Financial Integration Research Articles

Mapping Financial Connections: Market Integration in Emerging Economies through Graph Theory

In this study, we explore the financial and economic integration of BRICS nations (Brazil, Russia, India, China, and South Africa) and key emerging economies (Egypt, Saudi Arabia, and the UAE) using graph theory, aiming to map intersectoral connections and their impact on financial stability and market risk. The research addresses a critical gap in the literature; while political and economic linkages between nations have been widely studied, the specific connectivity between sectors within these economies remains underexplored. Our methodology utilizes eigenvector centrality and Euclidean distance to construct a comprehensive network of 106 publicly listed firms from 2013 to 2022, across sectors such as energy, telecommunications, retail, and technology. The primary hypothesis is that sectors with higher centrality scores—indicative of their interconnectedness within the broader financial network—demonstrate greater resilience to market volatility and contribute disproportionately to sectoral profitability. The analysis yielded several key insights. For instance, BHARTI AIRTEL LIMITED in telecommunications exhibited an eigenvector centrality score of 0.9615, positioning it as a critical node in maintaining sectoral stability, while AMBEV SA in the retail sector, with a centrality score of 0.9938, emerged as a pivotal player influencing both profitability and risk. Sectors led by companies with high centrality showed a 20% increase in risk-adjusted returns compared to less connected entities, supporting the hypothesis that central firms act as stabilizers in fluctuating market conditions. The findings underscore the practical implications for policymakers and investors alike. Understanding the structure of these networks allows for more informed decision making in terms of investment strategies and macroeconomic policy. By identifying the central entities within these economic systems, both policymakers and investors can target their efforts more effectively, either to support growth initiatives or to mitigate systemic risks. This study advances the discourse on emerging market integration by providing a quantitative framework to analyze intersectoral connections, offering critical insights into how sectoral dynamics in emerging economies influence global financial trends.

Higher education integrating into the “Belt and Road” economic development and its path selection, taking Kyrgyzstan as an example

Since its inception in 2013, “The Belt and Road Initiative” has become an important engine driving global economic growth. The initiative has not only promoted infrastructure construction in countries along the Belt and Road but also strengthened financial integration, unimpeded trade, people-to-people exchanges, and policy communication. In this context, higher education, as an important avenue for talent training and scientific and technological innovation, is of great significance to promoting the economic and social development of countries along the Belt and Road. By strengthening academic cooperation with Chinese universities, Kyrgyzstan can enhance its curriculum, adopt advanced teaching methods, and integrate cutting-edge research to foster more skilled labor. In addition, innovation and technology transfer through higher education partnerships can drive sustainable economic growth and diversification. This paper explores the strategic path of integrating higher education into the Belt and Road. Initiative, focusing on academic collaboration, enhancing R&D capabilities, and fostering an entrepreneurial ecosystem.

Pengaruh Audit Tenure, Kepemilikan Manajerial, dan Ukuran Perusahaan terhadap Integritas Laporan Keuangan

Purpose: This study examined the impact of audit tenure, managerial ownership, and company size on the integrity of financial statements. Methodology: The sample was selected using purposive sampling, resulting in 29 companies and 77 data points from transportation and logistics companies listed on the Indonesia Stock Exchange during the period 2020-2022. Secondary data from the annual reports were analyzed using multiple linear regression. Results: Company size affects the integrity of financial statements, whereas audit tenure and managerial ownership do not. Limitations: The study is limited by measuring audit tenure as the number of years a Public Accounting Firm has engaged with a client, going back up to six years. Additionally, only one measurement tool–accounting conservatism–was used. Contribution: The findings are expected to enhance the understanding of financial statement integrity for both internal users, such as management, and external users, such as creditors and investors, aiding in making informed decisions. Furthermore, this study contributes to the literature by expanding the determinants of financial statement integrity in transportation and logistics companies.

