Financial Phenomena Research Articles

The Evolution of Bitcoin: A Historical Analysis and Future Prospects

Bitcoin is the first decentralized digital currency that was introduced in 2009 and has since garnered significant attention from investors, governments, and the general public. This research article provides a comprehensive historical analysis of the evolution of Bitcoin, tracing its roots from its early days as a niche, experimental technology to its current status as a global financial phenomenon. The study explores the key events and milestones in Bitcoin's development, including the creation of the first block chain, the emergence of cryptocurrency exchanges, and the proliferation of Bitcoin mining. It also delves into the economic and social factors that have influenced Bitcoin's growth and adoption over time, including government regulation, market fluctuations, and the rise of alternative cryptocurrencies. Furthermore, the article examines the potential future prospects of Bitcoin, including its potential to disrupt traditional financial systems, its viability as a long-term investment asset, and the emerging trends in the broader cryptocurrency ecosystem. The study concludes by highlighting the significance of Bitcoin as a transformative technology with significant implications for the global financial system. The insights provided by this research can aid policymakers, investors, and researchers in understanding the past, present, and future prospects of Bitcoin and its role in shaping the future of finance.

The good, the bad or the ugly: financialization through heterodox and mainstream lenses

Since the late 1970s, heterodox economists have paid increasing attention to the phenomenon of financialization. However, the process, identified with the growing role of finance in the economy, as well as with its impact on the social, cultural and environmental aspects of society, was rather neglected in the mainstream economics. Despite its growing importance in the subsequent years – mainly due to the global financial crisis 2007–2009 – financialization still eludes unambiguous interpretation. The aim of the article is to identify and explain the differences in the perception of financialization between heterodox and mainstream economics. We add to the existing literature by making a clear distinction between the ways in which heterodox and mainstream economists understand and interpret financialization. We find that the main source of the different approaches to financialization are oversimplifications in the understanding and modelling of monetary and financial spheres in the mainstream analyses.

Why Has Labor Productivity Slowed Down in the Era of Financialization?: Insights from the Post-Keynesians for the European Union Countries

This article employs a panel data econometric approach in order to empirically ascertain the role of the phenomenon of financialization in the deceleration of labor productivity in the European Union countries from 1980 to 2019. During that time, the European Union countries suffered a huge structural transformation based on Reaganomics and Thatcherism and their financial systems have experienced strong liberalization and deregulation, which have contributed to poor evolution of labor productivity and have revived fears around a new “secular stagnation” in the era of financialization. Grounded in post-Keynesian literature, the slowdown of labor productivity in the majority of developed economies in the last decades cannot be separated from the phenomenon of financialization, which has occurred through four different channels, namely, weak economic performance, the decline in the labor income share, the increase in personal income inequality, and the strengthening of the degree of financialization and its corresponding harmful effects on innovation, research and development, technological progress, and productive investments performed by nonfinancial corporations. Our findings confirm that lagged labor productivity, economic performance, and labor income share have a positive impact on labor productivity in the European Union countries, while personal income inequality and the degree of financialization impact it negatively. Our findings also reveal that labor productivity in the European Union countries in the last decades would have grown more if there had been a stronger economic performance, a smaller decline (or even a rise) of the labor income share, a smaller increase (or even a decrease) of personal income inequality, and a weakening of the degree of financialization. JEL Classification: C23, E12, E24, and E44

Analysis Behavioral Financial Bias in Invesment Decision Making

Traditional finance suggests that any investment made by a rational investor considers risk and return before making a decision to maximize return. Behavioral finance then challenges conventional finance and introduces psychological factors that influence decision-making on invesment. The purpose of this study is to investigate how behavioral biases affect investment decisions under. Relying on variables to make investment decisions is a complex activity that relies on individual resources. Based on this research, In this study examine the impact of alternative investment decisions by human rational and irrational behavior and then examine the impact of behavioral finance on the decision-making process. behavioral financial phenomenon variables; heuristics, prospect theory, Role of personality, and environmental factors are explored as part of this study. Overconfidence, representativeness, anchoring, regret avoidance, hindsight, the harding effect, and home bias are inherent in investor psychological behavior. A research questionnaire tool for collecting samples and conducting quantitative research. To test the hypothesis regression analysis performed by the SPSS as a result. We found that investment decisions are influenced by behavioral bias. Empirical results concluded that investment decisions are influenced more by heuristic behavior than by prospect theori or role of personality. The results showed that heuristic behavior, prospect theories and the role of personality. Significantly influences investment decisions. With this research, it is hoped that it can help novice investors who will make an investment and to other researchers in the financial institutions.

