Financial Methods Research Articles

Regulatory framework on governing equity crowdfunding: a systematic literature review and future directions

PurposeThe purpose of this study is to comprehensively analyse and compare equity crowdfunding (ECF) regulations across 26 countries, shedding light on the diverse regulatory frameworks, investor and issuer limits and the evolution of ECF globally. By addressing this research gap and providing consolidated insights, the study aims to inform policymakers, researchers and entrepreneurs about the regulatory landscape of ECF, fostering a deeper understanding of its potential and challenges in various economies. Ultimately, the study contributes to the advancement of ECF as an alternative financing method for small and medium enterprises (SMEs) and startups, empowering them to access much-needed capital for growth.Design/methodology/approachThe study used the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) model for a systematic literature review on global ECF regulations. Starting with 74 initial articles from Web of Sciences and Scopus databases, duplicates were removed and language criteria applied, leaving 42 articles. After a thorough full-text screening, 20 articles were excluded, resulting in the review of 22 papers from 2016 to 2022. PRISMA’s structured framework enhances the quality of systematic reviews, ensuring transparency and accessibility of findings for various stakeholders, including researchers, practitioners and policymakers, in the field of ECF regulations.FindingsThis study examines ECF regulations across various countries. Notably, the UK has advanced regulations, while the USA adopted them later through the Jumpstart Our Business Startups Act. Canada regulates at the provincial level. Malaysia and China were early adopters in Asia, but Hong Kong, Japan, Israel and India have bans. Turkey introduced regulations in 2019. New Zealand and Australia enacted laws, with Australia referring to it as “crowd-sourced equity funding”. Italy, Austria, France, Germany and Belgium have established regulations in Europe. These regulations vary in investor and issuer limits, disclosure requirements and anti-corruption measures, impacting the growth of ECF markets.Research limitations/implicationsThis study’s findings underscore the diverse regulatory landscape governing ECF worldwide. It reveals that regulatory approaches vary from liberal to protectionist, reflecting each country’s unique economic and political context. The implications of this research highlight the need for cross-country analysis to inform practical implementation and the effectiveness of emerging ECF ecosystems. This knowledge can inspire regulatory adjustments, support startups and foster entrepreneurial growth in emerging economies, ultimately reshaping early-stage funding for new-age startups and SMEs on a global scale.Originality/valueThis study’s originality lies in its comprehensive analysis of ECF regulations across 26 diverse countries, shedding light on the intricate interplay between regulatory frameworks and a nation’s political-economic landscape. By delving into the nuanced variations in investor limits, investment types and regulatory strategies, it unveils the multifaceted nature of ECF regulation globally. Furthermore, this research adds value by comparing divergent perspectives on investment constraints and offering an understanding of their impact on ECF efficacy. Ultimately, the study’s unique contribution lies in its potential to inform practical implementation, shape legislative frameworks and catalyse entrepreneurial ecosystems in emerging economies, propelling the evolution of early-stage funding practices.

Patent pledge and corporate risk-taking: A quasi-natural experiment from China's patent pledge pilot

Intellectual property pledge financing, as a novel financing method, plays a significant role in alleviating financial constraints for enterprises and encouraging them to increase their risk-taking levels. Empirical research results demonstrate that patent pledging significantly enhances the risk-taking levels of enterprises. Further studies reveal that the effect of patent pledging on enhancing corporate risk-taking is more pronounced in samples with greater financing constraints and higher human capital. These research findings provide substantial micro-level evidence for the state to further promote the objectives of the patent pledge policy.

