Most recent papers:

• Responsible Credit Allocation and Corporate Green Innovation: The Role of Bank ESG Preferences.
  Yuanyuan Man, Yulong Wang, Youwei Li.
  International Journal of Finance & Economics. 3 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nSustainable finance is vital for long‐term corporate development, yet evidence on whether responsibility‐oriented capital allocation genuinely promotes green innovation remains limited. This paper examines the impact of bank ESG preferences on firms' green innovation. Based on loan portfolio ESG scores, we classify banks into ESG‐preference banks (ESGBs) and non‐ESG‐preference banks (NESGBs). Our findings demonstrate that firms borrowing from ESGBs exhibit significantly higher green innovation output, particularly in substantive green invention patents. Mechanism analysis indicates that ESGBs drive innovation by reducing financing costs, enhancing managerial environmental awareness, and promoting green investment, whereas NESGBs merely extend loan maturities without achieving environmental benefits. These effects are stronger in firms with environmentally experienced executives, greater financial access, or weaker environmental regulation. Further analysis supports the value‐driven lending motive and demonstrates that ESGBs primarily incentivize source control green technologies and deliver tangible emission reduction benefits. This study provides important implications for sustainable finance design.\n"]

  August 06, 2026   doi: 10.1002/ijfe.70276   open full text
• The Impact of Market Liberalisation on Bank Performance: Evidence From South and Southeast Asian Countries.
  Michael Enowbi Batuo, Sridevi Yerrabati, Ashiq Zaman, Helen Solomon.
  International Journal of Finance & Economics. 3 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nUtilising annual data covering 1995–2022, this study examines the effects of market liberalisation on bank performance in 19 South and Southeast Asian countries. Bank performance is assessed using three dimensions: efficiency, profitability, and stability. Market liberalisation is measured using the Economic Freedom Index, Financial Freedom Index, Fiscal Freedom Index, Business Freedom Index, Trade Freedom Index, Monetary Freedom Index, Investment Freedom Index, and Labour Freedom Index. The data are analysed using the GMM estimation approach, and the findings are validated using the Driscoll‐Kraay effect estimator with instrumental variables, along with a robustness test to the GFC‐crisis interaction. Different measures of market liberalisation have varying effects on bank performance. Under GMM, economic freedom is the only index with a robust, positive, and statistically significant impact across all three performance dimensions; this result holds for efficiency and profitability under DKIV, though significance for stability is not confirmed under the stricter identification strategy. Subsample analyses reveal pronounced income‐group heterogeneity: identical liberalisation measures can stabilise banks in low‐income contexts but destabilise them in high‐income economies, rendering a uniform liberalisation agenda suboptimal. The study concludes with critical policy implications.\n"]

  August 06, 2026   doi: 10.1002/ijfe.70277   open full text
• Cost‐of‐Carry Dynamics in China's Crude Oil Futures: The Role of Macro‐Financial Term Structures.
  Boqiang Lin, Weimin Tian.
  International Journal of Finance & Economics. 6 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe deepening financialisation of commodities has intensified the complex macro‐linkages within emerging energy markets. This paper investigates the dynamic connectedness among China's crude oil futures (INE), interest rates and exchange rates from a term‐structure perspective (level, slope and curvature). Employing the Nelson–Siegel model and a time‐varying parameter vector auto‐regression (TVP‐VAR) framework based on daily data from March 2018 to June 2025, we analyse the spillover effects of term structure factors to trace their interconnections across short‐term, medium‐term and long‐term horizons. Empirical results reveal that the exchange rate acts as a primary risk transmitter, whereas the interest rate functions as a shock absorber. Notably, system connectivity intensifies during crises, with interest rates reversing roles to become a net transmitter during the Russia–Ukraine conflict. Additionally, the INE market remains a passive price taker, heavily constrained by macro‐financial shocks. Crucially, geopolitical risk and energy price uncertainty exert significant non‐linear moderating effects on this cross‐market network. These findings provide implications for managing cross‐market risks in emerging derivatives markets.\n"]

  August 03, 2026   doi: 10.1002/ijfe.70274   open full text
• Price Stability, Financial Stability and Central Bank Effectiveness: A Common‐Agency Perspective.
  Georgios E. Chortareas, Riccardo Russo.
  International Journal of Finance & Economics. 6 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis article considers the institutional design of monetary policy and the trade‐offs faced by central banks when they try to tackle both price and financial stability at the same time. The complementarity between monetary and macroprudential policies has been highlighted in terms of objectives and operational implementation, the ‘divine coincidence’. Nevertheless, the assignment of both mandates to the same institution has not remained unchallenged. While the literature typically assumes homogeneous preferences of the public/society, in this article we introduce agency considerations, reflecting heterogeneous preferences of policymakers and the public. We adopt a common‐agency framework, accounting for formal central bank mandates along with external pressure on monetary policy, to analyse under which conditions it is optimal to assign price and financial stability mandates to one or two separate institutions. Our results show that the ability to achieve a set of given monetary and financial stability targets does not depend on the number of tasks an institution is assigned, but on the degree of independence of the institution itself.\n"]

  August 03, 2026   doi: 10.1002/ijfe.70275   open full text
• Spatial Marginal Expansion and Financing Constraints of Small and Medium‐Sized Enterprises From the Perspective of Machine Learning Algorithms.
  Qingyuan Wu, Jiajia Huang, William A. Barnett, Xue Wang.
  International Journal of Finance & Economics. 12 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the relationship between spatial marginal expansion and financing constraints among small and medium enterprises (SMEs) using a machine learning approach. Based on panel data from China's A‐share listed companies (2008–2023), we identify an inverted U‐shaped relationship. Spatial expansion influences financing constraints through channels such as firm size, commercial credit, and equity structure. Further analysis reveals a positive correlation between SME financing constraints and regional market development. Thus, accelerating the formation of a unified national market requires greater emphasis on SMEs as key connectors in cross‐regional production and trade. Breaking regional protectionism and market segmentation can help optimize the spatial allocation of productive forces and expand financing opportunities. These findings offer insights for corporate debt financing strategies.\n"]

  July 28, 2026   doi: 10.1002/ijfe.70268   open full text
• ESG, Policy Uncertainty and Green Innovation.
  Sultan Sikandar Mirza, Najoua Elommal, Asif Saeed.
