Financial Flows Research Articles

Fund Flows and Fund Performance on Lottery Funds

This study introduces a new indicator to measure the lottery-like degree of financial products by considering their idiosyncratic volatility and skewness. The findings indicate that investors tend to purchase funds that hold lottery-like stocks, while investors prefer lottery-like funds when the market sentiment is high. However, funds holding lottery-like stocks and those exhibiting lottery traits experience relatively lower adjusted returns in the next quarter. Interestingly, when the market sentiment is high, investors can obtain better performance only from funds that hold lottery-like stocks, indicating that investors may be better off selecting lottery-holding funds rather than lottery-like funds during periods of high sentiment. Overall, our study sheds light on investor behavior and the impact of market sentiment on fund flows and performance in lottery-like funds.

A Justice-Oriented Conceptual and Analytical Framework for Decolonising and Desecularising the Field of Educational Technology

Education systems globally are increasingly being shaped by the logics, assumptions and pedagogical underpinnings of educational technology (EdTech) products, services, programmes, policies, and systems. These often promote rationalistic, secular, universal, objectivist, (post)modernist, written, behaviourist, and individualistic ways of being, marginalising religious, spiritual, oral, subjective, critical, and communitarian ways of being. Given that technological ways of being have been propagated globally, these logics are no longer predominantly promoted by those in the Global North, but by techno-solutionists globally, although the core-to-periphery flows of ideology and funding are still prominent. This article develops a conceptual and analytical framework for decolonising and desecularising the field of EdTech. Concepts are drawn from various discourses: the desecularisation of knowledge to set the ontological framing; embodied cognition to set the epistemological framing; and social justice and decolonial discourses to set the axiological framing. From this, the article develops the Dimensions of Human Injustice Analytical Framework—covering material, ontological and epistemic, and (geo)political injustices—to assist policymakers, educators, EdTech developers, and international development practitioners in identifying and confronting coloniality in their EdTech. Acknowledging the complexity and contentions within decolonial thought, this article does not claim a unified stance on achieving justice but aims to offer a tool for deconstructing and questioning injustices.

International Money Laundering Trends in the Cryptocurrency Market

Cryptocurrencies are specific financial instruments that work based on blockchain technology and are currently used by an increasing number of people as a means of payment and investment. By analysing the positions of official institutions in the field of cryptocurrencies, as well as the opinions of experts in financial information technologies, a complex view of the issue has been developed. heir anonymity and the support infrastructure make them attractive to international criminal activities, especially for laundering illicit financial flows through various scams. Different methods are used for this. To combat this phenomenon in different countries, combative measures have been taken. At the same time, an important opportunity has become the improvement of the regulatory framework at the national and international level of activity on the cryptocurrency market.

Balancing privacy and public interest in the fight against illicit financial flows: Lessons from an European Case Study

Illicit Financial Flows (IFF) – such as corruption and money laundering – have a significant negative impact on the enjoyment of human rights. Combating IFF is an integral part of the 2030 Agenda for Sustainable Development. SDG 16 explicitly promulgates the relation between the rule of law, social security and the fight against IFF. Cross-border data access and exchange by enforcement authorities is crucial to map and disrupt IFF, punish suspects and take away their criminally earned assets. At the same time, human rights restrain national enforcement authorities when combatting IFF. States must abstain from undue interference with individuals’ privacy rights, such as the storage of information relating to an individual’s private life and the sharing of such information. Pursuant to article 8 ECHR, interference with the right to respect for private – in accordance with the law – is only permissible if this is necessary in a democratic society, e.g. in the interests of national security and public safety. In this article we explore the balance between individual rights and states’ responsibilities in the fight against IFF; between privacy and the common good of fighting bad money. To what extent may privacy concerns be an obstacle to investigate global IFF? Our conclusion is that there is an imbalance. We suggest that human dignity and human security should be given more weight in the balancing of human rights in this context.

How do Ivorian Cyberfraudsters Manage Their Criminal Proceeds?