Success factors of real estate crowdfunding projects: Evidence from Spain

AbstractReal estate crowdfunding is a relatively new alternative financing and investing method. This research aims to identify factors which might increase investors' willingness to participate in real estate crowdfunding campaigns. We analyse 195 lending-based real estate crowdfunding campaigns from four Spanish platforms. Project success is measured by duration, i.e. the time required to reach the funding target. We assess the impact of the funding target, the annual return, the loan duration, several risk-related metrics and the minimum investment amount. We find that the higher the funding target and the minimum investment amount, the longer it takes to reach the target. We document that investors prefer projects where the maturity of the loan is shorter. We also find that construction-type projects reach the funding target faster than other type of fundraising goals. At the same time, we do not find any association between the annual return or risk-related metrics and project success. To assure successful fundraising, real estate crowdfunding platforms should prioritize those real estate projects which are highly popular among investors (i.e. construction-type projects with short maturity). Real estate developers, in turn, should crowdfund projects which are demanded by the crowdinvestors and use their traditional financing methods for the remaining projects.

Analysis of Spatial Spillover Effects of Digital Inclusive Finance on Urban-Rural Income Gap

This article mainly analyzes the changes in urban-rural disparities under digital inclusive finance, which can be divided into three levels of research objectives, gradually and layer by layer. Firstly, based on the theoretical foundation of accelerating the development of rural financial markets and reducing economic disparities between rural and urban areas through digital inclusive finance, a panel threshold model is constructed to quantitatively analyze the threshold effect of digital inclusive finance on the urban-rural income gap, and to study how to reduce the threshold effect and narrow the digital divide between rural and urban areas; Secondly, from the perspective of spatial spillover, this study examines the positive or negative spatial spillover effects of digital inclusive finance on regional urban-rural income disparities, in order to analyze the direction of the impact of digital inclusive finance on urban-rural income disparities. Using the Spatial Panel Lag Model (SAR) and Spatial Durbin Model (SDM) to empirically test their inherent correlation and impact; Thirdly, there are differences in policies and resource allocation among provinces and cities, as well as differences in urban-rural income disparities in different regions. Based on this, a quantitative analysis model is constructed to analyze the path and methods of digital inclusive finance promoting urban-rural income disparities.

Mushārakah Mutanāqiṣah (Diminishing Partnership) Regulation for Housing Finance in Indonesian and Malaysian Law

The housing business continues to grow along with the increasing need for the fulfillment of housing. This research delves into the application of mushārakah mutanāqiṣah in housing finance within Indonesia and Malaysia, scrutinizing their regulations and relevant governing institutions. Employing a normative legal approach, it explores legal principles, systematics, synchronization, and historical context about this financing method. Employing inductive, deductive, and comparative methods, it analyzes regulations and practices in both countries. By offering insights into the potential and challenges of implementing mushārakah mutanāqiṣah in housing finance, the study aims to provide recommendations for regulatory enhancements, fatwa institutions, product development, and adherence to sharī’ah principles. This research is crucial for deepening understanding and facilitating improvements in various sectors related to housing finance within the context of Islamic finance in Indonesia and Malaysia.

‘It Is Said That at Least 300,000 rt of Capital are Required for a Raft Trade’

Although the Dutch timber trade from the seventeenth to the nineteenth century has been the subject of many historical studies, the development of the capital-intensive timber wholesale trade has remained rather underexposed by economic historians with regard to the actors involved. This is surprising since a capital of up to 600,000 Reichstaler had to be raised for the Dutch timber trade; amounts that were hardly invested in any other commercial enterprise in Germany at the time. The article therefore focuses on the timber wholesalers of the eighteenth century and analyzes in detail, based on our own archival research and previous research results, how the timber wholesalers organized their business (business strategies, business practices, etc.) and what significance their income had for the economic development of the participating economic regions of West and South-West Germany in the long term. It appears that around 1750 the German timber wholesaler and the timber companies from the Black Forest had long since driven out their Dutch competitors and acquired large fortunes. With the Dutch timber trade, capitalist practices (creation and management of companies, accounting, new methods of credit financing, etc.) also spread, which also formed an important building block for the further development of the South-West and West German economy. However, the most important thing was undoubtedly the emergence of a risk-loving entrepreneurial class with a sufficient capital base and business knowledge, which had long since broken away from 'artisan' self-reliance. Because the timber wholesalers often also invested their capital acquired in the Dutch timber trade in other industries, and these often formed a crystallization point for the West and South-West German industrialization after 1815, it can be said that the timber trade with the Netherlands not only generated an enormous volume in the eighteenth century and supported West German economic growth from 1740 onwards, but in the long term also contributed to the economic and social structural changes of the nineteenth century.

