Modeling and predicting earnings per share via regression tree approaches in banking sector: Middle East and North African countries case
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DOIhttp://dx.doi.org/10.21511/imfi.17(2).2020.05
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Article InfoVolume 17 2020, Issue #2, pp. 51-68
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The regression tree approach is an effective and easy to interpret technique where it utilizes a recursive binary partitioning algorithm that divides the sample into partitioning variables with the strongest correlation to the response variable. Earnings per share can be considered as one of the main factors in making the investment decision. This study aims to build a predictive model for earnings per share in the context of the Middle East and North African countries (MENA) . The sample of the study consists of sixty-three banks, which were chosen from eight countries, with a total of six-hundred thirty observations. The simple regression, regression tree, and its pruned regression tree, conditional inference tree, and cubist regression are used to build the predictive model for earnings per share that depends on total assets, total liability, bank book value, stock volatility, age of the bank, and net cash. The results show that the cubist regression is outperforming other approaches where it improves root mean square error for the predictive model by approximately double in comparison with other methods. More interesting results are obtained from the important scores, where it shows that the total assets of the bank, bank book value, and total liability have the biggest impact on the prediction of earnings per share. Also, the cubist regression gives an improvement in R-squared over other methods by at least 30% and 23% using training and testing data, respectively.
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JEL Classification (Paper profile tab)C53, D22, F47, M10
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References47
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Tables9
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Figures9
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- Figure 1. The correlation matrix, histogram, and scatter plots for the study variables
- Figure 2. Linear regression variable importance scores for EPS model
- Figure 3. Basic regression tree for EPS model
- Figure 4. Basic regression tree variable importance scores for EPS model
- Figure 5. Pruned regression tree for EPS model
- Figure 6. Pruned regression tree variable importance scores for EPS model
- Figure 7. Conditional inference tree for EPS model
- Figure 8. Conditional inference tree variable importance scores for EPS model
- Figure 9. Cubist regression variable importance scores for EPS model
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- Table 1. Descriptive statistics for the study variables
- Table 2. Linear regression analysis for EPS model
- Table 3. Linear regression variable importance scores and performance metrics for EPS model
- Table 4. Basic regression tree variable importance scores and performance metrics for EPS
- Table 5. Pruned regression tree variable importance scores and performance metric for EPS
- Table 6. Conditional inference tree variable importance scores and performance metrics for EPS model
- Table 7. Cubist resampling results across tuning parameters for 566 samples and 6 predictors
- Table 8. Cubist regression approach variable importance scores and performance metrics for EPS model
- Table 9. Performance metrics for the study methods
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The risk management practices in the manufacturing SMEs in Cape Town
Problems and Perspectives in Management Volume 15, 2017 Issue #2 (cont. 2) pp. 386-403 Views: 5857 Downloads: 1238 TO CITE АНОТАЦІЯRisk management is one of the prominent issues which are pivotal to the success of a business and may adversely affect profitability if not properly practised. Therefore, the main objective of this paper was to determine risk management practices in manufacturing SMEs in Cape Town. The research conducted was quantitative in nature and constituted the collection of data from 74 SME leaders, all of whom had to adhere to a list of strict delineation criteria. All data collected were thoroughly analyzed through means of descriptive statistics. From the findings made, it is clear that SMEs in the manufacturing sector do in fact understand risk management initiatives applicable to ‘manage’ their respective businesses towards sustainability, but not to a large extent. It was found that respondents are unaware of the elements which make risk management effective, which ultimately aids to the development of problems for SMEs. All employees, managers and owners must coordinate their efforts together to identify and manage organizational risks within their ambit to obtain total risk coverage, as well as provide assurance that these risks are effectively managed from a coordinated approach. Further studies may be carried out to identify measures that can be taken to improve the effectiveness of risk management practices in SMEs.
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Understanding the preference of individual retail investors on green bond in India: An empirical study
Dhaval Prajapati , Dipen Paul
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Sushant Malik 
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Dharmesh K. Mishra
doi: http://dx.doi.org/10.21511/imfi.18(1).2021.15
Investment Management and Financial Innovations Volume 18, 2021 Issue #1 pp. 177-189 Views: 5733 Downloads: 1975 TO CITE АНОТАЦІЯThe biggest challenge facing countries, including India, is creating and managing an LCR (low carbon resilient) economy, which balances the need for high growth rates and is environmentally sustainable. The green bond market provides investors the means to help change the economy into an LCR economy. The study was undertaken to understand the key drivers and the factors influencing the individual retail investor’s decision to invest in green bonds. A survey instrument was designed and administered through the snowball sampling technique to 125 Indian respondents of various age groups who were eligible to invest in the Indian bond market. SPSS software was used to conduct a descriptive analysis followed by regression and conjoint analyses. The study results suggest that the Environmental, Social, and Governance (ESG) rating and credit rating of the green bond issuers are the key factors that influence an individual’s investment decision. The findings also highlight that incentives such as tax exemptions and awareness of green bonds also affect an investor’s decision. This research stands out as one of the first attempts to understand the Indian retail investors’ perception of a green bond.
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The nexus between financial literacy, risk perception and investment decisions: Evidence from Indonesian investors
Wendy Wendy
doi: http://dx.doi.org/10.21511/imfi.21(3).2024.12
Investment Management and Financial Innovations Volume 21, 2024 Issue #3 pp. 135-147 Views: 4776 Downloads: 1260 TO CITE АНОТАЦІЯFinancial literacy is an essential factor for individuals or households in making investment decisions. However, the problem of insufficient financial literacy is still considered one of the factors limiting the creation of successful investments, especially in relation to risk perception. Some investors have financial losses due to their limited financial literacy, making inefficient investment decisions and implicating high-risk investment choices. Hence, this study aims to explore the interconnection between financial literacy, risk perception and investment decisions. Moderated regression analysis was used for 233 investors in Indonesia who completed financial management training. The results showed that financial literacy has a positive and significant impact on investment decisions, which means that it could be used to improve the quality of investment decisions. On the other hand, risk perception as a moderating variable weakened the impact of financial literacy on investment decisions; this confirmed the consistent results before and after financial training. Overall, financial literacy across three dimensions (knowledge, skills, and attitude) plays an important role in investors allocating more funds to investment instruments than respondent groups with lower financial literacy levels. In addition, the level of financial literacy also influences the choice of investment product.
