Palestine Stock Exchange Research Articles

The power of financial literacy: paving a clear path for the influence of board diversity on intellectual capital disclosure

PurposeUtilizing a multi-theoretical framework, this study aims to investigate the impact of board gender and nationality diversity on the extent of intellectual capital disclosure. Additionally, it seeks to explore the moderating role of financial literacy among audit committee members on the aforementioned relationship.Design/methodology/approachTo empirically test the study’s framework, a panel dataset of listed firms on the Palestine Stock Exchange (PEX) spanning 12 years (2010–2022) was utilized. To address potential endogeneity issues and ensure robust findings, a battery of econometric estimators was employed, including ordinary least squares (OLS), one-step system generalized method of moments (GMM), lagged independent variables and a sub-index model.FindingsThe study findings make a significant contribution to existing intellectual capital literature. Specifically, the results reveal that the positive influence of board gender and nationality diversity on the extent of corporate intellectual capital disclosure is stronger when there is a high proportion of audit committee financial literacy. Additionally, the study distinguishes between overall index and sub-index analyses. Interestingly, the findings from the sub-index analysis, focusing on structural capital, relational capital and human capital, are somewhat similar to the results of the full index analysis.Originality/valueTo the best of the authors’ knowledge, this study represents the first empirical attempt to uncover the impact of financial literacy among audit committee members on the relationship between board diversity and intellectual capital disclosure.

The power of ESG factors in driving financial growth: insights from Palestine

This study examines the effects of environmental, social, and governance disclosure (ESG) components on the financial performance (FP) of firms listed on the Palestine Stock Exchange (PEX) from 2016 to 2022, focusing on the moderating role of corporate governance. This study used primary data from 44 PEX-listed companies. A context analysis technique was used through company websites and disclosures, the entire population (308 observations) was used for this study, and the study used STATA utilizing the required statistical analysis for this research. The study finds that environmental, social, and governance disclosures significantly influence the Return on Equity and Return on Assets. Testing for the moderating role of Corporate Governance, especially board diversity and size, shows that board diversity moderates the association between social and governance disclosure and firm performance. Board size moderates the relationship between social disclosure and firm performance. By contrast, Board Size and Diversity do not moderate the relationship between environmental disclosure and firm performance. The study contributes to the literature as the first of its kind conducted in Palestine, examining the moderating effects of board size and diversity on the association between ESG disclosure and firm performance.

Competitive Advantage in Light of AI to Achieve Innovative as a Key of the SDGS: Palestinian Insurance Industry

Objective: The study aims to shed light on the role of artificial intelligence in enhancing the competitive advantage of insurance companies listed on the Palestine Stock Exchange and as a result promoting innovation. Theoretical Framework: The study relied on the knowledge-based theory (innovative knowledge), which is difficult to replicate and helps the company become a market leader. Method: The study used a descriptive-analytical approach And correlation coefficients, with a Random sample consisting of 100 managers and heads of marketing, sales, and customer service departments. Results and Discussion: The results revealed that the overall degree of artificial intelligence in the sample companies was between moderate and high. The findings confirmed the presence of a positive, statistically significant effect of using artificial intelligence dimensions in enhancing the competitive advantage of insurance companies and therefore promoting innovation. Research Implications: Based on the aforementioned results, the study recommended expanding investment in artificial intelligence areas while adopting modern marketing approaches in dealing with policyholders. It emphasized the importance of taking into account customers' perspectives and expectations to meet their needs and desires. Originality/Value: This study contributes to the understanding of how artificial intelligence can be leveraged to enhance the competitive advantage of insurance companies, providing a strategic perspective based on the knowledge-based theory.

