IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v10y2022i9p1462-d803404.html
   My bibliography  Save this article

Modelling the Vulnerability of Financial Accounting Systems during Global Challenges: A Comparative Analysis

Author

Listed:
  • Monica Laura Zlati

    (Department of Business Administration, Dunarea de Jos University, 800008 Galati, Romania
    Department of Accounting, Audit and Finance, Stefan Cel Mare University, 720229 Suceava, Romania)

  • Romeo Victor Ionescu

    (Department of Administrative Sciences and Regional Studies, Dunarea de Jos University, 800008 Galati, Romania)

  • Valentin Marian Antohi

    (Department of Business Administration, Dunarea de Jos University, 800008 Galati, Romania
    Department of Finance, Accounting and Economic Theory, Transilvania University, 500036 Brasov, Romania)

Abstract

In times of crisis, the vulnerability of global financial markets can be considered as an element in the analysis of economic stability and sustainable development, which also indicates significant differences in the recognition of economic capital. We aimed to analyse the convergence of accounting systems within a global context under the influence of economic crises and uncertainty, which was based on an observational study of the major financial markets in Paris, New York and Shanghai during the period of 2015–2022. A dedicated database was built using official information. The main objective of the study was to develop a volatility matrix of the gravity development model in relation to the characteristics of the accounting systems on which economic capital recognition is based. The proposed model highlights regional disparities according to relevant statistical grounds and quantifies the volatility issues that are induced by the application of economic capital recognition rules on the global model. The methods that were used consisted of a critical study of the literature to substantiate the research hypotheses and an application of analytical procedures to define, test and validate the proposed statistical model. The usefulness of the model is all the more important because its development took into account the pandemic period and the outbreak of the military conflict in Ukraine, which helped to create pragmatic tools to ensure the faster convergence of accounting systems and limit the spread of vulnerabilities through open transactions on the global market. The results of the research can support decision makers in accessing regional financial markets and achieving a better convergence of accounting information. The study and its approach were new and original and the results represent a good base for accounting policy adjustments from a global perspective.