  International Journal of Finance & Economics. 13 days ago
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nChina's energy sector is central to national economic growth and industrialization, yet it faces mounting environmental challenges due to its heavy reliance on coal‐based energy. Grounded in real‐options theory and stakeholder theory, this study examines the relationship between corporate environmental, social and governance (ESG) initiatives, firm‐perceived economic policy uncertainty (FEPU) and green innovation strategy (GIS) in China's energy industry. Using a panel of 1203 Chinese A‐share‐listed energy firms from 2010 to 2023, we find that ESG initiatives significantly promote GIS, with stronger effects observed in utility‐oriented green innovations and social dimension–driven ESG activities. Moreover, FEPU positively moderates the ESG–GIS relationship, highlighting the dual role of policy uncertainty as both a constraint and a catalyst for strategic innovation. Heterogeneity analyses indicate that this relationship is more pronounced among larger firms, low‐leverage firms, state‐owned enterprises and non‐new‐energy firms. Further evidence shows stronger effects in the post‐Paris Agreement period, while FEPU's moderating role is more evident before COVID‐19. Overall, the findings offer important implications for policymakers and corporate leaders seeking to foster sustainable innovation under regulatory uncertainty.\n"]

  July 27, 2026   doi: 10.1002/ijfe.70273   open full text
• Board Co‐Option and Corporate Social Responsibility Decoupling.
  Aitzaz Ahsan Alias Sarang, Asif Saeed, Asad Ali Rind, Ammar Ali Gull.
  International Journal of Finance & Economics. July 21, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe current study addresses the question of how co‐opted directors affect corporate social responsibility decoupling. Using a US sample, we document that the co‐opted directors, those hired after the incumbent CEO, significantly and positively impact CSR decoupling, reflecting their weak monitoring. The cross‐sectional tests reveal that the relationship persists in firms with weaker internal monitoring, such as low board compensation, poor board oversight, high CEO entrenchment, lower board gender diversity, absence of a CSR committee, and few multiple directorships. However, the presence of strong external monitoring, including analyst coverage, competition intensity, the firm's hostile takeover susceptibility, and audit quality, mitigates this effect. Moreover, the interaction between co‐opted directors and CSR decoupling reduces firm value, indicating that weak governance carries real economic costs and ultimately lowers shareholder value. The findings are robust to alternative variable definitions and endogeneity issues. This study contributes to the growing literature on corporate governance's role in CSR decoupling and offers key policy implications for promoting ethical practices.\n"]

  July 21, 2026   doi: 10.1002/ijfe.70269   open full text
• Can Green Public Procurement Drive Corporate Breakthrough Green Innovation? Evidence From Green Patent Textual Analysis.
  Shaner Chu, Jiamin Zhang.
  International Journal of Finance & Economics. July 21, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the effect of green public procurement (GPP) on corporate breakthrough green innovation. We construct a novel measure of breakthrough innovation by applying advanced natural language processing models (i.e., SBERT and PatentSBERTa) to the textual similarity of green patent networks. Using a comprehensive panel of Chinese listed firms from 2015 to 2023, we find that GPP significantly catalyses breakthrough green innovation, with the magnitude of the effect increasing with procurement intensity. We identify two primary mechanisms: an external financing channel, where GPP alleviates financial constraints via credit generating effect, and an internal green governance channel, where government demand improves corporate governance through green demand effect. Cross‐sectional tests show the effect is more pronounced in firms receiving higher media attention and in regions with stronger intellectual property rights and stricter environmental regulation. Furthermore, we document significant positive spillovers along both industrial and supply chains. Our results are robust to local projection models, propensity score matching, instrumental variable estimation, omitted variable tests, and double machine learning method. Collectively, these findings highlight the pivotal role of demand‐side policy tools in shaping high‐quality corporate green innovation.\n"]

  July 21, 2026   doi: 10.1002/ijfe.70271   open full text
• Untangling the Complexities of Central Bank Digital Currency Rejection Amongst Merchants: A Qualitative Comparative Analytical Approach.
  Christian Nedu Osakwe, Oluwatobi A. Ogunmokun, T. Ramayah, Nnamdi O. Madichie, Kwami Ahiabenu.
  International Journal of Finance & Economics. July 19, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study draws on behavioural economic theories, particularly dispositional resistance to change and status quo bias, and extends them by incorporating the relatively overlooked concept of perceived economic risks of non‐adoption. Drawing on this integrated framework, it empirically examines the configurations of antecedents that contribute to the rejection of central bank digital currencies (CBDCs). Using fuzzy‐set qualitative comparative analysis (fsQCA), it is the first to examine early CBDC rejection with a specific focus on merchants in a pioneering CBDC country. The findings highlight five distinct conditions influencing CBDC rejection. Crucially, even when merchants perceive high economic risks from non‐adoption and express dissatisfaction with existing fintech solutions, rejection persists if routine‐seeking behaviours, emotional resistance to change, and a short‐term focus are present. These results demonstrate that resistance to innovation often stems from entrenched behavioural and psychological factors, rather than purely rational considerations. By identifying the diverse pathways leading to CBDC rejection, this study offers policymakers critical insights into the complex interplay of resistance factors. It provides a foundation for designing targeted interventions aimed at mitigating merchant resistance and fostering broader adoption of digital currencies.\n"]

  July 19, 2026   doi: 10.1002/ijfe.70257   open full text
• Gauging the Spillover Interlinkage Level Between Green FDI, Economic Growth, Renewable Energy Consumption, and Pollution Emission in Vietnam: New Findings From a Model‐Free Connectedness Approach.
  Bui Huy Nhuong, Ho Dinh Bao.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 2985-3002, July 2026. ", "\nABSTRACT\nSince the 1986 Doi Moi reforms, Vietnam has been expanding its private sector and attracting foreign direct investment, which causes serious issues on environmental sustainability. We use a model‐free connectedness approach to investigate connections between green FDI, energy security, economic growth, and carbon risk in Vietnam from 1995 to 2022. Our results highlight the two‐way relationship between green FDI and energy security in our sample period. The net total connectedness shows that green FDI receives the most net shocks in our sample. Non‐renewable energy is an energy source that sends shock waves. Renewable energy was negatively impacted from 2016 to 2020. Pairwise directional connectivity shows that renewable energy and fossil fuels, GDP, and carbon dioxide emissions have dominated the attraction of green FDI after 2017. The growth of green FDI in Vietnam faces many difficulties when energy security is threatened. Our findings carry significant policy implications for both investors and governments, particularly in light of the observed spillover effects and the complex interconnections among key indicators. A clear understanding of the primary channels of contagion between these variables provides policymakers with valuable insights for formulating targeted and effective policy responses. By identifying the most influential transmission mechanisms, authorities can design more informed and adaptive strategies to mitigate systemic risks and enhance market stability.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70071   open full text
• Editorial: Current Issues in Governance, Economics and Finance: Toward Ecosystems.
