Macroeconomic Risk and Growth in the Southeast Asian Countries: Insight from SEA: Volume 33B

Risk reporting in financial reports has a positive impact on the company and its stakeholders. The purpose of this research is to present a literature review using the bibliometric method with the title we used is Risk Reporting, and the keywords are risk disclosure, risk reporting, stakeholders, and stakeholder theory. Data processing in this chapter uses Publish or Perish (PoP) software and Vos Viewers. This study uses the Google Scholar database. The researcher scanned the journal by using Scimagojr.com to view the journal quartile. Before the search was revised, there were 230 papers from 1991 to 2021 (30 years). Researchers will see the development of risk reporting from several sides, such as the country of origin of the researcher, the type of industry that reports risk, the research methods that have been used so far, and the analysis used for reporting risk.

This chapter investigates the effect of financial performance and corporate governance on market performance, using evidence from the companies listed on the IDX30 Index of the Indonesia Stock Exchange (IDX) from 2015 to 2018. The authors use six main independent variables and one dependent variable, controlled by using control variables in the regression analysis. Ordinary least square (OLS) regression methods are used to model the relationship between the dependent variable and the independent variables. The results show that the current ratio (CR) and Board Size (BS) have a significant negative effect on stock return (SR). In contrast, the quick ratio (QR) and debt to equity ratio (DER) have a significant positive impact on SR. Both the debt to asset ratio (DAR) and Independent Board of Commissioners (BOC) have an insignificant effect on SR. This evidence suggests that the CR, QR, DER, and BS are essential factors affecting SR.

This study aims to verify the influence of stakeholders on Disruptive Innovation Disclosure (DID) by using company size as a control variable. DID is measured using the DID index. The authors use panel data regression with the period 2011–2020. Observations were made on 198 companies throughout the year in companies around the world. This study proves that shareholders, customers, suppliers, and company size are dimensions that affect DID. This situation shows that these dimensions have the power to control DID. The average company in the world has provided information about disruptive innovation. The scope of this research is limited to countries that have a visualization network of disruptive innovation collaboration in as many as 15 countries. The value of this study is to portray DID in countries that have disruptive innovation collaborative visualization networks.

The aviation business has had a difficult time due to the COVID-19 pandemic in the past year. As a result, people worldwide are limited to travel which causes a decrease in turnover from a business in the transportation sector, particularly aviation. This condition, indeed, also affects the company’s stock price. This study examines the volatility of stock prices as an initial indication of what has happened and looks at future projections. The method used in this study is the autoregressive integrated moving average (ARIMA) in achieving research objectives. The findings found that the autoregressive combined moving average on AR1 and MA1 can show conditions based on past data and predict the projection of its volatility. The aviation business is still considered to survive with daily stock prices that are relatively positive and stable for the next upcoming period.

This chapter focuses on testing optimal capital structure theory: The role of intervening variable debt to equity ratio (DER) on the influence of the financial performance, Ownership Structure of Independent Board of Commissioners (IBCO), Audit Committee (ACO), and Institutional Ownership on Firm Value. The research design was explanatory research using path analysis. Using purposive sampling, 61 manufacturing companies, observation period from 2014 to 2018 with 286 N samples. The research novelty empirically can prove the role of intervening variable DER on the effect of return on assets (ROA) on firm value and shows the market response to the ROA is fully reflected by DER, indicating the existence of an optimal capital structure. The role of DER on the effect of ROE and IBCO on firm value is a partial mediation with the inverse direction. This phenomenon shows that the mechanism of forming a balance between the responses of investors and creditors relates to debt financing.

One of the main sustainable development goals (SDGs) highlights gender equality. Gender inequality is usually measured through the Gender Inequality Index (GII) based on three main dimensions, namely, (1) economy, (2) social empowerment, and (3) reproductive health, as demonstrated by death ratio and fertility rates. The aim is to formulate a model for women’s empowerment towards achieving the SDGs. Specifically, the objectives include (1) comparing gender inequality levels among ASEAN countries and (2) analyzing regulations on gender and development perspectives in Indonesia. This research used the mixed method and panel data, namely analyzing gender inequality.