The audit expectations gap firms listed on the Palestine Stock Exchange: empirical evidence on Palestinian stakeholders

Purpose The purpose of this study is to empirically evaluate the audit expectations gap among stakeholders in listed firms in Palestine. The purpose of the investigation is to determine whether or not there is a gap in audit expectations between auditors and investors, auditors and board directors, as well as among auditors and financial managers and also among auditors and shareholders. Design/methodology/approach To attain its ultimate objective, this study was created using an exploratory descriptive methodology grounded in the use of quantitative methods. A structured questionnaire was used to gather study data from 81 respondents, and a statistical package for the social sciences-26 was then used for analysis. Findings The results of this research showed that there is a sizable difference in audit expectations among shareholders, financial managers and board directors, as well as among auditors and investors. The findings also demonstrate that, in comparison to the difference between auditors and financial managers, the gap between auditors and board directors and auditors and shareholders is very narrow. Research limitations/implications This investigation, which examines the audit expectations gap in great detail, has some significant limitations. This study was limited to the Palestinian market alone. Future research might compare or examine the variations in audit expectations in Jordan, Lebanon, Syria, Iraq and Iran, among different countries. In addition, the demand for accurate and reliable financial reports has sparked a recent increase in interest in auditing, a long-standing sector that has expanded in recent years. Practical implications The study has several practical implications, for example, it underlines how crucial it is to make stakeholders aware of the limitations and difficulties related to the auditing process. By doing this, the situation that audit committees and listed firms find themselves in will be easier for investors, board directors, financial managers and shareholders to understand. The way that auditors and stakeholders communicate can help reduce this gap since it affects how much each party underestimates or understates the other’s obligations. Originality/value This paper contributes to the literature by analysing and identifying the causes of the audit expectations gap in companies listed on the Palestine Stock Exchange and providing useful insights and potential solutions to close or mitigate it. It also adds a new contribution to the literature related to the audit expectation gap. This investigation offers unambiguous evidence of a sizable discrepancy between audit expectations and actual performance in terms of formal auditor obligations as outlined by current law, as well as auditor reliability standards and practices, between auditors, board directors, investors, shareholders and financial managers in listed Palestinian firms.

Impact of accounting conservatism and corporate governance on stock price breakdown in firms listed on the Palestine Stock Exchange

PurposeThis paper uses test panel data for the biggest companies listed on the boards of directors of the Palestine Stock Exchange from 2016 to 2022 and will focus on the relationship between the corporate governance index, accounting conservatism, and the comprehensive index of corporate governance.Design/methodology/approachThe relationship between corporate governance and accounting conservatism is experimentally investigated for its impact on the likelihood of stock price breakdown and decline among companies listed on the Palestine Stock Exchange between 2016 and 2022, using a mixed utilities approach.FindingsThe findings demonstrated the adverse correlation between corporate governance, accounting conservatism, and stock prices. Higher levels of corporate governance can effectively reduce the likelihood of future stock price increases, while conservative accounting policies can effectively prevent stock price collapses in these listed companies. Higher levels of corporate governance can greatly lessen the detrimental effect of accounting conservatism on the likelihood of future stock price breakdowns and declines. Both accounting conservatism and corporate governance have substitution effects in decreasing the danger of stock price collapse.Research limitations/implicationsThe limitations of the current research are that higher levels of corporate governance can significantly reduce the harmful effect of accounting conservatism on the probability of stock price breakdown and decline in the future on the study sample used, and these results cannot be generalized to all company stocks that were excluded in this study. The last research limitation is that the sample size of this study is somewhat small, and therefore the effects of the results cannot be used on all unlisted companies, and they cannot be generalized to all of these companies except only to companies listed on the Palestine Stock Exchange.Practical implicationsOur findings have interesting managerial and policy implications. Listed firms should first strengthen external audit oversight, improve the method of disclosing accounting information, and improve the system architecture to raise the level of accounting conservatism. Moreover, it is imperative to enhance and improve the ownership structure of publicly traded firms, construct a robust mechanism for replacing shareholders, fortify the duties of the board of directors, proficiently fulfil the role of independent directors, and develop and refine the internal and external framework for corporate governance.Originality/valueThis study provides insights about reducing the probability of a stock market breakdown and collapse from two sides: enhancing corporate governance, improving accounting conservatism, enhancing the reliability and integrity of disclosure, and growing the number of sustainable disclosures. These suggestions can also be used as a template for Palestine's capital market's gradual and sustainable expansion.