  Fadi Alkaraan, Khaled Hussainey.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4330-4333, July 2026. ", nil]

  July 17, 2026   doi: 10.1002/ijfe.70099   open full text
• The Role of Media Institutions in Economic Growth: Evidence From a Panel of Developing Countries.
  Nicholas Apergis, Mehdi Hasan, Anu Jossan.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3340-3359, July 2026. ", "\nABSTRACT\nOver the past two decades, the internet has become a crucial driver of development, contributing to productivity gains in many countries. However, despite its growing significance, there is a substantial gap in research about the impact of media quality and accessibility on economic growth. The previous research focused on high‐income countries, often lacking theoretical depth and key control variables. The current study uses freedom on the net indicator and internet penetration data, from 2013 to 2023, to estimate how they both affect economic growth in 15 emerging economies. The analysis implements a dynamic panel regression originating from a modified Cobb–Douglas production function. Using the panel General Method of Moments and panel Granger causality tests, the findings reveal a positive impact of Internet penetration on economic growth, indicating that an increase in the number of Internet users correlates with stronger economic performance. Additionally, there is a positive association between internet freedom and economic growth, suggesting that countries with higher levels of internet freedom and less censorship experience more robust economic growth. The results are significant for policymakers since they signify the importance of their efforts to enhance access to the internet as this strategy can increase transparency bringing down government expenditure and corruption. At the same time, the findings point out the need for highly educated people in terms of online safety measures, as well as their higher responsibility to safeguard vulnerable citizens from mis and disinformation.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70093   open full text
• Climate Change Laws and European Stock Markets: An Event Analysis.
  Theodoros Bratis, Georgios P. Kouretas, Evangelos Salachas.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3027-3058, July 2026. ", "\nABSTRACT\nUnder the context of the climate change we assess the impact of EU's legislative initiative on European stock markets. Specifically, we focus on its impact on energy and Environmental Social Governance (ESG) sectors for equity returns and volatility for a representative basket of EU countries (participating also in Eurozone) as well as countries outside Eurozone/EU. We derive a cross‐country event analysis for the European green deal (willingness to implement and legal adoption on EU level as long‐term strategy) and national climate laws. Moreover, we assess the efficient market hypothesis (EMH). Second, we expect the announcement effect of the law implementation to have an impact on industry sectoral stock markets' volatility. The EMH is initially exhibited and announcement‐dependent; stock market is pricing announcements inefficiently. We find negative cumulative abnormal returns (CARs) both in the ESG, energy industry sector indexes. Abnormal return (AR) volatility is found per se at the announcement day. The magnitude and sign for abnormal returns as well as cumulative abnormal returns are announcement‐dependent. Heterogeneity is present since ESG (green index) appears to exhibit more statistically significant cumulative abnormal returns than the energy index.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70073   open full text
• How Does Fair Value Measurement Affect Corporate Financing Constraints? Evidence From China.
  Jinying Liu, Qianru Hu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3059-3074, July 2026. ", "\nABSTRACT\nUsing data from A‐share listed companies in China from 2014 to 2021, this study investigates the impact of fair value measurement on corporate financing constraints. The findings indicate that fair value measurement significantly alleviates these constraints. Additionally, the study identifies information asymmetry and executive compensation incentives as key mechanisms through which fair value measurement reduces financing constraints. Furthermore, it explores how ownership structure, industry competition and audit opinion type moderate this relationship. The analysis reveals that fair value measurement is more effective in non‐state‐owned enterprises, companies in highly competitive industries and those receiving unqualified audit opinions. Overall, our findings offer innovative theoretical and practical insights into understanding and leveraging the impact of fair value measurement on corporate financing constraints.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70075   open full text
• Manager‐Analyst Engagement and Stock Return Synchronicity.
  Lifei Lei, Kai Yao, Minjia Chen, Rong Huang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4228-4246, July 2026. ", "\nABSTRACT\nResearch has shown that the market actively interprets information conveyed in question and answer (Q&A) conversations during conference calls. However, previous studies have not clearly indicated how this information influences the market. This study aims to investigate the impact of conversational engagement on stock price informativeness. Conversational engagement is measured by linguistic style matching (LSM) in manager‐analyst conversations during the Q&A session of earnings conference calls, while stock return synchronicity serves as a proxy for informativeness. Our findings reveal robust evidence that \n\n\nLSM\n\n\n significantly diminishes stock return synchronicity. Furthermore, the impact of manager‐analyst engagement on stock return synchronicity is more pronounced in firms with severe information asymmetry, facing intense competition in the product market or with low levels of institutional ownership. This study highlights that increased engagement facilitates the capitalisation of firm‐specific information into stock prices, thereby enhancing the efficiency of the capital market.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70076   open full text
• Reexamining the Efficiency of Chinese Commercial Banks Using a Novel Two‐Stage General Equilibrium Efficient Frontier DEA Approach With Fixed‐Sum Intermediate Measures.
  Qiong Xia, Jie Zhu, Fangqing Wei, Yingying Shao.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3098-3119, July 2026. ", "\nABSTRACT\nMeasuring and improving the efficiency of commercial banks is crucial for promoting the high‐quality development of the banking industry. Bank operations can be divided into a sequential, two‐stage process consisting of a deposit collection stage and a profit earning stage, with deposits as an intermediate measure. Deposits are a limited resource for which banks compete, exhibiting a fixed‐sum characteristic, which must be considered when measuring bank efficiency. To this end, based on the noncooperative game mechanism, we propose a novel two‐stage general equilibrium efficient frontier data envelopment analysis (GEEFDEA) approach considering fixed‐sum intermediate measures. We then apply the model to measure the deposit collection efficiency, profit earning efficiency, and overall efficiency of 56 listed Chinese commercial banks from 2017 to 2023. Further, we employ a fuzzy set qualitative comparative analysis (fsQCA) approach to explore the paths leading to high bank efficiency from a configurational perspective. This study finds that when deposit collection takes priority, 44 banks had an overall efficiency below 1 during the study period, with a deposit collection efficiency of 1.1216 and a profit earning efficiency of 0.7901. When the profit earning stage takes priority, 42 banks achieved an efficiency above 1. The deposit collection efficiency (0.3671) is much worse than the profit earning efficiency (2.8612). Additionally, the configuration analysis shows that high bank efficiency results from the synergistic effects of condition variables. Finally, theoretical and practical implications are discussed.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70078   open full text
• Permanent and Transitory Volatility Spillovers Between Conventional and Islamic Stock Indices During the SARS‐CoV‐2 Pandemic.