Influences on financial statement integrity: the role of intellectual capital, independent commissioners, and gender diversity

<span>This study aimed to determined the impact of intellectual capital, independent commissioners, gender diversity, and financial statement integrity in property and real estate subsector companies listed on the Indonesia Stock Exchange (IDX) during the period 2019-2023. Financial statement integrity was measured using market to book value (MBV). The population included property and real estate companies listed on the IDX for the period 2019-2023. Purposive sampling was used to select 8 companies meeting the criteria, providing a total of 40 observation data points. Panel data regression analysis was performed using E-views 12. Results indicate that intellectual capital, independent commissioners, and gender diversity had a simultaneous effect on financial statement integrity. However, intellectual capital and independent commissioners did not affect financial statement integrity, while gender diversity had a negative impact on financial statement integrity. Property and real estate companies should enhance financial statement integrity to increase investor confidence, strengthen market reputation, and gain sustained competitive advantage.</span>

Factors Militating against the Efficacy of the Mutual Agreement Procedure: A Comparison between South Africa, Kenya, Uganda and Ghana

The effective resolution of transfer pricing disputes has been identified as one of the primary challenges to eliminate double taxation and/or double non-taxation as well as to enhance the free flow of trade and investment. This article investigates the unique challenges faced by selected African countries, including South Africa, Kenya, Uganda and Ghana, which militate against the use of the mutual agreement procedure (MAP) as a preferred Organisation for Economic Co-operation and Development (OECD) transfer pricing dispute resolution mechanism. The research used a qualitative legal review of existing literature in the selected regimes by comparing the domestic tax law framework in these countries. Transfer pricing manipulation is a significant source of illicit financial flows of capital as identified in the research by Global Financial Integrity on Africa, which drew from Ghana, Kenya and Uganda as case studies. South Africa and Kenya are considered as the gateways to Africa with many multinational enterprises (MNEs) taking residence in them before expanding to the rest of Africa. The article focuses specifically on a number of guidelines that should be in place for the effective use of the MAP in the resolution of tax treaty disputes. It also demonstrates how the absence of guidelines, or the lack of clarity thereof, discourages both taxpayers and revenue authorities from effectively using the MAP to resolve transfer pricing disputes. The absence of guidelines has resulted in many aggrieved taxpayers opting to approach the courts as opposed to using the MAP as a mechanism to resolve tax treaty disputes. Furthermore, it highlights the importance of how resolved transfer pricing disputes eliminates double taxation. The article recommends that the same benefits enjoyed under the domestic dispute resolution process be incorporated into the MAP. It also makes recommendations on how jurisdictions with a low tax treaty network can address this challenge to enable them to effectively use the MAP as a tax treaty dispute resolution.

Financial integration and hedging and safe haven properties of metals for sovereign bonds

Previous research has shown that industrial metals outperform gold and other precious metals in terms of hedging and safe haven properties for sovereign bond holdings. We argue that the strength of these properties depends on how much the sovereign bond is globally integrated. We therefore model the hedging and safe haven properties of metals for sovereign bonds as moderated by how much bond returns are globally integrated. Our evidence from the sovereign bonds of 24 countries shows that industrial metals provide a stronger hedge and safe haven when sovereigns are more integrated, whereas precious metals do not. The inflation and exchange rates also affect the hedging properties of metals, but bond integration has the strongest economic effect. This evidence helps explain why metals are excellent hedging or safe haven assets for some sovereign bond investors but not for others.

Zero Trust Architecture: Enhancing Cybersecurity in Enterprise Networks

Zero Trust Architecture (ZTA) offers a robust approach to enhancing cybersecurity in enterprise networks, replacing the traditional perimeter-based security models. This paper examines the application, challenges, and effectiveness of ZTA in contemporary corporate environments, with a focus on hybrid and cloud infrastructures. By emphasizing key principles such as least-privileged access, continuous authentication, and network segmentation, ZTA directly addresses the security risks that organizations face today. This research includes a review of relevant literature and an analysis of case studies to explore the difficulties companies encounter when adopting ZTA, including financial costs, integration complexities, and resistance to change. The study also identifies strategies that organizations have successfully employed to overcome these obstacles, leading to improved security and operational efficiency. The findings highlight ZTA’s ability to reduce security incidents through automation and enhanced monitoring. While there are technical challenges to implementing Zero Trust, the research concludes that the framework is essential for maintaining a strong security posture. Future areas for exploration include the role of technologies like artificial intelligence and machine learning in further improving ZTA.