Suggested Citation

  • Monica Laura Zlati & Romeo Victor Ionescu & Valentin Marian Antohi, 2022. "Modelling the Vulnerability of Financial Accounting Systems during Global Challenges: A Comparative Analysis," Mathematics, MDPI, vol. 10(9), pages 1-21, April.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:9:p:1462-:d:803404
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/10/9/1462/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/10/9/1462/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Li, Lin Yang & Hermes, Niels & Meesters, Aljar, 2019. "Convergence of the performance of microfinance institutions: A decomposition analysis," Economic Modelling, Elsevier, vol. 81(C), pages 308-324.
    2. Richard Simmons & Paolo Dini & Nigel Culkin & Giuseppe Littera, 2021. "Crisis and the Role of Money in the Real and Financial Economies—An Innovative Approach to Monetary Stimulus," JRFM, MDPI, vol. 14(3), pages 1-28, March.
    3. Adrian, Tobias & Borowiecki, Karol Jan & Tepper, Alexander, 2022. "A leverage-based measure of financial stability," Journal of Financial Intermediation, Elsevier, vol. 51(C).
    4. Erik Vogt & Michael Fleming & Or Shachar & Tobias Adrian, 2017. "Market Liquidity After the Financial Crisis," Annual Review of Financial Economics, Annual Reviews, vol. 9(1), pages 43-83, November.
    5. Abuzayed, Bana & Bouri, Elie & Al-Fayoumi, Nedal & Jalkh, Naji, 2021. "Systemic risk spillover across global and country stock markets during the COVID-19 pandemic," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 180-197.
    6. Chen, Qianying & Filardo, Andrew & He, Dong & Zhu, Feng, 2016. "Financial crisis, US unconventional monetary policy and international spillovers," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 62-81.
    7. Daniel Covitz & Nellie Liang & Tobias Adrian, 2015. "Financial Stability Monitoring," Annual Review of Financial Economics, Annual Reviews, vol. 7(1), pages 357-395, December.
    8. Tobias Eckernkemper, 2018. "Modeling Systemic Risk: Time-Varying Tail Dependence When Forecasting Marginal Expected Shortfall," Journal of Financial Econometrics, Oxford University Press, vol. 16(1), pages 63-117.
    9. Karthik Balakrishnan & Ross Watts & Luo Zuo, 2016. "The Effect of Accounting Conservatism on Corporate Investment during the Global Financial Crisis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 43(5-6), pages 513-542, May.
    10. Eckhard Hein & Walter Paternesi Meloni & Pasquale Tridico, 2021. "Welfare models and demand-led growth regimes before and after the financial and economic crisis," Review of International Political Economy, Taylor & Francis Journals, vol. 28(5), pages 1196-1223, October.
    11. Stuart Mestelman & Emad Mohammad & Mohamed Shehata, 2015. "The Convergence of IFRS and U.S. GAAP: Evidence from the SEC's Removal of Form 20‐F Reconciliations," Accounting Perspectives, John Wiley & Sons, vol. 14(3), pages 190-211, September.
    12. Liudmila I. Khoruzhy & Valery I. Khoruzhy & Bogdan S. Vasyakin & Wenhao Shen, 2022. "Program-Targeted Approach to Managing Financial Risks of Sustainable Development Based on Corporate Social Responsibility in the Decade of Action," Risks, MDPI, vol. 10(3), pages 1-20, March.
    13. Tao Chen, 2020. "Country herding in the global market," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 21(2), pages 174-185, April.
    14. Aktar, Asikha & Alam, Md. Mahmudul & Al-Amin, Abul Quasem, 2021. "Global Economic Crisis, Energy Use, CO2 Emissions and Policy Roadmap amid COVID-19," OSF Preprints 69kje, Center for Open Science.
    15. Fuad, Fuad & Juliarto, Agung & Harto, Puji, 2019. "Does IFRS convergence really increase accounting qualities?Emerging market evidence," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 24(48), pages 205-220.
    16. repec:ers:journl:v:xxiv:y:2021:i:3:p:899-917 is not listed on IDEAS
    17. Walter Isard & Merton J. Peck, 1954. "Location Theory and International and Interregional Trade Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 68(1), pages 97-114.
    18. Michael E. Bradbury & Tom Scott, 2021. "What accounting standards were the cause of enforcement actions following IFRS adoption?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 2247-2268, April.
    19. Smales, L.A., 2021. "Investor attention and global market returns during the COVID-19 crisis," International Review of Financial Analysis, Elsevier, vol. 73(C).
    20. Yaxian Gong, 2022. "Which is better, selective disclosure or fair disclosure? The effects of information asymmetry and incentive misalignment," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 29(1), pages 154-178, January.
    21. Jason Hickel, 2017. "Is global inequality getting better or worse? A critique of the World Bank’s convergence narrative," Third World Quarterly, Taylor & Francis Journals, vol. 38(10), pages 2208-2222, October.