  Mustafa Özer, Michael Frömmel, Darko B. Vuković, Melik Kamişli.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3120-3138, July 2026. ", "\nABSTRACT\nThis study examines the existence and nature of volatility spillovers between conventional and Islamic stocks indices in the context of the SARS‐CoV‐2 pandemic. By augmenting the Hafner and Herwartz methodology with the integration of Fourier terms in the test equations, we identify both unidirectional and bidirectional volatility spillovers, predominantly of a permanent nature, across these indices. The results suggest that the SARS‐CoV‐2 pandemic has challenged the traditional perception of Islamic stocks as safe havens. The robustness tests, incorporating the traditional Hafner and Herwartz and frequency domain causality tests, confirm the validity of our main findings by demonstrating that volatility spillovers between Islamic and conventional stock markets are persistent across 27 out of 38 countries, with the Fourier‐augmented Hafner and Herwartz test providing superior detection of spillovers compared to traditional methods. The study has significant implications for individual investors, market professionals and policymakers, underscoring the need for caution when considering safe havens during periods of market instability.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70081   open full text
• Operating Capacity, Pricing and Supply Elasticity in Container Shipping Markets.
  Cong Sui, Shang Wang, Jingmin Liang, Nikos K. Nomikos.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3139-3162, July 2026. ", "\nABSTRACT\nWe investigate the channels through which changes in operating capacity influence freight rates in the container shipping market using a novel dataset to create an operating capacity index at the shipping‐route level. Our analysis reveals that when supply elasticity is low, an increase in operating capacity tends to drive freight rates upward, as the market faces constraints and cannot easily accommodate additional demand. Conversely, when supply elasticity is high, an increase in operating capacity generally leads to lower freight rates since additional capacity can be deployed to meet rising demand, preventing price surges. These findings suggest that shipping companies strategically adjust capacity based on market conditions to optimise profitability, shifting between price and quantity competition depending on route characteristics and supply elasticity.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70082   open full text
• Beyond the Bin: The Effect of Waste Reduction on Real Earnings Management.
  Faten Lakhal, Assil Guizani, Khaled Ghozzi, Khaled Hussainey.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3163-3183, July 2026. ", "\nABSTRACT\nWe investigate the effect of waste management strategies on real earnings management. Using a sample of 6515 firm‐year observations from 22 countries spanning the 2011–2022 period, we show that companies that reduce their waste generation are less likely to engage in real earnings management, supporting the ethical theoretical perspective. However, waste‐recycling activities positively influence real earnings management due to the high costs of recycling processes. Additionally, we show that the negative effect of waste reduction on real earnings management is only prevalent in companies with low agency costs, those with high corporate governance quality, and those operating in non‐competitive markets. These findings highlight the broader implications of corporate waste management for financial reporting quality. By focusing solely on real earnings management, this study opens new avenues via which future research can explore other dimensions of financial reporting quality and examine evolving regulatory frameworks.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70083   open full text
• Insider Ownership and Investment Efficiency.
  Bibek Bhatta.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3184-3200, July 2026. ", "\nABSTRACT\nThis study examines the relationship between insider ownership and investment efficiency in Indian publicly listed firms, utilising panel data spanning 2001 to 2015. It explores how agency conflicts contribute to suboptimal capital investment decisions. Our analysis reveals that increased insider ownership is associated with reduced investment efficiency, primarily due to tendencies towards overinvestment rather than underinvestment. This pattern suggests that insiders may favour personal or empire‐building interests over shareholder value maximisation. Notably, the presence of independent directors on the board serves as a significant counterbalance, mitigating these inefficiencies. These findings hold when tested with different metrics for capital investment and investment opportunities. This research contributes to the literature by detailing the complex influence of ownership structure on investment behaviour and underscores the critical role of governance mechanisms, particularly board independence, in aligning investments with value creation. The insights are especially pertinent for developing economies with similar investor protection frameworks.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70084   open full text
• The Impact of Integrity Culture on Technology Innovation in Chinese Listed Companies: Evidence From Machine Learning.
  Yongbo Luo, Qiming Zhong, Chien‐Chiang Lee.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3248-3272, July 2026. ", "\nABSTRACT\nUtilising the annual report of listed companies in China from 2007 to 2020, we construct an indicator of ‘integrity culture’ using a machine learning technique—the word embedding model—and test the effect of integrity culture on company innovation. Our results indicate that integrity culture can improve the quantity and quality of innovation. Mechanism analysis suggests that corporate integrity culture pushes innovation by improving finance and incentives for innovation; that is, overcoming financial constraints, decreasing business uncertainty, assuming more employee responsibilities and suppressing managers' myopia. Further investigation indicates that the impact of integrity culture on innovation is more obvious in non‐state‐owned enterprises (non‐SOEs), firms with an entrenched chairman and when firms face relatively stable times. Our paper empirically tests the role of integrity culture in promoting enterprise innovation, which has important implications for companies, practitioners and policymakers.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70088   open full text
• Alternative Price Dynamics and Valuation of Flexible Strategies.
  Cristina Bertolosi, Gianluca Fusai, Ioannis Kyriakou.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3307-3324, July 2026. ", "\nABSTRACT\nIn this article, we study the optimal operational strategy of production projects. We investigate different underlying price models and determine the optimal barriers of transition to suspension, recovery, or irreversible abandonment of productive activity. We compute probabilities of switching between alternative states and the time spent in each state. Our findings suggest that in moderately volatile markets, different model assumptions lead to minimal variations in project strategy. This insight underscores that tractable model approximations can be strategically sound under certain volatility conditions. Our work significantly advances in this direction by demonstrating when and how model simplifications can be made without sacrificing accuracy.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70090   open full text
• Corporate Culture as a Shelter for Climate Change Exposure: A Text‐Based Approach.
  Huy Viet Hoang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3433-3464, July 2026. ", "\nABSTRACT\nThe rising frequency of abnormal climate events has left an undesirable burden on businesses, especially those that are exposed to climate change threats. This study delves into how corporate culture, which is the embedded beliefs and values that guide attitudes and behaviors of individuals in the organization, influences firms' climate change exposure (CCE). Using a fixed‐effect estimator with a U.S. firm‐level sample from 2004 to 2019, the empirical analyses reveal that strong corporate cultures alleviate firms' CCE, and three mechanisms are identified as transmission channels, namely climate change policy adoption, tightened board strictness and market attention. The results are robust to different model specifications and endogeneity diagnoses. Additional analyses show that the presence of chairwomen on the board dilutes the effect of corporate culture, and this effect is only evident in light‐emitting industries while turning insignificant among heavy‐emitting firms. The findings from this study offer several valuable implications for both businesses and policymakers to assist the collective efforts against climate change challenges.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70100   open full text
• Banks and Financial Crises: Market Valuation of the Nobel Prize in Economic Science 2022.
