Qualitative Research in Financial Markets

Saifurrahman, Adi; Kassim, Salina Hj

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-05-2022-0086

The primary objective of this study aims to intensively explore the environment of Indonesian regulations and laws related to the Islamic banking system and micro-, small- and medium-sized enterprises (MSME) and unveil the restrictive laws and regulatory flaws that potentially hinder the Islamic banking institution and MSME industry in achieving financial inclusion and promoting sustainable growth.Design/methodology/approachThis paper implements a qualitative method by implementing a multi-case study research strategy, both from the Islamic banking institutions and the MSME industries. The data were gathered primarily through an interview approach by adopting purposive uncontrolled quota sampling.FindingsThe findings of this paper reveal two essential issues: First, the regulatory imbalances and restrictions could demotivate and hinder the efforts of Islamic banks in providing access to finance for the MSME segment, hence, encumbering the achievement of the financial inclusion agenda from the Islamic banking industry. Second, the flaws in MSME registration and taxation might discourage the formal MSMEs from extending their business license and prevent the informal MSME units from registering their business. This issue would potentially lower their chance of accessing external financing from the formal financial institutions and participating in supportive government programmes due to the absence of proper legality.Research limitations/implicationsSince this paper only observed six Islamic banks and 22 MSME units in urban and rural locations in Indonesia using a case study approach, the empirical findings and case discussions were limited to those respective Islamic banks and MSME participants.Practical implicationsBy referring to the recommendations as presented in this paper, two critical policy implications could be expected from adopting the proposed recommendations, among others: By addressing the issues of the regulatory imbalance associated with the Islamic banking industry and introduce the deregulatory policies on profit and loss sharing (PLS) scheme implementation, this approach will motivate the Islamic banking industry in serving the MSME sector better and provide greater access to financial services, particularly in using the PLS financing schemes. By resolving the problems on MSME registration and taxation, this strategy will enhance the sustainability of the formal MSMEs’ operation and encourage the informal ones to register, hence, improving their inclusion into the formal financing services and government assistance programmes.Originality/valueThe present study attempts to address the literature shortcomings and helps to fill the gaps – both theoretical and empirical – by incorporating the multi-case study among Indonesian Islamic banks and MSMEs to extensively explore the Indonesia regulatory environment pertaining to the Islamic banking system (supply-side) and MSMEs (demand-side), and thoroughly investigates and reveals the restrictive laws and regulatory flaws that could potentially hinder the Islamic banking institutions and MSME industries in attaining financial inclusion and contributing to sustainable development.

Melnyk, Valeriia

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-08-2022-0129

This study aims to explore how the shift from traditional to digital banking transforms the nature of trust between banks and their younger clients (aged 18–35) from the perspective of bank employees.Design/methodology/approachQualitative semi-structured interviews with representatives of Ukrainian classical banks and neobanks were conducted. The interviews were analysed using the theoretical approach of institution-based and social network-based trust to identify the key distinctions between the nature of trust in traditional and digital banking.FindingsThe employees of the banks reported that digitalization processes have helped to mitigate trust issues; as a result, their banks have not experienced any difficulties in this regard among young people. Furthermore, social networks, particularly social approval, were found to be significant factors for establishing trust in digital banking among young people.Research limitations/implicationsThe results of this study could assist bank managers in adapting their strategies for cultivating trust among younger clients and aiding international law regulators and government institutions in preventing unintended circumstances in financial services. These contributions were shaped by the study’s limitations, including its focus on only two concepts of trust building: institution-based and social network-based, as well as its specific Ukrainian context.Originality/valueThis study highlights social approval as a valuable constituent of the trust-building process that influences trust in institutions. Furthermore, while gaining social approval – particularly through digital platforms – can promote trust-building among young people, this “easy way” may have negative societal consequences by endorsing unscrupulous institutions.

de Oliveira Cardoso, Nicolas; Zorgi Salvador, Eduarda; Broch, Gustavo; Mette, Frederike Monika Budiner; Yoshinaga, Claudia Emiko; de Lara Machado, Wagner