Mineral resource drivers in the global south: A case study of Australia

Mineral resource depletion directly restricts sustainable mineral development. This study investigates the drivers of sustainable mineral resource development via an evolutionary game model involving mineral firms, the Australian government, and financial institutions. The tripartite model provides a guide to strategies and interactions with external influences based on company liquidity. Leveraging panel data from Australian mining companies from 2015 to 2022, this study utilizes unconditional quantile regression techniques, culminating in three salient discoveries. First, despite financial limitations, small-to medium-sized enterprises (SMEs) can accumulate ample resources to enhance their green technology R&D and corporate social responsibility (CSR) expenditure through diverse financing methods, thereby creating an internal strategic impetus for CSR perpetuation. Second, by participating in CSR, mineral firms can transmit positive signals in an asymmetric market, which promotes their sustainable development. Finally, despite the Australian government's R&D tax refund policy incentivizing R&D investment, SMEs' lack of innovative capacity has led to the diversion of operational funds, which negatively impacts their sustainable development. These findings provide valuable insights for sustainable mineral resource development that extend beyond Australia to other Southern Hemisphere nations.

The Obstacles of Women Entrepreneurship on Empowerment in Rural Communities KwaZulu Natal, South Africa

This research aims to determine barriers to the expansion of women-owned businesses in rural communities of South Africa. To collect data for the research, a quantitative research approach was adopted. The research focused on 250 female business owners in the northern KZN rural regions of Umzinyakude, Uthukela, and Ugu. According to the survey, the primary barriers to developing women-owned businesses in rural communities are financial restraints, an absence of formal education, and inadequate facilities. These hurdles, however, may be overcome by women businesses being entrepreneurs in rural South African communities. Eliminating these barriers might empower women entrepreneurs and drive growth in the economy in rural communities, lowering poverty and improving rural people's living conditions. In light of these findings, the research suggests a variety of measures, including different financing methods, focused training and schooling programs, and the development of infrastructure to help women-owned businesses flourish in rural communities. Further research should investigate more issues like cultural as well as social barriers, an absence of accessibility to marketplaces and information, and legal and regulatory obstacles that prevent women from starting business entities in rural communities.

EQUITY CROWDFUNDING AS AN ALTERNATIVE FUNDING FOR MARITIME INFRASTRUCTURE DEVELOPMENT

The limited government funds necessitate the need for alternative financing for maritime infrastructure development. The purpose of this research is to explore the potential of equity crowdfunding as an alternative funding source for maritime infrastructure development. The results of this study conclude that equity crowdfunding has significant potential as an alternative financing method for maritime infrastructure. However, its current utilization is primarily for small-scale infrastructure construction or development. This is due to regulations limiting the maximum amount of funds that can be raised.

Financial sector development and industrialization: lessons and prospects for Ethiopia

ABSTRACT A functional and efficient financial sector is essential for the industrial advancement of a nation. In the context of Ethiopia’s rapidly growing economy, this study examines the limitations imposed by its underdeveloped financial sector on the country’s economic advancement and explores viable policy interventions. Characterized by state-owned bank dominance, a scarcity of non-bank financial institutions, and deficient infrastructure, Ethiopia’s financial system perpetuates widespread financial exclusion. This exclusion hinders industrial transformation, stifles local business growth, and narrows financing avenues for foreign entities. Insights from China’s shift toward market-oriented financial reforms and Kenya’s fintech innovations suggest a path for Ethiopia involving clear, gradual reforms. Strategic steps could include diversifying financial institutions, improving financial infrastructure, advancing mobile payment solutions, and adopting more versatile financing methods to address the financial challenges of industrialization.