Big Data Technology and Financial Performance of Listed Firms in Palestine: Mediating Role of Accounting Information Systems

The purpose of this paper is to examine the mediating effect of the rate of quality of accounting information systems on the relationship between big data technology and firms’ financial performance in firms listed on the Palestine Stock Exchange. The researchers conducted an account of the previous studies in this field. The researcher used the deductive approach in studying and analyzing previous studies related to big data by relying on books, periodicals, theses, and accounting standards related to the subject of the research. The researcher applied an inductive approach when conducting the field study and testing the statistical hypotheses related to the study of the relationship between the use of big data technology and firms’ financial performance. The findings show a correlation coefficient of (0.54) and a coefficient of determination of (48%), indicating that big data analytics positively affects the rate of return on assets, and that there is a statistically significant relationship between the advancement of accounting information systems and the enhancement of financial performance in big data technology, as measured by the rate of return on equity and the rate of return on assets, which have correlation rates of (0.53) and (42%), respectively. This relationship is reflected in the data on the existence of a statistically significant relationship between the use of big data technology and the enhancement of financial performance with big data technology. The intention of big data, as well as the absence of fundamental differences between the sample individuals, states that the use of big data technology leads to improved performance through the development of various accounting practices and good inventory management by predicting customer behaviour, thus increasing the competitiveness of competition and improving the reputation of the establishment on social media. This is reflected in the company’s sales and its survival in the market, as well as the development of analytical models and advanced methods of analysis that limit fraud and help control it, which is one of the establishment’s goals at present. This paper contributes to the literature by showing that the use of big data leads to a change in methods of preparing the final accounts, especially the financial position, and displaying them at fair value, which increases investor confidence. The study offers insights into the necessity of holding training courses for accountants concerning technology related to digital transformation and big data analysis for use in developing accounting practices.

Digital transformation under the governance of Palestinian banks

This study aims to understand and evaluate the impact of applying governance principles on digital transformation in Palestinian banks listed on the Palestine Stock Exchange. A questionnaire was distributed to 750 employees from the study population. It included four axes representing governance principles (board of directors’ tasks, board practices and conflicts of interest, disclosure and transparency, and risk management) and a fifth axe representing digital transformation. The study found a strong, statistically significant positive effect of applying governance principles on digital transformation in Palestinian banks. The results also showed the keenness of the boards of directors to discuss the commitment of bank management to implement the provisions and regulations of governance issued by the Palestine Monetary Authority. This helped in developing and approving the necessary policies for risk management and enhanced the effectiveness of oversight of the digital transformation system. This was reflected in increasing customer confidence in the banks’ performance and maintaining the interests of related parties. The study recommended the need to enhance the level of transparency and disclosure regarding governance performance and the progress of digital transformation in banks. It also recommended developing an integrated framework for analyzing and managing risks related to digital transformation. This assists in providing comprehensive training and development programs for practitioners to enhance their capabilities in the field of digital transformation and applying governance principles.

Leverage, earnings management and audit industry specialization: the case of Palestinian-listed companies

PurposeThis study explores the relationship between leverage and earnings management in the context of Palestinian-listed companies, while also investigating whether audit industry specialization influences this relationship.Design/methodology/approachThe data used in this study are extracted from public financial reports of 39 firms listed on Palestine Stock Exchange (PEX), spread across the service, insurance, industry and investment sectors, for the time period 2011–2022. A model is developed to test 4 hypotheses about the relationships between long-term and short-term debts, and earnings management, and then to examine the influence of audit industry specialization on these relationships.FindingsThe results depict a significant, negative relationship between long-term debt and earnings management. Whereas the association between short-term debt and earnings management is insignificant. Audit industry specialization is proven to have no influence on the relationships between the independent and the dependent variables. Results are robust for firms that changed their accounting policies and using different audit industry specialization proxies.Originality/valueThe association between leverage and earnings management is a significant research topic, given that previous research identifies credit ratings and debt covenant violations as key factors which motivate earnings management. This paper fills a substantial research gap by examining the relationship between the two variables in the context of Palestinian-listed firms, while emphasizing the distinction between long-term and short-term debts. It also highlights key relationships that have been neglected in this particular context, which adds to the body of literature. Furthermore, the research's findings provide a solid information base that is of great interest to accounting and auditing experts and that may be seriously evaluated to support and advance the PEX sector.