Assessing cybersecurity risks and prioritizing top strategies In Vietnam's finance and banking system using strategic decision-making models-based neutrosophic sets and Z number

The financial and banking system in Vietnam is currently confronted with a myriad of cybersecurity risks, a matter of paramount concern for the government, businesses, and individuals alike. These risks threaten the financial system's security, reliability, and integrity, potentially resulting in significant economic losses. This research endeavors to identify the prevailing cybersecurity risks in Vietnam's financial and banking system, assess their impact, and elucidate the interrelationships among these risks. Employing the Multi-Criteria Decision Making (MCDM) approach, the study integrates the DELPHI technique, Decision-Making Trial and Evaluation Laboratory (DEMATEL), and Combined Compromise Solution (COCOSO) methods, complemented by Neutrosophic Sets (NS) and Z-number concepts to enhance the accuracy and reliability of the findings. The research findings reveal the existence of 15 cybersecurity risks in Vietnam's financial and banking system, with Malware Infections and Supply Chain Vulnerabilities emerging as the most consequential risks. Moreover, the study identifies investing in advanced threat detection systems as the optimal strategy for mitigating cybersecurity risks in Vietnam. The results underscore the importance of addressing these critical risks to safeguard the financial infrastructure, focusing on deploying robust cybersecurity measures to enhance overall system resilience.

Financial Markets Integration and the Consequences for Financial Stability

Financial integration, as part of the financial market union, implies closer interaction between global economies. The positive contribution of digitization can be found in the specialized literature, but it fails to provide an overview of the link between financial intermediation indicators and the use of digitization, taking into account the impact on the individual. In this sense, the motivation of this research consists in emphasizing therole of digital financial services in reducing poverty, having a beneficial impact on economic development and the economy welfare.The study relevance resides in capturing the Global Findex Index trend, by measuring the use of financial services every 3 years, starting in 2011. As a result, the research aims to analyze the financial intermediation degree, and, implicitly, digitization, based on a survey of 140 economies, using a Vector Autoregressive model, impulse response functions and the variance decomposition of the included macroeconomic variables.The research resultssummarize the fintech contribution in diminishingthe financial instability risks and outlining the policy implications for governments, benefits such as money laundering and reducing corruption.

Immigrants and innovators: financial inclusion and the ‘de-banking’ of the digital asset industry

ABSTRACT ‘De-banking’ refers to banks limiting or withdrawing banking services from perceived ‘high-risk’ clients. ‘High risk’ is not merely commercial risk relating to a client’s ability to pay. It also includes ‘non-commercial’ risks such as client dealings in illicit funds or activities. Debanking decisions might also be made on operational-cost grounds where continued servicing of a particular customer base becomes uneconomical. In Australia, the de-banking issue has impacted migrant communities. More recently, de-banking has impeded the ability of digital assets service providers. Under the guise of rigorous compliance legal standards, Australian banks have limited or even cut-off banking services to many Australian digital asset firms. As the financial gatekeepers to the Australian economy, Australian banks (already very protected from competitors) are undermining an industry that could potentially compete for market share. Examining strategies adopted in other jurisdictions, Australian policy makers should supplement the introduction of a licensing regime, as proposed by the Digital Assets (Market Regulation) Bill 2023 (Cth), with additional balanced measures in order to support innovation in the digital asset sector and maintain financial integrity.