This article delves into the intricacies of managing illicit financial gains among Ivorian cyberfraudsters, shedding light on the findings of a field study conducted in Côte d’Ivoire by Swiss and Ivorian research teams. The study involved interviews with cybercriminals, law enforcement officials, and subject matter experts, in order to answer a specific question: What strategies do Ivorian cyberfraudsters use to manage and launder the criminal proceeds originating from romance scams and sextortion? The results explore the tactics employed by cyberfraudsters to obfuscate the illicit financial flows, their organizational structures, and the strategies they employ in managing and using their gains. It confirms certain elements from the scientific literature, in addition to introducing new insights for a better understanding of the processes of money laundering and the use of illicit funds. The article also unravels the multifaceted challenges encountered within the anti-money laundering framework in the context of cybercrime and raises avenues for further reflection and future work to enhance the fight against this scourge.

Navigating the impact of remittances on environmental quality in Africa: The crucial role of institutional quality

The Sub-Saharan African (SSA) region remains the world's largest recipient of remittances. Due to growing concerns over climate change issues, recent studies have examined how these financial flows have affected environmental quality. Sundry variables were controlled in such studies concerning the remittances-environment nexus, including institutional quality. Notwithstanding that remittance and institutional quality are imperative, their combined effect on environmental quality has been overlooked. The present study has inspected how remittances and institutional quality have jointly influenced environmental quality in 44 economies in the SSA region between 2000 and 2022. Using PMG-ARDL analysis, the findings revealed that remittances had a negative long-term impact on environmental quality. Conversely, the study found that institutional quality positively affected the per capita ecological footprints, as measured by the six indicators' average. Furthermore, the results indicated that improvements in institutional quality over time mitigated the adverse impact of remittances on the environment in the sampled SSA countries. Additionally, a threshold level of institutional quality effectively moderates remittances' detrimental effects on environmental quality were identified. Therefore, most regional countries must enhance their institutional quality to mitigate the negative environmental impact of remittances.

Реалізація виробничого потенціалу підприємства в контексті забезпечення економічної безпеки

The article substantiates the relationship between the development potential and the economic security of the enterprise. The new opportunities that open for business in the context of strengthening globalization and integration processes and developing innovative technologies simultaneously lead to the growth of threats associated with the peculiarities of material, financial, and information flows. In these conditions, the strategy of developing the company’s potential requires new approaches to management. It has been established that achieving the appropriate level of economic security is the basis of sustainable development and the enterprise’s potential growth. At the same time, the company’s potential growth in development is limited by the need to incur costs for protection against dangers and threats. Considering the state of economic security, the enterprise’s material and financial resources should be used to increase its development potential. The number of expenses necessary to ensure the economic security of the enterprise’s activities must be determined by the management bodies independently based on the scale of production, the specifics of technological processes, the state of the material and technical base, the number of possible losses, etc. This means that when making management decisions regarding the direction of the use of material, financial, and investment resources, it is necessary to proceed first from the need to ensure economic security as a basis for the stability and sustainable development of the enterprise. The priority of using resources to ensure economic security is explained by the role it plays in the activities of enterprises. Based on the example of financial security, the indicators that can be used to assess its condition are established. Comparison with marginal indicators makes it possible to assess the state of financial security and make timely management decisions regarding its change. Keywords: economic security, risks, threats, enterprise development potential, ways to ensure economic security.

The role of finance in production and international trade

We introduce finance in a neo-classical general equilibrium model of production and international trade to integrate the core microeconomic theory with the theory of finance. The stock of credit, as past savings, finances employment and the acquisition of machines or capital goods. The availability of finance or international financial flows does not affect production or trade patterns, except for nominal factor prices, in undistorted competitive structures. However, distortions such as unemployment, imperfect credit markets, and factor mobility do affect real outcomes and trade. Our results are consistent with contemporary empirical evidence and have policy implications for financial development and institutional quality. Numerical illustrations provide further insights.