E-Commerce Use and Financial Performance: Exploring The Moderating Role of Entrepreneurial Competencies in Palestine Stock Exchange Companies

The study aims to identify the role of e-commerce use through the efficiency of entrepreneurial competencies in directing the financial performance of companies listed on the Palestine Stock Exchange via financial performance indicators connected to e-commerce: sales value, and company value. The data for the study sample is gathered from the financial reports of all 49 companies listed on the Palestine Stock Exchange for the four sectors (commercial, service, industrial, and investment) over the 11 years of the study period, 2010 to 2020, resulting in a hypothetical sample size of 528 observations (11 years x 49 companies). A quantitative descriptive-analytical approach was employed, and the data was analyzed using SPSS and Stata software. The outcomes of the study have revealed a positive and significant relationship be- tween the employment of electronic commerce and the financial performance of businesses. In addition, it has been observed that Entrepreneurial competencies play a significant moderating role in the relationship between the use of e-commerce and the financial performance (sales value, company value) of companies listed on the Palestine Exchange. This is the first study to investigate Entrepreneurial competencies as a moderator between e-commerce utilization and business financial performance, based on previous knowledge in the field. The empirical findings of this study give managers and practitioners useful theoretical and practical insights for understanding the relationship between the deployment of e-commerce across all industries in hopes of enhancing company results.

The effect of the accounting Conservatism on some of the financial ratios selected for stocks (An applied study on investment companies listed on the Palestine Stock Exchange)

The effect of the accounting Conservatism on some of the financial ratios selected for stocks (An applied study on investment companies listed on the Palestine Stock Exchange)

The Impact of Financial Soundness Indicators (FSIs) on the Market Value of Palestinian Public Shareholding Banks

This study aimed to explore the financial soundness of the Palestinian banking sector. It also aimed to examine its impact on the market value of banks listed on the Palestine Stock Exchange (PEX) which lists six (6) banks. For this purpose, Financial Soundness Indicators (FSIs) were utilized including capital indicators, asset quality indicators, profitability indicators, and liquidity indicators. The study employed a descriptive-analytical approach, utilizing the published financial statements of these banks to calculate the necessary ratios for measuring FSIs. Additionally, publications from the PEX were used to measure market value for the period of 2012-2021. The study revealed several noteworthy findings, including the adherence of listed banks on PEX to the Basel III Committee's regulations regarding FSIs. The data also showed that the Palestinian banking sector ranks at intermediate to advance level in terms of banking safety. Furthermore, FSIs have a significant impact on the market-to-book value ratio.

Factors and determinants affecting banking sector stability: empirical evidence from conventional and Islamic banks listed on the Palestine stock exchange