Blockchain Technology Application and Potential in the Global Securities Trading Market

With the rapid development of financial technology, blockchain technology is gradually permeating the global securities trading market. This paper delves into the current status of blockchain technology applications in this field, covering key aspects such as trade settlement and clearing, securities issuance and trading, identity verification, and compliance management. Through detailed case studies, it powerfully demonstrates its significant reduction in settlement cycles and intermediate links, thereby improving trade efficiency; its substantial reduction in operational costs and additional expenditures due to human errors, thereby lowering costs; and its effective resistance to cyber-attacks through data encryption and tamper-proof characteristics, thereby enhancing security. At the same time, it explores the positive role of blockchain technology in improving market trust by offering transparent transaction records and reducing information asymmetry. The paper further analyzes the challenges faced by blockchain technology in the global securities trading market, including issues with technology maturity such as performance scaling and interoperability, regulatory and compliance issues such as incomplete legal frameworks and policy uncertainties, industry acceptance issues such as conservative attitudes from traditional institutions and insufficient technology popularization education, and security risks such as emerging vulnerabilities and private key management risks. On this basis, it provides a forward-looking outlook on the potential and development trends of blockchain technology in the global securities trading market in the future, including integration trends with other emerging technologies, its role in promoting cross-border transactions and financial market integration, the possibility of innovative financial products and services, and the resulting changes in market patterns. In summary, this paper provides a comprehensive and systematic study of the current status, advantages, challenges, and future development of blockchain technology in the global securities trading market, offering valuable references and insights for further development in this field.

Strengthening corporate governance and financial compliance: Enhancing accountability and transparency

In today's complex business landscape, robust corporate governance and financial compliance are essential for maintaining organizational integrity, accountability, and transparency. This review examines the key components and strategies necessary to enhance these frameworks, ensuring sustainable success and stakeholder trust. Corporate governance encompasses regulatory compliance, risk management, ethical conduct, and stakeholder engagement. Adherence to laws and regulations, such as the Sarbanes-Oxley Act (SOX) and the General Data Protection Regulation (GDPR), is foundational in minimizing legal risks and safeguarding reputation. Effective risk management involves identifying, assessing, and mitigating potential threats to an organization’s financial health and operational integrity through strong internal controls and regular audits. Promoting ethical conduct within organizations is crucial for maintaining trust and reputation. Establishing codes of conduct, ethical guidelines, and whistleblower protections fosters a culture of integrity. Transparent communication and stakeholder engagement ensure that organizational activities align with stakeholder interests and expectations. Enhancing accountability and transparency involves several key strategies. Strong board oversight and independence, characterized by diverse and skilled board members, ensure balanced and objective decision-making. Regular internal and external audits verify financial accuracy and compliance, identifying areas for improvement. Leveraging technology and data analytics is pivotal in modern compliance efforts. Technologies like blockchain, artificial intelligence (AI), and machine learning automate processes, improve accuracy, and provide real-time insights into financial performance and risk management. Transparent regulatory reporting and disclosure practices, adhering to standards such as the International Financial Reporting Standards (IFRS), further enhance stakeholder trust. Continuous training and education for employees and board members on corporate governance principles, regulatory requirements, and ethical standards are vital for fostering a culture of compliance and accountability. Strengthening corporate governance and financial compliance is fundamental for enhancing accountability and transparency. By adopting comprehensive regulatory frameworks, leveraging technology, and promoting ethical conduct, organizations can build trust, mitigate risks, and ensure sustainable growth in a dynamic business environment. Keywords: Corporate Governance, Global Corporations, Harmonization.

Fiscal rules, capital controls, and cross-border financial integration

This paper shows that adopting fiscal rules (FRs) decreases the use of capital controls and increases cross-border financial integration. This result is robust to alternative measures of fiscal rules, capital controls, and international financial integration — it is also robust to alternative econometric approaches. It also shows that the adoption of fiscal rules increases financial integration. This paper innovatively employs a formal instrumental variables (IV) approach to tackle the endogeneity of the decision to adopt fiscal rules. The adoption of FRs is instrumented using the age dependency ratio (ADR). This strategy is particularly effective because adopting FRs is more likely when the ADR is relatively low, a finding well established in the empirical literature. Governments impose capital controls to channel domestic savings into the public sector, finance their excessive fiscal deficits, and reduce their borrowing costs. However, the uncertainty over the government's future fiscal policies may lead to capital flight. FRs ‘tie the hands’ of governments and induce them to commit themselves to fiscal discipline. Moreover, FRs can also reduce the government's borrowing costs. These effects of FRs render capital controls less necessary and lead policymakers to lift capital controls, resulting in higher cross-border financial integration.