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-05-2022-0090

This paper aims to identify the impacts of sociodemographic covariates on behavioural biases (BB) scores; the psychometric evidence of the BB measurement instruments; and the main BB that influences the decision-making of individual investors.Design/methodology/approachPapers were retrieved through search using keywords in ten databases. This systematic review is based on 69 peer-reviewed papers, most of which were published between 2017 and 2021. The relevance of the included papers was assessed through the analysis of statistical/psychometric methods used, and content analysis of the BB literature and its sociodemographic correlations.FindingsOverconfidence is higher in men and not related to age. There was no consensus regarding the relationship between BB and other sociodemographic variables. Most measuring instruments are ad hoc, showing ≤ 4 types of psychometric evidence and assessing ≤ 9 BB. Therefore, the findings demonstrate that there is no gold standard instrument for measuring investors’ BB. Furthermore, 37 BB were cited as influencers of individual investors’ decision-making and overconfidence, herding, anchoring, representativeness and loss aversion were the most prevalent.Research limitations/implicationsConsidering that very few systematic reviews have been published in the behavioural finance area, this paper highlights the current state-of-the-art and identifies significant gaps in the literature that can be explored by further research.Originality/valueTo the best of the authors’ knowledge, this is the first systematic review that analyses the psychometric properties of instruments used for individual investors BB assessment.

Kandpal, Vinay

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-04-2022-0072

This qualitative study aims to examine bankers’ perspectives regarding financial inclusion, the challenges it faces and the scope for improvement. This research proposes a financial inclusion model, considering the inputs received by bankers. Financial exclusion of different sections is an issue common to emerging countries.Design/methodology/approachData for qualitative research were collected through interviews with bank officials. The information was gathered from 32 bankers from India’s several zones (North, South, West and East). The data were collected from bankers from different public and private sector banks. Thematic analysis was performed up to the point of saturation to study the response received from bankers.FindingsBank-related issues such as frequent computer problems, network connectivity problems, costs, a shortage of bank branches, fewer transactions through automated teller machines and a shortage of banking staff affect customers’ confidence in formal banking. Banking services are disrupted by a lack of trust in banking correspondents (BCs), as they are not regular employees of banks. Limits on daily transactions discourage high-value customers from using BCs and kiosks. The time spent on administrative formalities impacts customers. Financial inclusion is affected by availability, accessibility, usage and affordability. Digital financial literacy is essential for ease of transaction, but awareness about financial products helps protect customers from cyber scams. The findings of this research would benefit financial institutions globally in developing their businesses and helping to achieve financial inclusion and the United Nation’s sustainable development goals (SDGs).Originality/valueThis research paper undertakes a qualitative analysis of the views collected from bankers. Bankers are crucial stakeholders in the successful implementation of the National Financial Inclusion Policy of the Government of India. Bankers’ perspectives will be important not only for India and its researchers but also in the global context, as the UN’s SDGs focus on leaving no one behind.

Khan, Rahman Ullah; Ullah, Karim; Atiq, Muhammad

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-03-2023-0053

This study aims to synthesize the existing literature with insights gained from interviews conducted with regulatory experts. The objective is to analyse the challenges associated with incorporating cryptocurrencies into regulatory frameworks and to explore constraints in the regulatory institutionalization of cryptocurrencies.Design/methodology/approachThe study methodology consists of two steps. The first step is to identify regulatory constraints in the literature review and in the next step, interviews are conducted with officials of the State Bank of Pakistan (SBP). The study used a qualitative case study methodology, in which a single case (regulatory constraint) was selected as a unit of analysis.FindingsThe findings show that lack of traceability, legal status, lack of governmental control due to decentralization, difficulty enforcing laws, volatility, lack of skills with regulators and difficulty integrating cryptocurrencies into the current financial system are the main obstacles to the introduction of a regulatory framework. Thus, on a broader conceptual level, the findings can be grouped into opportunism, lack of strategic capability and fragmented global laws.Research limitations/implicationsThis study could inform global cryptocurrency regulation discussions, sharing a developing country’s views on balancing the government, central banks, the financial sector and public interests. This could guide countries to consider cryptocurrency adoption in similar situations. This could affect the cryptocurrency market, impacting demand, supply and investor trust in Pakistan.Practical implicationsThe study has implications for policy making officials. The research aims to offer valuable insights to the SBP and other regulatory authorities, helping them identify potential risks and create an effective regulatory framework for cryptocurrencies.Social implicationsThe study has implications for society in knowing about the volatile nature of cryptos and anonymity of their issuers, which poses regulatory constraints. This then implies its harmfullness to its traders and the huge losses that may arise from their trading due to its volatile nature.Originality/valueThis study contributes to the literature on the constraints, responsibilities and consultation framework of cryptocurrency regulations.

