings management has a positive effect on related party transactions for the non-export firms. Third, related party transactions for export firms have a negative effect on earnings management. Fourth, simultaneous equation models verified above mentioned conclusions. Fifth, the effects of earnings management on exports lasted for years while those of exports on earnings management lasted for years. However, the effects of related party transactions on both exports and earnings management lasted only for a year. Research Implications - Based on above findings, we can conclude that firms use exports and related party transactions for earnings management and that firms use related party transactions to manipulate exports of firms. Thus, traditional way of studying earnings management using discretionary accruals might shift focus to related party transactions, especially for export firms with subsidiaries abroad.

The Spatial Linkage Mechanism of Medical System，Public Health Safety and Economic Prosperity

With the global spread of the COVID-19 epidemic, the impact of a series of chain reactions triggered by public health security issues on the economic prosperity has become the primary concern of today’s society. It makes us more deeply aware of the importance of developing health care. Therefore, it is very important to re-pay attention to the impact of long-term potential public health security problems on the degree of economic prosperity, and then to find the external factors that affect public health security problems and the transmission path of their effects on the degree of economic prosperity.For the above purpose, this paper constructs a dynamic spatial Durbin model and uses the panel data of 31 provinces in China from 2007 to 2017 to study the spatial linkage mechanism of medical system, public health security and economic prosperity. The study finds that: Although the current treatment capacity is weak, under the existing medical system, the level of medical security and treatment capacity can adjust the negative impact of medical security problems on economic growth, the activity of financial institutions and the activity of the stock market, and there is an obvious spatial spillover effect. On this basis, the mechanism of public health security on economic prosperity is further analyzed. It is considered that public health security problems inhibit economic growth, financial institution activity, stock market activity, and spatial spillover effects to varying degrees by hindering exports, FDI and the upgrading of industrial structure. It is worth noting that the spatial spillover effect of exports on economic growth is not significant, and the spatial spillover effect of FDI on economic growth and financial institution activity is not significant. Finally, the regression results of night lighting data once again confirm the existence of the regulation effect of medical system and the transmission mechanism of public health security problems. Among the three transmission paths, FDI accounts for the largest proportion, followed by exports, and the proportion of advanced industrial structure is relatively small.The marginal contribution of this paper may be reflected in the following three aspects: First, the economic growth, financial institution activity and stock market activity are brought into the index system of economic prosperity at the same time, and the research perspective is extended to the spatial dimension. From the perspective of spatial spillover effect, this paper analyzes the spatial geographical relationship between public health security and economic prosperity. The important role of spillover effect in promoting regional coordinated development is analyzed. Second, it analyzes the mechanism of the medical system in reducing the impact of public health security problems on economic prosperity, in order to strengthen public health investment and personnel training, improve disease prevention and control conditions, optimize the national disease prevention, and control system to provide reference. Third, it further analyzes the transmission mechanism of public health security issues affecting economic prosperity through exports, FDI and advanced industrial structure, to provide support for adjusting the trade structure, further improving the policy of attracting investment, and promoting the transformation and upgrading of the industrial structure. In addition, the authenticity of the index system of economic prosperity is verified by using the night light luminance value (DN), which avoids the data distortion and minimizes the error of statistical regression.

Influence of Twitter activity on the stock price of soccer clubs

The interrelation between the fluctuations of stock prices of football clubs and the social media activity of their fans is of major economic interest. The results in this research provide measurable support for the suggestion that financial market activities and the number of tweets are linked in the case of big football clubs. The novelty of the research is to show which daily ratio of tweet counts and their mood can predict the stock market. Based on these findings, sport managers could use social media strategically to build better relationships with consumers and stakeholders.

Financial stress spillover across Asian Countries

AbstractThis paper uses fractional integration techniques to explore the stochastic properties of the Financial Stress Indices (FSIs) of 10 Asian countries, further investigating the bilateral linkages between them to ascertain how financial stress spreads among countries in the region. For the FSIs of each country, the results show that all the estimated orders of integration are in the interval (0, 1) implying fractional integration and a long memory pattern. Thus, shocks will have transitory though long‐lasting effects. For the cross‐country spillovers of the FSIs, we find that convergence is satisfied in all cases with values of the differencing parameter around 0 and thus showing short memory behavior. It is worth noting that for the larger economies in the region, Japan and China, financial stress transmission between Japan and the smaller economies was faster than with respect to China. Overall, the results provide valuable information on the financial market activity of the countries in the region. To check for the robustness of the baseline results we also use systemic risk measures for these countries, CoVaR with the results showing evidence of fractional integration for the individual series, with all values of the differencing parameter in the range (0, 1). For convergence, there is a substantial reduction in the degree of integration, though the results are not as clear as with the FSIs.

