European Investment Bank

Abstract Divergence measures are essential tools for detecting distributional shifts in model monitoring, particularly crucial given the volatility of financial data. We argue that JSD offers a more robust metric for mixture models by resolving common zero-frequency artifacts, while KLD remains the optimal choice for Bayesian frameworks. This study extends the work of [1] with two primary contributions: First, we derive the statistical properties and chi-square benchmark values for JSD and KLD. Second, we demonstrate their applicability by detecting distributional changes in credit default probabilities from Merton, Merton with jump, and stochastic volatility with jump models. Our results establish that JSD and KLD follow chi-square distributions and reveal important practical trade-offs. JSD exhibits superior Type I error control, maintaining rejection rates closest to 5%, thereby minimizing false positives. However, this conservatism reduces statistical power at small samples, requiring larger samples for reliable detection. This trade-off enables practitioners to select measures based on whether minimizing false alarms or maximizing detection sensitivity is prioritized.

Purpose This study aims to examine the effect of digital finance on the nonlinear relationship between financial development and economic wealth in 54 African economies from 2004 to 2023. Design/methodology/approach This study uses the dynamic system generalized method of moments to analyze the interrelationship between financial development, digital finance and economic wealth. Findings The results confirm that initial financial development enhances economic wealth. However, beyond the thresholds of 0.41 and 1.21, additional financial development reduces economic wealth. Digital finance has a positive influence on both financial development and economic wealth. Additionally, an increase in the levels of digital finance systems amplifies the positive linear effect of financial development on economic wealth. Research limitations/implications While this focus provides valuable insights into the role of digital finance in African economic growth, the findings may not fully capture the complexities and dynamics present in other global markets. Practical implications Policymakers should implement regulatory measures to establish an optimal level of financial development that maximizes economic wealth. Furthermore, fostering digital financial technology within a well-developed financial sector is essential for sustained economic growth in Africa. Originality/value This paper contributes to the literature by offering actionable recommendations for policymakers, emphasizing the need to strengthen financial institutions and infrastructure to fully harness the benefits of digital finance. The findings can inform policy development aimed at fostering inclusive economic growth through digital financial systems.

Dendropanax morbifera Léveille is a medicinal plant native to East Asia with its diverse therapeutic potentials. In particular, the antioxidant effect of this plant is well known, but there has been little research on the antioxidant effect according to different habitats or ages. In this study, we evaluated the proximate composition, mineral, saponin, rutin, total phenolic and flavonoid contents, and antioxidant activities of leaf extracts of D. morbifera plants cultivated from two different regions (New Zealand and Jeju Island, Korea) and of the same age (2-year-old plants). The assessment of proximate composition and total phenolic and flavonoid contents revealed significant variations in these parameters dependent on the cultivation region and age. The highest total phenol and total flavonoid contents were observed in D. morbifera from Jeju Island. In addition, the antioxidant activities of leaf extracts of D. morbifera from different cultivation regions and ages were assessed in terms of 1,1-diphenyl-2-picrylhydrazyl and 2,2'-azino-bis(3-ethylbenzothiazoline-6-sulfonic acid)free radical scavenging, total antioxidant capacity, and superoxide dismutase activity. The extract of D. morbifera from Jeju Island showed the highest antioxidant activity among the samples tested. These findings clearly indicate that both the cultivation region and plant age affect the phytochemical content and antioxidant activity of D. morbifera. Therefore, extracts of D. morbifera obtained from optimal harvest regions and ages could serve as promising natural antioxidant candidates with potential health benefits.