Kumari, Vineeta; Kumar, Satish; Pandey, Dharen Kumar; Gupta, Prashant

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-04-2023-0094

This study aims to provide insights into different aspects of the extant literature on the effects of dividend announcements. Along with other outputs of a bibliometric study, this study provides deeper insights into the concentration of the extant literature and suggest future research agendas.Design/methodology/approachThis study uses the bibliometric, network and content analysis of the dividend announcement literature indexed in Scopus. This study presents the temporal analysis, the network of authors, countries, author citations and the co-occurrence of author keywords. This study provides the concentration of the extant literature in three clusters and unearth some key future research areas. This study uses the latent Dirichlet allocation method for robustness.FindingsA total of 54 documents examining the US sample have received 1,804 citations. Interestingly, the first article on emerging markets was published in 2002, when at least 34 articles on developed markets had already been published from 1982 to 2001. The content analysis of top-cited literature unveils diverse insights into dividend announcements’ effects on financial markets. Contagion effects negatively impact non-announcing banks, particularly larger ones. Dividend maintenance affects stock market momentum, influencing loser returns. While current dividend/earnings news may not predict future company performance, information content dominates bond market reactions to post-dividend announcements. Concomitantly, while financially constrained firms exhibit short-term gains but worse long-term performance following dividend increases, larger stock dividends send stronger market signals in China.Originality/valueThis study significantly contributes to the bibliometric and content analysis literature by analyzing the sample documents based on the sample examined. To the best of the authors’ knowledge, no previous bibliometric study in this domain has been conducted to explore the markets (developed and emerging) to which the samples examined belong and the quality of publications from developed and emerging markets.

Ibekwe, Ibeawuchi

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-11-2022-0186

The purpose of this study was to explore the motives (especially the agency motives) for corporate diversification from the perspective of corporate executives who make such strategic decisions and manage the diversified firms daily.Design/methodology/approachA qualitative research approach was adopted, and 12 chief executive officers (CEOs) of diversified firms in Nigeria were interviewed for their perspectives on the motives for corporate diversification.FindingsStewardship motives – diversification to use excess capacities in assets and resources to exploit opportunities in the market and defend against adverse environmental developments – were the most cited reasons for diversification. The relevant agency problem related to corporate diversification motive in Nigeria is the principal–principal (majority shareholder-minority shareholder) one. CEOs with substantial holdings in their firms indicated that they use diversification to reduce their investment risk and retain control of their portfolio.Practical implicationsThe findings suggest that in corporate environments such as Nigeria that feature blockholding prominently, the corporate strategy-related agency problem that policymakers should pay greater attention to is the principal–principal conflict rather than the traditional agent–principal problem that has influenced corporate governance over the years. There is also a need to revise the dominant view that diversification is a value-destroying strategy motivated by the self-seeking behavior of managers who have little or no shares in the companies they manage.Originality/valueThe few studies on motives for corporate diversification that incorporated the perspectives of corporate executives did not address the agency motives of diversification. To the best of the authors’ knowledge, this is the first study that has done so.