  Carlos Fernández‐Méndez, Víctor M. González, Shams Pathan.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3561-3580, July 2026. ", "\nABSTRACT\nBen Bernanke, Douglas Diamond, and Philip Dybvig received the 2022 Nobel Memorial Prize in Economic Sciences for their work in preventing bank collapses. We investigate the cumulative abnormal stock returns of US and European banks around the announcement, analysing shareholder wealth impact. We find a significant positive wealth effect. The positive effect is particularly pronounced for US banks, riskier banks, and those with higher charter values—banks more likely to receive bailouts. Our findings suggest bank shareholders believe they will benefit from the economists' advocacy for public bailouts of distressed banks.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70106   open full text
• The Art of Conducting Macropru.
  Yannick Lucotte, Florian Pradines‐Jobet.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3981-4001, July 2026. ", "\nABSTRACT\nThis paper empirically assesses how effective macroprudential policies are at preventing and mitigating excessive procyclicality for credit, and whether their effectiveness is driven by how such policies are conducted over the business cycle. We use a sample of 42 OECD and non‐OECD countries over the period 1990Q1–2019Q4 and propose an original macroprudential policy stance index that gauges the degree of countercyclicality of a policy, and we estimate whether it is an important determinant of credit procyclicality. Our results are based on an IPVAR model and confirm that the intensity of credit procyclicality decreases significantly as the degree of countercyclicality of the macroprudential policy increases. We find that the credit cycle responds less to a business cycle shock when the macroprudential policy is conducted in a countercyclical way. Consequently, our empirical findings highlight that the key to making macroprudential policies effective is the art of moving instruments in the right direction at the right time.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70130   open full text
• Derivative Gains/Losses: Quantity Risk, Corporate Hedge Effectiveness and Earnings.
  Chee Kwong Lau.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4111-4126, July 2026. ", "\nABSTRACT\nThis study examined how firms should hedge. It is easier for firms to hedge with the right derivative instruments than to prospectively project and hedge the right quantity of exposures. When actual quantity unfolds, project‐actual quantity deviation (quantity risk) leads to hedge ineffectiveness. This could be a sensible explanation for the mixed empirical evidence on whether derivatives use can contribute to firm market value. Hence, this study proposed an under‐hedge hypothesis, which suggests that firms manage quantity risk when hedging. This study employed derivative gains/losses as a proxy to derivatives use, hedged exposure magnitude and hedging instrument performance. The proxy also provides insight into hedge effectiveness when linked to hedged‐risk losses/gains. It found that transaction exposures positively affect derivatives use, and such use contributes to earnings. Consistent with its hypothesis, risk‐averse managers under‐hedge their projected exposures. The planned under‐hedge position allows firms to hedge a substantial portion of their transaction exposures while reducing potential derivative losses if an actual over‐hedge position arises. When actual quantities unfold, this under‐hedge position also provides operational flexibility for firms. This allows them to add extra derivative contracts to hedge the unhedged exposures rather than terminate existing derivative contracts to rectify over‐hedge positions.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70138   open full text
• Climate Policy, Financial Development and Clean Energy Capacities in the EU: Policy Implications for the COP28.
  Mahmoud Hassan, Ji‐Yong Lee, Marc Kouzez, Sami Ben Jabeur.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3465-3479, July 2026. ", "\nABSTRACT\nTripling the world's installed renewable power capacity by 2030 is one of the global pledges at the COP28 UN Climate Change Conference to keep the 1.5°C goal within reach. Green finance (GRF), financial development (FD) and energy taxes (ENTAX) are expected to play a crucial role in achieving this goal. However, little empirical evidence has been provided on this topic at the European Union (EU) level. Therefore, this paper fills this lacuna by estimating the combined effects of these three variables on Installed Clean Energy Capacity (ICEC) in 14 European countries during the 2007–2021 period. Due to non‐normal data distribution, the Method of Moment Quantile Regression (MMQR) has been employed. The findings assert that GRF and ENTAX are positively associated with ICEC, whereas FD hinders investment in ICEC. However, energy taxes are more effective than green finance in promoting ICEC. A deeper analysis shows that the positive impact of GRF is higher when countries have a higher level of ICEC. In comparison, the positive effect of ENTAX in stimulating ICEC is higher when countries have a lower level of ICEC. Additionally, FD exhibits a U‐shaped influence on ICEC. Based on these results, this research suggests that accelerating the energy transition in the EU requires expanding both green finance and energy taxes. Furthermore, a reform of the current structure of the financial system is needed.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70101   open full text
• Can Digital Financial Inclusion Improve Pension Insurance Coverage: An Empirical Study Based on Provincial Panel Data in China.
  Qiyin Zhang, Can Huang, Xiaoxia Wang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4198-4212, July 2026. ", "\nABSTRACT\nThis study empirically investigates the impact of digital financial inclusion (DFI) on basic pension insurance (PI) coverage in China using provincial panel data from 2012 to 2022. Facing increasing pressure from an ageing population, China's pension system is challenged by financial constraints and inadequate contribution density and weak contribution compliance, for which DFI is explored as a potential solution. We measure DFI using the Peking University Digital Financial Inclusion Index, which includes coverage breadth, usage depth, and digitization level. Basic pension insurance coverage is measured by the number of insured individuals. Employing a two‐way fixed‐effects model and a one‐period lagged DFI as an instrumental variable to address endogeneity, our findings reveal that DFI expansion significantly increases basic PI coverage. Robustness checks, including variable substitution and sample interval adjustment, confirm these results. Heterogeneity analysis indicates varied DFI effects across income levels and regions. A key contribution is identifying labour productivity as a significant mechanism through which DFI enhances PI coverage. This study offers novel theoretical insights and practical implications for policymakers addressing pension security in ageing societies, particularly highlighting the differentiated regional impacts.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70168   open full text
• Reading the Financial Stars: The Interplay of Chinese Fortune‐Telling, Western Astrology, and Investment Decisions.
