Financial Paradigm Research Articles

Innovation, risk and finance paradigm from the polish perspective

The aim of the paper is the presentation of the discussion on innovativeness, risk and paradigms changes with regards to paradigm in finance. The author starts with the description of globalization process that supported by science and technology affected socio-economic development but also intensified phenomena indicating symptoms of chaos. Second part focuses on the innovativeness and risk associated with innovativeness activity. Then the Kuhn's theory of paradigm is confronted with nowadays world of growing chaos with regards to finance. The conclusions is that innovativeness of societies is not determined by how much people representing the world of science but how the whole society refer to science. In terms of financial paradigm a worrying phenomenon of disappearance of ethical principles is witnessed.

Market Conditions for Impact Investments as a Subsidiary of the Social Finance Model

In this paper, the author presents an overview of the development of socially oriented impact investing in country-specific markets as a development of the social finance model. This analysis focuses on socially responsible investing (SRI) or impact investing, which has experienced continuous growth in certain countries, including European (UK, particular Scandinavian) and US markets. The equity of social impact mutual fund markets has grown both in the number of funds and in the differentiation of the securities under the social finance model.
 Despite the fact that socially responsible investments or impact investments still lack a uniform definition under social finance, it mainly refers to investments that emphasize social/ecological/ethical value over monetary return. In the academic literature, it is not clear whether the behavior of impact investors will be sustainable toward the social finance paradigm, as their investment decision about the monetary return should be motivated by their economic behavior. The author analyzes the economic conditions of the capital market that provide long-term institutional support for socially oriented investments.

THE NEED FOR A PARADIGM SHIFT IN FINANCE: SUSTAINABLE CORPORATE FINANCE

Under current global conditions, finance may play a critical role in allocating investment to sustainable enterprises and projects, thereby hastening the transition to a low-carbon circular economy. Finance promotes risk assessment and, as a result, can aid in addressing the inherent ambiguity surrounding environmental concerns such as the impact of carbon emissions on climate change. In recent decades, thinking about sustainable finance has progressed through several stages, with the emphasis steadily changing from short-term profit to long-term value creation. This study seeks to conduct an examination of the concept and premises of sustainable corporate finance based on literature research, with the goal of bringing arguments to the need to shift the financial paradigm. This emerging perspective emphasizes that, while profit creation and maximization are important, firms must also seek other goals that have an impact on society, such as those connected to sustainable development. The integration of environmental, social, and governance components into financial decision-making processes is referred to as sustainable finance. Recent developments highlight the importance of businesses' commitment to responsible behavior in transforming the company into a truly sustainable enterprise that adds value to the business, society, and the environment.

Changing the healthcare financing paradigm: Domestic actors and international organizations in the agenda setting for diffusion of social health insurance in post‐communist Central and Eastern Europe

AbstractThis study elucidates the role of international organizations and domestic actors in post‐communist healthcare reforms aiming at a paradigmatic shift in healthcare financing and the introduction of social health insurance in Albania, Latvia and Poland. It inductively derives a causal mechanism behind the reform processes from these case studies. We demonstrate that the agenda setting for changing the healthcare financing paradigm was domestically driven and underpinned by the “nothing like the old regime” causal mechanism. In the context of post‐communist transition in Central and Eastern Europe this mechanism translated into an “anti‐communist backlash”. The backlash defined the domestic actors' perception of social health insurance as the only acceptable policy option because of its dissimilarity to the previous healthcare financing paradigm, and led to the rejection of World Bank suggestions to retain tax‐based healthcare financing in Poland and Albania. Doctors as policy entrepreneurs played the key role in agenda setting. Pre‐communist experience with social health insurance schemes and transnational cooperation with German and French experts and doctors served as sources of internal and external validation for the new paradigm.