Mani, Satya Prakash; Bansal, Shashank; Bhaskar, Ratikant; Kumar, Satish

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-05-2023-0128

This study aims to examine the literature from the Web of Science database published on board committees between 2002 and 2023 and outline the quantitative summary, journey of board committees’ research and suggest future research directions.Design/methodology/approachThis study examines bibliometric-content analysis combined with a systematic literature review of articles on board committees to document the summary of the field. The authors used co-citation, co-occurrence and cluster analysis under bibliometric-content analysis to present the field summary.FindingsBoard committee composition, such as their gender, independence and expertise, as well as factors affecting corporate governance, such as reporting quality, earnings management and board monitoring, all have a significant impact on board committee literature. The field is getting growing attention from authors, journals and countries. Nevertheless, there is a need for further exploration in areas like expertise, member age and tenure, the economic crisis and the nomination and remuneration committee, which have not yet received sufficient attention.Originality/valueThis paper has both theoretical and practical contributions. From a theoretical perspective, this study substantiates the prevalence of agency theory within board committee literature, reinforcing the foundational role of agency theory in shaping discussions about board committees. On practical ground, the comprehensive overview of board committee literature offers scholars a road map for navigating this field and directing their future research journey. The identification of research gaps in certain areas serves as a catalyst for scholars to explore untapped dimensions, enabling them to strengthen the essence of the committees’ performance.

Mohd Noor, Noor Fadhzana

2024 Qualitative Research in Financial Markets

doi: 10.1108/qrfm-10-2022-0171

This study aims to investigate the extent of Shariah compliance in wakalah sukuk and Shariah non-compliant risk disclosure in the sukuk documents and to analyse the risk management techniques associated with the disclosed risks.Design/methodology/approachThis study uses qualitative document analysis as both data collection and analysis methods. The document analysis acts as a data collection method for 23 wakalah sukuk documents selected from 32 issuances of wakalah sukuk from 2017 to 2021. These sukuk documents were selected based on their availability from relevant websites. Document analysis, both content analysis and thematic analysis, were used to analyse the data. Codes were grounded from that data through keywords search of Shariah noncompliant risk and its risk management. Besides these, interviews were also conducted with four active industry players, i.e. two legal advisors of wakalah sukuk, a wakalah sukuk trustee and a sukuk institutional issuer. These interview data were analysed based on categorical themes, on the aspects of the extent of Shariah compliance in sukuk, and the participant’s views on the risk management techniques associated with the risks or used in the sukuk documents.FindingsOverall, the findings reveal three types of Shariah non-compliant risks disclosed in the sukuk documents and seven risk management techniques associated with them. However, the disclosure and the risk management techniques can be considered minimal in contrast to the extent of Shariah compliance in a sukuk, i.e. Shariah compliance at the pre-issuance stage, ongoing stage and post-issuance stage. On top of these, it was also found from the interviews that not all risk management techniques are workable to manage Shariah non-compliant risk in sukuk. As a result, these findings suggest rigorous reviews of the existing Shariah non-compliance risk (SNCR) disclosures and risk management techniques by the relevant parties.Research limitations/implicationsSukuk documents used in the study are limited to corporate wakalah sukuk issued in Malaysia. Out of 32 issuances from 2015 to 2021, only 23 documents are available in relevant website. Thus, Shariah non-compliant risk disclosure and its risk management techniques analysed in this study are only limited in those documents.Practical implicationsThe findings of this study suggest rigorous reviews on the existing Shariah non-compliance disclosures and risk management techniques. Other than these, future research in relation to uncommon risk management clauses, i.e. assurance, Shariah waiver and transfer of risk, are needed.Originality/valueThe insights presented in the analysis are of importance to sukuk issuers and the sukuk due diligence working group in enhancing the sukuk Shariah compliance and Shariah non-compliant risks disclosure and towards sukuk investors, in capturing and assessing Shariah non-compliant risks in a sukuk and to assist them to make informed investment decisions. More importantly, this study has found few areas of future study in relation to SNCR disclosures and SNCR risk management techniques.