  Cheng Xu, Xudong He, Yanqi Sun, Min Bai.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4150-4176, July 2026. ", "\nABSTRACT\nThis paper explores the influence of traditional Chinese fortune‐telling and Western Astrology on investor decision‐making, specifically emphasising the indirect paths of investment through intermediaries such as entrepreneurs or fund managers. We scrutinise how fortune‐telling techniques, which purport to predict the fortunes of these intermediaries, shape investment decisions. Conducting two preregistered studies, we uncover the nuanced mechanisms that govern these indirect relationships. Study 1 demonstrates that venture capitalists' decisions are markedly influenced by both Chinese and Western fortune‐telling reports predicting the fortunes of their intermediaries, such as entrepreneurs or fund managers, whereas Study 2 reveals that individual investors in China respond only to Chinese fortune‐telling techniques that forecast the fortunes of their intermediaries, such as fund managers. Importantly, this divergence is not due to differences in awareness, as all participants underwent training and assessment in these techniques. We further discover that higher financial literacy levels temper the sway of fortune‐telling. Our findings highlight the paramount role of recognising not only the direct influences on investment but, more critically, the indirect pathways mediated by cultural and seemingly irrational factors. This comprehensive understanding contributes to the crafting of investment strategies and policies that navigate the multifaceted labyrinth of cultural influences, cognitive biases, and the layered intricacies of the financial system.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70141   open full text
• Crypto‐Climate Dynamics: Unveiling the Link Between Environmental Attention and Market Uncertainties Through Time‐Frequency Quantile Analysis.
  Brahim Gaies, Najeh Chaâbane, Nadia Arfaoui, Jean‐Michel Sahut.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4390-4409, July 2026. ", "\nABSTRACT\nThis paper explores the relationship between the Cryptocurrency Environment Attention Index (ICEA) and the level of uncertainty in the cryptocurrency market, including cryptocurrency price uncertainty and cryptocurrency policy uncertainty. We apply the wavelet coherence method, the novel quantile coherency technique introduced by Baruník and Kley, and a quantile‐on‐quantile regression analysis to a sample of data ranging from 2 January 2014 to 30 December 2022. Findings indicate that, in the near term, ICEA can exacerbate uncertainty in the cryptocurrency market due to news events and social media discourse concerning environmental issues associated with cryptocurrencies. In the medium run, pricing and policy uncertainties in the cryptocurrency market may attract public scrutiny about environmental concerns, resulting in regulatory discussions and modifications. The findings indicate that the correlation between environmental concerns over cryptocurrencies and uncertainties in the crypto market demonstrates a more consistent and enduring trend over the long run. Our analysis uncovers dynamic and asymmetric bidirectional effects between ICEA and cryptocurrency uncertainty indices, particularly pronounced during bullish market regimes, a dimension not previously explored in the literature. Methodologically, our choice to employ wavelet coherence, quantile coherency and quantile‐on‐quantile regression is deliberate. Unlike traditional cointegration or linear approaches, which can only reveal average or long‐term equilibrium relationships, these frequency‐ and quantile‐based tools capture the asymmetric, time‐varying and tail‐dependent co‐movements between ICEA and cryptocurrency uncertainty. This methodological design is thus directly aligned with the volatile and non‐linear nature of cryptocurrency markets, where extreme events and regime shifts are central features.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70128   open full text
• Investigating the Nexus Between Forest Product Trade and Economic Growth: Evidence From the Autoregressive Distributed Lag Approach.
  Muhammad Nasrullah, Muhammad Rizwanullah, Mohammad Maruf Hasan.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4177-4197, July 2026. ", "\nABSTRACT\nThe study aims to scrutinise the nexus amongst the exports of forest products, gross capital formation, exchange rates, population, and economic growth of BRICS (Brazil, Russia, India, China, and South Africa) and USMCA (United States–Mexico–Canada Agreement) countries. This study employs an autoregressive distributed lag (ARDL) model using annual time‐series data from 1970 to 2023. The estimated elasticities of the net exports of forest products obtained from ARDL confirm their significant role in the economic growth of BRICS and USMCA countries in both the short and long run. The estimated results also highlight that the International Tropical Timber Agreement (ITTA, 1983 and 1994), trade barriers (anti‐dumping and countervailing duties) imposed on forest products, and trade blocs (BRICS and USMCA) significantly affect economic growth. This study provides new evidence for policymakers to formulate precise policies to diversify and expand the forest product market by exploring new trade partners, changing market conditions and free and fair trade. The study suggests introducing new policies and agreements for forest trade more effectively, thereby enhancing a country's economic growth whilst maintaining a sustainable environment and forest diversity. Additionally, the study recommends that an effective policy is needed to resolve trade disputes and create a conducive environment for the forest product trade.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70142   open full text
• Bounding the Boundless: The Excesses of RIBA and the Equality in Exchange in Islam.
  Shahid Sultan, Ambreen Sultan.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3705-3719, July 2026. ", "\nABSTRACT\nThe concept of ribā, meaning prohibited excess, has been widely studied by scholars and economists, but it still needs clarification due to ongoing confusion in the existing literature. The main issue is that modern scholars and economists have not fully understood the well‐developed juristic methodology used to study the concept of ribā; instead, they rely on a weak historical analysis. Their descriptions often differ from the classical understanding of ribā and lack scholarly rigour. Classical Muslim jurists describe ribā in The Qur'ān as an unelaborated term, whereas the Sunnah provides the foundational basis for defining it. This article argues that ribā is difficult rather than unelaborated in the prohibition verses, as the exchange principle mentioned elsewhere in The Qur'ān clarifies it. Both The Qur'ān and the Sunnah instruct Muslims to ensure fairness in exchanges without causing excess or deficit to counter or third parties. Classical Islamic legal thought defines ribā as any stipulated excess without a countervalue that occurs in exchange transactions. It is a form of wealth usurpation disguised as exchange. Ribā appears in various forms, including as a benefit, time delays, and estimated differences. We categorise its basic and applied types as corporeal, incorporeal, and temporal. The prohibition of ribā explicitly forbids commercial monetary debt under the rules of ṣarf contract, making commercial monetary debt and bank credit creation impossible under Islamic law. Ribā can be recognised through correct foundational principles and can be avoided by striving for equality in exchange.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70114   open full text
• The Impact of Federal Reserve Monetary Policy Adjustments on RMB Exchange Rate Fluctuations.
