International Journal of Economics and Finance, Issue: Vol.18, No.10

Understanding the Determinants of Investor’s Subjective Risk Perception and Their Divergence from the Investor’s Objective Risk

Sat, 05 Sep 2026 01:21:00 +0000

This paper investigates the determinants of investors’ subjective risk profiles and the factors associated with the divergence between subjective and objective risk. Using a proprietary dataset of 1,077 investors provided by a major Italian bank, we analyse risk profiles derived from MiFID suitability assessments and compare them with an ex-post indicator of portfolio–profile alignment. First, ordered logit models show that gender, financial wealth, financial knowledge and experience, and investment horizon are significant predictors of subjective risk tolerance, while age, occupation, and ESG attitudes play a limited role. Second, we examine the persistence of portfolio suitability over time and find that the determinants of ex-post alignment differ from those of subjective risk. Wealth emerges as the most stable predictor of portfolio–profile coherence, while the effects of financial knowledge and investment horizon become weaker. The findings highlight the limitations of static risk profiling and suggest that maintaining long-term portfolio suitability depends on factors extending beyond initial investor characteristics.

Usage of Low-Cost Entrant and the Impact on Firm Performance: An Empirical Analysis of Private Security Firms in Nakuru County, Kenya

Sat, 05 Sep 2026 01:25:10 +0000

The private security industry in Kenya has grown steadily to meet rising demand for security services, yet the resulting competitive pressure has pushed many small firms out of the market. Efforts by these firms to target price-sensitive clients while still delivering essential security services have translated into thinner earnings, which in turn has depressed guard wages, limited investment in modern equipment, and constrained operational efficiency. The cumulative effect has been poor service delivery, delayed response to alarms, loss of property and cash in transit, and the collapse or deregistration of several firms. This study therefore examined the effect of low-cost entrants on the performance of private security firms in Nakuru County, Kenya, focusing specifically on pricing strategies, operational capacity, and cost management. The study was anchored on the balanced scorecard model and supported by price signaling and systems theories. A descriptive research design was adopted, targeting the 23 small private security firms and 235 management-level employees drawn from the finance, operations, and marketing functions. The Yamane formula was applied to derive a sample of 148 respondents, and primary data were collected using a structured questionnaire and analyzed with SPSS version 27 using descriptive, correlation, and regression techniques. The results showed that pricing strategies, operational capacity, and cost management each had a positive and statistically significant effect on firm performance, with operational capacity emerging as the most influential factor, followed by cost management and then pricing strategies. The study concluded that the effective integration of operational capacity, cost management, and strategic pricing enhances the performance of private security firms operating amid low-cost competition. It is recommended that firms invest in operational capacity, strengthen cost-control measures, and adopt value-based pricing strategies, and that policymakers foster a regulatory environment that supports fair competition and long-term sustainability in the private security sector.

Do Cocoa Certification Programmes Improve Farmers’ Income? Evidence from Côte d’Ivoire

Sat, 05 Sep 2026 01:27:49 +0000

Certification programmes are widely promoted as a means of improving the livelihoods of cocoa producers, but their effects on income remain debated. This study assesses the impact of certification programmes on cocoa farmers’ income in Côte d’Ivoire. The analysis is based on a sample of 150 farmers surveyed in three cocoa-growing regions (Bonon, Soubré, and Biankouma), which reflect evolution of cocoa-farming trajectories in Côte d’Ivoire. A Probit model is used to analyse the determinants of participation and to estimate propensity scores. The causal effect of certification is estimated using Propensity Score Matching (PSM) and assessed for robustness using a Rosenbaum sensitivity test. The results show that literacy, expenditure on inputs, and household assets significantly increase the probability of participating in a certification programme. In contrast, working time has a negative effect on this probability. After matching, certification increases gross income by FCFA 189,499, or 77.9%, and net income by FCFA 183,478, or 112.7%, compared with otherwise comparable non-certified farmers. These effects remain robust to potential bias arising from unobserved selection. These findings suggest that certification programmes constitute an effective lever for improving the income of cocoa farmers in Côte d’Ivoire. The study highlights the need to facilitate access to certification for farmers with fewer resources. Future research should go beyond measuring the average effect of certification on income to identify the mechanisms and conditions under which this effect arises.