    22. Urooj Khan, 2019. "Does Fair Value Accounting Contribute to Systemic Risk in the Banking Industry?," Contemporary Accounting Research, John Wiley & Sons, vol. 36(4), pages 2588-2609, December.
    23. Walter Isard, 1954. "Location Theory and Trade Theory: Short-Run Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 68(2), pages 305-320.
    24. Eling, Martin & Ghavibazoo, Omid & Hanewald, Katja, 2021. "Willingness to take financial risks and insurance holdings: A European survey," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Majid Ahmadi & Nathan Durst & Jeff Lachman & John A. List & Mason List & Noah List & Atom T. Vayalinkal, 2022. "Nothing Propinks Like Propinquity: Using Machine Learning to Estimate the Effects of Spatial Proximity in the Major League Baseball Draft," NBER Working Papers 30786, National Bureau of Economic Research, Inc.
    2. Martina Lawless, 2010. "Deconstructing gravity: trade costs and extensive and intensive margins," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1149-1172, November.
    3. Seetaram, Neelu, 2010. "Computing airfare elasticities or opening Pandora's box," Research in Transportation Economics, Elsevier, vol. 26(1), pages 27-36.
    4. Gharleghi, Behrooz & Popov, Vladimir, 2018. "Changes in the geographical structure of trade in Central Asia: Real flows in the 1989-2016 period versus gravity model predictions," MPRA Paper 89041, University Library of Munich, Germany.
    5. Adelaide Baronchelli & Raul Caruso & Roberto Ricciuti, 2022. "Trade in Small Arms and Light Weapons: Are embargoes effective?," The World Economy, Wiley Blackwell, vol. 45(5), pages 1336-1361, May.
    6. Qianyu Zhao & Boyu Xie & Mengyao Han, 2023. "Unpacking the Sub-Regional Spatial Network of Land-Use Carbon Emissions: The Case of Sichuan Province in China," Land, MDPI, vol. 12(10), pages 1-22, October.
    7. Nora Sharkasi & Nguyen Vo Hien Chau & Jay Rajasekera, 2023. "Export Potential Analysis of Vietnamese Bottled Coconut Water by Incorporating Criteria Weights of MCDM into the Gravity of Trade Model," Sustainability, MDPI, vol. 15(15), pages 1-26, July.
    8. Koffi Dumor & Li Yao, 2019. "Estimating China’s Trade with Its Partner Countries within the Belt and Road Initiative Using Neural Network Analysis," Sustainability, MDPI, vol. 11(5), pages 1-22, March.
    9. Escaith, Hubert, 2023. "Trade, (de)globalization and the distance puzzle," MPRA Paper 119045, University Library of Munich, Germany.
    10. Sung-Gook Choi & Deok-Sun Lee, 2019. "Engel's law in the commodity composition of exports," Papers 1911.01568, arXiv.org.
    11. Gil, Jose M. & Montañés, Antonio & Vásquez-González, Bernardo, 2023. "Are prices converging in the global sawnwood market?," Forest Policy and Economics, Elsevier, vol. 155(C).
    12. Siyu Huang & Wensha Gou & Hongbo Cai & Xiaomeng Li & Qinghua Chen, 2020. "Effects of Regional Trade Agreement to Local and Global Trade Purity Relationships," Papers 2006.07329, arXiv.org.
    13. Nii-Aponsah, Hubert, 2022. "Automation exposure and implications in advanced and developing countries across gender, age, and skills," MERIT Working Papers 2022-021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Franziska Appel & Alfons Balmann, 2023. "Predator or prey? Effects of farm growth on neighbouring farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 214-236, February.
    15. Dasgupta,Susmita & Wheeler,David R., 2020. "Modeling and Predicting the Spread of Covid-19: Comparative Results for the United States, thePhilippines, and South Africa," Policy Research Working Paper Series 9419, The World Bank.
    16. Trindade, Marco A.S. & Floquet, Sergio & Filho, Lourival M. Silva, 2020. "Portfolio theory, information theory and Tsallis statistics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    17. Muhammad ISHAQ & Qing PING & Zahoorul HAQ & Chongguang LI & Chen TONG, 2016. "Maximum residue limits and agrifood exports of China: choosing the best estimation technique," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(2), pages 78-92.
    18. Sri Indah Nikensari & Ega Nurdiyanto & Wong Sing Yun & Siti Fatimah Zahra, 2024. "Sustainable Exports to the European Union from ASEAN Countries: Is There an Impact of Low Carbon Economy?," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 616-623, July.
    19. Michael A. Allen, 2018. "The Influence of Regional Power Distributions on Interdependence," Journal of Conflict Resolution, Peace Science Society (International), vol. 62(5), pages 1072-1099, May.
    20. Iman Pal & Saibal Kar, 2021. "Gravity Models in International Trade: An Exploration in Econo-Physics," South Asian Journal of Macroeconomics and Public Finance, , vol. 10(1), pages 72-104, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:10:y:2022:i:9:p:1462-:d:803404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.