Ex-ante risk management and financial stability during the COVID-19 pandemic: a study of Vietnamese firms

Nguyen, Lan Thi Mai; Hoang, Phi Dinh

doi:10.1108/cfri-12-2020-0177

Cited by 32 publications

(22 citation statements)

References 27 publications

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“…Nevertheless, due to the organization's design and extensive product line, FI and DFSs might potentially exacerbate JFRC 32,1 agency issues. The financial institution's operational effectiveness declines when it becomes challenging for the corporate office to maintain effective oversight of the operations of branches (Salem et al, 2019;Agarwal and Chua, 2020;Nguyen and Hoang Dinh, 2021;Jungo et al, 2023).…”

Section: Banks Stability Financial Inclusion and Digital Financial Se...mentioning

confidence: 99%

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

Badwan,

Saleh,

Hamdan

2023

JFRC

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Purpose This 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/approach Pooled 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. Findings The 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/implications This 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 implications This 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/value This 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.

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Section: Banks Stability Financial Inclusion and Digital Financial Se...mentioning

confidence: 99%

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

Badwan,

Saleh,

Hamdan

2023

JFRC

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“…Marjanski &Sulkowski [ 59 ] also study the relationship between the size of companies and their financial liquidities throughout the pandemic, noticing that small firms that have not been sufficiently liquid for the pandemic challenge have used national aids and reduced their fixed expenses, too. Nonetheless, Nguyen & Dinh [ 62 ] study Vietnamese businesses before (in 2019) and throughout the pandemic to conclude that the effective adoption of risk management tools has helped the companies’ financial ratios, providing them with an improved use of assets and increased liquidities, compared to companies that have just expressed their risk concerns. While considering debt management to be an efficient provider of economic stability in times of crisis, the authors support the need for ex ante risk management strategies for future crisis.…”

Section: Literature Reviewmentioning

confidence: 99%

Were we happy and we didn’t know it? A subjective dynamic and financial assessment pre-, during and post-COVID-19

et al. 2022

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The COVID-19 pandemic has brought many changes into people’s lives. Fear, job insecurity, changes in their financial stability, concerns about their future lives have changed the entire lives of people and have affected the cognitive well-being of individuals. The purpose of the present analysis is to measure how the COVID-19 pandemic, along with financial factors, has affected the perceived level of well-being of individuals. We are also interested whether there are differences between life before COVID-19, life now with COVID-19, and life after the COVID-19 pandemic, in terms of future expectations. To address this objective, we performed an ANOVA approach and a GLM estimate on repeated measures for a large sample (1572 respondents) from 43 worldwide countries, during the period May 2020 and July 2021. Our results show that financial factors reflected by both the size of income and changes in personal or family income affect the levels of happiness. Robustness checks using stress as an alternative estimator for happiness have consolidated our results. Additionally, we find that well-being during COVID-19 compared to the previous period decreased, while in future, people expect to be happier, but not more than in the past when they did not know about the existence of this virus. This is one of the first studies to investigate the relationship between happiness and income before, during, and after COVID-19. These findings are important for policymakers to improve the conditions of living in the areas of health and financial stability.

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“…The tone of corporate disclosure at a time of turbulent economic conditions (e.g., COVID-19) tends to be conflicting in nature. On one hand, negative disclosure hampers firm performance (e.g., stock return) and hence discourages managers to disclose negative development [ 10 , 11 ]. On the other hand, suppression of negative disclosure could increase the risk of litigation and attract the attention of regulatory authorities [ 12 ].…”

Section: Introductionmentioning

confidence: 99%

Using 10-K text to gauge COVID-related corporate disclosure

Dutta

Kumar

Pant³

et al. 2023

PLoS ONE

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During the pandemic era, COVID-related disclosure has become quite critical for shareholders and other market participants to understand the uncertainties and challenges associated with a firm’s operation. However, there is no well-grounded and systematic measure to gauge the intensity of COVID-related disclosure and its plausible impact. Therefore, this study develops and validates various COVID-related disclosure measures. More specifically, using a sample of publicly listed U.S. firms and applying natural language processing (NLP) on 10-K reports, we have developed two types of COVID dictionaries (or COVID-related disclosure measurement tools): (a) overall COVID dictionary (count of all COVID-related words/phrases) and (b) contextual COVID-dictionary (count of COVID related words/phrases preceded or followed by positive, negative tones, or financial constraints words). Subsequently, we have validated both types of COVID dictionaries by investigating their association with corporate liquidity events (e.g., dividend payment, dividend change). We confirm that the overall COVID dictionary effectively predicts a firm’s liquidity event. We find similar results for contextual COVID dictionaries with a negative spin (i.e., COVID disclosures with a negative tone or an indication of financial constraints). Our results further show that better-governed firms (e.g., greater board independence, and more female directors) tend to have more COVID-related disclosures, despite the fact that more COVID-related disclosures suppress a firm’s market-based stock performance (e.g. Tobin’s Q). Our results suggest that better-governed firms prefer greater transparency, even if it may hurt their market performance in the short run.

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Ex-ante risk management and financial stability during the COVID-19 pandemic: a study of Vietnamese firms

Cited by 32 publications

References 27 publications

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

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

Were we happy and we didn’t know it? A subjective dynamic and financial assessment pre-, during and post-COVID-19

Using 10-K text to gauge COVID-related corporate disclosure

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