Advance Journal of Econometrics and Finance
The Advance Journal of Econometrics and Finance is a valuable resource for economists, finance professionals, and students alike. This journal provides an up-to-date analysis of the latest economic trends, data, and research from around the world. It also covers topics such as asset pricing, financial engineering, macroeconomics, and microeconomics. With its comprehensive coverage of the field of econometrics and finance, this journal is an invaluable source for anyone looking to stay informed on the latest developments in this field.
Social Performance Determinants of Global Islamic and Conventional Microfinance Institutions and Human Happiness
The achievement of human happiness is an emerging issue in 21st century where mental health is gaining as much importance as physical health and financial issues. Therefore, the purpose of this research was to explore and compare the role that the social performance of global Islamic and conventional microfinance institutions play in achieving human happiness by using non-traditional indexes. Further, the study also checked the moderating role of institution size in this relationship. Results indicate that the social performance of both Islamic and conventional microfinance institutions is important to achieving human happiness. Institution size as a moderator has a negative impact on social performance of conventional microfinance institutions in achieving sustainable development due to the possibility of commercialization. In terms of policy recommendations, the results of this study present several policy directions for both Islamic and conventional institutions managers for both developed and developing countries. Both Islamic and conventional MFIs mangers should focus on social performance especially outreach to the poor women to achieve human happiness. The managers should realize that in the case of increasing the institution's size, social performance can be improved. This study also gives directions to the government, central bodies, and other regulatory authorities to develop policies for improving the social performance of both Islamic and conventional microfinance institutions to achieve human happiness. Central bodies must switch from using outdated metrics used in MF industry related to governance, auditing, and client protection to gauge development and progress to metrics that focus on happiness and well-being. This study has taken multiple indicators of social performance that are extensively discussed in MIX reports. For future studies; financial performance indicators can be included in the study. JEL Classification: C1, D6, D9. Keywords: Social Performance, Islamic Microfinance, Microfinance, Human Happiness, Human Happiness Index
Copyright (c) 2026 Advance Journal of Econometrics and Finance
Artificial Intelligence, Fintech Adoption, And Entrepreneurial Ecosystem Development For Sme Growth And Financial Inclusion In Pakistan
Small and medium-sized enterprises (SMEs) are central to economic development in Pakistan; however, their growth and financial inclusion remain constrained by limited access to finance, weak institutional support, and low adoption of advanced digital technologies. In response to these challenges, Artificial Intelligence (AI), Financial Technology (FinTech), and entrepreneurial ecosystem development have emerged as critical enablers of SME transformation. This study examined the impact of AI adoption, FinTech adoption, and entrepreneurial ecosystem development on SME growth and financial inclusion in Pakistan. Grounded in the Technology–Organization–Environment (TOE) framework, the study proposed and tested an integrated model capturing the combined effects of technological and institutional factors. A quantitative, explanatory, and cross-sectional research design was employed, using data collected from 400 SME owners, managers, and financial ecosystem stakeholders across Pakistan. Structural Equation Modeling (SEM) was used for data analysis. The findings revealed that AI adoption, FinTech adoption, and entrepreneurial ecosystem development significantly and positively influence both SME growth and financial inclusion. Among these, FinTech adoption demonstrated the strongest effect on financial inclusion, while the combined model explained a substantial proportion of variance in SME performance outcomes. The results highlight that integrated digital transformation and ecosystem support significantly enhance SME competitiveness, financial access, and sustainable growth in emerging economies. The study contributes to literature on digital finance and entrepreneurship by providing an empirically validated integrated framework for SME development in Pakistan.
FinTech and SME Financing Constraints in Developing Economies: Complementarity, Substitution, and the Limits of Digital Credit
Small and medium enterprises in developing economies face well-documented financing gaps, with collateral requirements, information asymmetries, and high transaction costs excluding most firms from formal bank credit. This paper synthesises evidence from 13 empirical studies examining how FinTech adoption affects SME and microenterprise financing across China, Sub-Saharan Africa, Indonesia, India, Ghana, and Sierra Leone. The central question addressed is whether digital finance substitutes for or complements traditional bank credit in relieving SME financing constraints. The evidence is genuinely mixed. In China, digital financial inclusion shows a substitution relationship with local bank branch density in alleviating cash-investment sensitivity, with the interaction term reaching 0.452, but the combined effect of both channels together exceeds either alone. Across 47 African countries, FinTech development raises SME digital finance access most strongly at lower percentiles of existing digital finance, with the effect declining from 4.075 to lower magnitudes as digital finance development increases, indicating diminishing returns. In Indonesia, perceived usefulness and ease of use (β = 0.34 each) drive FinTech adoption among SME owners more than trust or government support. Qualitative evidence from Ghana and Sierra Leone documents that mobile money provides informal businesses and base-of-pyramid entrepreneurs with micro-loans, financial record-keeping capability, and reduced cash-handling risk, but high platform charges and limited interoperability constrain the depth of these benefits. The paper concludes that FinTech's contribution to SME financing is most accurately characterised as relieving specific frictions, transaction costs, information asymmetry, and geographic access, rather than resolving the underlying collateral and risk-assessment constraints that determine formal credit access, and that the complementarity-substitution relationship is itself context-dependent rather than fixed. JEL codes: G21, L26, O16, M13, O55
Fintech, Sme Financing, Financing Constraints, Digital Financial Inclusion, Microenterprise, Complementarity, Developing Economies
Digital Leadership and Its Impact on Healthcare Organizational Performance
Digital leadership is becoming a very important component in changing and turning healthcare organizations around and enhancing their overall performance on a more technology-driven world. This paper discusses how digital leadership can contribute to innovation, improvement of operational efficiency, and patient outcomes. The digital leaders are defined by the capacity to incorporate the use of advanced technologies in the healthcare systems, including artificial intelligence, electronic health records, telemedicine, and data analytics, and retain a patient-centered approach. The article mentions the effectiveness of digital leadership in fostering organizational agility, facilitating decision-making based on data-driven insights, and enhancing cooperation among healthcare professionals. In addition, it also discusses the obstacles that healthcare facilities encounter when undergoing digital transformation, such as resistance to change, digital skills, cybersecurity, and financial limitations. The results indicate that companies with digitally competent leaders have a better quality of services, lower costs, and patient satisfaction. Moreover, the digital leadership helps to create a continuous learning and innovation culture, which is vital in adjusting to fast changing healthcare needs. The research finds that healthcare organizations need to invest in leadership, digital infrastructure, and training to gain maximum advantages of digital transformation. In this way, they will be able to attain sustainable performance changes and stay competitive in the new healthcare environment.
Digital Leadership, Healthcare Performance, Innovation, Technology Adoption, Patient Outcomes, Organizational Efficiency, Digital Transformation, Data Analytics, Telemedicine
Copyright (c) 2025 Advance Journal of Econometrics and Finance
Unravelling Capital Investment Horizons: The Mediating Effect of Exchange Rate Volatility on Macroeconomic-Sectoral Investment Nexus in Pakistan
This study investigates the critical mediating role of exchange rate volatility in the relationship between key macroeconomic indicators and sectoral financial investments in Pakistan from 2014 to 2023. Employing a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model to quantify exchange rate volatility and mediation analysis in R, we analyse its effect on investments in green finance, roads/dams, and metro projects. Our results reveal that exchange rate volatility is a significant transmission channel, mediating 70% of the effect of oil prices on investments but only 1% of the impact of Foreign Direct Investment (FDI), underscoring FDI's stabilizing role. Tax rates exert a strong direct negative influence, while stock market growth boosts investments but exacerbates volatility via speculative flows. Sectorally, green finance is highly sensitive to tax policy, roads/dams rely on FDI, and metro projects suffer from political reprioritization. The study contributes a dual-channel investment theory and offers policy recommendations, including oil-hedging mechanisms, renewable energy transitions, and sector-specific FDI facilitation, advocating for integrated macroeconomic-infrastructure planning in volatile emerging markets.
Exchange Rate Volatility, Infrastructure Financing, GARCH, Mediation Analysis, Pakistan, Macroeconomic Indicators
Intermediate Import Demand Under Liberalized FTA Regime With China : A Case Study For Pakistan
With the emerging trend of globalization in the world, Pakistan also took the advantage and entered in signing trade agreements with neighbouring countries. These agreements used to strengthen the economic welfare and gain from trade. This study attempts to evaluate the impact of Pak-China Free Trade Agreement (FTA) on import demand at dis-aggregated level of intermediate goods using time series data from 1990 to 2023. For analyzing this impact of FTA on import demand, we developed two models, one model with only FTA dummy and the other model with an interaction dummy of FTA with relative import price. In this study we employed the ARDL bound testing approach developed by Pesaran (2001) and found cointegration relationship among the variables. Long run result findings show that all the variables including FTA dummy influencing import demand more significantly and positively in first model, whereas in second import demand is highly elastic with respect to GDP, but less elastic with relative import price. The positive result for relative import price is different, which may be in this case of sectoral import demand of intermediate goods. It empathizes the needs of intermediate goods as a necessary goods to meet the production requirements irrespective of import prices.Whereas foreign exchange reserves only significant with FTA dummy model but insignificant in the interaction dummy (FTA with relative price) model. Long run result indicates that FTA has favorable effect on imports when economy adjust fully. In short run, we found FTA impact is insignificant in the current period but significant in the lagged period.in both the models. The value of real GDP is highly elastic in the long run which means that as GDP grows, the import demand for intermediate goods will also grow in Pakistan. Because the intermediate goods comprises of industrial inputs used in production. As policy recommendation, Pakistan should produce those goods that will increase exports rather than in domestic consumer goods, otherwise there will be a high trade deficit in the economy. Keyword : bilateral trade, China, FTA, Cointegration, Disaggregate import demand JEL Classification : F14; F15; C22
Corporate Governance Laws And Their Impact On Startup Growth And Business Sustainability: A Comparative Study Of Pakistan And The Usa
Corporate governance laws play a major role in the development and survival of startups, and this paper examines these laws in Pakistan and the United States, how various rules are followed, how government policies are implemented, and what all that means for startups operating in other types of economies. It reveals that in places with strong corporate governance systems, people ensure the rules are followed, and, in this case, it helps secure funding, build investor trust, and make sound decisions about the future, which is very important for startups to grow. But when the rules are unclear or not followed, it causes problems that stop businesses from growing larger and lasting longer, which is why this is an important area of study. The findings provide insights into the importance of strengthening corporate governance laws, particularly in countries where the economy is only growing, so that they can support new ideas, attract investment, and help businesses perform better in the long term. This research provides further insight into the importance of strengthening corporate governance laws in these countries, where the economy is only growing, to support new ideas, attract investment, and help businesses perform better in the long term. Corporate governance laws play a significant role in how new businesses can grow and survive in the long term, particularly in countries such as Pakistan and the United States. It compares the two places to understand how they influence them and their rules, how much help they get, and whether technology is playing a good role in all this, which is not without its difficulties. This study uses a qualitative approach to compare how companies are managed, the rules they must follow, and what these differences mean for startups in very different financial situations (Khan & Lee, 2023). They find that when there is a strong system of governance, it makes it easier for businesses to raise money, investors feel more confident investing, and day-to-day operations remain steadier, and so on. But then, if the rules are not enforced well or there are missing parts in the regulations, it stops businesses from growing, and many people are affected by this every day. This study clearly shows that we need to strengthen governance rules to help new ideas emerge, attract more investment, and keep new businesses around for the long term. This is very important for our future. There is still much work to be done in this area to improve things.
Enhancing AI-Based Investment Decision Quality: The Roles of Perceived AI Transparency, Algorithmic Fairness, Trust, and Financial Literacy
Artificial intelligence (AI) is becoming a game-changer in shaping investment decision-making processes, with automated financial advice services and intelligent recommendation systems leading the way. Nevertheless, transparency, fairness, and trust issues remain within the sphere of investor acceptance for AI-driven financial services. In this study, AI transparency and algorithmic fairness are shown to influence the quality of investment decisions made using AI, with the effects being mediated by the trust placed in AI-based financial services and moderated by financial literacy. The sample size consisted of 487 investors from Pakistan that were analyzed by the Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that trust through perceived transparency of AI and fairness of algorithms is a key factor in improving the quality of investment decisions based on AI. Additionally, financial literacy enhances the positive association between trust and investment decision quality. The study also builds on existing theories such as Trust Theory, Signaling Theory, and Information Processing Theory, and offers valuable implications for fintech companies, financial institutions, and policymakers aiming to foster trustworthy and efficient AI-powered financial services in developing nations.
Artificial Intelligence, AI Transparency, Algorithmic Fairness, Trust in AI-Based Financial Services, Financial Literacy, Investment Decision Quality.
The Digital Divide And The Great Divergence: Internet Penetration, Economic Growth, And Income Inequality In A Panel Of 58 Countries (2000–2022)
This paper looks at the relationship between internet penetration, economic development and income inequality using an unbalanced panel of 58 countries between the years 2000 and 2022. We address the Kuznets hypothesis, and examine the possible moderating role of internet access in the income–inequality relationship based on processes of financial inclusion. Our pooled OLS, fixed effects and interaction models with country-clustered standard errors suggest robust support for an inverted-U Kuznets with the inflection point of around $6,636 per capita, which falls within the range of the data we were analyzing. Internet penetration might be associated with a reduction in the GINI coefficient by 0.66 percentage points for every 1% hike in the percentage of users holding income and structural factors fixed (at a 1% level of significance). The impact is not consistent as high-income countries have a negative but not significant relationship between internet penetration and inequality (–0.12, p = 0.626) and low-income countries have a positive but not significant relationship (0.16, p = 0.738), indicating that internet penetration does not initially affect inequality but through the income channel. When stratifying the internet–inequality relationship by the variable financial account ownership, mediation analysis shows that 41.2% of this relationship is through financial account ownership. Our results suggest that the investment in digital infrastructure is inequality reducing, at least in the sense that it increases incomes in developing economies. Keywords: Kuznets Curve, internet penetration, income inequality, digital divide, financial inclusion, panel data JEL Classification: D31, O15, O33, L86, C23
Small And Medium Enterprises As An Engine Of Economic Growth: Evidence From Pakistan
This paper seeks for a hypothetically sound and empirically validated justification of small and medium-sized enterprise (SME) growth to serve as a strong base for the growth of the economy and having a dominant effect on the provision of employment opportunities and removal of poverty from the backward areas in Pakistan. Its role in the phase of growth is undeniable. Research has been conducted to analysis it in the area of Khanewal. Collected data shown that contribution of small and medium enterprises is remarkable place in the removal of poverty and unemployment. Income and education emerge as primary engines: A 10% IncS increase could raise EMP by 2.7%, amplifying SMEs' GDP contribution (30% nationally). Conversely, WhL and DsKm's negative signs signal policy needs—excessive hours reduce worker retention, while distance limits urban linkages essential for SME scaling. Also there is a significant role in raising level of income. Policy should be adopted to increase its share in the economy. Keywords: SMEs; Poverty; Economic Growth; Unemployment.
Liquidity Profitability Trade-Offs And Dividend Policy: A Panel Data Analysis Of Non-Financial Firms
This paper aims to draw attention to a unique application of balance sheet management as a deliberate comparison, the new content included, and its application in managing dividend policy, given a certain protection margin. People tend to believe that the practice of making dividend payments only through some mathematical calculation is still rather simple, as it is impossible to support the level of profitability or meet the needs of stockholders by attacking liquidity. Unfortunately, despite the copious number of research presented on these themes, much of the research initiatives to examine the behavior of dividend decision making have fallen short proper examination of the relationship between liquidity and profitability. This thesis focuses on the interpersonal factors of liquidity, and why it affects the policy of paying dividends in particular men, rather than non-bank financial companies. Data were drawn from the food and personal care sector for the period of 15 years, which a general 225 observations’ analysis will be done with Fixed Effects estimation in combination with Driscoll-Kraay robust standard errors to deal with firm-specific heterogeneity, heteroskedasticity, as well as cross-section dependence. The core finding in this work is that liquidity has a positive impact on dividend decisions, thus presenting corporations with the capacity to pay shareholders. The result shows that working capital is being managed in a very poor state within the firm, and higher borrowing levels suppress the propensity to pay dividends because the internally generated funds available are too high to pay for the dividends. This paper adds to the corporate finance literature by discussing the interaction between liquidity and profitability in one setting. Nevertheless, the study on other sectors and different measures is incomplete. Suggestions for future work include the examination of moderating and mediating factors such as corporate governance, financial options, or firms’ life stages, and the inclusion of other theoretically derived predictors of dividends, such as the use of dynamic.
Macroeconomic Variables and Stock Market Performance in Pakistan: Evidence from PSX (1995–2025)
The macroeconomic determinants of stock market returns have been one of the most controversial topics in financial economics, especially in developing markets where financial markets are very sensitive to policy uncertainty and economic instability. The aim of this study is to examine the effect of some of the macroeconomic determinants on the performance of the Pakistan Stock Exchange (PSX) in the time frame 1995-2025. The data used in the study are annual time series data for inflation, interest rate, foreign exchange reserves, foreign remittances and per capita GDP and the stock market performance is proxied by the KSE-100 Index. The advanced econometric tools such as the Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test, Vector Error Correction Model (VECM). The results show that all variables are of first order of integration and all variables have significant long run cointegrating relationships with PSX performance. Inflation and interest rate negatively impact the performance of the stock market, while foreign exchange reserves, remittances and per capita GDP positively impact PSX growth. From the VECM results, it is observed that the PSX seems to move towards equilibrium after short-run disequilibrium shocks. The study contributes to the theoretical underpinning of the Efficient Market Hypothesis and Arbitrage Pricing Theory as it has shown that the macroeconomic information available in the public domain has a meaningful impact on the stock prices in Pakistan. Important policy implications for investors, regulators and policy makers are revealed by the study in the areas of macroeconomic stabilization and development of financial markets. Keywords Pakistan Stock Exchange, Macroeconomic Variables, KSE-100 Index, Cointegration, VECM
Data Chaos, Model Fragility, and the Human Fix for Financial GenAI
While Gen AI can offer a significant advantage in terms of financial forecasting, this might become neutralized if institutions employ similar models. The prediction error correlations during high volatility may enhance the systemic risk through the homogeneous architecture. In this study we seek answers to the questions whether good data quality can have consequences and whether human guidance can temper this risk. The data consists of 285 survey responses collected from financial professionals at Pakistani banks, asset managers, fintech and investment banks. Using structural equation modeling on the cross-sectional data gathered from financial professionals from 3Q2025 to 1Q2026, we conclude that increasing Gen AI adoption does improve forecasts; this effect stems partly from demanding more holistic multi-domain data quality. However, the finding comes with a caveat: human expertise calibration is characterized by an inverted-U shape — lack of it opens up blind spots while overreliance on it has a similarly negative effect. The best result lies in a moderate human judgment setting. These findings have clear implications for regulators, the design of corporate governance, and efforts at re-evaluating the human judgement setting. These finding have clear implications for regulators, the design of corporate governance,and efforts at re-evaluating the human contribution to Ai driven financial forecasting. Keywords- Generative AI; Financial Forecasting; AMOS; Moderated Mediation; ; Adaptive Fragility Risk; Human Expertise Calibration
The Digital Divide And The Great Divergence: Internet Penetration, Economic Growth, And Income Inequality In a Panel Of 58 Countries (2000–2022)
This paper looks at the relationship between internet penetration, economic development and income inequality using an unbalanced panel of 58 countries between the years 2000 and 2022. We address the Kuznets hypothesis, and examine the possible moderating role of internet access in the income–inequality relationship based on processes of financial inclusion. Our pooled OLS, fixed effects and interaction models with country-clustered standard errors suggest robust support for an inverted-U Kuznets with the inflection point of around $6,636 per capita, which falls within the range of the data we were analyzing. Internet penetration might be associated with a reduction in the GINI coefficient by 0.66 percentage points for every 1% hike in the percentage of users holding income and structural factors fixed (at a 1% level of significance). The impact is not consistent as high-income countries have a negative but not significant relationship between internet penetration and inequality (–0.12, p = 0.626) and low-income countries have a positive but not significant relationship (0.16, p = 0.738), indicating that internet penetration does not initially affect inequality but through the income channel. When stratifying the internet–inequality relationship by the variable financial account ownership, mediation analysis shows that 41.2% of this relationship is through financial account ownership. Our results suggest that the investment in digital infrastructure is inequality reducing, at least in the sense that it increases incomes in developing economies.
From Green Intentions to Golden Returns: The role of Innovation in achieving Sustainability Performance
This paper assesses the importance of financial resources and Intellectual Capital in SMEs' environmental and financial performance with the mediating role of technology innovation. Through a survey, 157 owners and managers of Pakistani SMEs provided empirical data for the models testing. The structural equation modeling results demonstrate that financial resources and intellectual capital have a significant positive Influence on environmental, financial performance, and technology innovation. Additionally, the outcome showed that technology innovation mediates to some extent the relationships between financial resources and the financial and environmental performance of businesses. In a similar vein, technology innovation fully mediates the link between intellectual capital and financial performance but only partially mediates the relationship between government intellectual capital and environmental performance. According to this research, the government and policymakers should give the industrial sector financial resources to boost technological innovation and performance. This will enable these businesses to support economic and environmental progress. Keywords: Intellectual capital, Financial Resources, Technology Innovation, Financial Performance, Environmental Performance.
Unlocking Sustainable Entrepreneurship through Green Finance: The Mediating Role of Green Innovation in Pakistani SMEs
Sustainability in Small and Medium Enterprises (SMEs) in Pakistan is consistently challenged because of the absence of adequate financial resources, poor innovation potential, and inadequate institutional support for adopting sustainable practices. This study investigates the mediator role between Green Finance (GF) and Sustainable Entrepreneurship (SE) in the process of Green Innovation (GI). The study used a quantitative research design with a sample of 388 employees from SMEs, and the proposed relationships were tested using structural equation modeling (SEM) with Smart PLS 4.0 software. The results indicate that the relationship between GF and SE is partially mediated by GI, and that GF has a significant positive effect on both measures. The results of this study are confirmed by the Resource-Based View (RBV), which emphasizes the need for a combination of access to financial resources and innovative capabilities in order to nurture entrepreneurship for sustainability. It also offers financial and policy implications for policymakers, financial institutions, and SME managers, highlighting the need to link financial instruments to innovation strategies for fast-tracking sustainability transitions. The study contributes to the literature by integrating finance, innovation, and entrepreneurship into a cohesive framework within the SME context of a developing economy. Keywords: Green Finance, Sustainable Entrepreneurship, Green Innovation, SMEs, PLS-SEM.
FROM TEACHERS' CREATIVITY TO STUDENTS' CURIOSITY: THE MEDIATING ROLE OF ENTREPRENEURSHIP EDUCATION IN BUSINESS SCHOOLS OF HYDERABAD, SINDH, PAKISTAN
Pupils' imaginative thinking capacities can be fostered through entrepreneurial activities and teaching. This research explores the entrepreneurial behavioral qualities. Entrepreneurial behavioral qualities are shown as a moderating factor between teacher creative thinking and student curiosity. In this context, the education in Pakistani business schools are studied along with the new dimension of design thinking. SEM-PLS was The qualitative use of it as a quantitative analytical tool for understanding the relationships between constructs. Participants were drawn the data was collected through an online survey from various business schools of Sindh, Pakistan. Results indicate that teachers' creative approach to the use of L2 textbooks is related to students' L2 writing. instruction enhances both entrepreneurial education and student curiosity. Entrepreneurial education also acts as a mediating factor. Design thinking is an important moderating influence, while relationship is the other. School-based entrepreneurship instruction Does a significant impact on students' curiosity and inventiveness. The study suggests that there should be a new policy in schools and governments to Encourage students to develop curiosity and promote more entrepreneurial tendencies.
Capitalizing on Diversity, Equity, and Inclusion in Organizations: Workforce Diversity as a Core Leadership Challenge for Sustainable Growth
Despite widespread organizational commitment to Diversity, Equity, and Inclusion (DEI), the empirical pathways through which workforce diversity translates into sustainable competitive advantage remain poorly specified, and prescriptive leadership frameworks remain insufficiently operationalized. This paper reports a multi-sector, cross-national mixed-methods study drawing on primary survey data from 1,247 employees across 312 organizations in five industries (technology, healthcare, financial services, manufacturing, and education) located in 14 countries, supplemented by 78 in-depth leader interviews. We develop and empirically test the DRIFT Model — a novel five-pillar leadership framework (Diversify, Represent, Include, Fix Systems, Transform) — as the primary mechanism through which organizational leaders convert workforce diversity into sustainable growth outcomes. Using Structural Equation Modelling (SEM) with bootstrapped mediation analysis, we demonstrate that inclusive leadership fully mediates the relationship between workforce diversity and innovation output (β=.341, p<.001), employee belonging (β=.512, p<.001), and revenue growth (β=.298, p<.001), while psychological safety moderates the diversity-innovation pathway (β_interaction=.173, p=.004, ΔR²=.038). A three-tier Inclusive Leader Behavior Taxonomy (ILBT) — operating at micro, meso, and macro levels across cognitive, behavioral, and structural dimensions — is introduced as an original prescriptive tool. Sector-stratified analysis reveals significant cross-industry variation in DEI maturity and outcome strength, with education and technology exhibiting opposing profiles despite similar innovation scores. These findings extend Social Identity Theory and Resource-Based View into a unified DEI sustainability architecture and generate robust, context-sensitive prescriptions for organizational leaders, CHROs, and governance boards.
The Impact of Artificial Intelligence Adoption on Financial Decision-Making Effectiveness: The Mediating Role of Data Analytical Capability and the Moderating Effect of Firm Size
The purpose of this study is to examine the impact of artificial intelligence (AI) adoption on financial decision-making effectiveness (FDME), while investigating the mediating role of Data Analytical Capability (DAC) and the moderating effect of firm size. The increasing adoption of AI technologies has transformed organizational decision-making processes, particularly in financial management. This study adopts a quantitative research approach and collects data from 300 managers and financial professionals working in different organizations. Data were analyzed using SPSS. Descriptive statistics, reliability analysis, correlation analysis, multiple regression analysis, mediation analysis, and moderation analysis were conducted. The findings reveal that AI adoption significantly enhances financial decision-making effectiveness. Data analytical capability partially mediates the relationship between AI adoption and financial decision-making effectiveness. Furthermore, firm size significantly moderates the relationship, indicating that larger firms derive greater benefits from AI adoption. The study contributes to the literature by integrating technological, organizational, and analytical perspectives into financial decision-making. Keywords: Artificial Intelligence, Financial Decision-Making Effectiveness, Data Analytical Capability, Firm Size, SPSS
Islamic FinTech Innovation, Digital Service Quality, and the Adoption Intention of Islamic Digital Banking in Pakistan: The Mediating Role of Perceived Trust and the Moderating Effect of Financial Literacy
The present research explores the factors that affect the adoption of Islamic digital banking in Pakistan by analyzing how Islamic FinTech Innovation and Digital Service Quality influences the Adoption Intention of Islamic digital banking with the mediation of perceived trust and moderation of financial literacy. A three-wave time-lagged survey design was used to reduce common method bias and 387 Islamic banking customers from Karachi, Lahore, Islamabad and Peshawar were surveyed. The proposed framework was analyzed using partial least squares structural equation modeling (PLS-SEM) with the software of SmartPLS 4.0. The results indicate that the Islamic FinTech Innovation and Digital Service Quality had a significant influence on Perceived Trust, which, in turn, had a significant impact on Adoption Intention for Islamic digital banking services. The findings also support the important mediating effect of Perceived Trust and moderating effect of Financial Literacy on trust–adoption link. The study fills the gap of Islamic FinTech and digital banking literature by suggesting integrated moderated mediation framework in the backdrop of Islamic banks in Pakistan.
Islamic Fintech Innovation, Digital Service Quality, Perceived Trust, Financial Literacy, Adoption Intention, Islamic Digital Banking, Pakistan, PLS-SEM, Moderated Mediation
THE GREEN PARADOX REVISITED: RENEWABLE ENERGY, ECONOMIC GROWTH, AND CARBON EMISSIONS IN A PANEL OF 58 COUNTRIES (2000–2021)
This paper focuses on the impact of renewable energy status on the association between renewable energy and economic growth and carbon dioxide (CO₂) emissions per capita over 2000–2021 by exploiting an unbalanced sample of 58 countries. The Environmental Kuznets Curve (EKC) hypothesis is tested along with examining if the consumption of renewable energy can moderate the income–emissions nexus. We report good evidence of an inverted-U EKC relation by using pooled OLS, fixed effects and interaction models with country-clustered standard errors. The per-capita CO₂ emission coefficient is –0.3037 (p < 0.001), which means that a 1% renewable energy share goes hand in hand with a 0.30% CO₂ emission reduction per capita, with income and structural conditions unchanged. The EKC turning point is outside of the range of countries observed (ln(GDP) ≈ 13.43, or $678,262), indicating that most countries are in the upward-sloping range of the EKC. The EKC shape is found to be flatter and the renewable-energy decarbonization impact more pronounced in low-income countries than in high-income countries, as revealed by subsample analysis where the turning point of the EKC is found at $44,195. Granger causality tests show there is bidirectional causality between renewable energy and CO₂ emissions. The results indicate that rapid renewable energy deployment is a key, although not the only, policy tool for decarbonization, especially in developing countries.
GENDER INEQUALITY, EMPLOYMENT, AND ECONOMIC DEVELOPMENT: A PANEL QUANTILE REGRESSION ANALYSIS OF SELECTED ASIAN COUNTRIES
This study examines the impact of gender inequality on economic development across 24 Asian countries from 1997 to 2021, utilizing panel quantile regression analysis. Employing GDP (constant 2015 US$) as a proxy for economic development, the research incorporates variables such as gender parity indices in primary and secondary education, female-male labour force participation ratio, foreign direct investment inflows and outflows, overall labour force participation, percentage of female employers, female employment in industry, and population growth rate. To ensure robustness, the study applies dynamic panel data models addressing endogeneity, including Panel Unit Root Test, descriptive statistics, correlation matrix, crosssectional dependency, Variance Inflation Factor, Pedroni test, Westerlund test, and Quantile Regression. Short-run quantile regression results indicate that total labour force participation, FDI inflows, and female employment rates positively and significantly influence GDP growth. Conversely, population growth rate, FDI outflows, and gender parity in primary education also show significant positive effects on GDP. In the long run, labour force participation, FDI net inflows, gender parity in primary education, and female employment rates maintain a significant positive impact on GDP growth. However, population growth rate, female employment in the industrial sector, and FDI outflows exhibit a significant negative impact in the long term.The findings underscore that enhancing gender equality in primary education and employment sectors fosters economic development in Asian countries. Implementing policies aimed at generating productive employment and reducing gender disparities in education may prove beneficial in achieving sustained economic growth.
Impact of AI-Driven HRM and Digital Capability on Future Work Adaptability: Mediating Role of Workforce Future-Readiness
This paper looks at how AI-Driven Human Resource Management (AIHRM), Employee Learning Agility (ELA), Workforce Resilience (WR), and Digital Transformation Capability (DTC) affect Future Work Adaptability (FWA) in employees in Pakistan leather industry through the mediator of Workforce Future-Readiness (WFR). The data were gathered through a quantitative cross-sectional design, where the researcher collected data of 300 respondents, and conducted the analysis using the Partial Least Squares Structural Equation Modeling (PLS-SEM). Findings affirm that all the four predictors have significant impacts on WFR and FWA, with a strong mediation of WFR. The model describes the 57.7% and 62.3% variance of FWA and WFR, respectively. The results present important policy implications to policy makers and HR managers working in the manufacturing industry of Pakistan who are going through a digital transformation. Keywords: AI-Based HRM, Digital Transformation Potential, Future Work Flexibility, Workforce Future-Ready, PLS-SEM, Pakistan Leather Industry.
Effect Of Digital Economy on The Economic Development of Pakistan
This study investigates the impact of the digital economy on the economic development of Pakistan using time-series data from 2000–2023. The study considers economic development as the dependent variable, while telecommunication services, computer services, and information services are used as indicators of the digital economy. Secondary data were obtained from international databases including WTO, UNCTAD, and ITC. To examine the relationship between the variables, descriptive statistics, correlation analysis, multiple regression analysis, and diagnostic tests including the Augmented Dickey-Fuller (ADF) test, Variance Inflation Factor (VIF), heteroskedasticity test, and Durbin-Watson test were employed. The findings reveal that digital economy indicators have a positive and statistically significant relationship with Pakistan’s economic development. The study concludes that expansion of digital infrastructure, telecommunication services, and digital innovation can substantially contribute to economic growth and development in Pakistan. The study recommends that policymakers should prioritize digital infrastructure development, digital literacy, and technology-driven innovation to accelerate sustainable economic development. Keywords: Digital Economy, Economic Development, Telecommunication Services, Computer Services, Information Services, Digital Innovation.
Beyond Western Dominance? The Rise of Asia and the Middle East in Global Tourism
This conceptual study examines the changing dynamics of global tourism through a comparative analysis of destinations across five macro-regions: Europe, Asia, the Middle East, Africa, and the Americas. Drawing on qualitative content analysis of secondary sources, including policy documents, academic studies, and digital tourism narratives, the paper explores how tourism is increasingly shaped by governance strategies, digital media interaction, and sustainability-oriented development. The analysis indicates that emerging destinations, particularly in Asia and the Middle East, are becoming increasingly competitive with long-established Western destinations, not only through infrastructure investment but also through active policy entrepreneurship and culturally grounded digital storytelling. The study argues that global tourism is moving toward a more multipolar configuration, where narrative control, symbolic legitimacy, and digital agency play a central role in destination competitiveness. By integrating postcolonial perspectives with tourism governance and media-based branding, the paper offers a conceptual framework that helps explain contemporary shifts in global tourism hierarchies and provides directions for future empirical research. Keywords- Global Tourism, Emerging Destinations, Destination Branding, Digital Storytelling, Sustainable Tourism, Policy Entrepreneurship, Postcolonial Tourism
The Impact of Management Accounting Practices on Firm Performance: The Mediating Role of Quality of Accounting Information Systems (QAIS) – Evidence from Pakistani Manufacturing SMEs
Even though smaller manufacturing enterprises experience severe operational difficulties and the primary reason of this failure is an over-reliance on traditional manual bookkeeping instead of modernized financial control mechanisms. Based on Contingency Theory, this study addresses this empirical gap by exploring how the Quality of Accounting Information Systems (QAIS) mediates the relationship between Management Accounting Practices (MAPs) and Firm Performance (FP). This relationship is measured by utilizing a quantitative, cross-sectional research design, primary data was gathered from 250 executives, via non-probability snowball sampling. Statistical outputs generated using SPSS revealed strong internal consistencies and significant positive correlations across all variables. Crucially, the regression and mediation analysis confirmed that QAIS acts as a powerful partial mediator. The empirical findings suggests that to ensure sustainable competitive advantage and superior financial outcomes, manufacturing SMEs must cooperatively process their accounting practices through high-quality, integrated digital infrastructure. These findings have major strategic implications, which encourage managers to view accounting software as a competitive advantage rather than an operational burden, and prompting policymakers to incentivize technological upgrades within the SME sector.
Corporate Governance and Stage-Wise Banking Efficiency: Evidence from a Multi-Layer Two-StageNetwork DEA Framework
This paper revisits the issue of the relationship between corporate governance and banking efficiency by suggesting a stage-wise framework that separates operational performance and market performance. Most previous studies have mainly focused on efficiency as one of the outcomes, which ignores the mechanisms through which governance influences value creation. The analysis results were obtained after a two-step Network Data Envelopment Analysis (NDEA), Tobit regression, and a multi-layer governance model (individual variables, dimensions, and composite index) were used on panel data of commercial banks, which yielded a dual and asymmetric effect. Governance systems, especially those with a high level of monitoring, lower operational efficiency (Stage-1), as an indicator of coordination costs and managerial rigidity. On the other hand, there is the governance which increases the efficiency in the market/value (Stage-2) through increased transparency and investor confidence. Notably, there is a negative transmission effect, which suggests that market performance is not based on operational efficiency. The findings, in turn, contradict the belief of consistently positive governance effects and a trade-off between monitoring and value creation.
BALANCING WORK AND LIFE: HOW PERSONAL AND PROFESSIONAL HARMONY AND JOB ENGAGEMENT SHAPE WORKFORCE EFFECTIVENESS IN PAKISTANI ORGANIZATIONS EMPIRICAL EVIDENCE FROM PUBLIC AND PRIVATE SECTOR EMPLOYEES (2022–2026)
Effectiveness in workplace is actually the result of a mix of personal, interpersonal, and organizational factors. Among these, from the point of view of the employee, two factors are the main ones: first, the capability of drawing healthy boundary between work and personal life, and second, the extent to which one is so into one's work that he/she almost doesn't notice the time passing and at the same time is motivated. This paper is about how personal-professional harmony usually referred to as work-life balance (WLB) and job engagement usually referred to as employee engagement (EE) can together predict the performance of a worker. Various samples of employees were selected from a combination of the public and private sector organizations of Pakistan for structured questionnaire with a five-point Likert scale. Then some sort of descriptive statistics, reliability testing, Pearson correlation, standard multiple regression, and Partial Least Squares Structural Equation Modelling (PLS-SEM) were used for analyzing the collected data. Hypothesis formulation and results interpretation were facilitated by theoretical framework based on Social Exchange Theory, the Job Demands-Resources (JD-R) model, and the Conservation of Resources (COR) theory. Findings support the idea that WLB and EE are great indicators of self-rated performance, with EE being the better predictor (β =.597, p <.001 vs. β =.181, p =.016 for WLB). In total, the two factors explain 54.5% of the variation in performance. Besides, PLS-SEM shows that EE is a partial mediator between WLB and performance, indicating that balance and engagement are not separate paths but closely linked and help each other. HR experts, team leaders, and government policy makers can take some practical cues from this study.
IMPACT OF RESEARCH AND DEVELOPMENT ON THE VALUE ADDITION OF SERVICES: STRUCTURAL TRANSFORMATION OF PAKISTAN AND INDIA
The structural transformation requires that in the long run, the changes in sectoral shares are associated to the economic growth. With developed as well as developing countries transforming themselves into services-oriented economies, innovation and research and development in information communication technology has become inevitable to achieve sustained economic growth and value addition in services sector. Unit root testing, cointegration bound testing, correlation matrices and autoregressive distributive lag model is being implemented in our analysis of impact of research and development on the value addition of services showcasing the long-run impact vis a vis short-run impact on our time series data set. The time series dataset comprises of two South Asian economies (Pakistan and India). Time period taken into consideration is from 1996 to 2020. The unit root testing for all the variables showed us that they are not stationary at level and are integrated of either order I(1) or I(2). Similarly, covariance-correlation showed us a close relationship among explanatory variables. Cointegration bound testing made us aware of the fact that there certainly exists a long-run causal relationship between our outcome variables and explanatory variables. Auto Regressive Distributive Lag model showcased that relationship between research and development and value addition of services is positive and significant and does have long run positive implications on economic output and growth. Similarly, labor force with advanced education and expenditure on education are also taken as proxies for research and development. Both these variables showcased somewhat ambiguous results on value addition of services for both Pakistan and India.with TensorFlow or PyTorch if required. In order to test hypotheses, and inference regarding interrelationships between variables, regression and structural equation modeling (SEM) are suggested as statistical tools. The implications of the study are both
Do Investment Efficiency and Earnings Quality Matter for Firm Performance? Evidence from an Emerging Economy
Firms need efficient investment decisions and reliable financial reporting to improve performance. Poor investment decisions and weak reporting quality can decrease the profitability and investor confidence. This study examines the effect of investment efficiency and earnings quality on the firm performance of non financial listed firms in Pakistan. The study uses panel data from 350 firms covering the period from 2020 to 2025. The study applies two-step system GMM regression analysis. The findings show that investment efficiency has a positive and significant effect on firm performance. The results also indicate that earnings quality positively affects firm performance. The study concludes that efficient investment decisions and high-quality financial reporting improve profitability and financial performance. The findings support the agency theory and provide recent evidence from an emerging economy. The study offers useful implications for policymakers in improving corporate performance and financial reporting practices in Pakistan.