Construction of Legal System for Maritime International Trade Financial Supervision Cooperation

Zhuo, W.; Ding, C.; Xiong, Y., and Peng, J., 2020. Construction of legal system for maritime international trade financial supervision cooperation. In: Yang, Y.; Mi, C.; Zhao, L., and Lam, S. (eds.), Global Topics and New Trends in Coastal Research: Port, Coastal and Ocean Engineering. Journal of Coastal Research, Special Issue No. 103, pp. 143–146. Coconut Creek (Florida), ISSN 0749-0208.Under the background of financial globalization, the internationalization of financial market and financial activities has become an inevitable trend, and the financial crisis has universality and conductivity. Therefore, it is necessary to build a unified legal system of international trade and financial supervision cooperation at sea to protect the international financial supervision order. Due to the particularity of financial regulatory activities, the international community has not yet formed a unified legal system of international financial regulatory cooperation, and the urgent requirements of the globalization of financial activities for international financial regulatory cooperation make improving the legal framework of international financial regulatory cooperation become one of the important issues discussed by the international community today. The existing forms of international cooperation lay the foundation for the establishment of a unified legal mechanism for international cooperation in financial supervision. On the basis of the existing system, the current situation of the existing legal system in some countries and regions is analyzed. According to the analysis results, a new legal system for regulatory cooperation is constructed with the main research content of legal cooperation subjects, forms and contents. Through the form of empirical analysis, to verify the effectiveness of the designed legal system, the analysis results show that the system can effectively reduce the probability of financial events, which is conducive to the protection of financial order.

RECENT DEVELOPMENTS IN THE FINTECH INDUSTRY

In this article, we review some recent developments in the field of Financial Technology or “FinTech.” We begin with an overview of what FinTech is and why it has become an important growth industry in the financial services area and therefore an important research topic in finance. In the next section, we review some of the academic literature in the FinTech area. In the subsequent section, we characterize the financing of FinTech startups, especially by venture capital firms. In the following section, we characterize innovation by FinTech firms as well as by incumbent financial intermediaries. In the next section, we move on to discuss potential sources of value creation by FinTech start-up firms relative to existing incumbent firms: we conjecture that one source of value creation may arise from FinTech startups being able to provide a superior customer experience relative to incumbent firms in various areas of consumer finance. In the following section, we discuss the regulatory environment facing FinTech firms, in their banking as well as in their financial market activities. In the penultimate section, we analyze the buy-versus-build decision facing firms choosing to enter the FinTech sector and discuss the trade-offs that may drive such decisions in practice. We conclude with some remarks about the future directions that may be taken by the FinTech industry.

Determining Factors of Banking Performance in Indonesia

Motivated by the large number of banking studies in Indonesia that have not included NOP (Net Open Position) in profitability modeling, our research aims to realize this. As for the reason for the importance of the Net Open Position (NOP) variable, it is almost certain that all banks will use foreign currency items in their asset and liability management activities. All commercial banks in the BUKU level 1, 2, 3 and 4 will definitely be involved in demand deposits as a consequence of continuing financial market activities to safeguard the economic activities of a country. By referring to previous research models from Al-Omar, et.al. (2008), Albulescu (2015), Muhmad & Hashim (2015), Menicucci & Paolucci (2016) and Saputri & Oetomo (2016) then identified four determinants of bank profitability variables, namely CAR, NPL, NOP and LDR. These four variables will then be defined conceptually and formulas referring to banking theory applicable in Indonesia, namely CAMEL (Capital, Management, Asset, Earning and Liquidity). Each variable will function as a bank specific factor that will determine the profitability of the bank both grossly as measured by ROA and net measured by ROE. Results of the test with panel data regression show that the NOP variable is always a determining factor in the ROA and the ROE models. This also provides evidence that NOP is indeed very important in determining ROA and ROE for bankers. With the proven NOP as the main determinant, the argument is supported that commercial banks must pay attention to the foreign exchange items in their asset and liability management. In addition to NOP, NPL is also important for determining ROA and ROE of banks.

Recent Developments in the FinTech Industry

In this article, we review some recent developments in the field of Financial Technology or “FinTech.” We begin with an overview of what FinTech is and why it has become an important growth industry in the financial services area and therefore an important research topic in finance. In the next section, we review some of the academic literature in the FinTech area. In the subsequent section, we characterize the financing of FinTech startups, especially by venture capital firms. In the following section, we characterize innovation by FinTech firms as well as by incumbent financial intermediaries. In the next section, we move on to discuss potential sources of value creation by FinTech start-up firms relative to existing incumbent firms: we conjecture that one source of value creation may arise from FinTech startups being able to provide a superior customer experience relative to incumbent firms in various areas of consumer finance. In the following section, we discuss the regulatory environment facing FinTech firms, in their banking as well as in their financial market activities. In the penultimate section, we analyze the buy-versus-build decision facing firms choosing to enter the FinTech sector, and discuss the trade-offs that may drive such decisions in practice. We conclude with some remarks about the future directions that may be taken by the FinTech industry.

Development of financial market activities and economic growth: A cross-country evidence

This paper examines the relationship between insurance market development and economic growth and various conditions that affect the insurance-growth nexus. The conditions tested are degree of financial development, banking activity, and demographic profile of a country. The empirical study uses cross country panel data from 90 countries for the period 1995 to 2015 and applies Hausman–Taylor random effect model. The main findings confirm a positive non-linear relationship between insurance market development and economic growth. The study also finds the impact of banking and stock market developments reduce the positive effect of insurance market activities on economic growth implying these activities are substitutes for insurance market promoting economic growth. Two major contributions for this study are: (i) it tests the hypothesis that the impact of insurance development on economic growth is non-linear, which implies at a higher level of economic development increased insurance spending would reduce economic growth; and (ii) it tests the hypothesis whether banking development and stock market activities are substitute or complement to insurance market development in the economic growth process.