Nonlinear asset pricing in Chinese stock market: A deep learning approach

The redesign of asset pricing models failed to integrate the frequent financial phenomenon that stock markets exhibit a non-linear long- and short-term memory structure. The difficulty lies in developing a nonlinear pricing structure capable of depicting the memory influence of the pricing variable. This paper presents a Long- and Short-Term Memory Neural Network Model (LSTM) to capture the non-linear pricing structure among five elements in the Chinese stock market, including market portfolio return, market capitalisation, book-to-market ratio, earnings factor, and investment factor. The long–short-term memory structure implies that the autocorrelation function of the stock return series decays slowly and has a long-term characteristic. The LSTM model surpasses the standard Fama–French five-factor model in terms of out-of-sample goodness-of-fit and long–short strategy performance. The empirical findings indicate that the LSTM nonlinear model properly represents the nonlinear relationships between the five components.

Uncertain random portfolio selection with high order moments

<p style='text-indent:20px;'>In financial phenomena, investors are confronted with a hybrid uncertainty, where random and uncertain returns can occur simultaneously. This paper studies the kurtosis of an uncertain random variable and its application in portfolio selection. We are aware that the kurtosis measures the extreme values in each tail of the distribution. However, the notion of kurtosis for uncertain random variables has not been properly established. Thus, we introduce the concept of kurtosis of an uncertain random variable and extract some significant properties. Next, by invoking chance distribution we derive the kurtosis of three particular uncertain random variables, as well as the variance. Then, we present an uncertain random mean-variance-skewness-kurtosis portfolio selection model with their corresponding variations to meet various investors' requirements. Finally, two numerical examples are presented along with a comparative study to explain and illustrate the main results.</p>

The Evaluation and Financial Situation Forecast of the Selected Cities of The Eastern Poland

Purpose – The article attempts to answer the question about the current and future financial capabilities of local governments. This study was conducted on the basis of financial situation in 18 cities located in the eastern part of the country, which vary in terms of demographics and functions. Research method – Recognizing and evaluating many processes and financial phenomena occurring in cities is possible due to the financial analysis. Its subject is the diagnosis of their financial situation and the forecast of future money inflows. The analyses’ results, obtained on the basis of the financial forecast model developed with that aim, may constitute a starting point for the local governments’ decisions regarding future financial policies. Results – Maintaining the existing historical trends, resulting in the operational surplus decrease, might cause the limited development potential of the studied cities. In order to counter this situation, it is crucial to take steps to reverse negative identified trends, including the improvement of the net operating result. It seems that in order to achieve that, it is necessary for local governments to take action, and to change central authorities’ policy in relation to the local government subsector. Originality /value /implications /recommendations – Theoretical research was carried out on the financial condition of selected cities in eastern Poland, assessing their current and future financial potential. A financial forecast model was developed and used in the implementation of this research.

METHODOLOGICAL APPROACHES TO THE RESEARCH OF STATE FINANCIAL RESOURCES AND THE FINANCIAL SECURITY OF BUSINESS ENTITIES IN THE CONDITIONS OF PUBLIC FINANCES MANAGEMENT REFORM