Navigating the shadows: exports and money laundering dynamics in Bangladesh

Purpose This study aims to analyze the complex dynamics of money laundering (ML) in the export sector of developing countries, with a special focus on Bangladesh. It aims to uncover the strategies and tactics money launderers use to exploit export transactions and understand the vulnerabilities that exist in economies where enforcement agencies neglect the export industry. Design/methodology/approach This study examines Bangladesh’s export sector ML using qualitative methods. Customs officers, central bank officers, port authorities and selected exporters were interviewed semi-structured. Document analysis of Bangladesh Bank orders, media and Customs Intelligence and Investigation Directorate reports was also done. Qualitative data patterns were identified using theme analysis. Findings The study identifies the most vulnerable export commodities – readymade garments, agricultural items and processed foods – as prime targets for ML. Key methods of laundering include under-invoicing, over-invoicing, misdeclaration and fake documentation. The research highlights the significant risk posed by the improper use of government financial incentives and introduces the “sample shipment” method as a novel laundering tactic. The findings underscore the need for stronger oversight and controls to mitigate these risks. Research limitations/implications This research is limited by single-point data because ML is a continual activity. The reliance on case studies from newspaper reports and online platforms introduces a degree of selection bias and the chosen instances may not comprehensively represent the broader landscape of trade-based ML. Practical implications The study provides several practical recommendations for policymakers and law enforcement agencies to fortify the export sector against exploitation by money launderers, ensuring greater transparency and accountability in international trade operations. Social implications By closing loopholes in the export sector, the research supports the Sustainable Development Goals, particularly Goal 16.4, which aims to reduce illicit financial flows, thereby contributing to poverty eradication and economic stability in developing countries. Originality/value Original research results supported by technical analysis are presented in this work. It contributes to the body of knowledge by detailing the adaptive strategies of money launderers and proposing targeted recommendations for enhancing the integrity of the export sector.

Investigate The Influence Of The Fama and French Five-Factor Model On The SRI-KEHATI Stock Index

The capital market functions as an intermediary for the flow of funds between investors and companies, in accordance with the general principle that the greater the risk, the greater the potential profit. In estimating returns, there are several methods, one of which is the Fama French five factor model which was developed from the CAPM, APT and Fama French three factor models. This research aims to evaluate the relationship between the five-factor Fama French model and excess returns on the SRI-KEHATI stock index from 2015 - 2022. This research method adopts quantitative analysis with an associative causality approach and uses a purposive sampling technique to select 9 companies as samples. Data analysis used by Eviews 12. Study findings show that market factors have a significant influence on excess returns, while size, value, profitability and investment factors are not significant on excess returns. Overall, the Fama-French model's five factors collectively influence excess returns. This finding confirms that market conditions will influence the excess returns obtained by investors.

Impact of Industrial Intelligence on China’s Urban Land Green Utilization Efficiency

Against the backdrop of the fourth technological revolution, industrial intelligence (INDI) represented by industrial robots has rapidly developed. This evolution provides favorable opportunities for precise decision-making in pollution control and achieving China’s “dual carbon” goals. Previous studies have mainly discussed the economic effects of INDI from the perspective of the labor market. This study shifts its focus to examining the impact of INDI on the land green utilization efficiency (LGUE) in cities. Using the panel data of Chinese cities spanning 2009–2021, this study empirically tests the effect and transmission mechanism of INDI on LGUE. We find that urban INDI significantly enhances LGUE. In terms of its transmission mechanism, INDI drives improvements in urban LGUE through technological progress, energy structure optimization, and industrial structure upgrading. Urban infrastructure construction and financial agglomeration level can further strengthen the positive impact of INDI on LGUE. In addition, the improvement in LGUE due to INDI is more significant in non-resource-based and large-sized cities than resource-based and small and medium-sized cities. Therefore, each region should enhance the integration of intelligent technology with traditional industrial manufacturing. Doing so is essential to establish comprehensive assessment indicators that balance environmental protection and economic growth, strengthen regional information infrastructure construction, ensure steady financial flow, and support green development initiatives across regions.

