Financial Strategies Research Articles

Artificial intelligence adoption and revenue growth in European SMEs: synergies with IoT and big data analytics

PurposeThe conventional notion that adopting Artificial Intelligence (AI) positively affects firm performance is often confronted with various examples of failures. In this context, large-scale empirical evidence of the economic performance implications of adopting AI is poor, especially in the context of Small and Medium Sized Enterprises (SMEs). Drawing upon the Resource-Based View and the Digital Complementary Asset literature, we assessed whether the adoption of AI affects SMEs’ revenue growth.Design/methodology/approachFirst, we examine the relationship between the adoption of AI and SMEs’ revenue growth. Second, we assess whether AI complements the Internet of Things (IoT) and Big Data Analytics (BDA). We use firm-level data from the European Commission in 2020 on 11,429 European SMEs (Flash Eurobarometer 486).FindingsAmong the key findings, we found that ceteris paribus, the adoption of AI positively affects SMEs’ revenue growth and, in conjunction with IoT and BDA, appears to be even more beneficial.Originality/valueOur results suggest that AI fosters SME growth, especially in combination with IoT and BDA. Thus, SME managers should be aware of the positive impacts of investments in AI and make decisions accordingly. Likewise, policymakers are aware of the positive effects of SMEs’ reliance on AI, so they may design policies and funding schemes to push this digitalization of SMEs further.

Does interest rate liberalization affect corporate debt structure?

AbstractThis study examines how interest rate deregulation affects debt structure of Chinese listed firms through two quasi‐natural experiments: the cap removal (2002–2006) and floor removal (2011–2015). Following deregulation, risky firms increase short‐term debt while decreasing long‐term and total debt, whereas non‐risky firms exhibit opposite patterns. These changes are influenced by collateral requirements, industry cluster proximity, bank relationships, and ownership structure. The divergent outcomes reflect increased borrowing costs for risky firms and reduced costs for non‐risky firms due to enhanced banking competition. Post‐liberalization, risky firms face reduced risk exposure but increased asset‐liability mismatches, while experiencing declining growth prospects. Conversely, non‐risky firms demonstrate improved growth prospects and higher profitability with increased long‐term debt. These findings illuminate how banking sector liberalization shapes corporate financial strategies.

Analysis of Investment Strategy and Practice in the Construction of China's Belt and Road Initiative

The current study offers a thorough study of investment strategies and practices under the BRI (Belt and Road Initiative) to promote international economic cooperation and development and China announced BRI in 2013. The study delves into the financial strategies employed by China, such as governmental loans, commercial financing, and the creation of specialized funds to support infrastructure projects across participating countries. It also examines how China has tight ties with the Asian Infrastructure Investment Bank (AIIB) and other global financial institutions, to leverage technical and financial support. Key focus areas include the optimization of investment layouts, innovation in financing models, and the creation of mechanisms for risk management to ensure a guaranteed sustainability of investments for long term. This research emphasizes the importance of balancing long-term strategic goals with short-term economic benefits, particularly when investing in large-scale infrastructure projects that require significant capital and extended timelines for returns. Furthermore, the study investigates the role of sustainable development and the necessity of building cooperative models that foster mutual growth, with the aim of contributing to the shared prosperity of China and its partner nations along the Belt and Road.