  Yu Liu, Jianxun Shi, Yishi Li.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4073-4090, July 2026. ", "\nABSTRACT\nThis paper examines how U.S. monetary policy is transmitted to the renminbi (RMB) within China's onshore–offshore exchange‐rate structure. Using monthly data from 2012 to 2025 and a time‐varying parameter vector autoregression (TVP‐VAR) model, we identify how adjustments in three dimensions of U.S. policy—prices, interest rates, and liquidity—affect the onshore (CNY) and offshore (CNH) markets. The estimates show apparent differences across channels and between the two markets. Movements in the U.S. Dollar Index exert the most persistent influence and become more important when global uncertainty rises. Interest‐rate shocks also matter, but their effects depend on the policy environment, whereas liquidity shocks have limited explanatory power. CNH responds more quickly and more strongly than CNY, reflecting the contrast between a globally traded market and one constrained by domestic policy. Institutional changes, including the 2015 exchange‐rate reform and the later introduction of the counter‐cyclical factor, modify how external shocks influence RMB pricing by altering the interaction between onshore policy tools and offshore market behaviour. Overall, spillovers from U.S. policy to the RMB are neither constant nor uniform; they evolve with shifts in global financial conditions and changes in China's monetary policy. These insights contribute to a deeper understanding of monetary autonomy, exchange‐rate formation, and the evolving role of the RMB in global financial markets.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70135   open full text
• Corporate Bond Issuance From Birthplace‐Connected Politicians.
  Senlin Miao, Fenghua Wen, Chufu Wen.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4057-4072, July 2026. ", "\nABSTRACT\nWhile numerous studies examine the impact of political factors on corporate bonds, there is scant literature focusing on the influence of politicians' birthplace favouritism on the likelihood of corporate bond issuance. To address this gap, we leverage turnover events of the chairman of the China Securities Regulatory Commission (CSRC) to identify shifts in regions favoured by politicians. Our findings reveal that firms headquartered in the birthplace of the incumbent CSRC chairman have a higher probability of issuing bonds. Channel analysis indicates that firms issuing bonds and headquartered in the incumbent CSRC chairman's birthplace are more likely to possess lower initial credit ratings and barely meet the CSRC's quantitative thresholds. The birthplace favouritism of politicians in corporate bond issuance is more pronounced among chairmen with strong hometown preferences and less pronounced when concerns about their political careers are high. Furthermore, the positive relationship between politicians' birthplace favouritism and bond issuance likelihood remains unaffected following the anti‐corruption campaign, highlighting that such favouritism is unlikely to be primarily driven by corrupt motives.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70134   open full text
• The Mediating Effect of Capital Adequacy on the Relationship Between the ECL Model and Commercial Banks Profitability in the Middle East.
  Abdallah Al‐Hanandeh, Aniza Othman, Nor Hamimah Mastor.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4016-4033, July 2026. ", "\nABSTRACT\nThis study examines the mediating role of capital adequacy, in accordance with Basel III, in the relationship between the Expected Credit Loss (ECL) model under IFRS 9 and the profitability of commercial banks in the Middle East. Using panel data from 36 commercial banks across six countries over the period 2015–2020, mediation analysis is employed to assess how the transition from IAS 39 to IFRS 9 affects bank performance. The results indicate that capital adequacy partially mediates the relationship between ECL and profitability, while ECL has a significant positive impact on both return on assets and return on equity, highlighting the importance of maintaining adequate capital buffers and integrating forward‐looking information. The study provides practical insights for policymakers and regulators on aligning IFRS 9 with Basel III to enhance financial stability and risk management in the banking sector, and contributes to the academic literature by clarifying the interaction between regulatory frameworks and bank performance in emerging markets.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70132   open full text
• Reading Between the Reels: An AI‐Driven Approach to Analysing Movie Review Sentiment and Market Returns.
  Haowen Tian, Wenlan Tony Xie, Yanlei Zhang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3948-3980, July 2026. ", "\nABSTRACT\nThis study examines the relationship between market sentiment derived from movie reviews and stock returns. Using GPT‐4o large language model (LLM), we construct daily sentiment measures from approximately 247,850 movie reviews. Empirical results indicate a robust negative relationship between movie sentiment and excess market returns, suggesting that well‐received theatrical films distract investor attention from fundamental market information, leading to reduced market participation and lower returns. The robustness of this finding is confirmed through a comprehensive set of validation tests, including out‐of‐sample forecasting, multiple testing corrections, and validation against human‐annotated sentiment scores. Time‐series regressions indicate that the negative relationship between movie sentiment and daily market excess returns persists for approximately 2 or 3 days, but does not hold over longer horizons, and no reversal in returns occurs thereafter. Heterogeneity analyses reveal that this effect is more pronounced during bear markets and the COVID‐19 pandemic period, highlighting investor behaviour driven by cognitive fatigue and emotional diversion during stressful market conditions. However, during financial crises, investor attention remains largely focused on critical macroeconomic events, reducing sensitivity to non‐financial sentiment signals. Further analyses confirm that elevated movie sentiment negatively affects trading volume and positively influences market volatility, consistent with the attention distraction hypothesis. Our findings remain robust across alternative deep learning architectures including BERT, LSTM, CNN, Bi‐LSTM and TIIF. Overall, the findings highlight the importance of investor attention to multimedia visual stimuli and psychological mechanisms in shaping financial market outcomes.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70129   open full text
• Kryptonite for Cryptocurrencies? What Are the Effects of Regulatory Controls on Bitcoin Returns and Volatility?
  Robert Mullings.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3905-3920, July 2026. ", "\nABSTRACT\nThis paper examines the impact of regulatory controls on Bitcoin's excess returns and volatility. The paper innovates by proxying changes in the regulatory environment using global Google search volume intensity data. The generated regulatory indices accurately identify episodes of regulatory tightening within cryptocurrency markets. A three‐factor model—incorporating market, momentum, and size factors—is employed to evaluate the effects of regulation on Bitcoin returns. The study also assesses the influence of changes in the regulatory environment on volatility using additional controls. Findings reveal that increased regulation significantly reduces monthly Bitcoin returns and increases return volatility. These effects are both statistically and economically significant, robust across multiple proxies for regulatory activity, and persist even when accounting for the effects of the COVID‐19 pandemic. The results highlight the real regulatory risks associated with Bitcoin investments, particularly for risk‐averse investors, and underscore the importance of policy developments in shaping cryptocurrency market dynamics.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70126   open full text
• Environmental, Social and Governance (ESG) Rating Divergence and Corporate Carbon Risk: Evidence From China.
  Qunyong Jiang, Fang Wang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3887-3904, July 2026. ", "\nABSTRACT\nThis study investigates the impact of environmental, social and governance (ESG) rating divergence on corporate carbon risk (CR) using a sample of Chinese A‐share listed companies from 2011 to 2020. As confirmed by a series of robustness checks, ESG rating divergence significantly exacerbates corporate CR. Moderating mechanism analysis reveals that increased corporate environmental attention and enhanced information transparency mitigate this adverse effect. Heterogeneity analysis shows that the impact of ESG rating divergence on CR is more pronounced in firms with focused operations, higher emissions, low‐quality audits, and limited political connections. Additional analysis indicates that corporate CR tends to rise with greater rating divergence among industry peers. This study offers recommendations for regulating ESG ratings, guiding enterprises to mitigate CR, and helping investors better account for rating divergence in their decision‐making.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70125   open full text
• The Drivers of NPLs in Europe: A Dynamic Panel Data Analysis.
