Asian Economic and Financial Review

Continuous effect of fintech adoption on SME sustainable performance of SMEs: A moderating and mediating model based on multi-country comparison approach

2025-12-24T21:14:41-06:00

A scarce literature guides the examination of FinTech adoption on SMEs' sustainable performance via the mediation of green finance on green innovation, with the moderating effect of ESGTL and green innovation strategy. Data were collected from 250 SME managers and owners from Pakistan and Malaysia for comparative perspectives, and CB-SEM was applied for data analysis. Results revealed FA's significant effect on SMEs' SP in both countries. GF partially mediates the effect of FA on GI in Malaysia, whereas complete mediation prevails between the constructs in Pakistan. GI fully mediates the effect of GF and SP in both countries. Higher involvement in green innovation strategy moderates the increase in the changes to focus on green finance practices. The higher commitment to ESGTL increases the influence of green financing on green innovation applications in both countries. Lastly, ESGTL improves green innovation's role in attaining sustainable performance for Malaysian SMEs compared to Pakistan. Findings contribute to the enduring literature on fintech and the sustainable performance of SME firms from the perspective of growing economies. Furthermore, it confirms the importance of FA, GF, and GI in enhancing the SP of SME firms, and in due course, confirms the sustainable financial advancement of a country.

The impact of board of directors effectiveness on greenhouse gas disclosure: Evidence from Saudi Arabia

2025-12-24T21:54:06-06:00

This study investigates the impact of the board of directors’ effectiveness on greenhouse gas (GHG) disclosure among listed firms in Saudi Arabia, a resource-rich emerging economy transitioning towards sustainability under Vision 2030 and the 2060 net-zero pledge. Guided by stakeholder and legitimacy theories, board effectiveness was measured as a composite index comprising independence, size, gender diversity, and meeting frequency. Using a purposive sample of 150 high-impact firms across 750 firm-year observations (2020–2024), GHG disclosure was assessed through a novel, context-specific disclosure index developed via content analysis of publicly available reports, capturing both breadth and quality. The random-effects regression results indicate that board effectiveness (BOE) has a strong and positive effect on GHG disclosure (β = 0.0630, t = 8.82, p < 0.01), confirming that well-functioning boards drive climate transparency. This suggests that firms with more independent, diverse, and active boards are better positioned to oversee climate-related strategies, ensure the credibility of environmental reporting, and respond effectively to growing stakeholder and regulatory demands for sustainability accountability. The findings further underscore the pivotal role of robust governance in enhancing climate-related transparency, delivering actionable insights for policymakers crafting regulations, corporate executives shaping sustainable strategies, and researchers exploring governance impacts. The limitations include the study’s sector-specific focus, reliance on secondary disclosures, and temporal scope, suggesting future research avenues in cross-country comparisons, longitudinal analysis, and governance climate strategy integration.

Digital transformation and income gaps in Vietnam’s labor market

2025-12-29T04:37:51-06:00

This study examines the impact of digital transformation and personal characteristics on income disparities between formal and informal workers in Vietnam. Such disparities mainly arise from differences in benefits, qualifications, career opportunities, and access to digital technologies. Using data from the Labor Force Survey (LFS) together with the provincial ICT index, the study applies quantile regression and the Machado–Mata decomposition method. The results show that education, gender, and digital skills significantly influence income, while the effect of provincial ICT indicators remains limited, especially for informal workers. This indicates that Vietnam’s digital transformation has so far focused more on infrastructure, with less direct impact on business activities or job accessibility. In addition, the findings reveal that formal workers earn more at lower income levels, but at higher quantiles, informal workers perform better due to their flexibility and market adaptability. The novelty of this study lies in combining micro labor data with a provincial digital transformation index to analyze income gaps between the two labor sectors. It provides empirical evidence of the limited effectiveness of current digital transformation efforts and suggests several policy directions to improve skills, reduce inequality, and promote more inclusive digital development.

How managerial behavior biases mediate audit committee effectiveness and earnings quality

2026-01-19T07:14:01-06:00

This study investigates the mediating role of managerial behavioral biases including overconfidence, optimism, and narcissism in the relationship between audit committee composite and earnings quality among manufacturing firms listed on the Iraq Stock Exchange from 2016 to 2023. The methodology is based on exploratory factor analysis (EFA) to construct latent variables, combined with panel regression techniques. Findings reveal that although the composite index of audit committee attributes (size, independence, and financial expertise) does not directly and significantly affect earnings quality ( = 0.016, p = 0.203), it exerts a significant positive indirect influence on financial reporting quality by reducing managerial behavioral biases. This mediating effect was statistically confirmed through the Sobel test (z = 5.65, p < 0.001) and bootstrap analysis (95% CI: [0.0085, 0.0343]). In other words, effective audit committees primarily enhance earnings quality by moderating managers’ cognitive and emotional biases not merely through direct oversight. These results carry concrete policy implications: regulators in Iraq and similar emerging markets should not only strengthen audit committee mandates but also integrate behavioral risk assessments into corporate governance codes. Specifically, requiring audit committees to evaluate and challenge managerial bias through training, disclosure requirements, or behavioral oversight mechanisms can significantly improve financial reporting integrity where institutional enforcement is weak.

