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- Quality of Board Members’ Training and Bank Financial Performance: Evidence from PortugalPublication . Pereira, Vítor; José António FilipeThis study examines the impact of the quality of board members’ training on the financial performance of Portuguese banks. The study employs a sample of 276 board members. Financial ratios such as return on average assets (ROAA) and return on average equity (ROAE) are used as measures for gauging banks’ financial performance. Three indexes are used as proxies for board members’ educational qualifications, specifically: Eduindex, for all academic qualifications obtained in areas such as business or economics; EduindexDP, for all qualifications obtained in prestigious domestic business schools; and EduindexFP, for all qualifications obtained in prestigious foreign business schools. The study findings have important policy implications, specifically a positive and significant impact on the bank’s financial performance from having board members holding degrees from prestigious foreign business schools. In particular, the findings suggest that the prudential supervision developed by Banco de Portugal in cooperation with the European Central Bank should include a more rigorous process in the selection of board members. The present study is one of the first attempts in the literature emphasizing all these aspects simultaneously, that is, the banking sector, quality of board members’ training, and Eduniversal Rankings, in the context in which all the banks of a specific country are analysed.
- Core Predictors of Debt Specialization: A New Insight to Optimal Capital StructurePublication . Khan, Kanwal Iqbal; Qadeer, Faisal; Mata, Mário Nuno; Neto, José Chavaglia; Sabir, Qurat Ul An; Martins, Jessica Nunes; Filipe, J.A.Debt structure composition is an essential topic of discussion for the management of capital structure decisions. Researchers made extensive efforts to understand the criteria for selecting debts, specifically, to know about the reasons for debt specialization, concealed in identifying its predictors. This question is essential not only for establishing the field of debt structure but also for the financial managers to design corporate financial strategy in a way that leads to attaining an optimal debt structure. Sophisticated financial modeling is applied to identify the core predictors of debt specialization, influencing the strategic choices of optimal debt structure to address this issue. Data were collected from 419 non-financial companies listed at the Karachi Stock Exchange from 2009 to 2015. This study has validated debt specialization by showing that short-term debts maintain their position over the years and remain the most popular type of loan among Pakistani firms. Further, it provides a comprehensive view of the cross-sectional differences among the firms involved in debt specialization by applying a holistic approach. Results show that small, growing, dividend-paying companies, having high expense and risk ratios, followed the debt specialization strategy. This strategy enables firms to reduce their agency conflicts, transaction costs, information asymmetry, risk management and building up their good market reputation. Conclusively, we have identified the gross profit margin, long-term debt to asset ratio, firm size, age, asset tangibility, and long-term industry debt to asset ratio as reliable and core predictors of debt specialization for sustainable business growth.
- Economic Policy Uncertainty and Stock Return MomentumPublication . Goel, Garima; Dash, Saumya Ranjan; Mata, Mário Nuno; Caleiro, António Bento; Xavier Rita, João; Filipe, J.A.This paper investigates the relationship between economic policy uncertainty (EPU), an index capturing newspaper coverage of policy-related issues, and momentum profits. Momentum remains an unexplained anomaly. Our findings reveal a statistically negative association between EPU and hedge momentum portfolios. The short side portfolio dominates this effect as compared to the long side. EPU is statistically significant after controlling for macroeconomic variables. Further- more, the paper conducts a battery of time series analysis, which highlights that EPU has a causal relationship with the hedge portfolio in the short run. On the other hand, the hedge portfolio has a long-term relationship with EPU, not the other way around.
- An incomplete information static game evaluating community-based forest management in Zagros, IranPublication . Mata, Mário Nuno; Zandebasiri, Mehdi; Filipe, J.A.; Soosani, Javad; Pourhashemi, Mehdi; Salvati, Luca; Mata, PedroThe present study adopts a game theory approach analyzing land-use planning in Zagros forests, Iran. A Static Game of Incomplete Information (SGII) was applied to the evaluation of participatory forest management in the study area. This tool allows a complete assessment of sustainable forest planning producing two modeling scenarios based on (i) high and (ii) low social acceptance. According to the SGII results, the Nash Bayesian Equilibrium (NBE) strategy suggests the importance of landscape protection in forest management. The results of the NBE analytical strategy show that landscape protection with barbed wires is the most used strategy in local forest management. The response to the local community includes cooperation in conditions of high social acceptance and noncooperation in conditions of low social acceptance. Overall, social acceptance is an adaptive goal in forest management plans.
- The moderating role of CSR in board gender diversity and firm financial performance: empirical evidence from an emerging economyPublication . Jiang, Lisha; Cherian, Jacob; SIAL, SAFDAR; Wan, Peng; Filipe, J.A.; Mata, Mário Nuno; Chen, XiangyuThe current study aims to investigate the moderating role of corporate social responsibility (CSR) in board gender diversity and firm financial performance. We used the panel data regression (fixed effect) in our analysis to check the moderating role of CSR in the board gender diversity and the firm financial performance. We collected the data of Chinese listed companies from the Shenzhen and Shanghai stock exchanges from the China stock market and accounting research (CSMAR) database. We used a two-stage least square (TSLS) regression model to control the possible problem of endogeneity. Our results show that higher representation of female directors in the board is positively related to firm financial performance and that CSR has a significantly positive effect when moderating the relation between board gender diversity and firm financial performance. Besides, three control variables (board size, board member average age, and Big4) have a positive impact on the firm performance, having the leverage variable a negative impact on the firm performance. Our findings hold for a set of robustness tests. This study has important implications, namely by enriching the existing literature on CSR and by highlighting the importance of board gender diversity, and emphasizing the importance of the reporting of more CSR activities and its impact on the decision-making process.