Scielo RSS http://www.scielo.org.pe/rss.php?pid=2077-188620230001&lang=en vol. 28 num. 55 lang. en http://www.scielo.org.pe/img/en/fbpelogp.gif http://www.scielo.org.pe http://www.scielo.org.pe/scielo.php?script=sci_arttext&pid=S2077-18862023000100001&lng=en&nrm=iso&tlng=en Abstract Purpose: The study aims to use individuals using the internet and fixed broadband subscriptions as a proxy for digitalization to empirically assess the effects of Foreign Direct Investment (FDI), digitalization, their interaction on income inequality in developed and developing countries from 2002 to 2019. Design/methodology/approach: The paper used the system general method of moments (GMM) estimators for 30 developed and 35 developing countries. Findings: FDI increases income inequality in developed countries but decreases it in developing countries, digitalization reduces income inequality in both groups, interaction term narrows income inequality in developed countries but widens it in developing countries. Originality/value: The paper is the first to introduce digitalization into the FDI - income inequality relationship. Furthermore, it provides empirical evidence to show the difference in the role of digitalization in this relationship between developed and developing countries. http://www.scielo.org.pe/scielo.php?script=sci_arttext&pid=S2077-18862023000100022&lng=en&nrm=iso&tlng=en Abstract Purpose: The present study aimed to examine the relationship between information and communication technologies (ICT) diffusion, financial development and economic growth in the panel of developing countries for 2005-2019. Design/methodology/approach: The study employed the principal component analysis (PCA) to extract the index of ICT diffusion. First-generation panel unit root tests such as Levine Lin Chu (LLC), Im Pesaran Shin (IPS), Augmented Dickey-Fuller (ADF) and Phillips and Perron (PP) were employed to check the stationarity of the variables. Pedroni and Kao co-integration techniques were used to examine the existence of the long-run relationship, and co-integration coefficients were estimated using FMOLS and dynamic ordinary least squares (DOLS). The panel Granger causality approach examined the short-run and long-run causality. Findings: The results confirmed that ICT diffusion, financial development and trade openness accelerate growth, whereas inflation dampens economic growth. Further, the causality test showed bidirectional causality between ICT growth and financial development growth but a unidirectional causality from financial development to ICT diffusion in developing countries. Originality/value: The study recommends synchronizing public and private sector investment for a synergistic effect on ICT infrastructure and adequate investment in the financial sector to increase the growth rate in developing countries. Economic policies should be adopted toward incentives and subsidies to ensure affordable ICT services for disadvantaged communities. Also, training programs focussing on enhancing digital literacy to enable all segments of the population to use digital platforms for financial services are recommended. http://www.scielo.org.pe/scielo.php?script=sci_arttext&pid=S2077-18862023000100092&lng=en&nrm=iso&tlng=en Abstract Purpose: This paper measures different market risk impacts on options portfolios under the new Fundamental Review of the Trading Book (FRTB) regulation, issued in Basel and coming into effect in 2023. Design/methodology/approach: This paper first suggests an algorithm for implementing the FRTB standardised approach via the sensitivities-based method to estimate a portfolio's risk capital and presents an illustration applied to an option position. Second, it proposes a methodology to estimate the expected shortfall in options portfolios from the FRTB internal models approach. In this regard, an application is developed to measure expected shortfall (ES) and value at risk (VaR) impacts under FRTB versus conventional VaR in a currency option position by considering stress scenarios from the 2007-9 and 2020-1 crises and back-testing procedures. Findings: The suggested algorithm satisfactorily captures impacts via the sensitivities-based method, and higher risk capital demands are expected for emerging economies. Also, the planned FRTB methodology to measure ES and VaR is appropriate; in particular, historical metrics perform well. Astonishingly, their revealed impacts are more significant under the 2020-1 pandemic crisis than the 2007-9 financial crisis. Originality/value: The proposals developed weave a communication bridge between the standardised and internal approaches of FRTB regulation, which can be scaled up technologically and institutionally. http://www.scielo.org.pe/scielo.php?script=sci_arttext&pid=S2077-18862023000100112&lng=en&nrm=iso&tlng=en Abstract Purpose: This paper aims to provide empirical evidence for using the prospect theory (PT) basic assumptions in the Argentine context. Mainly, this study analysed the financial decision-making process in students of the economic-administrative academic area of two universities, one public and one private, in Córdoba. Design/methodology/approach: The analysis methodology included (1) the descriptive statistical analysis to identify the presence of the certainty, reflection and isolation effects; (2) the construction of a set of indicators on the application of the PT; (3) the chi-squared independence test, to determine if the decisions made are independent of the degree course taken; (4) the non-parametric Kruskal-Wallis test, to determine if the decisions made by individuals vary according to the semesters taken or students' levels of progress; and (5) the non-parametric Mann-Whitney test, to determine if there are differences between the decisions made by men and women. Findings: The empirical results provided evidence on the effects of certainty, reflection and isolation in both universities, concluding that the study participants make financial decisions in situations of uncertainty based more on PT than on expected utility theory. Originality/value: This study contributes to the empirical evidence in a different Latin-American context, confirming that individuals make financial decisions based on the PT independently of their degree course, semester, level of advance, gender or the kind of university where they belong (public or private).