Economic shocks, fairness perceptions, and redistributive preferences: Evidence from Asia

2026-01-19T15:25:15-06:00

This study examines how COVID-19-related economic hardship has reshaped perceptions of fairness and support for redistribution across Asian countries. Using three waves of the Asian Barometer Survey (2014–2023) and a Difference-in-Differences design, the analysis compares changes in attitudes between countries with higher versus lower shares of respondents reporting household income loss or job loss. Controlling for individual characteristics, country fixed effects, and common time shocks. The results show that in high-loss countries, perceived fairness falls by about 0.15 points on a four-point scale (around 0.20–0.25 standard deviations). In comparison, support for redistribution rises by roughly 0.10 points, with sharper fairness declines and stronger redistributive demands in non-democracies and upper-income economies and near-zero effects in poorer settings. These findings provide causal evidence from a non-Western context that fairness beliefs are highly elastic to large adverse shocks. In contrast, redistributive preferences respond more modestly and are conditioned by regime type and fiscal capacity. The practical implication is that crisis-time welfare design in Asia must focus not only on the generosity and targeting of support but also on transparent, predictable, and procedurally fair delivery in order to sustain perceived legitimacy during periods of widespread hardship.

CEO CSR expertise, ownership structure, and their effects on CSR budgeting and spending

2026-01-19T15:34:01-06:00

This study investigates how CEOs with extensive CSR expertise allocate and spend financial resources on CSR initiatives, and how ownership structure moderates these decisions. Using a comprehensive dataset of Omani listed companies from 2016 to 2023, and employing unique proxies for CSR activities, the analysis reveals that CEOs with CSR expertise significantly improve firms’ disclosure of CSR-related financial information, reflecting greater transparency and commitment to responsible practices. The results further show that such CEOs tend to set larger CSR budgets and allocate more financial resources to CSR programs. These relationships are not uniform across firms; they are moderated by ownership characteristics. Specifically, institutional ownership enhances the positive influence of CEO CSR expertise on CSR spending, while family ownership tends to weaken it. Additional analyses demonstrate that CEOs’ CSR expertise improves the efficiency of resource allocation to CSR activities, leading to more targeted spending and contributing to higher firm value. The findings provide valuable theoretical insights into the monetary aspects of CSR and underline the strategic role of CEO expertise in shaping CSR financial decisions. They also offer practical implications for firms, boards of directors, investors, and regulators interested in improving CSR budgeting processes and increasing the social and economic value generated from CSR initiatives.

Remittances and financial development as determinants of economic growth: Evidence from MENA and ASEAN using a SUR approach

2026-01-19T21:55:28-06:00

This study investigates the interaction between remittances and financial development in promoting economic growth in MENA and ASEAN middle-income economies during 2000–2021. The purpose of the research is to better understand whether remittances complement or substitute domestic financial systems in these regions, where migrant inflows and structural financial constraints coexist. The Seemingly Unrelated Regression (SUR) approach is employed to account for cross-country error correlations and shared macroeconomic shocks. According to our findings, there is a substitute relationship between remittances and financial development in terms of fostering economic growth, implying that local financial sectors make inefficient use of remittances, as investors seek external financial resources when their financial sectors are dysfunctional. Furthermore, the global economic shocks have had a significant negative impact on economic growth, as has the trade deficit. In addition, robustness tests incorporating additional major remittance-receiving countries Bangladesh, China, India, Mexico, and Pakistan confirm the consistency and stability of the findings. The implications of these results highlight the need for policymakers to strengthen financial institutions, enhance financial inclusion, and improve the efficiency of domestic credit markets so that remittances can shift from acting as short-term substitutes for financial development toward serving as long-term complements that support more sustainable economic growth.

Digital financial inclusion and household happiness: The role of financial behaviors in China

2026-01-21T19:43:51-06:00

Household happiness plays a fundamental role in shaping daily lives. In the technology era, digital financial inclusion (DFI) significantly influences household happiness. Despite the growing interest in DFI, existing studies have yet to analyze its specific impact on household happiness. In response, this study aims to fill this gap through an in-depth examination of the relationship between DFI and household happiness, with financial behaviors as a mediator. Additionally, this study adopts financial literacy (FL) as a moderator in the DFI-financial behavior relationship. By employing the Peking University DFI Index of China (DFIIC) and data from the China Household Finance Survey (CHFS), this study finds that DFI significantly positively influences household happiness. Borrowing and saving behaviors exhibit a significant negative impact on household happiness. Spending behavior had no intermediary role in household happiness. Furthermore, investing behavior plays a partial intermediary role in enhancing household happiness. Regarding the moderating effect of FL, the results suggest that higher FL increases household happiness but reduces the marginal positive effect of DFI. This indicates a complex interplay between DFI and financial literacy. This study contributes by testing the mediating role of financial behaviors in the relationship between DFI and household happiness. Additionally, the findings on the moderating effect of financial literacy offer novel insights for policymakers to design inclusive policies that enhance people's well-being. Lastly, future research may focus on how financial behaviors influence the DFI-household happiness relationship.