PurposeThis paper aims to investigate the determinants that contribute to the financial stability and banking sector of Palestinian banks listed on the Palestine Stock Exchange (PEX) by using yearly data for the years 2012–2022.Design/methodology/approachPooled ordinary least squares (OLS) and two-stage least squares (2SLS) were used to identify the variables and factors affecting the financial stability and banking sector of Palestinian banks. The study’s data were collected from the banks listed on PEX and from the yearly reports posted on the Palestine Monetary Authority’s (PMA) webpage over the years from 2012–2022. According to this research’s analysis, SMEs loans and capital sufficiency have a statistically significant positive impact on the stability of Palestinian banks. Unobserved heterogeneity, simultaneity and dynamic endogeneity are taken into account when using the 2SLS regression approach to adjust for the study endogeneity factor.FindingsThe study’s findings show that some factors and determinants might have both good and negative effects on financial stability and banking sector. Loans to small and medium-sized businesses (SMEs) and enough capital are two characteristics that statistically have a major favourable impact on the stability of Palestinian banks since they help the banks withstand deficits. A further potential discovery relates to the favourable effects of financial inclusion (FI) and digital financial services (DFS) on the stability of banks.Research limitations/implicationsThis research has faced some limitations, such as the lack of a defined index from the regulatory organizations, this research is based on information from bank annual accounts. It has mostly relied on self-developed or World Bank indexes. Furthermore, the research solely used information from the supply side (banks); demand-side data were not taken into consideration.Practical implicationsThis paper has managerial implications for stability of banking sector. The Palestine Monetary Authority, as the central bank, must increase the percentage of bank loans directed to small and medium-sized companies and oblige bank management to adhere to adequate capital standards, which contributes to strengthening the Palestinian banking sector and increasing its profits. The study findings advise banks that are enjoying financial stability to speed up the pace of FI and DFSs because most of these reliable banks have relatively low FI ratios. PMA is responsible for preserving the stability of the financial system. PMA, decision makers and banks management must retain adequate liquidity in their institutions and raise client collateral expectations to raise credit conditions.Originality/valueThis paper adds some contributions to the literature. To adjust for discrepancies between various types of banks, the authors concentrate on conventional and Islamic banks, which enables us to use a homogenous data set as opposed to depending on dichotomous variables. The authors used Z-scores, which have recently been used in research, to measure stability and FI at the level of specific institutions. This research contributes in some key aspects that no prior research has addressed. Conventional banks are different from Islamic banks, and a number of issues might impact their stability. To evaluate the connection between FI and DFSs, it is important to consider the actions of bank regulators.

The Impact of Board of Directors' Independence on Corporate Social Responsibility Disclosure in Palestinian Companies

Corporate social responsibility (CSR) is a comprehensive approach of the company that determines the amount of the organisation's contribution to society and the use of its available resources in a responsible manner. Previous statistics have shown that the contributions of Palestinian companies towards social issues are still limited, and corporate social responsibility disclosure (CSRD) is at a low level. This paper aims to examine the level of CSRD of Palestinian companies and to examine the relationship of board of directors’ (BOD) independence on CSRD. The study employs OLS linear regression analysis to analysis of data using a sample of 31 companies listed on the Palestine Stock Exchange (PSE) during the period from 2012 to 2021. The theoretical framework of agency theory will be adopted to comprehend the relationship between the variables under investigation. The findings reveal that the level of CSR disclosure in Palestinian companies included in the sample of study is 29.5%.The results of the study also, indicated that the positive and significant relationship between BOD independence and CSRD.

Ownership Structure Effect on the Stock Returns for Companies Listed in Palestine Exchange

This study aimed at identifying the impact of the ownership structure on the stock returns of the public companies listed in the Palestine Stock Exchange. In order to achieve this goal, panel data for the period from 2009 to 2019 was collected from the financial reports of the 46 public companies listed in the Palestine Stock Exchange. In this study, the fixed-effect method was used in the analysis of the study's panel data. The results of the study showed a positive effect of the ownership of major shareholders on equity returns and a negative effect of the ownership of board members on equity returns. Furthermore, the study found no significant effect of institutional ownership, foreign ownership or executive-management ownership on equity returns. In light of the study's findings, the study made several recommendations to investors, legislators and board members regarding the ownership structure and stock returns.

Characteristics Boards of Directors and Cash Dividend Policy

Purpose: The purpose of this study is to Explanation the relationship between the characteristics boards of directors (Board size, Board women's representation, Board independency, and Board diversity) and cash Dividend Policy. Design/Methodology/Approach: The study uses a firm level panel data set of sample included 13 banks and insurance companies publicly traded firms on the Palestine Stock Exchange between 2012 and 2021. Cash Dividend Policy have been measured by (dividends per share), and the data analyzed within the framework of OLS regression technique. Findings: The results of this study reveal no significant effects of all characteristics boards of directors on cash Dividend Policy at banks and insurance companies publicly traded on the Palestine Stock Exchange. The study recommended the need to control the application of corporate governance for commercial banks and insurance companies in Palestine. Research, Practical & Social implications: The results of this study differ somewhat from most previous studies. The study emphasizes the necessity of activating internal governance factors related to the characteristics of the board of directors to support the process of making a decision to cash dividend Policy because of their important reflection on the analyzes and expectations of investors in the Palestine Stock Exchange. Originality/Value: This study provides valuable insights to shareholders and stakeholders about activating internal governance mechanisms in the Palestinian financial sector and highlights the role of the characteristics boards of directors in making financial decisions, including cash dividend Policy, while giving a clearer picture to investors and analysts for building investment strategies.