EFFECTS OF GREEN FINANCE ON NON PERFORMING LOAN OF BANKS: EVIDENCE FROM BANGLADESH

The banking sector in Bangladesh has been suffering from a high level of non-performing loans (NPLs). In recent years, incorporating green finance (GF) practices within banking institutions has received considerable attention as a potential solution to improve their loan performance. However, despite the extension of GF practices, there have been very few studies on the impact of GF on NPL and the relationship between GF and NPL in Bangladesh. This study, therefore, seeks to examine the effects of bank’s green finance schemes on their loan performance. This quantitative study employs the panel data of the banks from 2015 to 2023 and focuses on variables related to GF and NPL to serve this objective. Data validity was justified using the unit roots and collinearity tests, such as variance influence factor and tolerance level. Accordingly, this study employs the panel least square (PLS), panel ordinary least square (POLS) and fixed effect model (FEM), and quantile regression to examine the impact between these sets of variables. The correlation between GF schemes and NPL has been determined. The study reveals that GF has significant effects on NPL since p values for the significant green finance variables are less than 0.10 (P ≤.10) at the 0.10 level, less than 0.05 (p≤0.05) at the 0 .05 level and less than 0.01 (p≤0.01) at the 0.01 level. The results of this study suggest that taking the GF scheme into the banking investment would reduce NPLs and help design the policymaking of the government, banks, and other stakeholders.

Integrated reporting: developing an injustice assessment framework and a research agenda

PurposeIntegrated reporting (IR) provides a joint overview of an organisation’s financial and sustainability performance and strategies. While the prior literature often critiques IR’s potential to entrench injustice, a systematic approach has not been followed. Therefore, this paper provides a systematic literature review, uncovering IR injustices, informing the development of an IR injustice assessment framework to identify injustices and a research agenda.Design/methodology/approachCombining Flyvbjerg’s phronetic social science and the phases of the IR idea journey to focus on injustice, this paper reviews published IR articles to inform a critique of IR. As a result, we identify specific injustice(s), the actors responsible for them, as well as the victims, as a basis for recommendations for praxis through the development of an IR injustice assessment framework and a research agenda.FindingsWe find that different approaches are needed in each phase of the IR idea journey. In the (re)generation phase, a pluralistic approach to IR is needed from the very beginning of the decision-making process. In the elaboration phase, the motivations and the features of IR are assessed. In the championing phase, IR champions support radical innovation, whereas IR opponents are obstructing its spread. In the production phase, the extent to which IR and integrated thinking are linked to the business model is assessed. Finally, we find that IR’s impact is often limited by the symbolic implementation of its tenets.Practical implicationsThe findings suggest a need for companies to rethink the ways in which IR is implemented and used to analyse the ways in which IR is supported and disseminated within and outside the organisation, to focus on internal processes and to reflect on the expected impact of IR on the company’s stakeholders.Originality/valueThis study represents the first systematic approach to identifying IR-related injustices, involving how IR adoption might create injustices and marginalise certain stakeholder groups, and offering recommendations for praxis. Furthermore, the paper details the role of IR in either mitigating or amplifying these injustices and develops a research agenda.

Incentive Contract, Equity Pooling, and Optimal Securitization Design

ABSTRACTThis paper examines the optimal security design and financing structure for investment funds, considering investors with heterogeneous risk preferences. The private equity (PE) fund serves as an information intermediary that plays a crucial role in aligning incentives and facilitating financing activities. To address the potential misalignment between incentive structures and financing requirements, we develop an integrated framework that incorporates both internal moral hazard and external financing decisions. Our analysis demonstrates that optimal equity incentives effectively align the interests of fund manager and PE fund, thereby enhancing fund performance. The results indicate that the optimal financing mechanism comprises a “waterfall” structure consisting of equity, senior bonds, and junior bonds. Furthermore, we find that pooling equity and issuing asset‐backed securities substantially reduce financing costs, although these costs increase with the size of the financing gap. The dual information asymmetry framework offers novel insights into structured financing and corporate growth strategies.

Global Study Revolutionizes Bankruptcy Prediction

This study evaluates bankruptcy potential in food and beverage companies listed on the Indonesia Stock Exchange during 2018-2022 using four methods: Grover, Springate, Zmijewski, and Altman. Analyzing data from 31 sampled companies, the research employs descriptive quantitative methods and SPSS 26 analysis. Findings reveal varied bankruptcy predictions: Grover predicts 3 potential bankruptcies, Springate identifies 18, Zmijewski finds none, and Altman predicts 14. Notably, Zmijewski's method demonstrates superior accuracy. These results aid investors in understanding company performance and inform future financial strategies, addressing a critical need in early bankruptcy prediction for the food and beverage industry. Future research may explore additional prediction models and extend the study period to enhance predictive accuracy further. Highlight: Diverse methods: Grover, Springate, Zmijewski, Altman offer varied bankruptcy predictions. Zmijewski's accuracy: Highest accuracy among methods for bankruptcy prediction. Investor insight: Guides future financial decisions based on company performance analysis. Keywoard: Bankruptcy, Food & beverage, Stock Exchange, Analysis, Prediction.

