Issue #3 (Volume 23 2026)

Type of the article: Research Article

Abstract
This study examines the impact of investment efficiency on firms’ financial distress risk in ASEAN. Using 30,440 firm-year observations from listed firms in Vietnam, Malaysia, Thailand, Indonesia, Singapore, and the Philippines during 2015–2024, financial distress risk is measured by the O-score and Z-score. Listed firms are classified into overinvestment and underin-vestment groups based on the model residuals. Control variables are return on total assets, leverage, firm size, and growth rate. The results obtained using the FGLS estimation method indicate that overinvestment and underinvestment increase financial distress risks for ASEAN firms as measured by the O-score. Overinvestment increases financial risk (coefficient 0.3-0.63), with the most severe impact in Thailand and Malaysia (coefficient 0.95-0.99) and Vietnam (coefficient 0.39). High debt is consistently the biggest risk factor (coefficient >7.1), while profitability is the strongest risk mitigation factor (coefficient <–6.6). By contrast, Z-score results show higher safety for overinvestment and insignificant underinvestment. However, the impact of investment efficiency on financial distress risk, whether linear or non-linear, differs across countries. The results indicate an inverted U-shaped relationship in Indonesia, the Philippines, Thailand, and Vietnam, while no statistically significant evidence of a non-linear relationship is found for Malaysia and Singapore. In the Philippines and Thailand, the non-linear effect is strong, with investment-deficit coefficients of 1.9416 and 1.6463, respectively, indicating a sharp increase in financial risk in the early stages of investment cuts. These findings provide valuable empirical evidence for firms in mitigating financial distress risk and enhancing sustainable value.

Type of the article: Research Article

This study addresses the critical role of investment efficiency in improving firm performance and firm value in emerging markets, where corporate governance mechanisms remain uneven across firms. Despite extensive research on the determinants of investment efficiency, limited evidence exists on its economic consequences and the conditions under which its benefits are maximized. Therefore, this study aims to examine the impact of investment efficiency on firm performance and firm value, and to investigate the moderating role of corporate governance quality. This study uses panel data from 193 non-financial firms listed on the Stock Exchange of Thailand over the period 2017–2022, covering 1,206 firm-year observations. Investment efficiency is measured based on deviations from an optimal investment level, while firm performance and firm value are proxied by return on assets, return on equity, and Tobin’s Q. Corporate governance quality is measured using Refinitiv governance scores. To address endogeneity, the generalized method of moments is applied. The results indicate that investment efficiency is positively associated with firm performance and firm value. Specifically, investment efficiency significantly improves ROA (β = 0.0035, p < 0.01) and Tobin’s Q (β = 0.0046, p < 0.01). Moreover, corporate governance strengthens these relationships, as shown by the positive interaction between investment efficiency and governance quality for ROA (β = 0.0167, p < 0.01) and firm value (β = 0.0419, p < 0.01). These findings suggest that effective corporate governance enhances the value-creating impact of efficient investment, highlighting the importance of governance in improving firm outcomes in emerging markets.

Type of the article: Research Article

Abstract
This study examines the relationship between governance quality, leverage, and firm performance and financial distress in Jordanian industrial companies listed on the Amman Stock Exchange (ASE). The industrial sector was chosen for this study due to its capital-intensive nature, reliance on external funding, and ongoing operational and market challenges in Jordan. The sample consists of 474 observations from 2014 to 2022. The quality of governance is represented by board size and board independence, leverage is represented by the debt-to-assets ratio, and firm performance is represented by gross margin. For financial distress, the integrated logit model indicates that board size is not statistically significant (coefficient = 0.078, p = 0.361), and the board independence is also not statistically significant (coefficient = 2.341, p = 0.076). Leverage, on the other hand, has a positive and significant association with financial distress (coefficient = 3.560, p = 0.001), while gross margin is negatively and significantly associated with financial distress (coefficient = –9.614, p < 0.001). The results suggest that financial distress for Jordanian industrial firms is primarily attributed to financing pressure and operating performance, and that the governance proxies used in this study do not adequately explain financial distress.

Acknowledgment
This research was funded through the annual funding track by the Deanship of Scientific Research, from the vice presidency for graduate studies and scientific research, King Faisal University, Saudi Arabia [Grant No. KFU263483].

Type of the article: Research Article

Abstract
Digital transformation and sustainability integration increasingly influence strategic decision-making in manufacturing firms, particularly in emerging economies. Despite growing investments in digital infrastructure and sustainability initiatives, empirical evidence regarding their financial implications remains inconsistent. This study examines whether the implementation of enterprise resource planning systems and sustainability practices influences financial performance directly or indirectly through the development of organizational capability in Indonesian manufacturing firms. The empirical analysis uses panel data from 185 firm-year observations of publicly listed manufacturing companies during the period 2020–2024. The proposed framework is tested using partial least squares structural equation modeling. The results indicate that enterprise resource planning implementation significantly strengthens organizational capability (t = 3.253; p = 0.001), whereas sustainability practices do not demonstrate a statistically significant relationship with capability development (t = 0.175; p = 0.861). Organizational capability shows a strong positive effect on financial performance (t = 19.563; p < 0.001) and fully mediates the relationship between enterprise resource planning implementation and financial outcomes (t = 3.163; p = 0.002). In contrast, neither enterprise resource planning systems nor sustainability practices exhibit significant direct effects on financial performance. These findings suggest that digital infrastructure alone does not automatically generate financial benefits. Financial value emerges when technological resources are effectively embedded in coordinated organizational processes that enhance firm capability. Within the observed emerging-market context, sustainability initiatives appear primarily compliance-oriented and therefore have not yet resulted in measurable improvements in financial performance.