The Impact of Employee Empowerment on Intellectual Capital and Organizational Citizenship Behavior: Moderating role of Demographic

In recently, human resources management measured as the most worth able resource has been the center of approaches, activities and it plays an important role in promoting the objectives and goals of the organization. In fact the financial paradigms do not meet the requirements and expectations of the organization, it has led organizations to seek other paths to achieve competitive advantages. In this study, the growth of intellectual capital and organizational citizenship behavior can be taking new approaches in to account field. Practices for development going beyond the role of recognized expectations needs vital infrastructures. Therefore, empowerment is an important element to plays positive role to describing about social exchange of organizational citizenship behavior. Alternatively, in the economy of knowledge-based, the intellectual capital is the creating knowledge and sharing to enhance enterprise values. The study based on descriptive analysis and it examine the relationship between employee’s empowerment, intellectual capital and organizational citizenship behavior. To the theoretical data collection and to extract initial factors and indicators, library and Internet resources were used and questionnaire was used to gather the data needed to evaluate the assumptions. In this research, random method sampling has been used and Pearson's correlation coefficient was used to analysis data. The findings of study state that a positive and significant relationship occurs between dimensions of employee’s empowerment with growth of Intellectual capital and organizational citizenship behavior. On the other hand, becoming more empowered, employees` growth of intellectual capital has increased and the organization will enjoy more progressive staff

The Impact of Behavioral Finance on Lebanese Investors’ Decision Making

The inability of the traditional expected utility maximization of rational investors (within the efficient markets Framework) to explain many empirical patterns; was the main stimulus beyond the appearance for another track to resolve and analyze this inconsistency; through combining behavioral and cognitive psychological theory together where Behavioral Finance is known mainly as the irrational part that deals with investors’ Sentimental side. Furthermore it can be agreed on that behavioral finance is considered as “Subjective judgement” where ideas and decisions cannot be transmitted to other’s knowledge, as each one acts from his own point of interest; unlike conventional finance paradigm. Therefore, this paper seeks to determine the main behavioral errors or biases that are faced mainly by the Lebanese individual investor during decision making process. Results obtained by analyzing 211 questionnaires through SPSS software to develop a Structural equation model. Findings prove that Over Confidence and regret aversion are the main behavioral biases that control the Lebanese individual investors’ decision making.

THE NEW PARADIGM OF EUROPEAN FINANCIAL SCIENCE

For finding out the main problems in the financial system of the EU countries, it was madea rapid analysis of its main indicators for nine years, where it was found that its state is unstable. There are identified the main problems of functioning of the EU financial system and it isrevealed the gaps in the explanation of modern economic phenomena by financial science. In order to understand the current financial processes in European countries, it has been developedan immanent-cognitive architecture of the modern economy, with the separation of relevant elements and relations. There are presented the views of foreign and domestic researchers on the use of existing theories of financial content, where it is proved the inconsistency of these theories with present realities. The way out of this situation, in particular to improve the functioning of the EU financial system, is to theoretically justify the vectors of European development with the development of the financial science paradigm. Taking into account the results of the performed analysis of the state of the EU financial system and the inability of current theoretical financial structures to explain the current processes that are formed in the financial system, it is proposed a new paradigm of financial science with the separation of conceptual and categorical apparatus. There are identified three main components of this paradigm. The first one is the method of cognition, which is used a system one, which allows to explore complex public open systems, which one is financial and to form theoretical constructions. The second component is the principles that should contribute to the most comprehensive consideration of all factors of influence and vectors of development of financial science. The third component identifies theoretical provisions, in particular: the formation of directions for the development of the financial system with the separation of its main components; development of a new model of financial system development, which would be aimed at innovative development of economic sectors, budget support of strategically important enterprises; development of theories of financial control over the movement of financial resources; substantiation of direct administrative and financial responsibility of officials of all levels for corruption manifestations