The economy of market-town and village hospitals in medieval Valencia

ABSTRACT This study seeks to identify the funding sources and financial management strategies employed by rural and market-town hospitals in medieval Iberia, with a specific focus on the Kingdom of Valencia during the latter Middle Ages. Recognizing the limited availability of financial records, this research integrates various types of written sources, including fourteenth-century episcopal visitation reports and fifteenth-century notarial and royal records. The article begins by dissecting the administration of hospitals in market towns and villages, delineating the unique aspects of each type of settlement. It then investigates the diverse forms of revenue on which these hospitals relied. In examining regular incomes, the study focuses on loans and rents from assets, analyzing the implications of each type. It also explores extraordinary sources of income, as well as sporadic and recurring expenditures, encompassing salaries for the hospitaller -the person who took care of the ill people in the hospital feeding them and offering them emotional support- and hospital administrator, and the provision of material and food for inpatients and livery-holders, and municipal taxes for assets. The complex economic dynamics of medieval hospital economies are also examined.

Triangulation and Delphi method analysis of alternative management scheme for sustainable public-rented flats

Purpose Currently, public-rented flats in Jakarta Province are managed by the Management Unit of Public-Rented Flats (MUPRF), which uses the Regional Revenue and Expenditure Budget (RREB) as the source of its financing. However, several previous studies have suggested that the MUPRF change its institutional scheme, to be more independent and not rely on the RREB as its source of finance. The study aims to identify three variable groups, public-rented flats’ characteristics, alternative institutional and financial schemes and challenges in the change of institutional and financial schemes. Design/methodology/approach This is a qualitative research, where both triangulation and the Delphi method are used to enrich findings. Triangulation is used to collect data from more than one source, and the Delphi method is used to gather opinions from experts and reach a consensus on the variables identified in the triangulation process. Findings Based on the findings there are 11 variables of public-rented flats’ characteristics, three variables of alternative institutional and financial schemes and four variables of challenges in the change of institutional and financial scheme. Research limitations/implications Through the triangulation process, only two sources were used, sources from previous research and regulations. In the Delphi method process, experts were staff from the Department of Community Housing and Settlement of the DKI Jakarta Province. Originality/value This research will be used as the basis on developing a system dynamics on how the MUPRF works as a system to figure out whether it can be changed into the alternative scheme proposed, with all the characteristics and challenges identified.

Carbon Footprint, Financial Structure, and Firm Valuation: An Empirical Investigation

This study aims to investigate the complex link between carbon emissions, firm value, and financial choice in regard to the GCC, a dynamic emerging economy. It also seeks to answer the question on whether the financial structure of a firm moderates the correlation between carbon emissions and firm value. We focus on analyzing data from non-financial firms registered on the GCC stock markets between 2010 and 2020. By applying the GLS technique, we assess the impact of carbon emissions on firm value and examine the manner in which a firm’s financial structure either enhances or hinders this relationship. The results demonstrate that there is a strong and adverse connection between carbon emissions and corporate value, as increased emissions translate into lower corporate value. The study then moves on to emphasize the critical role that capital financing plays in mitigating the detrimental effects of carbon emissions. This is accomplished by balancing both debt and equity in terms of their proper proportions (optimal capital structure). However, excessive borrowing could have adverse consequences in terms of carbon emissions on company value. Moreover, the GMM estimator is also applied to carry out a robustness check and the results are consistent with the main findings. This study highlights the significance of financial strategy in advancing sustainability and protecting business value. These findings are supported by both stakeholder and signaling theory, proving that companies can use their capital financing to signal their dedication to sustainability. These results could be used by GCC policymakers to create rules and regulations that encourage environmentally friendly corporate activities and efforts to lower emissions. The research expands the existing literature by examining the difficulties and opportunities faced by GCC firms when combining financial strategy with environmental objectives. It may be necessary to perform additional research in regard to various circumstances and for an extended period, because this study is restricted to non-financial sectors.

