Journal of Business Accounting and Finance Perspectives

(ISSN: 2603-7475) Open Access Journal
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JBAFP, Volume 2, Issue 2 (June 2020)
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JBAFP 2020, 2(2), 14; doi: 10.35995/jbafp2020014
Received: 27 Aug 2019 / Revised: 10 Apr 2020 / Accepted: 2020-04-12 / Published: 2020-04-14
Abstract
This study proposes a competitive model using the Box–Jenkins approach to implement a Box–Jenkins ARIMA-GARCH model in order to improve financial forecasting. Differing from previous studies, we consider optimizing the lagged terms, which assist in capturing the relationships more properly. The competitive model
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This study proposes a competitive model using the Box–Jenkins approach to implement a Box–Jenkins ARIMA-GARCH model in order to improve financial forecasting. Differing from previous studies, we consider optimizing the lagged terms, which assist in capturing the relationships more properly. The competitive model is then used to forecast the stock market index in Taiwan. This study conducts out-of-sample forecasting and compares the root mean square errors (RMSEs) against previous studies. The results show that the competitive model outperformed in terms of both RMSEs and consistency. Full article
JBAFP 2020, 2(2), 10; doi: 10.35995/jbafp2020010
Received: 27 Aug 2019 / Revised: 23 Mar 2020 / Accepted: 2020-03-25 / Published: 2020-03-28
Abstract
This paper attempts to analyze the relationship between social network activity (message sentiment) and stock market (trading volume and risk premium). We used Artificial Neural Networks to analyze 87,511 stock-related microblogging messages related to S&P500 Index posted between October 2009 and October 2014.
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This paper attempts to analyze the relationship between social network activity (message sentiment) and stock market (trading volume and risk premium). We used Artificial Neural Networks to analyze 87,511 stock-related microblogging messages related to S&P500 Index posted between October 2009 and October 2014. The results obtained suggest that there is a direct relationship between trading volume and negative sentiment, and between risk premium and negative sentiment. The paper concludes with several directions for future research. Full article
JBAFP 2020, 2(2), 13; doi: 10.35995/jbafp2020013
Received: 27 Aug 2019 / Accepted: 2020-02-15 / Published: 2020-02-19
Abstract
The banking sector has begun a process of digital transformation that is changing the way financial products and services are sold. This transformation is a consequence of the growing demand for digital channels by some sectors of the population, the progress of new
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The banking sector has begun a process of digital transformation that is changing the way financial products and services are sold. This transformation is a consequence of the growing demand for digital channels by some sectors of the population, the progress of new technologies and the banks’ need to improve efficiency after the economic crisis. The emergence of innovative financial technology (fintech) startups in the banking sector has been the lever initiating this digital transformation. Technology companies are challenging established banking business models and promoting the democratisation of finance in a more efficient and transparent financial ecosystem. Increasing investment in these technology companies has also attracted the interest of various regulators, and the future suggests a scenario of collaboration between these new players and traditional companies, with a consequently difficult task for the regulators of guaranteeing the same conditions of competition for new entrants and incumbents. However, technology companies with vast experience in the gathering and use of data from millions of users (such as Amazon, Google or Facebook) are considered a threat. Moreover, some types of evolving fintechs, such as neobanks with bank licences, may also become competitors. Distributed ledger technology (DLT) or blockchain, a fintech technology that is evolving constantly, has already awoken the interest of all financial sector participants because it could trigger real disruption and produce a new era of value. Full article
JBAFP 2020, 2(2), 12; doi: 10.35995/jbafp2020012
Received: 27 Aug 2019 / Accepted: 2020-02-13 / Published: 2020-02-16
Abstract
For decades, European Union (EU) wide corporate tax harmonization has been sought to eradicate business relocation for tax reasons. It is hoped that this harmonization will ensure that companies pay taxes in the countries where they operate. One mechanism that countries use to
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For decades, European Union (EU) wide corporate tax harmonization has been sought to eradicate business relocation for tax reasons. It is hoped that this harmonization will ensure that companies pay taxes in the countries where they operate. One mechanism that countries use to achieve this harmonization is tax incentives. Yet each country establishes its own incentive structure, according to its statutory tax rate. This study analyzes the effective tax burden in the initial 15 EU member states between 2006 and 2014 to identify significant differences that prevent tax harmonization across these countries. The statutory and effective tax rates are used to evaluate the tax burden. The net tax incentives and disincentives are also considered. The analysis shows that between 2006 and 2014, these 15 member states used tax incentives to close the gaps among these countries’ tax burdens. Countries with above-average effective tax rates offered greater tax incentives than countries with below-average effective tax rates. However, though these tax policies reduced the gap in the tax burden, harmonization of the effective tax rate was not achieved during the study period. Full article