Type of the article: Research Article

Abstract
This study examines how interest rates influence bank risk-taking within Vietnam’s transitional banking system, with a particular focus on how bank size moderates this relationship. While previous studies have linked prolonged low interest rates to increased risk-taking, Vietnam’s banking context – characterized by strict credit limits, frequent interventions, opaque ownership structures, and a tendency toward evergreening during tightening periods – suggests a reversed pattern. Using the System Generalized Method of Moments on annual data from 24 Vietnamese banks over 2014–2024, the findings indicate that higher interest rates are associated with significantly greater risk-taking. Specifically, the rediscount rate exerts the most significant impact on bank risk, followed by refinancing and interbank rates. Bank size also shows a negative baseline association with the Z score, suggesting that larger banks tend to take on more overall risk. This baseline risk in larger institutions is primarily driven by aggressive revenue diversification into volatile non-interest activities. Yet size also plays a crucial moderating role: larger banks demonstrate greater resilience when interest rates rise, as reflected in larger improvements in Z-scores and lower risk sensitivity compared with smaller banks, which are more vulnerable. Quantitatively, the adverse effect of interest rate shocks on the Z-scores significantly diminishes from the 25th to the 75th size percentile. This happens because larger banks successfully manage rising rates through funding advantages and diversified credit portfolios, while smaller banks react to these pressures by evergreening loans to conceal worsening asset quality.

Acknowledgment
The authors are thankful to the Internal Grant Agency of FaME TBU in Zlín, no. IGA/FaME/2026/016 for financial support to carry out this research.

Type of the article: Research Article

Abstract
The transition to a circular economy is a strategic priority in Vietnam’s sustainable development agenda, necessitating robust fiscal instruments to mitigate high capital cost barriers. This study aims to evaluate the legal and financial efficacy of accelerated depreciation mechanisms for sustainable investments in Vietnam by benchmarking them against ASEAN Taxonomy standards. Using a doctrinal legal analysis and a quantitative simulation of the Depreciation Tax Shield (DTS) via a Net Present Value (NPV) approach, the study quantifies the financial impact of various depreciation scenarios on a hypothetical capital expenditure.
The simulation-based evidence indicates that the current maximum depreciation coefficient of 2.0 provides a marginal tax shield benefit of only 2.86 billion VND per 100 billion VND of investment, which is approximately 20% lower than the tax shield values in neighboring countries that utilize initial investment allowances. Furthermore, the doctrinal analysis confirms a systemic misalignment between Vietnam’s project-based regulatory management and the asset-based classification logic of the ASEAN Taxonomy, creating significant barriers to rapid capital recovery amid risks of technological obsolescence. The study concludes that Vietnam should establish a synchronized national green asset catalogue and increase the depreciation coefficient to 3.0 for strategic equipment. Such reforms would not only optimize financial benefits but also directly enhance Vietnam’s competitiveness in attracting green foreign direct investment within the region.

Type of the article: Research Article

Abstract
Financial inclusion has become a critical driver of inclusive growth; however, disparities in digital access, literacy, and usage limit improvements in financial well-being, particularly across gender and residential groups. This study examines how digital financial literacy influences digital financial inclusion and financial wellbeing among digital consumers in the Delhi National Capital Region of India. This study employed an online structured survey administered between August and October 2025, yielding a sample size of 431. Using structural equation modelling, the results indicate that infrastructure accessibility (β = 0.521), knowledge and awareness (β = 0.379), digital financial skills (β = 0.277), motivation and attitude (β = 0.223), and social and institutional support (β = 0.215) significantly enhance digital financial literacy (all p < 0.001). Digital financial literacy strongly influences digital financial inclusion (β = 0.684, p < 0.001) and financial wellbeing (β = 0.509, p < 0.001), whereas digital financial inclusion further improves financial wellbeing (β = 0.479, p < 0.001). The indirect effect of digital financial literacy on financial wellbeing through digital financial inclusion is also significant (β = 0.328, p < 0.001). Necessary condition analysis confirmed that all five antecedents are essential for achieving higher digital financial literacy levels. Descriptive and ANOVA analyses reveal significant mean-level differences across gender and residential groups, providing evidence that these demographic factors condition the digital financial outcomes. The findings highlight that digital financial literacy and infrastructure are central to enhancing financial wellbeing, with implications for the design of gender-sensitive and context-responsive financial inclusion policies.

Acknowledgments
The Institutional Human Ethics Committee of the Central university of Jammu, with the reference number CUJ/IHEC/11, granted ethical approval for the study.