Financial Economics

Rahmat Heru Setianto · Rani Septiani Sipayung · W.N.W. Azman-Saini ·Entrepreneurial Business and Economics Review ·2022

The objective of the article is to empirically investigates the role played by financial development in determining the relationship between working capital financing and firms’ performance. Employing data of publicly listed manufacturing firms in five ASEAN countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand spanning from 2009-2018 resulted in 6,183 firm years observation. This study conducts an analysis using the two-steps generalized method of moments (GMM) estimator. The inverted U-shape effect of working capital financing on firm profitability is confirmed, indicating a trade off in utilizing short-term debt to finance working capital requirements. Moreover, new evidence was shown that firms which operate in more financially developed regions have the opportunity to utilise a greater percentage of short-term debt without destroying their profitability.

Catherine S F Ho · Nur Hazimah Amran · Irfan Syarafuddin B Ab Aziz · Wahida Ahmad ·International Journal of Economics and Management ·2021 ·JEL: G11, G12, G15, G23

Financial crises and the geopolitical issues around the world have caused much volatility in returns and market uncertainty. This trend of higher uncertainty in risk and return causes vast changes in stock and investment values, which caused investors scrabbling to maintain the value of their wealth. It is therefore vital that investors understand and compare investment alternatives in order to maximize return. The purpose of this research is to analyze the performance of Islamic and conventional mutual funds and provide a comparison of fund performances to enable investors to make informed decisions. Mutual fund data from 2013 to 2017 for Saudi Arabia and Malaysia, the two largest Islamic fund markets are compiled and risk-adjusted performance statistics applied to arrive at measurement of performances. Although fund performance comparison is a wellresearched area, this study contributes to the literature in terms of a comprehensive investigation of various types of Islamic funds with an in-depth evaluation of different investment time horizons. Empirical evidence on risk-adjusted performance comparison indicates that Malaysian conventional equity, mixed asset and money market funds for all 1, 3 and 5-year horizons outperform their Islamic counterparts. Similarly, Saudi Arabian equity and mixed asset funds also outperform their Islamic counterparts for all time horizons. On the contrary, the Saudi Islamic money market funds outperform their conventional partners. Cross country comparison confirms that Malaysian funds achieve superior performance except for money market funds which underperform their Saudi counterparts. In summary, current evidence concludes that, depending on the investment horizon and risk appetite, investors are better off investing in the appropriate fund.

Nur Ainna Ramli · Hengky Latan · Grace T.Solovida ·Quarterly Review of Economics and Finance ·2019 ·JEL: G14; G10; M41

We examine the impact of capital structure determinants on firm financial performance together with the mediation effect of firm leverage in Malaysia and Indonesia over the period of 1990–2010. Our results show that certain of the capital structure determinants directly affect firm financial performance. We also observe that only the Malaysian sample has a positive significant correlation between firm leverage and firm financial performance. Malaysian firms use external financing instead of internal financing to heighten performance. Our results also show that firm leverage plays a mediating role in Malaysia but not for the Indonesian sample. The asset structure, growth opportunities, liquidity, non-debt tax shield and interest rate are the attributes that were indirectly influenced by firm leverage on firm financial performance. Further analysis for multi-group analysis (MGA) in PLS was also used to test the equality of the parameter estimates. We observe that certain attribute coefficients in the determinants of capital structure and firm financial performance are significantly different between Malaysia and Indonesia.

Khanifah Khanifah · Pancawati Hardiningsih · Asri Darmaryantiko · Iryantika Iryantik · Udin Udin ·Journal of Asian Finance, Economics and Business ·2020 ·JEL: E44, M14, Q56

A series of corporate failures and financial crises have raised attention to organizational governance issues, especially for financial institutions. In the banking system, corporate governance further plays a unique role because of the uniqueness of the banking organizations. Therefore, this study aims to examine the effect of corporate governance disclosure on bank performance by building a corporate governance disclosure index (CGDI) for 10 Islamic banks operating in Iran, Saudi Arabia and Malaysia. The data used in this study are secondary data taken from annual reports and sourced from the official websites of each banks include Iran Exchange, Stock Market Quotes and Financial News, and Bursa Malaysia. This study uses content analysis of the annual bank report within five years (2014-2018). The results show that Islamic banks comply with 72.4% of the attributes discussed in the CGDI. The most frequently reported and disclosed elements are board structure and audit committee. The regression results provide evidence that Islamic banks with a higher level of corporate governance disclosure reported high operating performance measured by ROA. In contrast to the expectation, the financial performance of ROE and Tobins'q are not significantly related to the disclosure of sharia bank governance.

Pancawati Hardiningsih · Indira Januarti · Etna Nur Afri Yuyetta · Ceacilia Srimindarti · Udin Udin ·International Journal of Energy Economics and Policy ·2020 ·JEL: E44, M14, Q56

This study aims to analyze the effect of sustainability information disclosure on financial and market performance. Using purposive sampling, this study obtains 21 mining sector companies in Indonesia and 18 companies in Malaysia. Regression analysis with WarpPLS is used to test the proposed hypotheses. The results show that environmental and social disclosure has a significant effect on return on assets, return on equity, price-earnings ratio, and Tobin’Q in Indonesia and Malaysia. Overall, there is no significant difference in financial and market performance between Indonesia and Malaysia. Good sustainability information disclosure further improves financial performance and trust among stakeholders and regulators in decision making, which in turn, increases corporate value.