Устойчивые финансы: новая теоретическая парадигма

The article provides a brief overview of the concepts that substantiate the feasibility of moving from the classical paradigm of finance to a new paradigm of sustainable finance. In the modern world, there is a sharp increase in the number of works on the problems of sustainable finance. At the same time, the number of theoretical works in this area is insignificant, and they are underrepresented in leading scientific journals. The concept of sustainable finance has several key elements, including a new interpretation of the value of corporations and securities (which takes into account environmental and social externalities), long-term value creation as the main corporate goal, the adaptive markets hypothesis. All these elements are based on the initial thesis about the need to combine financial and non-financial (social and environmental) goals in the development of corporations, which is followed by an increasing number of investors. Accordingly, supporters of the concept propose a revolutionary transition to a new paradigm, trying to refute such fundamental concepts of the traditional paradigm of finance as the efficient markets hypothesis and the capital asset pricing model. A natural continuation of attempts to refute these concepts are practical recommendations of sustainable finance for financial organizations, suggesting a change in the approach to diversification, preference for passive investment, a reduction in the investment chain, etc. A certain justification for such claims is given by a sharp increase in the share of responsible investors (investors who share the ESG principles) in the total volume of investments under professional management. In addition, special attention to sustainable finance is predetermined by the growing importance of the UN Sustainable Development Goals, one of the instruments for the implementation of which is sustainable finance. Acknowledgements. The paper was written with the support of budget financing for fundamental research at RANEPA.

Innovative Opportunities for Insurance Development in a New Financial Paradigm

This article examines and analyses innovative opportunities for insurance development in Russia. Thanks to innovative opportunities in a new paradigm, it is possible to move from traditional insurance products to new ones, which in turn will become the basis for regional development. Based on the analysis of the current state of the insurance market, the authors have concluded that insurance products/services need to be continuously improved, which will allow insurance companies to increase the flow of insured, to maximize the financial results of insurance companies.

Warm-Glow Giving, Hedonism, and Their Influence on Muslim User Engagement on Loan-Based Crowdfunding Platforms

This paper investigates how platform design features affect the funding motivation of Muslim users on loan-based crowdfunding platforms. Theoretically grounded in Andreoni’s warm-glow giving theory and Sober and Wilson’s model of evolutionary and psychological giving, this work has high practical relevance, given the increasing demand for Islamic financial products. Loan-based crowdfunding platforms are important to the unique context of this research since Islamic religious constraints regulate monetary transactions involving lending. We used a scenario-based survey developed on the basis of a pilot study and confirmed by our manipulation check. The results show that “hedonism” represented by monetary interest negatively affected Muslim users’ willingness to engage in a loan-based crowdfunding project. This finding challenges the commonly agreed-upon egoistic motivator for loan-based crowdfunding platforms (i.e., monetary interest), which is based on Western Christian and Chinese Confucian capitalist economic and financial paradigms. Remarkably, we also found that Muslim funders’ level of willingness to engage on the hedonistic platform had an exponentially positive effect on the amount of money that funders were willing to lend. By contrast, “warm-glow giving,” manifested as belonging to a community, had no effect on users’ engagement. Implications of these findings for theory and practice are discussed.

ФІНАНСОВА ПАРАДИГМА ІННОВАЦІЙНОГО РОЗВИТКУ ТЕЛЕКОМУНІКАЦІЙНИХ ПІДПРИЄМСТВ В УМОВАХ ЦИФРОВОЇ ТРАНСФОРМАЦІЇ ЕКОНОМІКИ

The formation of a competitive national economy in the digital transformation of economic processes contributes to the formation and development of the digital economy. Intensification of Ukraine's European integration processes, as well as the use of modern information technologies in public life require reformatting the management system of enterprises, their financial support and accelerating economic development of industries based on the growing role of innovation. The article presents the role and importance of the digital economy in the formation of a competitive national economy and presents the features of the digitalization telecommunication industry. The economic content of innovations, innovative development of enterprises and their role in the activities of telecommunications enterprises in the conditions of deepening globalization and constant intensification of competition are revealed. The indicators of global indices of the digital economy development in Ukraine are analyzed. The importance of forming financial paradigms of innovative development telecommunication enterprises in the new reality of the national economy digital transformation is substantiated. A strategy for improving the financial support of telecommunications enterprises is proposed and important components of the financial paradigm implementation of their innovative development are identified.

