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This study aims to examine the impact of national culture on classification shifting in Eastern European Member States of EU Eastern European countries (EEU) vis-à-vis the Western Member States of EU (WEU). The EEU provides a unique sample to study the quality of financial reporting that the authors measure with classification shifting given that for more than five decades they were following the model of a centrally planned economy, where market-based financial reporting was absent. Yet, the EEU transitioned to a market-based economy and completed its accession to the EU.

This study uses a panel data set of firm year observations from 1996 and 2020 that covers the full transition of EEU. This empirical analysis is based on fixed effects panel regression analysis where the authors report a plethora of identifications.

This study finds classification shifting in the EEU countries since their transition to the market-based economy, though they have no long record of market-based financial reporting. This study also notices that cultural factors are associated with classification shifting across all Member States of the EU. This study further examines the impact of interactions between cultural characteristics and special items and reveal variability between WEU and EEU. As part of the robustness analysis, this study also tests the impact of culture on real earnings management measures for both WEU vs EEU, confirming the variability of the impact of culture on earnings management.

Future research could explore the role of religion differences in WEU vis-à-vis EEU states, as they are also subject to cultural differences.

The findings are important for regulators, external monitors and investors, as they show that cultural factors affect earnings management with some variability across countries in the EU, and they should be acknowledged in policymaking.

The findings show that cultural differences between EEU and the “old” Member States of the EU could explain classification shifting.

To the best of the authors’ knowledge, this is the first study that sheds light on the impact of national culture on classification shifting in EEU of EU vis-à-vis the “old” WEU of EU.

This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics.

The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices.

According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment.

The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices.

Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy

This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.

The purpose of this study is to empirically investigate the Greek firms' earnings management policies compared with debt, taxation and the financial crisis.

In this paper, the authors show that existed measures of real earnings management, whether corrected for performance or not, rely crucially on strong assumptions. The authors provide a novel modelling that permits panel structure so as to correct for heterogeneity across firms while permitting to determine endogenously the number of underlying firm-groups in the data generating process.

The empirical results indicate that Greek firms are likely to reduce earnings manipulation activities when they face liquidity risk. Taxation and financial crisis have a negative and positive effect on earnings management, respectively.

The effect of debt, taxation and financial crisis on earnings management has never been investigated in Greece. The empirical results offer valuable information to shareholders and investors as they can understand how some main factors, such as debt, taxation and financial crisis, influence firm's accounting practices.

This study investigates the reasons behind the very high net interest margins in the Greek banking industry compared to the euro-area, focussing on the association between bank competition and recapitalisations.

The author conducts a dynamic panel analysis covering the period from the early 2000s to 2021, that controls for possible endogeneity and treats for heterogeneity. The author also employs local projections impulse response functions that control for structural changes in Greek banking.

The author finds that low bank competition has contributed to high net interest margins in Greece. Interestingly, the impact of recapitalisations conditional to low bank competition has had a significant further impact on increasing net interest margins, which is a noteworthy case due to several Greek bank recapitalisations in the last ten years. The author’s findings are supported by local projections impulse response functions.

To mitigate distortions in bank competition, the author argues to accelerate steps toward the direction of the banking union and a common bank regulation framework in the euro-area.

In this paper, the authors investigate whether coronavirus disease 2019 (COVID-19) impacts household finances, like household debt repayments in the UK.

This paper employs a vector autoregressive (VAR) model that nests neural networks and uses Mixed Data Sampling (MIDAS) techniques. The authors use data information related to COVID-19, financial markets and household finances.

The authors' results show that household debt repayments' response to the first principal component of COVID-19 shocks is negative, albeit of low magnitude. However, when the authors employ specific COVID-19-related data like vaccines and tests the responses are positive, insinuating the underlying dynamic complexities. Overall, confirmed deaths and hospitalisations negatively affect household debt repayments. The authors also report low persistence in household debt repayments. Generalised impulse response functions (IRFs) confirm the main results. As draconian measures, the lockdowns are eased and the COVID-19 shocks are diminishing, and household financial data converge to the levels prior to the pandemic albeit with some lags.