The results show that, in the common effect model, all variables affected the participation of women in the workforce. The analysis shows that the enactment of laws and regulations on gender mainstreaming has an impact on reducing gender inequality and increasing various indicators of gender mainstreaming, especially in increasing the participation of women in the workforce.

The first alternative is to enrich shareholding by management. The basic theory of this research is the agency theory. This study aims to examine the institutional ownership, dividend policy, debt policy, and risk that are interconnected directly or indirectly. The research sample was a non-financial company from 2010 to 2014. Four variables will be tested using Two-stage Least Square (2SLS) in the SPSS application. The result of this study represents the overall interdependency relationship among institutional ownership, dividend policy, debt policy, and risk. The research outcome signifies an interdependency relation for endogenous variables, even if some exogenous variables have no significant relation. In addition, the effects of substitution between institutional ownership and dividend policy, debt policy and dividend policy, and institutional ownership and risk. Meanwhile, institutional ownership and dividend policy, risk and dividend policy, and risk and debt policy have no substitution effect.

The authors believe the COVID-19 pandemic has an impact on supply and demand. The potential decline in real sector performance leads to lower expectations of securities performance. The uncertainty of future performance can change investor behaviour. This study tried to gain insight into stock investor behaviour during the COVID-19 pandemic. The results showed that the majority of the investor realized and believed the pandemic would affect the stock market performance. Hence, they did not show herding behaviour and were very confident during the COVID-19 pandemic. The survey also indicates that investors tend to avoid risk rather than take the opportunity to buy at a lower price. Moreover, investors believe that the COVID-19 vaccine will soon be found, and the economy will return to normal. Government and self-regulated organizations (SRO) are responsible for making effective policies to convince the investors about the future prospect.

Environmental degradation is a global concern that results from massive economic activities. Carbon dioxide (CO₂) emissions are one of the environmental degradation indicators. This study investigates the impact of population, oil consumption, international tourist arrival, and corruption on CO₂ emissions in ASEAN’s five developing countries of Malaysia, Indonesia, Thailand, Philippines, and Vietnam from 1998 to 2017. This study employed panel Fixed-effect (FE) regression to estimate the panel data generated by British Petroleum and World Bank. The result revealed that the population has a significant positive effect on CO₂ emissions. Furthermore, oil consumption has a significant positive effect on CO₂ emissions. Meanwhile, the effect of tourism and the corruption perception index (CPI) as a proxy of corruption on CO₂ emissions was positive but not significant. Authorities should construct such policies to reduce CO₂ emissions by applying low-carbon technologies, green mass transport, and creating less corrupt behavior.

A banking system is essential for financial stability, especially economic growth and development. The authors investigate the dynamic linkage of key banking system stability measures, namely, liquidity, capital, profitability, and credit risk. To this end, the authors employ Panel Vector Autoregressive (VAR) to a panel data set of country-level banking system indicators from seven developing countries; from March 2010 to December 2020 (308 country quarter observations). A nation is selected on the basis of similar characteristics large and bank-based economy with the considerably same stage of economic development. The authors find a remarkable resilient feature of the banking system in which both liquidity risk and credit risk appears significant only in the short run (within three quarters). Shocks from both risk sources dissipate quickly, suggesting an internal mechanism is at work. This study provides evidence of how a good performance of financial safety net should be.

In this study, the authors propose a VaR method for evaluating the market risk of investing in the stock portfolio of Pension Institutions. The data used for this research is hypothetical data, including the exposure or the amount of value invested by Pension Institutions in their stock portfolio. With the VaR – Monte Carlo simulation, the authors know the loss level will occur when the Indonesian economy or market conditions deteriorate. The lost value amount is determined in the Rupiah value, according to the confidence level or the desired percentile level. The results revealed that at the 5% (99.95%) percentile level of confidence, a pension fund with an investment value of IDR 4,070,000,000 would suffer a loss of IDR 1,110,000,000. While at the 1% (99.995%), the loss rate will be of IDR 1,480,000,000. The conclusion is that the results of this study are useful for Pension Institutions in managing their asset portfolios with the VaR model.