Impact of Compliance with the International Financial Reporting Standard IFRS No. 9 on Financial Risk Reduction in Banks Listed on the Palestine Stock Exchange

Purpose - This study empirically investigates the impact of compliance with International Financial Reporting Standard (IFRS) No. 9 on reducing financial risks in the banks listed on the Palestine Stock Exchange.
 Design/methodology/approach – The sample of study consists of all financial statements of the banks for the period 2015-2021 that met the study’s criteria. A simple linear regression test was used to examine the study’s hypotheses.
 Findings - The findings of the study show a correlation between the compliance with IFRS No. 9 and the mitigation of financial risks in the banking sector. The study shows an adverse effect of the compliance with IFRS No. 9 on reducing credit and capital risks in the banks under study. It also found that there was an insignificant effect of the compliance with IFRS No. 9 on the reduction of exchange rate and interest rate risks in those banks, while the study observed a positive effect of the compliance with IFRS No. 9 on reducing liquidity risk in those banks.
 Recommendation - The study recommended the necessity to develop and cultivate the banks’ human resources and work on increasing the awareness of the users of financial statements. The study also underscored the need for banks to bolster their capital reserves to meet the expected increase in provisions stipulated within IFRS No. 9.
 Originality/value: Our research highlights the importance of underscored of banks to bolster their capital reserves to meet the expected increase in provisions stipulated within IFRS No. 9. and reducing financial risk in those banks

Assessing market efficiency in Palestine Securities Exchange (PSE) market at weak form: Analysis from 2010–2022

The efficient market hypothesis (EMH) asserts that financial markets are efficient, meaning that current market values of stocks incorporate all available information. This study examines the weak-form efficiency of Palestine Stock Exchange stocks using the indices returns from 2010 to 2022. The study used parametric tests (Augmented Dickey-Fuller (ADF) unit root, serial autocorrelation) and nonparametric tests (Phillips-Perron (PP) unit root, run test, variance ratio test). The findings of these tests provide insights into the behavior of the Palestine Stock Exchange market. The run test outcomes reveal a statistically significant pattern in the data for general, insurance, and service indices, with a p-value below the significance level. Furthermore, the unit root tests indicate statistical significance for all indices with 0.00 p-values and t-statistic below the critical values of –2.86 for level and intercept, and –3.14 for level, trend, and intercept, signifying that the indices returns are stationary. In addition, serial autocorrelation test show that the general and Al-Quds indices show statistically significant links between consecutive observations at all four lags. However, the insurance, investment, and services indices show statistically significant results on three lags. The variance ratio test results challenge the random-walk hypothesis for all indices except industry and insurance. With low probability values, a discernible, long-term, predictable pattern is evident in the Palestine Stock Exchange indices. The analysis reveals that Palestine Stock Exchange index returns exhibit nonrandom behavior, suggesting predictability and patterns in daily returns, indicating the possibility of exploiting market inefficiencies in investment strategies.

The impact of corporate governance mechanisms on corporate failure: an empirical evidence from Palestine Exchange