Increased investment activities in the region in the strategic financial management paradigm

Increased investment activities in the region in the strategic financial management paradigm

Research of globalization influence to paradigm change in financial services

Research background: Study of paradigm about financial services and how it changes under influence of globalization and introduction of a new player as a financial technology company or shortly Fintech. Literature and other informative sources regarding issues of innovation in financial services, impact of globalization and formation of new perspective to financial services was reviewed during the study. Purpose of the article: The main purpose of this work is to detect and highlight the change of the concept about financial services in favor of Fintech companies supported by tendencies which are characteristic for globalization process, and how it can be beneficial for consumers and overall financial services industry. Methods: For this research was used content analysis approach, which has advantage over other methods since it allows to extract specific data from text and other forms of information without intervention by researchers. Obtained data was encoded and applied to a model created by authors to see certain change pattern during the study of the phenomenon of financial services paradigm change. Finding & Value added: The findings of this research proved that globalization led to change of the paradigm about financial services. The value of this research is to provide theoretical fundamentals for application of paradigm change concept in the sphere of management science.

Внедрение парадигмы устойчивых финансов в стратегию развития финансового рынка ЕАЭС

Внедрение парадигмы устойчивых финансов в стратегию развития финансового рынка ЕАЭС

Современные тенденции формирования системы зеленого финансирования: методологический и практический аспекты

The concept of green growth and sustainable development is turning into a global ideology guiding the transformation of national economies. The focus is shifting from quantitative assessments of performance to rational choice conditions. Rationality is becoming the decisive factor behind sustainable green growth, and a change in the financial model that supports such growth may be needed. Therefore, the most urgent problems relating to sustainable growth are the transformation of the finance system, on the one hand, and the creation of a new financial paradigm based on the principles of responsible investment and corporate social responsibility, on the other. This study aims to consider the theoretical and practical aspects of creating a national green finance model ensuring sustainable growth in the Russian Federation. The development of a green finance mechanism and a green bond market in Baltic Sea countries is analysed to determine national features and explore the possibility of translating the Baltic experience into practice in Russia. The research uses methods such as economic observations, economic description, structural and logical analysis, and systems analysis. Perhaps the most significant finding is the description of a methodological framework for sustainable development theory, as seen by major schools of economic thought. Studying the experience of Baltic Sea countries in creating a new finance model of responsible investment helped detect national features and development priorities that can be used in Russia in devising the ideology, principles, and mechanism of green growth and sustainable growth financing.

Investigation of the possibilities of barter chains based on decentralized technologies

The purpose of this work is to analyze the capabilities of automated barter chains basedon decentralized technologies — distributed databases and peer-to-peer networks. Blockchaintechnologies are taken as an example. The authors describe the concept of the so-called Game,which is a system-forming platform of automated barter chains for effective interaction betweenparticipants in economic processes (players) and is aimed at developing and acquiring the wealth of each participant, as well as revealing their creative and personal potential. As a result of the analysis, the function of the equivalent in exchange without money is determined. A conclusion is made about the possibility of creating a distributed mentoring Institute, where each talent will invite apprentices and become responsible for their development. The issues of generalization of the financial paradigm in the transition to a new socio-economic technological order by changing cultural attitudes to the model of effective, targeted use of resources in the amount necessary to disclose the creative potential of each player and to empower his personal sense of happiness and harmony with himself, the surrounding society and nature (symbiotic, ecological, systematic approach). The software platform within the framework of the described concept will allow achieving a high level of automation with maximum reliability and guarantee of transactions' security. The presented concept is proposed as a basis for ensuring the sustainability of society's development by redirecting the resource base to the harmonious sustainable development and interaction of man and nature, forming an ecocentric socialconsciousness that determines the ethical attitude of Man to the Biosphere, Flora and Fauna.