Analysis of Current Situation of Green Finance and Sustainable Development in China

Amidst escalating global environmental challenges, green finance, serving as a pivotal instrument for advancing sustainable growth, is garnering heightened interest from the international arena. This financial mechanism seeks to channel societal capital into eco-friendly sectors including environmental stewardship, energy efficiency, decarbonization, and renewable energy, all the while adeptly mitigating ecological hazards and fostering harmonious development dynamics. The primary objective of this piece is to delve into the conceptual framework, historical evolution, predominant operational paradigms, hurdles, and prospective growth trajectories of green finance. Moreover, it seeks to dissect the interplay between green finance and pertinent governmental strategies, alongside its influence on various facets of the economy. Through this approach, the endeavor seeks to furnish both theoretical benchmarks and practical insights that can propel the development and refinement of the global green finance framework. Moreover, it intends to catalyze more profound investigation and hands-on experimentation within this domain, thereby accelerating the evolution and enhancement of green finance mechanisms to more effectively support the overarching objective of global sustainability.

Investment Research on Individual Stocks in Large Research Industry Enterprises

As technology continues to develop, the influence of the technology industry on the market cannot be ignored. This study aims to explore the trends and fluctuations of key representative technology stocks, specifically focusing on Advanced Micro Devices (AMD), Oracle Corporation (ORCL), and Qualcomm Incorporated (QCOM). By meticulously analyzing the publicly available balance sheets and income statements of these companies, we will extract pertinent financial indices and conduct a comprehensive financial analysis. The analysis will include key financial metrics such as revenue growth, profit margins, return on equity (ROE), and debt-to-equity ratios, among others. These metrics will be used to evaluate the financial health and performance trends of each company over a specified period. Additionally, we will compare these metrics across the three companies to provide insights into their relative market positions and competitive advantages. The objective of this analysis is to furnish investors with a reliable and data-driven market analysis that can inform their investment decisions. By understanding the financial underpinnings of these technology giants, investors can better assess the potential risks and returns associated with investing in these stocks. This study aims to bridge the gap between financial theory and practical investment strategies, offering a valuable resource for both individual and institutional investors interested in the technology sector.

Philosophy meets culture: How existential reflection and 'Arema Spirit' shape startup bootstrapping strategies?

​​Existential philosophy provides a framework to understand the motivations and strategic decisions of startup founders in navigating uncertainty and limited resources. This study explores the interplay between existential reflection and the 'Arema Spirit,' a cultural ethos in Malang, Indonesia, in shaping financial bootstrapping strategies. Using a qualitative phenomenological approach, data was collected from 30 creative startup founders through in-depth interviews, participatory observations, and qualitative questionnaires. The analysis emphasizes how founders integrate philosophical reflection with local cultural values to balance autonomy, ethical responsibility, and resource efficiency. The findings reveal that existential reflection fosters strategic independence and resilience while the 'Arema Spirit' inspires ethical and community-oriented decisions. This dynamic is encapsulated in the Bootstrapping Existential Reflection Cycle, an iterative framework connecting existential values, bootstrapping practices, and practical innovation. The study highlights the role of cultural identity in entrepreneurial strategy, bridging philosophy, and practice in navigating startup challenges.

Energy finance strategy and governance nexus with economic growth: Results from emerging economies.

