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.

Type of the article: Research Article

Abstract
This study aims to examine the strategic role of sukuk and bonds as primary sources of financing and the differences in their characteristics in influencing corporate adjustment behavior. The subjects were 187 companies included in the Indonesian Islamic Stock Index (ISSI) for the 2010–2023 period. The methodology used is a partial adjustment model with a dynamic panel approach, which formulates speed of adjustment (SOA) as a function of debt instruments, accompanied by subsample analysis and robustness tests using alternative leverage definitions and bootstrapping. Sukuk-issuing companies have the highest average leverage, both in terms of book (0.530) and market (0.567). The average SOA of Islamic companies is moderate (book SOA = 0.267; market SOA = 0.364). Bonds consistently accelerate adjustment towards optimal capital structure in both book and market leverage. In contrast, sukuk issuers exhibited a high book-based SOA (0.948), but this was not statistically supported due to sample limitations. This finding extends the literature by confirming that SOA is not simply a fixed value, but rather a function of the financing instrument used. Theoretically, this study develops trade-off theory and pecking order theory by incorporating the dimension of sharia instruments. Practically, the results suggest that bonds are currently more effective as a compliance mechanism. Meanwhile, sukuk require strengthening of market infrastructure. From a policy perspective, this study emphasizes the urgency of developing a sukuk market to achieve credibility equivalent to bonds at the global level.

Acknowledgment
This research was funded by the Directorate General of Higher Education, Research and Technology, Ministry of Education, Culture, Research and Technology of the Republic of Indonesia through the 2025 Fundamental Research Scheme. The author also expresses his appreciation and gratitude to As-Syafi’iyah Islamic University for the administrative support and facilitation provided so that this research can be carried out properly.

Type of the article: Research Article

Abstract
This study examines investor reactions to financial statement manipulation in the Vietnamese stock market using a large, unbalanced panel dataset of 11,418 firm-year observations over the 2016–2024 period. The sample comprises 1,398 non-financial companies listed on the HOSE, HNX, and UPCOM, explicitly excluding the financial and banking sectors due to their distinctive regulatory and accounting frameworks. By integrating accrual-based earnings management measures with the M-score model, the research provides novel empirical evidence of asymmetric market behavior. Specifically, investors respond positively to income-increasing earnings management in the short term, while largely ignoring income-decreasing practices. Furthermore, the findings reveal a notable “delayed reaction” phenomenon: fraud risk, as proxied by the M-score, is not immediately incorporated into current stock prices but instead leads to significantly lower future returns. The results also emphasize the M-score’s critical moderating role, demonstrating that the negative impact on future returns is amplified in high fraud-risk environments. Ultimately, this study highlights market inefficiency in an emerging economy and recommends utilizing the M-score as an early warning tool for stakeholders to avoid the earnings illusion trap.

Acknowledgments
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Vietnam National University, Hanoi (VNU) under project number QG25.98 (QG25.98).

Type of the article: Research Article

Abstract
This study aims to examine how risk perception, perceived gain, and perceived loss influence digital investment participation intention, with loss aversion as a mediating mechanism in the context of India. Structural equation modeling was applied to survey responses from 418 digitally active investors in India, collected online between January 15, 2025 and July 12, 2025, using judgmental sampling to ensure respondents possessed prior investment exposure and were actively engaged in digital investment environments, thereby enhancing the contextual relevance of the sample. The model explains 62.4% of the variance in investment participation intention and 58.7% in loss aversion. Perceived gain positively influences intention (β = 0.279, p < 0.001), while perceived loss negatively affects it (β = −0.226, p < 0.001). Risk perception has no direct effect (β = −0.061, p = 0.226) but increases loss aversion (β = 0.111, p = 0.010). Loss aversion positively predicts intention (β = 0.564, p < 0.001). Mediation analysis confirms significant indirect effects for all predictors. The findings suggest that, within this young and digitally active Indian sample, investment intention is shaped by perceived gains, perceived losses, and loss aversion as an affective mediating mechanism in digital investment environments.