The Fiscal Reaction Function and the Transmission Mechanism for Pakistan

Modern macroeconomics literature emphasises both the short run and long run objectives of fiscal policy [Romer (2006)]. In the short run it can be used to counter output cyclicality and/or stabilise volatility in macro variables, which is descriptively same as of effects of the short run monetary policy. Further for the long-run, fiscal policy can also affect both the demand and supply side of the economy. But in most traditional analyses it is assumed that fiscal policy would adjust to ensure the intertemporal budget constraint to be satisfied, while monetary policy is free to adjust its instruments [‘Ricardian Regime’ by Sargent (1982)] such as stock of money supply or the nominal interest rate [Walsh (2003)]. The debt financing methods, expenditure and tax powers of fiscal authorities i.e. the fiscal policy has also been seen as to affect both the supply and demand side of the economy. As noted by Baxter and King (1993), the initial Real Business Cycle models had only the supply side effects of the fiscal policy, where these were transmitted through the wealth effect and labourleisure choices of the household. Recently also New-Keynesian type models with micro-foundations and sticky prices argue that still through the supply side fiscal policy management could be accorded for stabilisation [Linnemann and Schabert (2003)]. The demand side effects of the fiscal policy could also be found only with more imperfections such as ‘Rule of Thumb’ consumers or those with liquidity constraints, which lead to exclusion of Ricardian equivalence [Gali, et al. (2005)]. But all that depends on the structure of the economy, as Blanchard and Perotti (2002) stated:

Financing Dilemma and Optimization Strategies of High-Tech Enterprises

In recent years, Chinas economic market has been developing rapidly and the number of enterprises has been increasing. However, the development of enterprises needs to rely on the support of capital, due to the high financing threshold of the capital market, ordinary commercial banks and private financial institutions can not fully meet the capital needs of all enterprises in the market. This has, to a certain extent, exacerbated the phenomenon of capital bottlenecks and stagnant development faced by Chinese enterprises, and many even went bankrupt due to poor capital turnover. This paper combines the views and conclusions put forward by a number of professional articles to analyze the status quo and predicament of the company's financing. It is found that high-tech enterprises have problems such as less application of financing methods, high financing costs and unreasonable financing structures. By optimizing the financing structure, improving the company's credit level to expand financing methods, and reducing financing costs, the government has introduced helping policies and other optimization strategies that can promote the healthy and stable development of high-tech enterprises.

Financing mechanism for solid waste management in Anambra, Nigeria: analyses of emerging challenges and implication for circular economy.

Waste management is a critical public service provided by municipalities around the world. It is often problematic, inefficient, and abysmally performed in developing countries. Among the problems associated with waste management in these global locations is the issue of finance. Finance is required for both capital investment and operational costs. Methods of waste management financing differ from place to place due to cultural, political, and socio-economic peculiarities. Understanding these conditionalities is necessary to be able to proffer sustainable solutions. Despite these facts, there is limited comprehensive and relevant academic literature on waste management financing mechanisms in developing countries both in the past and recent times. This work addresses a significant gap in the literature by studying the mechanism for waste management financing in developing countries using Anambra State, Nigeria, as a case study. The current study further investigated the associated challenges and opportunities and made critical discussions on the implications on the circular economy. User fees and subsidies from the government are the major financing sources. The absence of cost-revenue model analysis, economic and institutional volatility, the unwillingness of the service users to pay fees, and lack of transparency are major challenges to the financial sustainability of waste management in the studied context. The creation of incentives for behavioral changes, adoption of neo-liberal policies, and formal integration of informal waste pickers are factors that can minimize the cost of waste management services while promoting a circular economy.