The rapid economic development in emerging economies, particularly in BRICS nations, is closely intertwined with their energy consumption and financial investment in energy sectors. However, the global shift towards sustainability has raised concerns about the continued reliance on fossil fuels and the environmental implications of such practices. Energy finance-particularly the balance between fossil fuel energy finance (FFEF) and renewable energy finance (RENF)-plays a critical role in shaping economic growth trajectories in these economies. At the same time, governance frameworks can either enhance or hinder the effectiveness of energy finance strategies. As the global push for sustainability intensifies, the need to balance these two energy sources becomes increasingly important. This study investigates the impact of energy finance on economic growth in BRICS nations and explores how governance moderates these relationships. Using data from the World Development Indicators (2000-2023) and employing econometric models, including Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) for robustness, the findings reveal that both FFEF and RENF positively impact EGR. However, RENF also offers the added benefit of environmental sustainability, positioning it as a viable alternative for economic development. Good governance emerges as a critical factor that can mitigate the negative environmental effects of FFEF and further amplify the positive impact of RENF on EGR. The study highlights that BRICS nations have the option to shift from FFEF to RENF, as RENF not only promotes economic growth but also aligns with environmental goals. Strengthening governance frameworks will be essential in facilitating this transition and supporting sustainable economic growth.

The implementation of ijarah muntahiyah bittamlik in infrastructure project financing within the public-private partnership models: A collaborative governance perspective

This paper investigates the implementation of ijarah muntahiyah bittamlik (IMBT) as an infrastructure project financing scheme within the Public-Private Partnership (PPP) models from a collaborative governance perspective. This paper follows a case study methodology. It focuses on two Indonesian non-toll road infrastructure projects, i.e., the preservation of the East Sumatra Highway projects, each in South Sumatra province and Riau province. The findings revealed that Indonesia’s infrastructure development priorities and its vision to become a global leader in Islamic finance characterized the system context that shaped the implementation of IMBT as an infrastructure project financing scheme within the PPP-AP model. Key drivers include leadership from the government, stakeholder interdependence, and financial incentives for the partnering business entity to adopt off-balance sheet solutions. Principled engagement, shared motivation, and the capacity for joint action characterized the collaboration dynamics, leading to detailed collaborative actions crucial for implementing IMBT as a financing scheme.

Combat counterfeits effectively or not? Encroachment and financing strategies with production disruption risk

AbstractCounterfeits spur brand‐name supply chain to engage in manufacturer encroachment. Financial constraint disturbs encroachment strategies, especially with disruption risks. Developing an analytical model investigates how supply chain finance with production disruption risk affects encroachment strategy and its efficacy in combating counterfeits. We obtain optimal strategies for three scenarios: rich, moderately poor, and poor brand‐name supply chains. Encroachment strategies effectively combat counterfeits in rich and moderately poor brand‐name supply chains. The production disruption risk reduces the manufacturer's willingness to encroach, regardless of financial positions. Relative to rich brand‐name supply chains with encroachment, trade credit with risk‐free bank credit increases the manufacturer encroachment's likelihood, while it with costly bank credit reduces this likelihood. Financial cooperation through trade credit in moderately poor brand‐name supply chains effectively curbs counterfeiting. Even if bank credits are perfectly competitive, optimal strategies in poor brand‐name supply chains with encroachment depend on initial capitals, violating classical Modigliani‐Miller (M&M) theory.

PROFITABILITY DETERMINANTS OF INDONESIAN ISLAMIC BANKS: FINANCING TO DEPOSIT RATIO AND GOVERNANCE

This study examines the impact of the FDR on the profitability of Islamic commercial banks in Indonesia, GCG as an intervening variable. The analysis utilizes financial data from 2015 to 2019, collected from annual reports and financial statements of selected banks. The study employs regression and mediation analyses to test the hypotheses. The results indicate that FDR does not significantly affect profitability, measured by ROA. Furthermore, GCG does not mediate the relationship between FDR and ROA. These findings suggest that other factors may play a more critical role in determining the profitability of Islamic banks. The study underscores the importance of adopting conservative financing strategies and enhancing corporate governance frameworks tailored to Sharia compliance. These insights provide valuable recommendations for bank managers and policymakers to improve financial performance and ensure sustainable growth in the Islamic banking sector.