Industrial Online Gambling as Dangerous Cyber Crime in Indonesia

Currently, the reality of a lifestyle that tends to be consumptive, especially combined with the increase in daily necessities due to the speedy rate of economic inflation, makes everyone want to achieve everything practically and instantly, or they think it is easy. One of the things done is gambling. Gambling is a criminal act, i.e., risking a certain amount of money where the winning party will get the entire bet. Gambling can also be referred to as a matter of luck, as it can harm society and the nation's moral values. This crime also disturbs public order, peace, and security. In addition, the influence of gambling does not only affect adults but the impact of gambling also affects children. The Online Gambling Task Force (Satgas), formed by President Joko Widodo and the Financial Transaction Reporting and Analysis Center (PPATK), found several findings related to online gambling in Indonesia. Among them, the turnover of online gambling money reached Rp 600 trillion, and the flow of funds flowed to several countries abroad, including several ASEAN countries such as Cambodia, Vietnam, Thailand, and the Philippines. Online gambling turnover will reach 600 T, and the January-March 2024 period will reach 100 T. A total of 2,370,000 residents are addicted to online gambling, 2% (800,000) of children under the age of 10 years.

Balancing India's energy trilemma: Assessing the role of renewable energy and green technology innovation for sustainable development

The energy trilemma, which includes energy security, affordability, and sustainability, is vital for India's path towards green development. A practical assessment of the energy trilemma's level is crucial for assessing the current state of India's energy landscape and making substantial progress towards Sustainable Development Goals 7 and 13. Based on time series data from 1990 to 2021, this paper investigates the direct and indirect effect of renewable energy use and green technology innovation on India's energy trilemma by using the dynamic autoregressive distributed lag (DYNARDL) simulation model. Our findings indicate that renewable energy use impacts the energy trilemma positively in both the short and long run. However, the effect of green technology on energy trilemma is positive but insignificant, suggesting the need for further technological advancement. The mediation analysis highlights that environmental regulation and energy efficiency are crucial through which both renewable energy and green technology innovation influence energy trilemma, while R&D shows an insignificant mediation effect. Based on the above findings, the study provides implications for policymakers to focus on strengthening environmental regulation, enhancing energy efficiency, and increasing the financial flow for R&D investment to incentivize the mitigating effect of green technology on renewable energy use on energy trilemma.

ENSURING SUSTAINABLE WAQF-ZAKAT MICROTAKAFUL PROTECTION THROUGH A SYSTEM DYNAMICS APPROACH

The Islamic financial ecosystems, such as zakat and waqf, have roles in tackling poverty and can be integrated into providing financial protection, such as death benefits to the poor through microtakaful. However, unpredictable payouts and irregular contributions can hinder the implementation of microtakaful, affecting cash flows. This paper employs a system dynamics approach to simulate the cash flows of microtakaful funds, emphasizing the influence of three key factors: the rate of new participants, the mortality rate, and the contribution rate. Note that this approach is chosen for its ability to model complex systems and predict the behavior of microtakaful funds over time. The data collected were from various institutions, including the Life Insurance Association of Malaysia (LIAM), the Central Bank of Malaysia (BNM), and the Department of Statistics Malaysia (DOSM) from 2018 to 2020. The model indicates a minimum contribution rate of RM130 per year, with a 2% mortality rate and 0.8% annual increase in the new participants. The model serves as a foundation for designing a simple and understandable non-profit microtakaful product.

Inflation and Fiscal Policy: Is There a Threshold Effect in the Fiscal Reaction Function?

Abstract The euro area, like other advanced economies, faced high inflation over the past years. We analyse empirically the impact of inflation on public finances in the euro area, focusing on the question of whether at such high levels, inflation could have a different impact on the primary budget balance. To this end, we estimate a fiscal reaction function for euro area countries and find evidence of non-linear short-term effects of HICP inflation on the primary balance. Over the period 1999–2022, we unveil an inverse U-turn relationship and an inflation turning point – beyond which its short-term (contemporaneous) impact on the primary balance starts being negative. These results reflect primarily the most recent high inflation episode and indicate that in such conditions inflation can be costly for public finance flows even in the shorter run.

