The impact of conversion on market share in Indonesian Islamic banks

The study aims to determine the impact of Capital Adequacy Ratio, Credit Losses Ratio and Efficiency Ratio on the two significant profitability ratios, namely Return on Assets (ROA) and Return on Equity (ROE), during the pandemic. Panel Data Regression is used to model the effects of Capital Adequacy, Credit Losses and Efficiency Ratio on Return on Assets and Return on Equity of Indian banks. A suitable model has been developed by analyzing the results of the Hausman test and the p-values. It has been found that Capital Adequacy Ratio (CAR) with coefficient value of –0.664, CET1 with coefficient value of 1.83 and efficiency ratio with coefficient value of 1.825 have significantly affected the return on assets as their p-values are less than 0.05. However, the accepted relationship between CAR and ROA, efficiency ratio and ROA were inverse, but their coefficients were significant. The provision for credit losses (PCL) was not affecting the ROA significantly during the pandemic and hence was not considered while framing the model. Again, the dependent variable is the return on equity, except CAR. Other ratios, i.e., CET1, efficiency ratio, and PCL ratio have unacceptable correlations and are even non-significant as their p-values are less than 0.05.

Over the years, green finance tools have gained considerable attention with the increased concern to achieve sustainability in the economy. Green bonds are one such new innovative green finance tool embodied with bonds and green attributes. However, research on the Indian green bond is relatively modest. Thus, this study aims to analyze the impact of bond attributes on green bond yield. The study retrieves green bond data from the Bloomberg and Climate Bonds Initiative databases from 2015 to 2022. To test the framed hypotheses, the study employs a panel regression technique with a random effect model. The findings of the study show a significant positive effect of bond ratings (β = 2.80926, p < 0.05) on green bond yield based on the argument that good-rated bonds serve as collateral in the security market. On the contrary, the result also reveals a significant negative effect of bond maturity (β = –0.327296, p < 0.05) and bond label (β = –3.16480, p < 0.05) on green bond yield. The results based on the observation suggest that when the certified bond is issued, this signals the greenness of the bond in the market and attracts high demand, whereas the long maturity ensures the green project construction for a longer period, resulting in a lower bond value. Thus, empirical findings reveal that bond attributes are the major factors in influencing bond yield. The obtained results serve as a prerequisite for potential issuers, investors, and policymakers to further popularize the green bond in the country.

The paper examines the impact of a firm’s financial leverage on its investment decisions in the period 2011–2019, which occurred between two financial crises (2008–2010 and 2020–2022) and was globally marked by low interest rates and high leverage. The study focuses on non-financial listed firms in world’s top 13 largest economies consisting of 11 OECD+ countries and two emerging nations. The analysis explores the relationship between firm leverage and investment decisions, considering the growth opportunities and corporate risks of the firms, as well as the type of economy they operate in. The findings indicate that, overall, there is a negative relationship between leverage and investment. In developed nations, such as the OECD+ countries, this negative effect is more pronounced for firms with limited growth opportunities. Contrary to the existing literature, emerging economies exhibit a positive relationship between firm leverage and investment. Specifically, in China and India, firms with low growth opportunities display a stronger positive correlation between leverage and investment. These results suggest that in developed countries, debt continues to have a disciplining effect on firm investment, even in a high liquidity environment. However, in high-growth emerging economies, both firm management and lending institutions show less concern regarding leverage. Lastly, the study finds that firm risk has an adverse impact on investment decisions. These empirical findings highlight the non-uniform nature of the relationship between firm leverage and investment, which depends on the type of economy and the growth opportunities of the firms.

Acknowledgments
The infrastructural support provided by Management Development Institute, Murshidabad, India and FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged.