The Economics and Finance Letters

Key factors influencing P2P lending adoption in Vietnam

Le Trung Hieu, Tram Thi Xuan Huong, Nguyen Hong Ha — Fri, 16 Jan 2026 00:00:00 -0600

This research examines the salient drivers of the adoption of peer-to-peer (P2P) lending in Vietnam, a fast-growing country with expanding digitalized finance activities. This research is grounded in theories of trust, perceived risks, regulation, economic behaviors, and technological innovation. From these theoretical foundations, five key drivers are derived: trust, perceived risk, regulatory framework, economic status, and usefulness of technology. A quantitative method was used, based on 285 respondents from Hanoi and Ho Chi Minh City, with the analysis employing multiple linear regression to investigate the effect of independent variables on the adoption of P2P lending. The findings demonstrate that all five drivers have a significant effect on the usage of P2P lending, with perceived risk and trust having the greatest impact. The research calls for the reinforcement of user trust by enhancing transparency of the platforms and secure operation, reducing perceived risks, and issuing clearer regulation policies. Economic stability and user-friendly technology are key facilitators for widespread adoption. The research contributes to the expanding FinTech literature in emerging economies and provides actionable recommendations for policymakers, platform developers, and financial institutions to support the sustainable growth of P2P lending within Vietnam.

Capital market instruments and development in Nigeria: The mediating role of corporate taxation

Cordelia Onyinyechi Omodero — Fri, 16 Jan 2026 00:00:00 -0600

This research aims to evaluate the role of investment instruments in fostering capital market growth in Nigeria. It employs time series data covering the period from 1991 to 2023. The investment assets include equity, government bonds, and corporate bonds, while corporate tax is considered a moderating factor. The Vector Error Correction Model is employed for data analysis in this study. The results indicate that, in the long run, corporate bonds lead to a 6.4% increase in capital market expansion, while other predictors tend to suppress it. All things being equal, government bonds, equity, and corporate tax substantially decrease capital market growth in the long term by 4.7%, 51.4%, and 65.5%, respectively. There is a 69.1% convergence to equilibrium in the current period, meaning the previous years’ deviation from long-run asymmetry is corrected at an adjustment speed of 69.1% in the short run. A percentage change in corporate tax is associated with a 1.1% increase in capital market growth in the short term. Additionally, a percentage change in equity, government bonds, and corporate bonds in the short run decreases capital market growth by 80.9%, 10.5%, and 5.8%, respectively. Further tests show that market capitalization responds negatively to shocks from corporate bonds and equities across nearly all periods, while it reacts positively to government bonds and corporate tax. Thus, the study proposes a limit on the issuance of government bonds to foster private sector access to funds, which are essential for supporting capital market growth and performance in the country.

Exploring user switching intention to central bank digital currency payments

Chengdong Li, Lain-Tze Tee, Si-Roei Kew, Chenglin Li — Tue, 27 Jan 2026 00:00:00 -0600

With the widespread use of mobile devices, mobile payments have become increasingly popular worldwide. In China, third-party providers such as Alipay and WeChat Pay dominate the mobile payment landscape. However, drawbacks of these systems have gradually surfaced, prompting the development of Central Bank Digital Currency (CBDC) payments, most notably China’s Digital Yuan (e-CNY). Despite its advantages, CBDC adoption remains limited compared with established third-party platforms. This study investigates the factors influencing users’ switching from third-party mobile payments to CBDC payments. Unlike third-party systems, CBDC belongs to the cash category (M0), making it distinct in nature and warranting a tailored research framework. To capture this complexity, the Push-Pull-Mooring (PPM) model was employed, integrated with privacy calculus theory, status quo bias theory, and national identity theory, to construct a comprehensive model of switching intention. Methodologically, a combined approach of partial least squares (PLS), artificial neural networks (ANN), and fuzzy-set qualitative comparative analysis (fsQCA) was adopted. This hybrid strategy enhances robustness and provides nuanced insights into the interplay of causal factors. The findings reveal that privacy concern and trust act as key drivers of users’ intention to switch to CBDC payments, whereas inertia represents a significant barrier. These results enrich theoretical research on CBDC payments and extend the application of the PPM model in a novel financial context. Practically, the study informs policymakers and managers by highlighting the importance of targeted strategies that strengthen trust, address privacy issues, and reduce switching barriers, thereby accelerating CBDC adoption.

Carroll’s CSR pyramid model revisited: The contingent role of responsible leadership in insurance product innovation performance

Kyeame Ghansah, Uday Kumar Jagannathan, Rabiu Latif Mustapha — Fri, 13 Feb 2026 00:00:00 -0600

This study examines the relationship between Corporate Social Responsibility (CSR) and product innovation performance, focusing on the dimensions of responsible leadership, including ethical, transformational, and sustainability-oriented leadership as contingent factors. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) with data from 370 employees across 49 insurance companies in Ghana, the findings reveal that economic CSR significantly impacts product innovation performance (β = 0.129, p = 0.038) of firms. While ethical CSR, legal CSR, and philanthropic CSR showed no direct effect relationships, there was evidence of indirect influences through responsible leadership. Moderation analysis indicates that ethical leadership strengthens the effect of economic CSR (β = 0.430, p = 0.001) as well as the negative effect of philanthropic CSR (β = -0.272, p = 0.006) on product innovation performance. Sustainability-oriented leadership also enhanced the relationships between philanthropic CSR (β = 0.312, p < 0.001), economic CSR (β = -0.355, p < 0.001), and product innovation performance. Additionally, transformational leadership was found to have a positive moderating effect on ethical CSR (β = 0.384, p = 0.015) and philanthropic CSR (β = 0.372, p < 0.001), and a negative moderating effect on legal CSR (β = -0.539, p = 0.002). Grounded in stakeholder and upper echelons theories, this study shows that insurers should integrate economic CSR with ethical and sustainability-oriented leadership to maximize product innovation. Firms in the finance sector, particularly insurers, should be intentional about their CSR strategies and incorporate the appropriate leadership techniques to achieve product innovation performance.

The role of women’s perceived empowerment in sustaining mobile banking engagement: Evidence from rural Indonesia

Dwi Charnila, Siti Novrianti Winjaniatun, Evi Rinawati Simanjuntak — Fri, 13 Feb 2026 00:00:00 -0600

Digital financial inclusion aims to ensure equitable access to financial services; however, rural women continue to face structural, cultural, and psychological barriers that limit their ability to adopt and sustain mobile banking usage. This study extends the Theory of Planned Behavior (TPB) by incorporating Perceived Women’s Empowerment (PWE) as both a direct predictor and a moderating variable influencing long-term digital financial engagement. A quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM) was conducted on data collected from 420 rural women mobile banking users in Indonesia. The measurement and structural models demonstrated strong reliability, validity, and significant relationships among all hypothesized paths. Attitude toward technology (β = 0.199), subjective norm (β = 0.164), and perceived behavioral control (β = 0.487) significantly predicted behavioral intention. Behavioral intention strongly influenced continuous usage (β = 0.470), which subsequently had a major impact on digital financial inclusion (β = 0.742). Perceived women’s empowerment directly affected usage patterns (β = 0.141) and significantly strengthened the relationship between behavioral intention and continuous usage. The findings highlight empowerment as a critical behavioral catalyst that enables rural women to move from basic digital access toward meaningful and sustained financial engagement. The proposed framework emphasizes the need for gender-sensitive financial inclusion strategies that build psychological readiness and agency, allowing policymakers and practitioners to design more inclusive and effective digital financial systems for developing regions.

Balancing resources: Returns and the digital transformation of Vietnam’s banking sector

Nguyen Thi Lan Anh, Duy Van Nguyen — Fri, 13 Feb 2026 00:00:00 -0600

Research on digital transformation plays a crucial role for enterprises, especially those in emerging economies such as Vietnam. This study aims to examine the impact of digital transformation, measured through the ICT index, on bank performance (ROE, ROA) during the period 2015–2022, involving 26 commercial banks listed on the Vietnam Stock Exchange. The results of the Feasible Generalized Least Squares (FGLS) regression analysis indicate that the ICT index of the previous year has a negative impact on bank performance. This finding suggests that the Resource-Based View (RBV) theory can provide a sound explanation for this relationship. Specifically, while banks make significant investments in digital transformation, the limited availability of resources may generate high costs, thereby negatively affecting bank performance in the short term. Based on these results, the authors also provide several theoretical and practical implications for enhancing bank performance through digital transformation. Establishing a clear roadmap that aligns with current capabilities can help banks avoid unnecessary costs during the digital transformation process. This study will make a significant theoretical contribution by explaining the impact of digital transformation on bank performance in Vietnam. Consequently, banks and relevant agencies can develop appropriate resource-balancing policies to promote the effectiveness of digital transformation.

Financial literacy, financial behavior, and financial decision: The mediating role of investment intention among SMEs in Indonesia

Moh Amin, Cipto Wardoyo, Puji Handayati, Agung Winarno — Fri, 13 Feb 2026 00:00:00 -0600

Financial literacy and financial behavior are two primary determinants of financial decision-making among small and medium enterprises (SMEs), and empirical research holds significant promise for entrepreneurship. Therefore, this study investigates these linkages and analyzes the mediating role of investment intention in promoting investment decisions among SMEs in Malang Raya, East Java, Indonesia. The research employed a quantitative methodology using partial least squares structural equation modeling (PLS-SEM) and was grounded in the Theory of Planned Behavior (TPB). A total of 310 halal-certified SME owners in Malang Raya participated in this study. The results reveal that financial literacy can influence investment; however, it does not necessarily promote investment decisions. Additionally, financial behavior showed a negative direct effect on investment decisions, but it contributes positively when mediated by intention. This finding confirms that investment intention can be a strong predictor of decision-making. The contributions of this study are twofold. First, it adds to the existing literature on the role of financial literacy and its components in supporting investment decisions, particularly within the context of entrepreneurship and SMEs. Second, it highlights the limited role of intention alone, suggesting that individual or organizational knowledge can directly influence behavior, and that intention is an integral part of behavior.

Federal reserve interest rates, investment behavior, and arbitrage in exchange traded-funds

Pegah Sobati, Ayben Koy, Andac Batur Colak — Mon, 16 Feb 2026 00:00:00 -0600

This study investigates the influence of U.S. Federal Reserve interest rate policy on investor behavior, liquidity, and arbitrage efficiency in 29 iShares exchange-traded funds (ETFs) spanning large-, mid-, and small-cap benchmarks from 2013 to 2024. Using weekly data and econometric techniques combining time-series and panel approaches, the analysis incorporates key macroeconomic indicators, interest rates, the U.S. dollar index, economic activity measures, and market volatility to assess their combined effect on ETF market dynamics. Findings show that interest rate shifts significantly influence asset allocation, sector preferences, and risk tolerance, with higher rates often strengthening the dollar and increasing the appeal of fixed-income assets. Active trading is associated with narrower bid–ask spreads through enhanced liquidity, while passive investment widens spreads. ETF volatility is positively related to spreads, reflecting increased uncertainty and transaction costs in turbulent markets. The results provide empirical evidence on the behavioral channels linking monetary policy, market conditions, and trading efficiency, offering implications for policymakers, asset managers, and market participants. The major contribution of the study is to the empirical finance literature by integrating time-series and panel econometric methods to quantify the joint effects of interest rate policy, macroeconomic indicators, and investor sentiment on ETF market microstructure. Findings offer statistically robust insights into liquidity formation, volatility transmission, and arbitrage efficiency in diversified ETF markets.

Forecasting stock market volatility using GARCH models: A comparative study of the U.S. and Saudi markets

Somaiyah Alalmai — Fri, 20 Feb 2026 00:00:00 -0600

The paper analyzes the volatility trends of the Saudi Arabian Tadawul All Share Index (TASI) and the S&P 500 index, focusing on the COVID-19 pandemic as a key market shock. The analysis incorporates daily stock return data covering the period from January 2015 to May 2025. The volatility of emerging and developed markets is examined through EGARCH and GARCH approaches to study characteristics such as volatility clustering and asymmetry. The effect of the pandemic is directly embedded by introducing COVID-19 dummy variables into the models. Empirical findings suggest that both indices are characterized by volatility clustering, and the EGARCH model is more appropriate than the GARCH model for estimating asymmetric volatility, particularly during crisis periods. Additionally, the COVID-19 dummy variable is statistically significant in the EGARCH model, as opposed to the GARCH model. The results support the leverage effect, indicating that negative shocks have a more significant impact on market volatility than positive ones. The S&P 500 showed a faster recovery after the COVID-19 crisis, whereas TASI was slower in mean reversion, indicating structural and behavioral divergence between the markets. This comparative study contributes to the literature by providing a clear picture of volatility dynamics in diverse financial contexts and highlighting the superiority of EGARCH models during crisis periods. The findings offer guidance to policymakers aiming to improve market stability and to investors seeking diversification into both developing and mature markets.

Gen-Z and green banking adoption in Yogyakarta, Indonesia: Evidence from a PLS-SEM survey

Ninik Sri Rahayu, Ahmad Rifqi Hidayat — Wed, 25 Feb 2026 00:00:00 -0600

The study investigated the determinants of Generation Z's intention to adopt green banking using four variables: financial literacy, sustainability literacy, green banking intention, with trust serving as a mediating variable. Generation Z was selected as the target group due to their high awareness of environmental issues and advanced digital skills, which may make them more receptive to eco-friendly efforts such as green banking. A digital survey in 2024 focused on the youth of Yogyakarta, Indonesia. Of the distributed questionnaires, 417 valid responses were collected, resulting in a response rate of 40%. The data was analyzed using PLS-SEM. The results demonstrate that financial literacy substantially affects both sustainability literacy (β = 21.255, p = 0.000) and trust (β = 11.261, p = 0.000), which consequently influence green banking intention. Additionally, financial literacy directly encourages green banking adoption (β = 4.006, p = 0.000), while trust primarily acts as a determinant in bridging financial literacy and intention to act (β = 11.262, p = 0.000). The findings can assist policymakers and SDG adopters in engaging post-millennials as key actors for promoting the UN sustainable development framework and spreading eco-literacy within their communities at various levels.