The Alternative Exchange (AltX) is the secondary exchange to the Johannesburg Securities Exchange (JSE). It was launched in 2003 as a market for SMEs that have high growth rates (Correia & Holman 2008). The primary objective of the AltX is to be a growth catalyst to South African SMEs by enabling access to finance (JSE 2013).Orientation: Despite their significant contribution to the South African economy, the majority of small and medium enterprises (SMEs) fail because of lack of access to appropriate types of capital. The Alternative Exchange (AltX) was established to address the lack of access to equity finance for SMEs.Research purpose: This study aims to determine whether the AltX has adequately enabled access to equity finance for the firms listed thereon.Motivation for the study: This study was motivated by the apparent lack of SME access to appropriate forms of finance. By evaluating the effectiveness of the AltX, the study seeks to investigate whether further measures are required to enable access to equity finance for SMEs.Research design, approach and method: A quantitative methodology was employed and panel regression models were used to compare the levels of equity and debt of firms listed on the AltX to those listed on the Johannesburg Securities Exchange's (JSE) main board. In this manner, the study aims to determine whether AltX firms enjoy the same level of access to capital markets as their counterparts on the JSE. Main findings:The findings indicate that firms listed on the AltX have significantly higher levels of debt than those listed on the JSE's main board. This debt tends to be the more accessible yet risky short-term debt.Practical/managerial implications: The findings infer that despite the establishment of the AltX, SMEs still face considerable constraints to accessing equity finance and, as such, may be compelled to consider other means of raising finance. Contribution/value-add:This study contributes to the research on SMEs in South Africa and suggests that further interventions are required to enable their access to appropriate forms of finance.
Purpose An understanding of the role of decision-making has been emphasised since the seminal works on human information processing and professional judgements by accountants. The interest in these topics has been reignited by the increasing digitisation of the financial reporting and auditing processes. Whilst the behavioural research on accounting is well-established, the application of seminal works in cognitive psychology and behavioural finance is lacking, especially from recent research endeavours. The purpose of this paper is to provide a synthesis of theories relating to accounting behavioural research by evaluating them against the theories of cognitive psychology. Design/methodology/approach Using theory synthesis, this research draws seemingly isolated strands of research into a coherent framework, underpinned by cognitive psychology. Findings Evidence from accounting and auditing behavioural research is largely consistent with the psychology and finance research on cognitive limitations and errors. There remains a lacuna in accounting behavioural research on debiasing techniques. Such research, if underpinned by a single, cohesive theoretical framework, is likely to have practical relevance. Research limitations/implications The current research has theoretical implications for the accounting decision-making and uncertainty research. Areas for future research, based on identified gaps in the current accounting behavioural research, are also proposed.
Background: Companies are increasingly encouraged to focus on the creation of sustainable value. Financial research institutions evaluate companies’ performance based on pre-established indicators relating to environmental, social and governance (ESG). These scores are intended to inform decisions by equity investors, among others. However, traditional asset pricing models do not include ESG scores.Aim: The purpose of this research is to discover whether the inclusion of ESG scores in the Fama-French five-factor model (FF5F) will improve the model’s predicting power.Setting: Financial research institutions aim to improve the information environment in the South African capital markets. Johannesburg Stock Exchange (JSE)-listed firms are also required to produce integrated reports, emphasising responsible investment.Method: For the largest 40 JSE-listed companies, data over the 5-year period from 2015 to 2019 were employed to compare the predicting power of the FF5F model before and after the inclusion of ESG scores.Results: The results showed that the predictive power of the FF5F model is only marginally improved when the ESG scores are incorporated.Conclusion: These findings indicate that equity returns are not significantly influenced by ESG scores. This research provides the basis for further endeavours on the share-price implications of ESG performance.Contribution: This research contributes to the growing strand of literature on responsible investment and the creation of sustainable value. The research also offers a theoretical contribution by connecting literature on asset pricing with work on sustainability.
Orientation: Behavioural finance research suggests that human biases can cause irrationalities which have a significant impact on decision making. Discovery Bank is an organisation that attempts to apply behavioural finance to improve the financial health of its clients.Research purpose: This study attempts to determine the extent to which the Discovery Bank business model is grounded in behavioural finance theory.Motivation for the study: Discovery Bank is the first bank to leverage behavioural insights to improve personal financial decisions.Research approach/design and method: This study followed an explanatory case study methodology with primary data sources being interviews with key employees, academic research and electronic artefacts. The Discovery Bank business model was evaluated against the behavioural finance theoretical framework to establish the extent to which it conforms to behavioural finance theories.Main findings: The Discovery Bank business model is grounded in behavioural finance theory to a significant extent, with emphasis on modifying the behaviours that inhibit financial well-being. The bank generally uses incentives rather than nudges as behaviour modification tools.Practical/managerial implications: Whilst behavioural finance continues to attract substantial attention in finance research, its practical implications for the banking industry and personal finance are largely unexplored. Furthermore, the study contributes to the literature by examining the behavioural finance theoretical framework in the context of the banking and the broader financial services industry.Contribution/value-add: This research may be of value to practitioners in the financial industry as it explores a unique business model. Researchers on behavioural finance may find value in the practical application of the theoretical framework.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.