International Journal of Finance & Banking Studies

This paper aims to examine the financial performance of Bangladeshi listed commercial banks. The study analyzed the financial performances of banks categorized into three generations—first, second, and third—based on their year of commencement of operations in the country. The data of a total of 24 banks, 8 from each generation, listed in the Dhaka Stock Exchange (DSE), has been collected from audited financial statements for the time period of 13 years, from 2010 to 2022. Data has been analyzed using different ratios of profitability, liquidity, capital adequacy, operational efficiency, and credit risk. The ANOVA test also has been used to make a comparison of profitability—the return on assets (ROA), and return on equity (ROE) of the banks of different generations. According to the results, the average profitability ratios in terms of ROA, and ROE of the second-generation banks showed their credibility than banks of other generations; while first generation banks kept higher liquidity, and capital adequacy with higher credit risk than the banks of other generations. The first-generation banks also showed a lower cost-expense ratio, and a higher efficiency in terms of operation, than the banks in the second and third generations. The research also discovered that the profitability of banks of different generations significantly varies from one another.  

This paper investigates how firms shifted their dividend policies and leverage policies in response to the economic shock caused by the 2008 financial crisis. The sample countries are United States, Great Britain, France, Germany, Australia, Japan, China, and Korea. The empirical relationship of firms’ dividend policies with their capital structures and earnings was likely to undergo a major change around the 2008 financial crisis, as firms adjusted their capital structures and dividend policies in response to the extreme credit crunch caused by the financial crisis. The extent and the speed that firms deleverage themselves and reduce their dividends were likely to be influenced by countries’ cultural and social norms. This paper finds a significant reduction in dividends across sample countries except Great Britain and France after the 2008 crisis. This finding supports the free cash flow theory that dividends are paid to dissipate free cash flow to address agency conflicts between managers and shareholders. This paper finds a higher correlation between dividends and leverages before the 2008 crisis, and that it strengthened after the crisis except Great Britain and Korea. This finding is consistent more with the pecking order theory than with the trade-off theory of leverage.

Examining the reasons why Albanians use internet banking services is the focus of this paper. Due to recent technological developments, Albania's banking industry is utilizing technology for an increasing number of banking procedures. We started by presenting some of the key elements that have been identified as having a significant impact on the literature regarding the adoption of online banking, including demographic, socioeconomic, and other elements based on the technology adoption model (TAM). For our empirical research, we used primary data that was collected through surveys that various bank customers in Albania completed. The decreased desire to utilize cash appears to be a key element influencing the rise in the usage of online banking applications and services. Other important factors are the application technical issues and reduction of banking operations time as well as the application security level. The findings of this study will help banks better understand their customers' needs and will provide them with suggestions on how to make technology development plans easier.  

By drawing on Ukrainian experience, this paper analyzes the anatomy of bank efficiency in a transitional economy. Acknowledging the vast disparities in the business technology of different size banks, in this comprehensive study, we innovatively estimate group-specific (distinct) frontiers for small, medium, and large size banks. The results from separate frontiers reveal that Ukrainian banks record 38% technical inefficiency, 26% pure technical inefficiency, and 17% scale inefficiency on average. Apparently, banks in transition waste about the two fifths of their factor inputs during the production of financial services. The cardinal source of sub-performance in transitional banks seems to be managerial inefficiencies. We also found that banks operating in areas with more political influence and more developed infrastructure outperform the banks operating in politically and economically weaker regions. The results also indicate that larger banks, enjoying public trust in a risky business climate, dominate smaller banks in all forms of efficiency. However, such bias for size causes large banks to suffer from decreasing returns to scale and small banks from idle capacity. Consequently, the policies promoting consolidation between small and large banks may alleviate the excess (idle) capacity for large (small) banks in a transitional economy.

Using a large sample of U.S. firms during 1987–2011, we find robust evidence that the issuance of seasoned equity is associated with abnormally high future stock price crash risk. The association between seasoned equity offerings and crash risk is stronger among offerings that involve the sale of secondary shares (existing shares sold by insiders or large blockholders). We also find that recent seasoned equity issuers are far less likely to experience sudden positive price jumps relative to firms that have not recently issued equity. Our findings of elevated crash risk and diminished jump risk, when taken together, are consistent with a heightened propensity for firms to hoard bad news but not good news when issuing equity.

