The impact of financial regulation on financial control efficiency: A comparative analysis of economies
A significant aspect of financial regulation provides for risk mitigation, transparency improvement, and maintaining economic stability, making financial control systems more efficient. This article analyzes the interaction of financial regulation strength with financial control efficiency in five e...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2025-03-01
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| Series: | Accounting and Financial Control |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/21696/AFC_2025_1_Rekunenko.pdf |
| _version_ | 1826553035040489472 |
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| author | Ihor Rekunenko Artem Koldovskyi Kristina Babenko Rasa Subačienė |
| author_facet | Ihor Rekunenko Artem Koldovskyi Kristina Babenko Rasa Subačienė |
| author_sort | Ihor Rekunenko |
| collection | DOAJ |
| description | A significant aspect of financial regulation provides for risk mitigation, transparency improvement, and maintaining economic stability, making financial control systems more efficient. This article analyzes the interaction of financial regulation strength with financial control efficiency in five economies, such as the USA, the UK, Germany, Poland, and China, from 2020 to 2023. An econometric model is utilized and the World Bank Financial Regulatory Index is incorporated as the core independent variable, along with financial infrastructure, efficiency of risk modeling, GDP growth, inflation, and financial leverage; all variables are used to understand their effect on financial control mechanisms. It is confirmed that the stronger financial control efficiency of the USA, the UK and Germany is associated with their stronger scoring by financial regulation (the countries with higher scores of financial regulations are better enforced and have more appropriate risk management strategies). On the other hand, Poland and China have problems in terms of regulatory enforcement which translates into lower effectiveness of financial control. The results also show that inflation and financial leverage decrease the efficiency of financial control, and financial infrastructure and risk modeling are positively related to financial control efficiency. The study emphasizes the exigency of regulating financial oversight in emerging markets, strict enforcement policies, and embracing technological advancements that supplement the area. A future research agenda needs to broaden the scope to other economies and qualitative assessments of regulatory effectiveness. |
| first_indexed | 2025-03-14T07:18:37Z |
| format | Article |
| id | doaj.art-3dc2841cff624c9781e4f521f0a02575 |
| institution | Directory Open Access Journal |
| issn | 2543-5485 2544-1450 |
| language | English |
| last_indexed | 2025-03-14T07:18:37Z |
| publishDate | 2025-03-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Accounting and Financial Control |
| spelling | doaj.art-3dc2841cff624c9781e4f521f0a025752025-03-03T14:54:12ZengLLC "CPC "Business Perspectives"Accounting and Financial Control2543-54852544-14502025-03-0161132410.21511/afc.06(1).2025.0221696The impact of financial regulation on financial control efficiency: A comparative analysis of economiesIhor Rekunenko0https://orcid.org/0000-0002-1558-629XArtem Koldovskyi1Kristina Babenko2https://orcid.org/0000-0001-7227-886XRasa Subačienė3https://orcid.org/0000-0001-6559-8478Doctor of Economics, Professor, Head of the Oleg Balatskyi Department of Management, Academic and Research Institute of Business, Economics and Management, Sumy State UniversityPh.D. in Economics, Associate Professor, Department of Management and Tourism, Zhytomyr Economic and Humanitarian Institute of the University “Ukraine” Ph.D. in Math, Doctor of Economics, Professor, Researchers-at-Risk Fellow, Newcastle University Business SchoolDSc in Management, Professor, Head of the Department of Accounting and Audit, Faculty of Economics and Business Administration, Vilnius UniversityA significant aspect of financial regulation provides for risk mitigation, transparency improvement, and maintaining economic stability, making financial control systems more efficient. This article analyzes the interaction of financial regulation strength with financial control efficiency in five economies, such as the USA, the UK, Germany, Poland, and China, from 2020 to 2023. An econometric model is utilized and the World Bank Financial Regulatory Index is incorporated as the core independent variable, along with financial infrastructure, efficiency of risk modeling, GDP growth, inflation, and financial leverage; all variables are used to understand their effect on financial control mechanisms. It is confirmed that the stronger financial control efficiency of the USA, the UK and Germany is associated with their stronger scoring by financial regulation (the countries with higher scores of financial regulations are better enforced and have more appropriate risk management strategies). On the other hand, Poland and China have problems in terms of regulatory enforcement which translates into lower effectiveness of financial control. The results also show that inflation and financial leverage decrease the efficiency of financial control, and financial infrastructure and risk modeling are positively related to financial control efficiency. The study emphasizes the exigency of regulating financial oversight in emerging markets, strict enforcement policies, and embracing technological advancements that supplement the area. A future research agenda needs to broaden the scope to other economies and qualitative assessments of regulatory effectiveness.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/21696/AFC_2025_1_Rekunenko.pdfaccountingeconometric modelingfinancial control efficiencyfinancial infrastructurefinancial regulationmacroeconomic stability |
| spellingShingle | Ihor Rekunenko Artem Koldovskyi Kristina Babenko Rasa Subačienė The impact of financial regulation on financial control efficiency: A comparative analysis of economies Accounting and Financial Control accounting econometric modeling financial control efficiency financial infrastructure financial regulation macroeconomic stability |
| title | The impact of financial regulation on financial control efficiency: A comparative analysis of economies |
| title_full | The impact of financial regulation on financial control efficiency: A comparative analysis of economies |
| title_fullStr | The impact of financial regulation on financial control efficiency: A comparative analysis of economies |
| title_full_unstemmed | The impact of financial regulation on financial control efficiency: A comparative analysis of economies |
| title_short | The impact of financial regulation on financial control efficiency: A comparative analysis of economies |
| title_sort | impact of financial regulation on financial control efficiency a comparative analysis of economies |
| topic | accounting econometric modeling financial control efficiency financial infrastructure financial regulation macroeconomic stability |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/21696/AFC_2025_1_Rekunenko.pdf |
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