Introduction. The study of the problems of formation and use of state financial resources, financial security of public sector economic entities in the conditions of reforming the management of public finances is of great importance for financial science and practice. The scientific value of such research depends on the skillful use of methodological approaches and is reflected in the quality of the conclusions drawn and the proposed theoretical and practical recommendations. Today, financial science uses a number of methodological approaches that make it possible to deeply understand the meaning of financial phenomena and processes. However, there is a need for an in-depth analysis of these approaches, the relationships between them, the availability of appropriate tools and methods of their use for the depth of scientific research. The purpose of the article is to substantiate the theoretical and practical foundations of methodological approaches to the study of state financial resources and financial security of economic entities in the context of reforming public finance management, as well as the effectiveness of their use in financial scientific research. Methods. The work uses dialectical, hermeneutic, systemic, holistic, project-oriented, process, cybernetic, informational, synergistic, institutional, structural, historical, functional, structural-functional, sociocultural, behavioral approaches. The results of the research were obtained through the use of methods of generalization, analysis and synthesis, induction and deduction, comparison, descent from the concrete to the abstract and from the abstract to the concrete, evaluation, description, prediction, and others. Results. The content and components of the methodology of modern financial science are considered. The relationship between methodological approaches and methods in financial scientific research is revealed. Emphasis is placed on the place of state financial resources and financial security of public sector economic entities among financial categories and concepts of state finance using the main laws of dialectics – the law of transition of quantity into quality and the law of unity and struggle of opposites. Approaches to the determination of financial resources in the process of capital circulation in accordance with the dialectical law of negation of negation are clarified. The relationship between the management of financial security, financial resources of public sector economic entities and the budget process using the structural-functional approach is analyzed. Other methodological approaches in the study of state financial resources and financial security of economic entities in the conditions of public finance management reform are characterized. Conclusions. Proposals regarding the use of methodological approaches to the study of state financial resources and financial security of economic entities in the conditions of public finance management reform are substantiated. In further scientific research, special attention will be paid to the use of the considered methodological approaches in scientific research, which will make it possible to deepen the theoretical and practical foundations of the objects of research.

Distribution Analysis of S&P 500 Financial Turbulence

In 2010 a new financial risk measure was discovered, namely Financial Turbulence. Although it has been studied by other papers, its statistical distribution study is still missing. Knowing a financial phenomenon distribution is of importance when performing risk and portfolio management, especially when estimating parametric Value-at-Risk with Copulas and performing Monte Carlo simulations. Therefore, this paper explores the S&P 500 Fi-nancial Turbulence to determine its best distribution fit by making use of various residual measures and goodness-of-fit tests. Additionally, it makes use of in-sampling and out-sampling in the period between 01/11/2012 and 01/11/2022. The results of this research indicate that the Generalised Hyperbolic distribution describes the S&P 500 Financial Turbulence the best.

Political turnover and corporate financialization: Evidence from China.

In the context of the slowing growth of the real economy and the rapid development of the financial industry, more and more non-financial companies are participating in the financial industry for the purpose of development and profit expansion. China has gradually appeared the phenomenon of corporate financialization. This paper uses the panel fixed effect model empirically examines the effect of political turnover on corporate financialization by using data of listed companies and top prefecture level officials in China between 2007 and 2020. We find that the turnover of mayors significantly decreases corporate financialization, while the turnover of party secretaries has no impact on corporate financialization. Moreover, these results are moderated by the characteristics of government officials and firm's characteristics. Our results further show that changes by mayors increase fixed asset investment and decrease cash holdings, and, thus, reduce corporate financialization. These findings could assist in solving the "from real to virtual" problems, strengthening financial services, and realizing high-quality economic development.

Social, Economic, and Financial Aspects of Modelling Sustainable Growth in the Irresponsible World during COVID-19 Pandemic

The subject matter of this study is connected to the functions of socially responsible business, which has become an essential topic within the insurance sector during the COVID-19 pandemic. This issue has received increasing attention from scientific, business, and political communities. Our study is devoted to the social, economic, and financial dimensions of the problem concerning sustainable development, and is analysed from the perspective of the financial market, including the insurance sector, during the COVID-19 pandemic. Our research indicates that the emerging social, economic, and financial phenomena offer an adequate description of the changes in the global economy. This study could become the basis for a better strategy against the COVID-19 pandemic than the current view of the economy, and may lead to a breakthrough in the development of social sciences. We attempt to integrate the environments and concepts into the starting point of a central question: does the social responsibility of a business allow for the chance of sustainable growth from social, economic, and financial perspectives? Thus, this study deals with the hypothesis that the social, economic, and financial aspects concerning the development of Poland are connected to the behaviours of the financial market, which compose their strategy by taking socially responsible actions both during the COVID-19 pandemic and after it into account by modelling sustainable growth. Statistical data from the Central Statistical Office from the years 2010–2020 concerning age, place of residence, and level of education was a selection basis while creating the layers. The methodological concept of the study was theoretical and empirical. In the empirical section, the research was conducted in the territory of the Polish state using proprietary indicators of sustainable development and a questionnaire. Moreover, a theoretical and historical analysis has been conducted. Within sustainable development, there is a noticeable attitude among the respondents who are aware of the COVID-19 threat characteristic of mature customers. Customers of insurance companies in Poland expect to receive a good-quality insurance product and to be well served in the event of an insurance accident. Moreover, it is expected that, as CSR develops, insurers will continue to serve as shock absorbers for the economy and society.