A monetary model of global peace and health

BackgroundThis study aims to expand on the concept of peace and health by drawing from Keynes' theory of the economic consequences of peace, in light of the global pandemic experienced in 2020 due to COVID_19.MethodsIn this paper, I will elaborate on the concept of ‘security’, as an indicator of peace in the time of biological shocks, in order to expand the definition of Keynesian precautionary motivation. This puts forth a new monetary policy model developed to make contributions to achieving global peace. In so doing, I will calculate the optimal growth rate of discount rate through utilizing the Global Peace Index (GPI), adjusted by the Case Fatality Risk (CFR) of COVID-19 in a dynamic shopping time monetary model. This analysis is comprised of the top 15 GDP countries as well as the 10 most and least peaceful countries in 2020.ResultsThe results indicate that households in more peaceful and healthy countries tend to hold less money compared to those in less peaceful and healthy countries. Besides, the discount rate needs to be reduced due to the outbreak of COVID-19 and the decrease in the level of peace in the economy.ConclusionInsofar as the imposition of fines through international legal circles on countries with an insignificant health and peace policy will increase the cost of liquidity, other alternative methods of financing will be affor dable for the countries.

Exploring Small and Medium Enterprises Access to Finance: A Bibliometric Analysis

This study conducts a bibliometric investigation into the access of small and medium enterprises (SMEs) to finance. Access to finance significantly impacts SME success and growth, yet understanding this intricate matter still needs to be completed. Bibliometric analysis aims to uncover significant trends, research gaps, and influential contributors. The methodology involves extensively searching and assessing scholarly articles, journals, and publications related to SMEs' finance access. A systematic approach identifies relevant studies, extracts bibliographic data, and analyzes citation patterns, co-authorship networks, and thematic clusters. This detailed process maps the research landscape's structure, showcasing trends and new research areas. Results of the bibliometric analysis provide vital insights dominant themes like alternative financing methods, government policies, financial inclusion initiatives, and entrepreneurial finance. Influential authors, institutions, and journals contributing to SMEs' finance access knowledge are also identified. This research offers a comprehensive understanding of existing knowledge and addresses critical research gaps. Analyzing scholarly literature provides valuable insights for researchers, policymakers, and practitioners. Identified gaps and emerging areas guide future research, shaping agendas and prompting further investigations. Furthermore, the bibliometric analysis encourages interdisciplinary collaboration and knowledge exchange among scholars and practitioners. Identifying key authors and institutions supports collaborations and knowledge sharing. Ultimately, this research aims to aid evidence-based decision-making and policy formulation for improved SME finance access. By understanding the research's current state, identifying gaps, and noting emerging trends, this study strives to enhance SME growth and development by fostering a better understanding of finance access challenges and possibilities.

Recent advances in mathematical methods for finance

Recent advances in mathematical methods for finance

THE MANAGEMENT OF WAQF IN PERLIS: A STUDY AT STATE ISLAMIC RELIGIOUS COUNCIL OF PERLIS, MALAYSIA

Waqf properties contribute to a huge percentage of societal wealth in several Muslim countries. However, numerous Muslim countries are facing massive socio-economic problems such as poverty, education, and lack of basic healthcare services. This encourages contemporary Muslim scholars to formulate new financing methods that can be used to develop waqf properties and ensure that these modes confirmed with the Shariah. However, these methods are not maximumly been practiced in several states in Malaysia due to problems such as management, lack of funds, customer awareness, and others. Indeed, the applications of some of these financing methods have been proven successful in the development of Waqf properties. This paper attempts to review deeply on the main resources of waqf properties in Perlis, the current development of waqf properties as well as the issue in the management of waqf asset to aid the development of waqf properties in the Perlis Islamic Religious Council. By implementing qualitative research methods, this research design to ensure the finding of this study will give a massive contribution, especially to the Perlis Islamic Religious Council to practice an instrumental approach to developing the waqf properties to meet urgent social needs of society. The study discusses the findings of the current waqf management practices in Perlis specifically on waqf development such as al-mudharabah, al-musharakah, al-muzara’ah and implementation of cash waqf. Based on the findings, there are several methods been used to manage waqf properties in Perlis such as al-Musyakarah, al-Mudharabah, al-Muzaraah and also cash waqf been implemented.