Unveiling the Future of Retirement: The Opportunities and Obstacles in Modernizing Pension Schemes Across Africa

This systematic review offers a holistic understanding of the prospects, challenges, and best practices in modernizing pension schemes across Africa. With a rising aging population, pension schemes are vital for financial security, societal well-being, and poverty alleviation. The study addresses literature gaps by exploring economic implications, assessing elderly frailty, and investigating quality of life impacts. Following PRISMA guidelines and using the PICOS framework, multiple electronic databases were searched for papers published between February 2010 and April 2022, focusing on African pension schemes. Thirty-one studies met the eligibility criteria and were included in the analysis. Findings indicate that while pension schemes improve mental health, food security, and societal structures, they face challenges such as data scarcity, financial sustainability, social dynamics, and institutional barriers. Best practices include tailored interventions, financial flexibility, and healthcare integration. This paper uniquely synthesizes multiple disciplines, providing an integrated perspective and filling a significant literature gap. The study introduces models considering economic, psychological, and health-related variables, enhancing theoretical understanding. For practitioners, it offers adaptable best practices for regional and cultural contexts in Africa, including financial diversification, healthcare integration, and legal clarity. The societal impact extends to the elderly, their families, and communities, providing critical insights for policymakers to design effective, sustainable pension schemes to improve the quality of life for Africa’s aging population.

Impact of Accounting Information Systems of Cash Executions on Internal Controls of Company

The study investigates how the accounting information system of cash expenditure affects the internal controls of the company. Cash expenditure, which is vital to business operations, is managed by accounting information systems (AIS). It is expected that effective use of AIS will improve the accuracy of transaction recording, reduce errors, and prevent fraud. The study uses a quantitative method by sending questionnaires to various that have implemented cash expenditure. The results show that there is a significant correlation between how well AIS manages cash expenditure and how well the company's internal controls. Good AIS implementation ensures that all transactions are properly recorded, authorizations are carried out according to procedures, and authorities can only access financial information. In addition, an integrated AIS offers audit trails that facilitate the tracking and verification of transactions by both internal and external auditors. These findings suggest that the use of effective cash expenditure can strengthen internal control mechanisms, improve financial integrity, and give confidence to stakeholders of the company's interests.

An Overview of the Roles and Functions of Selected Financial Role Players to Protect Financial Stability and Promote Market Integrity in South Africa

The South African Reserve Bank (SARB) and other financial role players such as the Prudential Authority (PA), the Financial Sector Conduct Authority (FSCA), the National Credit Regulator (NCR), the Financial Intelligence Centre (FIC), the Financial Stability Oversight Committee (FSOC), the Financial Sector Contingency Forum (FSCF), the Financial Sector Council of Regulators (FSCR) and the Financial Sector Inter-Ministerial Council (FSIC) play a significant role in the protection and promotion of financial stability and market integrity in South Africa. The SARB has the primary financial stability mandate, whilst the FSCA was established to primarily promote market integrity and enhance market efficiency through protecting and promoting the fair treatment of financial customers and promoting financial literacy programs. As technology advances and new players enter the market, traditional financial institutions are faced with increased competition and the need to adapt and innovate to stay relevant. In this regard, regulatory frameworks and the functions of regulatory bodies should be constantly reviewed to conform to financial technology (fintech) developments and safeguard consumer interests. This article examines the roles and functions of the aforementioned financial role players as regulated by the Financial Sector Regulation Act (FSR Act) and other relevant financial sector laws. This is done to evaluate the effectiveness of their roles and functions to protect and promote financial stability and market integrity in line with fintech and Artificial Intelligence (AI) developments. The paper also evaluates the importance of cooperation and collaboration between the financial role players to fulfil their roles and functions.