Современные аспекты развития инфраструктуры городов с использованием государственно-частного партнерства

The purpose of the article is to study modern aspects of the development of the infrastructure of Russian cities by means of public and private partnership. The paper identifies and systematizes the advantages and risks for the state, business and the population connected with the use of public and private partnership in urban infrastructure. This research made it possible to develop measures aimed at the reduction of the exposure of public and private partnerships to these risks (improvement of risks distribution and obligations, creation of an effective motivation system, reference forecasting use, and so on). The analysis and assessment of the current state of public and private partnership in the urban infrastructure of Russia are made and then measures are suggested to overcome obstacles in achievement of high ranks of cities in terms of infrastructure development. It is concluded that public and private partnership in urban infrastructure contributes to a successful creation of a number of risks connected with modern challenges (adverse climate change; environmental, energy and pandemic crises) and, as a result, lays the foundations for the creation of infrastructure with high economic, social, environmental and institutional sustainability. Modern challenges in conditions of extremely high instability make it necessary to improve state approaches to planning and regulation of public and private partnership projects in urban infrastructure, in particular, by improving the quality of legal support and institutional environment, as well as the effectiveness of the process of creation and adaptation of targeted qualitative and quantitative public and private partnership facilities in urban infrastructure, and so on. At the same time, it is important that these projects have such characteristics as inclusiveness, focus on sustainable (including green) development, viability, flexibility. The methodological basis of the research presented in the article consists of general scientific methods of cognition of economic and financial phenomena and processes. The methods of analysis, synthesis, observation and others are used in the paper. The practical applicability of the materials presented in the article lies in the possibility of their use in decision-making to ensure sustainable infrastructural development of Russian cities using public and private partnership.

Underpricing or Overvaluation? Theoretical Review of Initial Public Offering Phenomenon

The abnormal initial return of Initial Public Offerings (IPOs) has become an interesting financial phenomenon that attracts many researchers’ interest. This phenomenon has become more attractive because IPOs have increased during the pandemic since 2021. This study investigates whether the positive initial performance of IPO stock led to underpricing or overvaluation in a broader context in the form of literature reviews. After elaborating and analyzing several related studies, theories and empirical research in the literature, this research finds that the aftermarket has a lower performance than the initial one. It shows that abnormal initial returns tend to be caused by investors’ overvaluation and overreaction instead of underpricing.