부동산 크라우드펀딩 특성으로 인한 투자참여의사가 활성화 방안에 미치는 연구

With the development of IT technology, crowdfunding is growing as a new financing method that connects demanders and suppliers online through the Internet. In addition, efforts to increase assets through investment have become very important, making it inevitable to expand investment in financial investment products that seek higher returns while managing risks to some extent. As a result, loan-type crowdfunding (P2P) is emerging as a new investment alternative.The purpose of this study is to study real estate investment decisions using real estate crowdfunding, and to suggest a direction to expand and revitalize the investment participation of the general public through crowdfunding. As a result of the analysis, investor characteristics, real estate market characteristics, investment product characteristics, and platform characteristics were found in the order, and the higher the importance, the higher the impact on real estate investment decision-making. This served as the basis for being in the spotlight as a new financial product, and in conclusion, first, it is the need for systematic and continuous financial and investment education from the perspective of investors. Second, in terms of platforms, P2P loan brokers must ensure transparency and safety of funds. Third, in terms of investment products, it is necessary to develop financial products, establish marketing and education strategies, and improve the quality of financial counseling services. Fourth, in terms of the real estate market, if the market such as policy and interest rates stabilizes and the real estate market is activated, it will be closer to each other’s goals not only in investment decisions through crowdfunding but also in revitalizing real estate investment participation.

Research on Green Finance Supporting Green and Sustainable Development of Railway Enterprises

In the process of rapid industrialization and urbanization in China, there is a strong demand for energy, while carbon emissions have not yet reached their peak. As an important market-incentivized environmental policy tool, green finance plays an increasingly important role in the process of carbon neutrality. The railway is the backbone of the transportation system, and a complete green finance application model has not yet been formed in its green development process. This article focuses on the impact of green finance on railway enterprises, analyzes the challenges and necessity faced by the development of green finance in railway. It also explores the green and sustainable development methods of railway enterprises, analyzes the application of green financial tools in enterprises, and proposes exploration and expansion suggestions from the development path and mechanism of green finance in railway enterprises. The study has shown that the main sources of green funds for railway construction come from green loans and green bonds. The construction of a green transformation plan takes green funds as an important innovative financing method. In the railway industry, enterprises innovate and develop financial service supply side reforms through green insurance and green leasing, and apply carbon trading and related financial derivatives to obtain green development benefits. Carrying out green finance in the railway industry can optimize financing structure, broaden financing channels, reduce the overall financing costs, and guide funds to clean, science and technology and other key areas, which is of great significance to support the high-quality development and green upgrading of the railway enterprises.

Case Study of Financial Situation Based on Harvard Analysis Framework

The pharmaceutical industry, as an industry closely related to public health, also plays a huge role in promoting the development of China's economy and is a major part of China's economy. This paper adopts the Harvard analysis framework, comprehensively uses the strategic analysis, accounting analysis, financial analysis and other relevant theories, and analyzes the current situation of Huadong Medicine Co., Ltd., and puts forward a series of suggestions and measures. This paper elaborated the company profile, strategy analysis, accounting analysis, financial analysis and prospect analysis of Huadong Medicine Co., Ltd., and pointed out the problems faced by Huadong Medicine Co., Ltd., such as lack of strategic development analysis, single financing channel, unclear cost accounting, etc. This paper puts forward a series of solutions and suggestions, such as timely adjustment of strategy development, broadening financing methods and financing channels, improving cost accounting level and adopting various strategies to improve enterprise development ability. The whole article aims to provide all-round support and guidance for the development of Huadong Medicine Co., Ltd., with high practical and theoretical value.