Spotting Portfolio Greenwashing in Environmental Funds

AbstractThis paper examines greenwashing practices in environmental funds. We utilize a unique data set of US equity mutual fund holdings between 2012 and 2021 to calculate the funds’ carbon footprints. Using a difference-in-differences analysis, we find that, following their commitments to sustainability, environmental funds fail to reduce their carbon footprints relative to a matched group of conventional funds. We also find, using an event study, a significant increase in the flows of environmental funds in response to these commitments. The combination of the failure to reduce carbon footprints and the surge in inflows provides evidence of greenwashing by environmental funds, raising concerns about their fiduciary duty. Our findings also show that greenwashers tend to initially have low flows and high portfolio carbon emissions suggesting that they announce their commitments to sustainability just to attract investors.

International Tax Transparency Standards and the Tackling of Illicit Financial Flows

Illicit financial flows, most of which are tax-motivated, continue to cripple development and undermine the rule of law and fairness in our societies. The now mature framework of international tax transparency standards can help tackle these flows by affording access and cross-border exchange of relevant financial and ownership data.

Global-local nexus in sustainable development: the influence of international green investment on local environmental spending

Strengthening the financial capabilities of local governments is essential for achieving the Sustainable Development Goals. Previous research has primarily focused on the flows of finance across countries and regions, neglecting the interaction between international investment and local fiscal response. To address this gap, this study first developed the typology of local environmental spending, and then linked it to a panel dataset composed of 4,439 CDM projects in China and expenditure at the provincial level from 2005 to 2017 to explore the role of international green finance. By categorizing local environmental spending into capital spending and recurrent spending, the findings reveal that international green investment primarily influences the former type, with regional and project type variations. With explanation and discussions of the results, this study contributes to sustainability research by investigating the global-local nexus through a fiscal lens and provides policy insights for local capacity building and global financial system design.

Rentier capitalism, social reproduction, and the limits of liberalism: mapping gendered asset value in Kuwait

ABSTRACT This paper introduces the concept of citizenship rent to help explain the apparently contradictory coexistence of liberalising economic reforms and the entrenchment of patriarchal values. Citizenship rent (CR) is defined as the financial flows that move from the state to the citizen in the form of entitlements, employment, and access to state-subsidised goods, labour and business opportunities. Our innovative proposal substitutes transaction cost economics’ assumption of market selection for a selection by patriarchy to show how gender plays a central role in the reproduction of the asset specificities that increase transaction costs. This illustrates how an extractive, asset-based economy, like Kuwait's, can afford to double down on conservative social values, even at a considerable fiscal price, as long as the transaction costs of getting oil to the international markets are not increased through social disruption or political uncertainty. Rather than examining how women’s social reproductive work subsidises social and political stability, CR reveals women’s role in sustaining assets valuable to the state. This paper demonstrates that a close examination of the social values that inhibit transactions can also reveal patriarchal structures in rentier capital and exhibit a need to further analyse the patriarchal transaction costs that shape and sustain societies.

Russian diplomacy and western gas wars against Russia

The article is devoted to the study the use by Western countries, primarily the United States and the EU, of the gas factor for political and economic pressure on Russia in order to squeeze it out of world gas markets, primarily European, and reduce the fl ow of funds from Russian gas exports to the state budget. The article analyzes how, in order to achieve their goals, the United States and a number of members of the European Union manipulate the actions of Qatar, Turkey and the Balkan countries to disrupt the implementation of large gas projects to deliver gas from Russia to Europe through main gas pipelines along the bottom of the Baltic and Black Seas, bypassing Ukrainian transit. Special attention how the West has used and is using Ukraine to displace Russian pipeline gas from European markets. The article also considers how the West has used and is using Ukraine to displace Russian pipeline gas from European markets. Special attention is paid to the role of liquefi ed natural gas (LNG)to increase the supply of Russian gas to the world market, which makes it possible to reduce Russia's dependence on gas exports through pipelines. The issue of prospects for the reorientation of gas exports from the West to the East, primarily to China, is also being considered.