DİJİTAL VERİNİN FİNANSALLAŞMASI VE PLATFORM KAPİTALİZMİ

Bu çalışmada finansallaşma olgusu, dijital verinin metalaştığı kapitalizmin güncel biçimlerinden biri olan platform kapitalizmi çerçevesinde tartışılmaktadır. Finansallaşma, literatürde çoğunlukla yeni bir birikim rejimi, şirket yönetimlerinin amaç fonksiyonlarının değişmesi ve gündelik hayatın finansallaşması şeklinde üç farklı yaklaşımla ele alınmaktadır. Bu makalede, bu sınıflandırmaya dördüncü bir ayrım eklemeyi öneriyoruz: dijital finansallaşma. Dijital finansallaşma, bireylerin dijital verileri aracılığıyla gözetimi ve bu yolla kâr elde edilmesine olanak sağlayan melez bir alan yaratmak için dijital ve finansal alanların bütünleşmesini ifade eder. Çalışmanın amacı geleneksel finansallaşma argümanlarının, dijital finansallaşma bağlamında geçerliliğini sorgulamak ve finansallaşma analizini dijital veriyi kapsayacak biçimde genişletmektir. Çalışmanın bulgularına göre, BigTech ve FinTech şirketleri bütünleşik bir dijital-finansal alan oluşturarak dijital veriyi finansallaştırmaktadır. Veriye dayalı finansal kapsayıcılık faaliyetleri, finansın demokratikleşmesi söylemi altında, finansal ürün kullanımını dünya nüfusunun büyük bir kesimine yaymayı amaçlar. Sonuç olarak dijital finansallaşma “bankasız nüfus” dahil olmak üzere geniş kesimlere platformlar aracılığıyla erişim sağlayarak finansallaşmayı genişletmekte ve derinleştirmektedir. Platform kapitalizmi altında geliştirilen iş modellerinin finansallaşma bağlantıları dikkate alındığında, dijital veriye dayalı yeni “sömürü” mekanizmaları oluşabilir

Meaning of New Means

This paper aims to explore the economic impact of mobile banking on rural Bangladesh. It also tries to detect the rural people’s perception about this new financial phenomenon. To meet the goals this study involves both quantitative and qualitative investigation. To get the quantitative data a survey was conducted by a set questionnaire where 300 people from three villages participated. In the qualitative part, semi-structured in-depth interviews of 60 mobile bank users were conducted. Applying grounded theory and hermeneutics approaches, this study finds that since the service of mobile banking is easy and fast, rural people adopted it quickly and it affects positively in the socio-economic development in rural Bangladesh. Its impact on employment creation, business, savings behavior, remittance, expenditure, and agriculture is found good. However, it is also found that the mobile banking services are helping the criminals to do illegal economic activities such as forgery.

Государственно-частное партнерство в российской системе образования: преимущества, проблемы и направления развития

The present article describes the advantages, current problems, and development directions of public-private partnership in the Russian education system. Sustainable development requires inclusive, affordable, and high-quality education. Statistical data demonstrated a significant state underfunding of the Russian education system and, as a result, the poor technical state of education facilities in the country. Therefore, public-private partnership can serve as a way to attract financial resources and competences of private partners to the education system. The paper focuses on such issues as the advantages of public-private partnership in the education system, the needs of the main stakeholders of public-private partnership projects, socio-economic effects of public-private partnership, etc. Based on various financial, economic, legal, and managerial issues, the author gives practical recommendations, e.g., state assistance at the local level, universal box solutions for standard education facilities, a new legitimate tool for changing public-private partnership projects, etc. The problem needs a systematic approach. The study relied on the general scientific method of dialectical cognition of economic and financial phenomena, as well as analysis, synthesis, and expert evaluation. The systematic approach can facilitate managerial decisions in the sphere of education and public-private partnership.

PHENOMENOLOGY APPROACH IN ISLAMIC ECONOMICS AND FINANCE RESEARCH: AN ANALYSIS

Islamic economics is a social science that studies the economic problems of people imbued with Islamic values. An Islamic economy or cooperative financial system is different from capitalism, socialism, or the welfare state. The phenomenological approach of Islamic economics and finance has become a study to find meaning or essence through the manifestation of economic and financial phenomena. This article aims to develop a different approach to researching Islamic economics and finance. This is library-based research with a qualitative approach. Sources of data in this study used secondary data derived from journals, books, and relevant research results. The result of this research is that the phenomenological approach can be applied to the study of Islamic economics and finance based on the methodological framework of the principle of truth based on the Islamization of science and Return to the philosophy of Islamic science.