JBAFP 2020, 2(2), 9; doi: 10.35995/jbafp2020009
Received: 22 Oct 2017 / Revised: 14 Feb 2020 / Accepted: 2020-02-13 / Published: 2020-02-15
Abstract
This conceptual article concentrates on the insolvency and recovery reforms and business survival. The aim of the research is an evaluation of the impact of insolvency law reforms on the increase of businesses’ survival. The study focuses on a comparative analysis of insolvency
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This conceptual article concentrates on the insolvency and recovery reforms and business survival. The aim of the research is an evaluation of the impact of insolvency law reforms on the increase of businesses’ survival. The study focuses on a comparative analysis of insolvency reforms on EU level, including the advantages and disadvantages, with a special emphasis on the Polish case, which includes some similarities and differences to other EU countries’ insolvency procedures. The article presents the concept of the most effective insolvency framework and its efficiency (as well as legal and financial framework) that gives the best results for companies to survive, to start recovery procedures and restructuring, not to go bankrupt, and not to become liquidated and eliminated from a competitive market. Taking a critical thinking approach, the article indicates the weaknesses of the existing insolvency procedures that should be improved and offers some recommendations for the future. The study covers, from a scientific point of view, the important issues that, in the face of complexity, a global, turbulent environment, and the global financial crisis, deserve an investigation. The findings and the implications are crucial not only for scientists, but also for insolvency practitioners, business and financial institutions’ representatives, and policymakers. Full article
JBAFP 2020, 2(2), 11; doi: 10.35995/jbafp2020011
Received: 27 Aug 2019 / Revised: 6 Nov 2019 / Accepted: 2020-02-12 / Published: 2020-02-14
Abstract
Socially Responsible Investment (SRI) has grown exponentially in recent years. The rising importance of social, environmental, and governance (ESG) aspects in decision making as well as in asset allocation is undeniable. However, important challenges must be addressed. The dramatic increase in ESG investments
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Socially Responsible Investment (SRI) has grown exponentially in recent years. The rising importance of social, environmental, and governance (ESG) aspects in decision making as well as in asset allocation is undeniable. However, important challenges must be addressed. The dramatic increase in ESG investments has coincided with a period of extremely low rates and massive liquidity injections. Also, the definition of socially responsible investment is too broad and can generate misunderstandings (an approximation to the correct definitions can be found in Sandberg et al., 2009). Additionally, I find that a significant part of funds that follow ESG principles can fall into the trap of investing in heavily subsidized and high-debt sectors. Investors should monitor the risk of concentration, the soundness of profit estimates, and strength of balance sheets to avoid rent-seeking and depending heavily on subsidies and grants. Furthermore, I find that performance of ESG and SRI funds has been monitored only in a period of low rates, high liquidity, rising asset valuations, and bullish markets. More tools have to be used to monitor risk as markets enter a consolidation phase. I find that it is essential to focus on real economic returns in a mid-cycle environment as well as monitoring excess leverage to avoid the risk of a very important reduction in ESG investments in a market correction phase for markets with rising interest rates. I conclude that strong fundamental analysis, diversification, and avoiding herd mentality are essential to prevent large outflows and a negative impact on ESG growth once the cycle changes. Full article
JBAFP 2020, 2(2), 8; doi: 10.35995/jbafp2020008
Received: 27 Aug 2019 / Revised: 12 Feb 2020 / Accepted: 2020-02-12 / Published: 2020-02-14
Abstract
Young firms and established firms have a tendency to emphasize one type of organizational learning to their detriment. This reduces organizational ambidexterity and makes them susceptible to failure. This study explores how two high-tech manufacturing firms use cost information from an accounting system
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Young firms and established firms have a tendency to emphasize one type of organizational learning to their detriment. This reduces organizational ambidexterity and makes them susceptible to failure. This study explores how two high-tech manufacturing firms use cost information from an accounting system to balance exploitation and exploration learning for ambidexterity. A successful growth firm and a revival firm are examined since both of these business life-cycle stages focus on a strategy of aggressive building. The evidence shows that the use of cost information to balance learning and achieve ambidexterity is different between a growth firm and revival firm. The use of cost information for exploitation and exploration is undertaken by taking each firm’s learning pre-disposition, pivoting organizational culture, and utilizing a functional structure to realize contextual and structural ambidexterity. This study provides preliminary models for future research on accounting and the organizational elements for achieving organizational ambidexterity. Full article

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