INVESTMENT BEHAVIOR OF B-SCHOOL GEN Z AMIDST GEOPOLITICAL TENSION

This study investigates the investment behavior of Gen Z students from business schools (B-schools) in Bangalore, India, amidst geopolitical tensions, focusing on their financial strategies, risk tolerance, and psychological responses. Utilizing data from 52 respondents collected through a structured questionnaire, the research highlights the cautious yet optimistic approach of these finance-trained individuals during periods of market volatility. Findings reveal that while 78.8% of respondents exhibit high-risk tolerance, their preference for holding investments and reliance on both self-research and financial advisors indicate a conservative, informed strategy emphasizing long-term stability. The majority identified retirement savings as a primary investment goal, showcasing a forward-looking perspective despite limited investment experience. The study also uncovers significant psychological impacts, with 32.7% of respondents expressing anxiety during geopolitical tensions, highlighting the role of external uncertainties in shaping investor sentiment. Moreover, respondents demonstrated a nuanced understanding of market dynamics, with 55.8% acknowledging the long-term impact of geopolitical events on the Indian stock market. Their behavior, including a preference for sectoral diversification and reliance on expert analysis, reflects the application of theoretical financial knowledge to practical investment scenarios. By analyzing the unique responses of B-school Gen Z during geopolitical crises, this research bridges gaps in existing literature, offering insights into how finance-educated individuals navigate uncertainty. These findings hold implications for enhancing financial education to build resilience and confidence in young investors while contributing to broader market strategies and risk management practices during periods of geopolitical instability.

PENGARUH ADOPSI DEBIT CARD DAN E-MONEY TERHADAP POLA BELANJA KONSUMEN

The adoption of debit card and E-Money is increasingly important to study due to its potential to influence payment patterns and overall consumer behavior. This research aims to analyze the effect of debit cards and e-money on consumer shopping behavior. The subjects of this study are students from the Faculty of Economics and Business at Universitas Brawijaya, cohorts 2020, 2021, and 2022, who have been using debit card and E-Money for more than one year and receive an allowance of more than IDR 1,000,000. The sampling method used is purposive sampling, with a total of 104 respondents. Data were collected through questionnaires and analyzed using inferential quantitative methods with the Structural Equation Modeling Partial Least Squares (SEM-PLS) approach. The results indicate that debit cards and e-money significantly enhance consumer shopping behavior. These findings have important implications for governments, companies, and individuals in adopting digital payment technologies as part of a more effective financial management strategy.

From ego to equity: exploring the influence of narcissism and gender on start-up funding success

Purpose This study aims to investigate the association between narcissistic tendencies, gender and funding success in high-growth start-ups. It aims to bridge a critical research gap by exploring the combined effect of gender and narcissism on start-up funding success. Design/methodology/approach The authors surveyed 540 founders of high-growth start-ups in Germany, Austria and Switzerland, using the NPI-16 questionnaire to assess narcissistic tendencies. By focusing on high-growth start-ups as opposed to small firms, the authors enhanced the validity of the sample. This study isolates and analyses the effects of gender and narcissism, providing insights into their individual and combined contributions to start-up funding success. Findings The findings reveal that gender is associated with lower start-up funding and lower narcissistic tendencies. This highlights the intricate relationship between gender, narcissism and funding success within the context of high-growth start-ups. Practical implications These findings have important implications for investors, policymakers and entrepreneurial educators, suggesting that a nuanced understanding of founders’ psychological traits could enhance funding strategies and start-up support mechanisms. Originality/value This research addresses the critical gap in the literature by examining the joint influence of gender and narcissism on funding success in high-growth start-ups. The study contributes to a nuanced understanding of the factors shaping founder psychology and performance dynamics, offering valuable insights for future research in gender, narcissism and start-up success.