Type of the article: Research Article

Abstract
In transition economies, the contribution of financial and transport infrastructure to new firm formation remains a first-order public-finance question. This paper examines how financial infrastructure and air connectivity relate to new business density across 28 transition economies over 2010–2024, and whether resource dependence moderates the relative contribution of branch-density and credit-volume channels (FDI and gross fixed capital formation serve as secondary benchmarks). Two-way fixed-effects panel regressions on an unbalanced panel of 28 transition economies (420 country-years as the maximal frame; the primary new-business-density model is identified on 249 complete cases from 24 economies), complemented by pooled OLS and between-effects estimators, are estimated for the three outcomes. Within countries, ATM penetration is the financial-infrastructure indicator most consistently associated with entrepreneurial activity (β = 0.011); trade openness is positive (β = 0.006) but does not survive relaxing the air-restricted sample. The relative contribution of bank branches versus domestic credit shifts with resource-rent intensity (branches × R = +0.016; credit × R = −0.011) − a pattern directionally stable across specifications but resting on the interaction design, a small complete-case panel, and a static moderator, its branch leg particularly sensitive to sample composition; the reversal is therefore read as suggestive rather than definitive. Air-passenger connectivity is a structural between-country correlate of entrepreneurship (between-effects β = +0.310) but not a within-country driver. New business density is more fully explained than the secondary outcomes (within-R2 = 0.26 versus 0.14 and 0.09); conclusions are therefore drawn for firm entry rather than for the investment-and-entrepreneurial ecosystem.

Type of the article: Research Article

Abstract
This paper examines the impact of colocation (permitting traders to place their servers in close proximity to exchange servers) on the price volatility at India’s fastest exchange, which operates at 6 microseconds. The study employs the event study method to examine the relationship between colocation and price volatility. The study analyzed daily trading data from the Bombay Stock Exchange (BSE) Sensex-30 index from January 1, 2000 to December 31, 2023. The findings of the study suggest a remarkable level of stability at BSE following the implementation of colocation in November 2010. Furthermore, there is substantial evidence of improved price volatility following the reduction in latency at BSE. The colocation has positively supported high-frequency trading, leading to improved price volatility in the Indian securities market. The study conducted additional analyses to assess its robustness and found qualitatively similar results. The study has implications for regulatory bodies, retail investors, market participants, and other interested stakeholders, providing valuable insights into the efficiency of colocation implementation at BSE.

Acknowledgments
The authors would like to acknowledge that this research work is fully funded by Kingdom University, Bahrain, through the research grant number KU-2025-26-02.

Type of the article: Research Article

Abstract
This study investigates the critical drivers of sustainable performance among agricultural startups (agri-startups) in Vietnam, a nation highly vulnerable to climate change. The research uses the Resource-Based View and Institutional Theory to model how green finance – including green credit incentives, green venture capital availability, and institutional support – influences perceived sustainable startup performance through eco-innovation capability. Furthermore, the moderating role of climate change risk perception is explored. Data were collected via an online Google Forms survey conducted from September to December 2025 across Vietnam. The study purposefully sampled 282 founders and senior managers (directors, head/deputy heads of departments) of agri-startups, as these leaders are the primary decision-makers directly responsible for strategic financial acquisitions and green innovation initiatives. Analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with a Reflective-Formative higher-order construct technique, the quantitative results (n = 282) reveal that green credit incentives, green venture capital, and institutional support are positively associated with eco-innovation capability (R2 = 23.7%). This capability, in turn, acts as a vital driver of holistic sustainable performance (R2 = 26.1%). Notably, climate change risk perception significantly moderates the relationship between eco-innovation and performance (β = 0.259, p < 0.001). The findings suggest that ensuring startup survival and sustainable growth highlights the need for policymakers to prioritize accessible green credit and institutional frameworks over generalized support. Concurrently, venture capitalists must evaluate founders’ climate risk awareness as a critical metric for funding resilient agricultural ventures.

Acknowledgment
The authors gratefully acknowledge financial support from the Science and Technology Program for New Rural Development, 2021–2025 (Second Round), Government of Viet Nam, under project code 738/QĐ-NNN-VPĐP. We also thank Ho Chi Minh National Academy of Politics, Vietnam, for facilitating access to survey respondents and supporting the research activities of this study.