Relationship of the Big Five Personality Traits and Risk Aversion with Investment Intention of Individual Investors

This empirical research is aimed at testing the relationship of the big five personality traits namely openness to experience, extraversion, consciousness, agreeableness, neuroticism, and risk aversion with the investment intention of individual investors belonging to Balochistan, Pakistan. The primary data is collected through a self-administered questionnaire (a structured form that consists of a series of closed-ended and open-ended questions) from a sample of 397 active individual investors belonging to different districts of the province. The data is empirically analyzed by applying the Partial Least Square (PLS) path modeling technique by using the estimation package available in Smart-PLS. The findings of this study suggest that all the variables are statistically significant with investors' investment intention with risk aversion as the strongest predictor. Moreover, openness to experience, extraversion, consciousness, agreeableness, and risk are significantly and positively related to an investor's investment intention, whereas neuroticism is negatively related to an investor's investment intention. The results extended by this study can be used by financial planners and investment bankers to channelize the available financial resources in diversified portfolios. The results will help financial planners to make available diverse investment alternatives for investors in Balochistan, thus catering to their unique needs. Academia must offer courses on contemporary finance paradigm based on behavioral finance to enable future business graduates to make wise financial decisions.

Debt Financing of Small OTC Firms Reporting to the SEC

Although the concept of financial growth cycle proposed by Berger and Udell (1998) is intuitively appealing, empirical evidence has been scarce due to data limitations. In this study, we use a novel data set, small emerging firms trading on the OTC market and filing annual reports with the SEC, to provide empirical support for the financial growth-cycle paradigm. We find that as firms develop and gain track records, their debt usage increases and debt specialization decreases, suggesting a gradual easing of supply-side constraints. Further, positive sales and positive cash flows mark two milestones in debt financing: Positive sales broaden the firms’ access to various segments of the debt market, and positive cash flows deepen their relationships with banks. We also examine binary features of debt in our sample and find that convertible debt peaks when firms start generating sales, and firms increasingly rely on secured debt as they grow.

Decrypting the Signs of Regulatory Competition in Regulating Cryptoassets

Abstract The icos market has challenged financial regulators in terms of determining fit with existing regimes and consideration for regulatory reform. Regulatory divergences have emerged in a number of jurisdictions and we discuss three dominant approaches in relation to hegemonic, self-regulatory and enabling regimes. These reflect different assumptions and regulators’ understandings of the cryptoasset industry, and we argue that the ‘terms for competition’ in relation to supply and demand side needs are still being discovered and are incomplete. This provides a unique opportunity for regulators to jettison familiar assumptions in relation to corporatized securities issuers or institutional investors in order to discover what governance needs are truly at stake. This may pose challenges for coherence with existing regulation but coherence should not itself be an obstacle for learning and potentially, reform. We also argue that signs of international regulatory coordination in relation to the Libra project are not necessarily reflective of a wider trend for the cryptoasset industry. This is because regulators can apply existing and familiar financial regulation paradigms more easily to the Libra Association, in particular its leading founding member Facebook. The cryptoasset market is still likely to give rise to diversity and should facilitate the discovery of new bases for regulatory thinking and policy, uncoordinated or otherwise.

Option pricing formulas for uncertain exponential Ornstein–Uhlenbeck model with dividends

Uncertain finance is an application to the finance of the uncertainty theory which provides an alternative analysis method from the probability theory under the circumstance that few samples are available. Under the research paradigm of uncertain finance, some financial assets are investigated and modeled with various tools in order to describe the price fluctuation accurately. This paper models the prices of stocks under uncertain finance based on the exponential Ornstein–Uhlenbeck model with periodic dividends. Through the $$\alpha $$ -path method, the pricing formulas are derived for European call and put options whose underlying assets follow the proposed stock model. In addition, some numerical algorithms to calculate the option prices are designed.