PurposeThe purpose of this research is to examine the impact of governance mechanisms on corporate failure.Design/methodology/approachThis study used a hypothesis-testing research design to collect data from the annual reports of 35 companies listed on Palestine Exchange from 2010 to 2019. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The variance inflation factor was used to test multicollinearity, and binary logistic regression was utilized to develop the research model.FindingsThere is a significant positive relationship between board of directors' independency, institutional ownership and the quality of external audit, and corporate failure reduction. No significant relationship has been found among corporate governance variables such as board size, board meetings' frequency, board members' remuneration and audit committee existence, and corporate failure reduction.Research limitations/implicationsSeveral empirical research studies have developed models to predict corporate failure using accounting and financial data. However, limited research has empirically investigated the impact of the different mechanisms of governance on corporate failure prediction.Practical implicationsThe research highlighted the significance of companies' commitment to governance principles and their impact on predicting failure. The study suggests that decision-makers and managers can adopt different governance mechanisms to support corporate success and avoid those that may lead to negative consequences and failure.Originality/valueThis research is the first in Palestine to use a comprehensive list of corporate governance mechanisms to predict the failure of companies listed on the Palestine Stock Exchange between 2010 and 2019.

Do professional shareholders matter for corporate compliance with IFRS reporting requirements: the moderating effect of board independence

PurposeFrom an agency theory realm, this study aims to respond to the more recent calls to deeply analyze the indirect influence of professional shareholders, namely, institutional, blockholder and foreign owners, on the extent of compliance with International Financial Reporting Standards (IFRS) mandatory reporting requirements.Design/methodology/approachMultivariate regression analysis was applied. Moreover, quantitative static and dynamic panel data have been used. More plainly, ordinary least squares was run as a baseline estimator. Afterwards, one-step system generalized method of moment and two-stage least squares were conducted to control for the potential endogeneity dilemma. The analysis is based on a sample of nonfinancial listed firms on the Palestine Stock Exchange for the time span of 10 years, from 2010 to 2019.FindingsAfter controlling for the detrimental effect of the endogeneity issue, the findings clearly reveal that the effect of the three types of professional shareholders (institutional, blockholder and foreign) on the extent of compliance with IFRS is more significant under a high proportion of independent nonexecutive directors.Originality/valueTo the best of the author’s knowledge, prior literature on the nexus between shareholding structure and compliance level with IFRS has restricted solely to analyzing the direct influence without casting the light on the moderation effect of independent nonexecutive directors. Hence, analyzing this sensitive configuration merits attention. In this vein, to ameliorate the compliance level with IFRS, regulators have to devote remarkable effort to updating both enforcement mechanisms and best practices of shareholding structure simultaneously.

The influence of corona pandemic on stock returns of companies listed on the Palestine Stock Exchange

Purpose This study aims to explore and verify the influence of the corona pandemic on the stock returns of the Palestinian companies listed on the Palestine Exchange during the period 2020–2021. Design/methodology/approach The research makes use of secondary financial data from 52 companies in the industrial, investment, services, banking and insurance sectors. Many financial ratios are calculated to assess stock returns: current ratio, cash ratio and average collection time as liquidity measures; debt-to-equity ratio as an indication of leverage or solvency; and net profit margin as an indicator of profitability. The research examines ratios between the (2020 and 2021) precorona outbreak using the Wilcoxon signed rank test and financial ratio analysis during the corona pandemic. Findings The findings show that liquidity in the investment, banking, insurance and industrial sectors has decreased significantly, whereas liquidity in the service sector has improved. The statistics reveal a considerable growth in debt in the service sector, while it stays unchanged in the other sectors. However, there is no discernible change in profitability during and after the corona outbreak. Research limitations/implications The present research faced many limitations, such as the approach to gathering primary data, which depended heavily on disclosures, financial reports and secondary data, as well as only analyzing one context and one country. Practical implications The findings of this study can guide the Palestinian government and decision-makers to respond to the COVID-19 outbreak and must act quickly because strong short-term policies are more functional than long-term policy measures. In addition, the temporal discrepancy between their policy actions and financial regulations regarding the stage of the outbreak, integrating monetary treatment methods, strengthening their control over exchange rate fluctuations and extending the duration of financial participation measures that ensure stable exchange rates, such as attempting to restrict trade of the monetary system between countries was assessed to reduce the important monetary stimulation policy. Originality/value This study presents important facts and results for regulators and decision-makers regarding the investment, industry, banking, insurance and services sectors as sectors that are most affected by the corona pandemic as a sample for this study from the Palestinian companies listed in Palestine Stock Exchange due to the corona pandemic.