This is a study about the financing of large group health insurance in the United States. Almost 8 in 10 covered employees in private large firms are enrolled in self-insured (or self-funded) health plans in contrast to only 20 percent of employees in small firms. More than half of all large standard (non-supplemental) health plans are self-insured although their number is decreasing. Considering their significantly greater risk of exposure and transaction costs, the question for scholarly investigation is why (and how) do private large firms self-fund employer-sponsored health insurance? Using plan-level data from health plan administrator filings of Forms 5500 and Summary Annual Reports (2014-2022) with the U.S. Department of Labor, six variables are examined in this study relative to large group self-insurance: industry/sectoral distribution, plan size/enrollment, plan administration, benefits coverage, plan assets and investments, and statutory compliance. Findings suggest that industry/sectoral and enrollee distributions of large health plans are not widely dispersed while their assets and investments and statutory exemptions offer comparative advantages. These plans have also increasingly relied on stop-loss insurance, third-party administration, supplemental health benefits, and less major medical plans to mitigate actuarial risks that involve considerable financial exposure to fluctuating claims costs, potential for catastrophic claims, and cash flow unpredictability. The intertwining theoretical and practical implications of large group self-insurance in healthcare finance and risk management are addressed by way of conclusion.    

In the loanable funds theory, the interest rate serves as a balancing factor between the savings offered for loans and the funds borrowed for investment. In Keynes’s theory, by contrast, it is a monetary phenomenon that balances the demand and the supply of money. At first glance, the monetary phenomenon of the interest rate may seem quite different and is often considered groundbreaking and revolutionary. In Keynes’s theory, people hold part of their savings in money to cope with uncertainty about the returns from long-term bonds, and it is savings held in money that leads the interest rate to be a monetary phenomenon. While people hold part of their savings in money, they also invest their savings by purchasing long-term bonds. The interest rate also balances savings offered, though only in part and not the whole, and funds borrowed in the bond market, as in the loanable funds theory. In this regard, Keynes’s theory and the loanable funds theory are not as strikingly different as it may first appear. The main exegetical work of Keynes’s ideas is Keynesian economics. In this theory, the interest rate is also a monetary phenomenon, as is expected of exegetical work. However, it is not due to savings held in money as in Keynes’s theory; rather, it is due to the cash holdings required for purchasing goods and services. This paper examines the differences among these three interest rate theories, the reasons behind them, and their practical implications.    

This paper examines the exchange rate pass-through (ERPT) and its impact on home inflation in Bangladesh, particularly in the post-pandemic era. Examining important economic factors including the nominal exchange rate (NER), money supply (M2), industrial production (IP), and global commodity index (GCI) using monthly data from January 2002 to August 2023 helps one to grasp their combined influence on consumer price inflation (CPI). By means of Johansen cointegration and Vector Error Correction Model (VECM) approaches, the study reveals important short-term and long-term dynamics. Contrary to patterns in many emerging nations, the results show that changes in exchange rates have apparently little impact on home prices. Rather, changes in the money supply and world commodities prices mostly influence inflation; the latter becomes a major factor. The study also exposes an unexpected positive link between industrial production and CPI, implying complexity in Bangladesh's production-driven economic structure. Moreover, this investigation underlines how complex monetary expansion, external commodities shocks, and devaluation of money interact to shape inflationary pressures. These results offer legislators important new perspectives and support strong monetary policies and focused involvement in world commodities markets to help to lower inflation. This study clarifies ERPT in developing countries and provides direction on inflation control techniques for Bangladesh.

Using A-share listed companies in Shanghai and Shenzhen from 2010 to 2019 and the density of Confucian temples and schools near sample company headquarters, this paper uses regression analysis to estimate the impact of Confucian culture on corporate environmental governance.  Enterprise environmental capital investment as a percent of total assets is the dependent variable used as a proxy for environmental governance. The log of the number of the number of Confucian temples and Confucian academies within a 200-kilometer radius of the company's registered location plus one is the independent variable. This study finds that the environmental capital expenditures increase by 0.007% for every unit increase in the independent variable. Similar results are found when the radius is expanded to 300 kilometers. The greater the influence of Confucian culture is, the more inclined enterprises are to participate in corporate environmental governance. Additionally, environmental governance information disclosure can be a key influence path for this correlation.  Further analysis finds that the relationship between Confucian culture and environmental governance is stronger with more experienced managers, a more developed institutional environment, and after 2015 following the People's Republic of China’s enactment of the Environmental Protection Law.  This study expands the literature on the factors that influence Confucian culture on corporate environmental governance, enriches the empirical evidence of the influence of the informal system of corporate environmental governance on enterprise decision-making, and confirms the modern commercial value of Confucian culture. 

Although the onset of the pandemic pressured monetary and fiscal policy across the globe, deficit finance was aided by the large, established debt markets in countries like the United States.  The expansionary efforts in emerging markets like Latin America put greater strains on their more limited capacity.  Our study analyzes data from seven Latin American countries, three European countries, three Asian countries, and the United States. We utilize panel vector autoregressive (VAR) models to explore the dynamic interactions and feedback mechanisms among the policy variables, while accounting for unobserved country-specific effects.  Our results demonstrate strong and significant interactions between monetary and fiscal policy around the time of the pandemic, with the primary causal effects running from fiscal to monetary policy.  Additionally, our results yield evidence of countercyclical policy reactions to inflation for both monetary and fiscal policy over the pandemic period.