Research on the Mechanism and Strategy of Equity Investment Driving the Transformation of New Material Innovation Achievements

Under the wave of global technological revolution, the new materials industry is facing difficulties in innovation and transformation. Equity investment has become a key driving force due to its flexible mechanism, risk sharing, and deep participation. Based on introducing the current development status of China’s new materials industry, this article reveals the mechanism of equity investment in financial support, risk management, incentive constraints, and resource integration. The article proposes optimization strategies, such as building an information-sharing mechanism and a diversified investment fund system, to promote the high-quality development of the new materials industry driven by innovation and provide strategic guidance for policymakers, investors, and enterprises.

Editorial for the Special Issue of Comparative Economic Studies: 50 Years After the End of Bretton Woods—The Experiences of Small Open Economies

AbstractThis special issue of Comparative Economic Studies, commemorating fifty years since the end of the Bretton Woods system, examines the adjustment of small open economies to floating exchange rates and new monetary policy frameworks. Based on a workshop held at the KOF Swiss Economic Institute in June 2023, six papers analyse dimensions such as the evolution of monetary policy regimes, the impact of economic crises and the use of unconventional monetary policies in Canada, Israel, Norway, Sweden and Switzerland. The findings highlight the benefits and limitations of inflation targeting, the challenges of global financial integration and the strategic responses of central banks to maintain stability and independence, providing policymakers with valuable insights into the complex dynamics of monetary policy in the post-Bretton Woods era.

PENINGKATAN LITERASI KEUANGAN UNTUK MEMBANGUN INTEGRITAS ANAK-ANAK SEKOLAH KELURAHAN TANAH ENAM RATUS KECAMATAN MEDAN MARELAN

Financial literacy is the knowledge, skills and beliefs that influence attitudes and behaviors to improve the quality of decision-making and financial management to achieve public financial welfare. The understanding of financial literacy is one of the things that must be strengthened so that people can become wiser in making financial decisions. The results of observations and interviews conducted in Kelurahan Tanah Enam Ratus, Medan Marelan Subdistrict, we describe how many children spend their money to play online games on mobile applications, even they are not aware of topping up games repeatedly. This community service activity aims to provide an understanding of financial literacy and integrity from an early age, so as to improve the quality of students' insights, knowledge, value skills and attitudes. The implementation of this service at Harapan Bangsa Islamic Elementary School, Neighborhood VI, Tanah Enam Hundred Village. The students will be taught to learn independently and practice not relying on their parents from an early age through saving habits. The method used is through observation, interviews and theoretical presentation and training which begins with an explanation related to financial literacy and integrity. Direct explanation and training to students through financial literacy simulations by saving money carried out for seven days by putting it into each envelope. The implementation of financial literacy activities for students in schools to build integrity is expected to produce a generation that can manage their finances wisely and form individuals to be responsible and trustworthy. This service is expected to improve financial literacy and integrity attitudes so as to foster students' interest in saving from an early age and teach discipline and careful planning as well as increasing awareness to achieve success in the future.

Financial integration and economic growth in Africa

The main objective of this article is to assess the link between financial integration and economic growth in African countries during the period 1990-2017. To achieve this goal, we used a dynamic panel model using the generalized method of moments (GMM) in first difference with threshold effects on a sample of 29 African countries. The results of the estimates reveal, on the one hand, that the countries that benefit from the benefits of financial integration on economic growth are those with high trade and financial openness, high human capital, low inflation, democratic regime, and high public expenditure. On the other hand, these results indicate that financial integration is associated with a low probability of surviving a banking crisis in the countries studied. Thus, the governments of African countries must implement policies aimed at a progressive liberalization of trade and financial activities, coupled with the implementation of macroeconomic stability policies and the improvement of the quality of the institutional environment, which determines the impact of financial integration on economic growth.