Will the luxury culture of the financial industry spread to non-financial companies? Based on empirical evidence of corporate financialization

China is the second-largest economy in the world. Recently it has shown a significant trend of financialization. The financial industry is becoming increasingly influential across the whole country. However, there is much negative information about its prevalent luxurious lifestyle. According to the finding presented in this paper, corporate financialization may cause the luxury culture of the financial industry to spread to non-financial companies, and the excessive perquisites reflect the luxury consumption of non-financial companies’ managers. This paper aims to determine the relationship between corporate financialization and excessive perquisites, as well as explore the mutual relationship between the two, in particular the role of luxury culture. Based on a sample of A-share companies listed on the Shanghai and Shenzhen stock exchanges from 2007 to 2021, this paper uses the difference between the total perquisites and the expected normal perquisites determined by economic factors to identify excessive perquisites. The Penman-Nissim framework is employed to measure corporate financialization and OLS regression analysis is performed. The empirical results show that the phenomenon of corporate financialization has a significant positive impact on excessive perquisites. Further research shows that such an impact is only evident during the period associated with established luxury culture excessive perquisites. This relationship can also be influenced by the skills and professional experience of managers, the level of corporate cash holdings, and investment income. This paper confirms the effect of luxury culture on firms’ financial behaviour and identifies new factors influencing excessive perquisites.

Государственно-частное партнерство в обеспечении устойчивого развития регионов России: современное состояние, проблемы и перспективы

The purpose of the article is to study the current state, current problems and prospects of public and private partnership as a way to ensure the sustainable development of Russian regions. The paper draws conclusions about significant achievements in the field of sustainable development of the regions of Russia, obtained through the use of public and private partnership. As an example, the high results in healthcare and ecology achieved through public and private partnership are presented. Based on the identified organizational, economic, financial, and legal issues of public and private partnership in healthcare, practical recommendations for their elimination are given (development and implementation of a federal model and uniform standards for the implementation of public and private partnership in healthcare at the regional level; development and application of economically sound ways to ensure the return on investment due to income from the guaranteed flow of patients and the tariff of compulsory medical insurance, etc.). With regard to public and private partnership in ecology, conclusions are drawn about the need to improve legislation in the regulating directions of public and private partnership models, developing methodological, informational and other support for public and private partnership, taking into account the specifics of environmental science. The mentioned above, together with the analysis of the structure of the Russian public and private partnership market, allowed us to identify the principles of sustainable regional development based on public and private partnership (compliance, transparency, stability, etc.), as well as growth points (formation of a systematic approach to the development plans of public and private partnership, increase in information openness of sustainable public and private partnership projects, etc.) and public and private partnership prospects (in particular, due to the need to improve the quality of urban infrastructure and the development of digital technologies). The methodological basis of the study was the general scientific method of dialectical cognition of economic and financial phenomena. The methods of analysis, synthesis, expert evaluation, etc. are used in the article. The practical applicability of the materials presented in the article lies in the possibility of their use in decision-making to ensure the sustainable development of Russian regions with the help of public and private partnership.

Healthcare Development Based on Public-Private Partnership: Opportunities and Limitations

Currently, the Russian healthcare system is in critical condition. And for many years, the limited financial resources of the state have significantly aggravated this problem. Therefore, it is necessary to search for effective ways to resolve this problematic situation. One of these methods is public-private partnership (hereinafter – PPP), which ensures the attraction of private investment in the healthcare system, contributing to the provision of high-quality medical services. The purpose of the article is to study the possibilities and limitations of the development of the Russian healthcare system based on PPP. The conducted research allowed us to draw conclusions, firstly, about the significant results in the development of the Russian healthcare system achieved through the implementation of PPP projects. Secondly, about the existence of tripartite opportunities for the development of healthcare based on PPP, identified through the use of a combined approach that combines the interests of stakeholders (a stakeholder approach) and a targeted orientation towards human development (a person-centered approach). Along with this, it is emphasized that there are a number of limitations that hinder the effective implementation of these capabilities. This implies the importance of implementing a number of practical measures, in particular: the development and implementation of a federal model and uniform standards for the implementation of PPP in healthcare at the regional level; assistance from the federal budget to the regions for the implementation of capital-intensive projects in healthcare; development and application of economically sound ways to return investments by generating income from the guaranteed volume of the customer base and the tariff of compulsory medical insurance. The methodological basis of the article is the general scientific method of dialectical cognition of economic and financial phenomena in their interrelation and interdependence. The methods of analysis, synthesis, expert evaluation and others are used in the work. The materials presented in the article can be used in decision-making in the Russian healthcare system in order to ensure its sustainable development using the PPP.