To the best of the authors' knowledge, this is the first study that examines the impact of the pandemic on household debt repayments. The authors' findings show that policy response in the future should prioritise innovation of new vaccines and testing.

Common Agriculture Police in the EU, direct payments, solvency and income

We employ agriculture data for all twenty-eight EU Member States. The data comes from the public Farm Accountancy Data Network (FADN) of the EU. In terms of methodology we employ panel regression and panel Vector Autoregression analysis (panel VAR) to take into account possible endogeneity issues.

The reported panel regressions, impulse response functions (IRFs) and variance decompositions (VDCs) show that agriculture income has been subdued due to negative shocks in direct payments and solvency. Our results do not support the hypothesis that higher direct payments would increase agriculture income. In addition, whilst solvency subdues agriculture income, investment asserts a positive impact on agriculture income.

Further research on the impact of direct payments of CAP on EU agriculture is warranted at a disaggregate level so as to examine whether there is variability in the underlying interlinkages at regional level

As a policy implication, and in light of the ongoing reform of the EU's CAP, we would propose to raise net value added in agriculture using targeted income support to small and medium-sized farms. The European Economic Recovery Plan (EERP) would be also supportive. In addition, further enhancing financial integration across the EU would provide funds for investment in agriculture.

As social implication, one would propose to raise investment in agriculture, that is through the European Economic Recovery Plan (EERP). The EERP is designed as a stimulus package set up to mitigate the consequences of the global financial crisis in the EU. Also, a way to boost agriculture income is through the credit channel of the on-going quantitative easing of the ECB, where unconventional monetary policy is aiming to support the growth prospect of the Euro area.

This study examines the impact of direct payments, which include all subsidies, of the EU's Common Agriculture Policy (CAP) on agriculture income as measured by the net value added. We also control for solvency. Despite the magnitude of CAP on the EU budget, few studies investigate the impact of direct payments on income in the aftermath of the financial crisis. This is surprising given the importance of agriculture for the economic recovery of the EU that remains anaemic more than a decade after the crisis.

This study aims to consider the effect of financial (banking) freedom and competition on bank efficiency.

With data from 11 Sub-Saharan African countries over the period 2006-2012, the study estimates both competition (market power) and bank cost efficiency using the same stochastic frontier framework. Subsequently, Tobit models, including instrumental variable Tobit regression, are used to assess how financial freedom affects the relationship between competition and bank efficiency.

The results show that increase in market power (less competition) leads to greater bank cost efficiency, but the effect is weaker with higher levels of financial freedom. This is not consistent with the quiet life hypothesis.

Policymakers usually take the view that opening up banking markets to greater competition may lead to higher efficiency. However, the results have shown that allowing banks to maintain some level of market power may be necessary to ensure banking system efficiency.

This study deepens the understanding of the inconsistent relationship between competition and bank efficiency, by using the same framework to measure both competition and efficiency, and by providing new empirical evidence on how the level of financial freedom affects this relationship.

The study examines the impact of risk on the profit efficiency and profitability of banks in Ghana.

Data envelopment analysis was used to estimate profit efficiency scores and accounting ratios were used to measure profitability. The panel corrected standard error regression was used to assess the nexus using a dataset of 32 banks from 2000 to 2015.

The paper found that the Ghanaian banking industry exhibits a variable return to scale property, suggesting that average costs change with output size. Profit efficiency score for banks closer to the efficiency frontier is 61%. Credit risk is significant in enhancing profit efficiency and return on equity. Market risk is relevant in improving profit efficiency, return on asset and asset turnover. To drive profitability, bank managers have to be committed to effective liquidity risk, insolvency risk and capital risk management. Operational risk reduces shareholders' returns. The impact of size, age, stock exchange listing, cost efficiency and competition have are all been discussed extensively.

The findings contribute to the knowledge on the risk-performance nexus and provide information that is valuable to academics, bankers and regulators for policy formulation. The findings are relevant to the newly established Financial Stability Council.

This paper appears to be among the premier attempts to examine the effect of various risk types identified in the Basel III framework on bank performance in Africa.