Digital Banking Quality Service and Customers’ Perception (Lebanese Banks)

Sat, 19 Sep 2026 12:09:04 +0000

This research investigated how digital banking service dimensions—tangibility, reliability, responsiveness, assurance, and empathy—affect customers of Lebanese banks. Data were collected using descriptive statistical methods through a five-section questionnaire administered to a random sample of bank customers across Lebanon. The collected responses were analyzed and hypotheses tested with the SPSS software. Findings revealed a strong overall correlation among the five dimensions of digital banking quality service and customers’ perception and engagement. Moreover, tangibility, responsiveness, assurance, and empathy showed significant influence on customer engagement, whereas reliability did not demonstrate a notable effect. There was no effect of the demographic variable (the number of years of dealing with the bank) on satisfaction The study came up with suggestions and recommendations, including marketing more for the mobile application, bills, and other electronic services provided by the banks and supporting the appropriate use of e-banking to encourage customers to use them more

Influence of Short Selling Mechanism on Equity Pledge Behaviors of Major Shareholders: Evidence from China’s A Share Market

Fri, 25 Sep 2026 00:23:30 +0000

The margin trading system launched in March 2010 is an important measure of financial innovation in China’s capital market, which brings short selling mechanism to the securities market. Short selling mechanism can improve the pricing efficiency of the stock market, accelerate the spread of negative news of listed companies, increase the downward pressure on their stock prices, and thus may reduce the equity pledge behaviors of major shareholders. By using quarterly data from 2010 to 2020 of A-share listed companies in Shanghai and Shenzhen stock exchanges, this paper empirically examines the inhibitory effect of short selling mechanism on equity pledge behaviors of major shareholders. The paper shows that short selling mechanism significantly inhibits the equity pledge behaviors of major shareholders and reduces the times and ratio of their equity pledge, and that the greater the power of short selling, the more obvious the inhibitory effect. In addition, short selling mechanism can restrain the tunneling practice of major shareholders, improve the equity balance degree of the companies, and therefore reduce the equity pledge behaviors of major shareholders. The findings of the paper enrich the empirical results of short selling mechanism in corporate governance, and also help deepen the understandings of the motives and influence factors of large shareholders’ equity pledge.

Government Cash Transfers and Poverty Reduction in Kenya: Evidence from a DEMETRA CGE-Microsimulation Model

Mon, 28 Sep 2026 07:49:52 +0000

Government cash transfer programmes are a central component of Kenya's social protection system, yet their economy-wide and distributional effects remain insufficiently quantified. This paper evaluates the poverty effects of a real KES 0.5 billion increase in government-to-household transfers using the DEMETRA comparative-static computable general equilibrium model linked to household microsimulation. The CGE model is calibrated to a customized 2021 Kenya Social Accounting Matrix, while the microsimulation uses the 2015/16 Kenya Integrated Household Budget Survey. The framework separates a direct welfare channel, through which transfers raise household income, disposable income and consumption, from an indirect macro-fiscal channel operating through government saving, aggregate saving, investment, output, factor income and prices. The simulation raises income and consumption for most household groups, with the largest proportional gains among lower-income groups. National poverty incidence falls from 40.7 percent to 31.6 percent, while the poverty gap declines from 15.5 percent to 11.0 percent. Under the savings-driven investment closure, the fiscal balance, total saving, investment and gross domestic product weaken. The findings show that cash transfers can generate substantial short-run poverty reduction, but the size of the gains depends on targeting, the microdata baseline and the financing closure. Sustainable expansion therefore requires accurate targeting and an explicit financing strategy.