  Theodoros Daglis, Panos Xidonas, Konstantinos N. Konstantakis, Panayotis G. Michaelides, Iason Sozon Peveretos.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4374-4389, July 2026. ", "\nABSTRACT\nThis work explores the determinants of non‐performing loans (NPLs) in Europe, focusing on how macroeconomic and bank‐specific agents augment systemic risk within the financial system. Using a dataset that includes quarterly data on European countries and incorporates major events like the BREXIT vote and the structural debt crisis, this research utilises dynamic panel data analysis to examine these factors. The findings reveal that Government Debt and the structural debt crisis show a strong and positive relation with elevated levels of NPLs. Conversely, the 10‐year bond rate is negatively related to NPLs. Additionally, total bank assets and total bank deposits also show a positive relation with NPLs. These results highlight the crucial role of macroeconomic stability and financial indicators in influencing NPL levels, while the paper points out the importance of effective policy measures to manage NPLs and improve financial stability.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70122   open full text
• Internal Control Quality Systems and Environmental Violations: How Digitalization, Media Coverage and Returnee Directors Make a Difference.
  Adnan Ali, Qian Yang, Afzaal Ali, Tatbeeq Raza‐Ullah, Zeeshan Ali.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3827-3848, July 2026. ", "\nABSTRACT\nDespite the dominant discourse on the significant role of internal control quality (ICQ) systems in corporate governance, their potential to mitigate corporate environmental violations has remained largely underexplored. Drawing on agency theory and stakeholder theory, we develop and test a novel model proposing that ICQ systems reduce environmental violations, with their impact being amplified by digitalization, media coverage and returnee directors. Using a longitudinal dataset of 773 Chinese‐listed firms from 2008 to 2018, we find a significant negative relationship between ICQ systems and environmental violations. This relationship is more prominent in firms with high levels of digitalization, media coverage and returnee directors. These results remain robust across alternative measures and endogeneity checks, including propensity score matching, Heckman corrections, industry controls and a two‐year lagged approach. This study contributes to the corporate governance and environmental management literature by reframing ICQ systems as a central mechanism for environmental stewardship and providing insights into how contextual factors, such as digitalization, media coverage and returnee directors interact with these systems to further enhance their effectiveness. The findings offer valuable implications for managers and policymakers aiming to improve corporate governance and environmental compliance.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70121   open full text
• Market Rewards in Capital Markets: The Impact of First‐Time Recognition by the Golden Round Table Award on Stock Price Crash Risk.
  Yuhang Zheng, Tingli Liu, Lin Han, Xinran Lu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3790-3826, July 2026. ", "\nABSTRACT\nIn recent years, the number of awards in the capital market has grown rapidly, yet their credibility has been repeatedly questioned. This study investigates whether the market provides credible incentives for high‐quality corporate governance. To eliminate the interference of commercialised awards and capture the genuine effect of governance signals, we focus on the Golden Round Table Award, which is recognised for its professionalism, authority and consistency, and regard it as an external certification signal of high‐quality corporate governance. Using data of A‐share listed firms from 2006 to 2021, we conduct an empirical analysis based on a multi‐period difference‐in‐differences model. The results show that a firm's first inclusion in the Golden Round Table Award list significantly reduces its subsequent stock price crash risk. Mechanism tests indicate that this effect is mainly achieved through three channels: improving information transparency, strengthening external supervision and enhancing market reputation. Further analyses reveal that award‐winning firms experience improvements in their information environment, operating performance, innovation input and accounting information quality. These findings suggest that the reduction in crash risk results from genuine governance improvement rather than short‐term risk avoidance. The heterogeneity analysis further shows that this mitigating effect is more pronounced among firms with higher financing constraints, higher leverage ratios and longer‐lasting governance improvements. Robustness and endogeneity tests confirm the reliability of these conclusions. Overall, the findings demonstrate that the market indeed provides positive incentives for high‐quality corporate governance certified by authoritative channels, as reflected in the significant reduction of stock price crash risk. This study provides new empirical evidence from an emerging market for the notion that ‘the market rewards good firms’, offering important insights for identifying effective market signals and improving the corporate governance ecosystem.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70120   open full text
• Inconsistency of the Capital Asset Pricing Model in a Multi‐Currency Environment.
  Khalifa Al‐Thani, Domenico Mignacca, Gianluca Fusai, Fabio Caccioli, Guido Germano.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3782-3789, July 2026. ", "\nABSTRACT\nThe capital asset pricing model (CAPM) is a widely adopted model in asset pricing theory and portfolio construction because of its intuitive nature. One of its main conclusions is that there exists a global market portfolio that each rational investor should hold in proportion to the risk‐free asset. In this paper, we demonstrate theoretically and through an example that the CAPM cannot hold in a multi‐currency environment. This is because it produces different market risk premia depending on the investor's base currency unless each exchange rate is uncorrelated with the asset prices in the portfolio.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70118   open full text
• Can Good Doers Perform Well? Novel Evidence From Corporate Innovation.
  Quang‐Thai Truong, Quynh‐Nhu Tran, Robin Chen, Chia‐Ying Chan.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3747-3765, July 2026. ", "\nABSTRACT\nCorporate Social Responsibility (CSR) has received increasing attention due to its perceived positive impact on firm performance. However, this study examines the potential downsides of CSR, specifically its impact on corporate innovation, through the lens of Resource‐Based Theory (RBT) and Agency Theory. CSR practices often require substantial financial, human and organisational resources. When firms allocate resources to CSR initiatives that are not aligned with innovation objectives, these resources may be diverted from critical activities such as research and development (R&D), limiting the firm's capacity for innovation. Furthermore, CSR can deplete scarce resources, including skilled personnel, diminishing the firm's ability to capitalise on its innovation potential. Drawing on Agency Theory, this study also suggests that firms may engage in CSR to mitigate negative perceptions or to fulfil personal managerial incentives, such as enhancing reputations. These motivations can exacerbate the depletion of resources needed for innovation. Our findings indicate a detrimental effect of CSR on corporate innovation, with agency‐related issues further intensifying this negative impact. This study contributes new insights into the trade‐offs associated with CSR and its complex relationship with innovation.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70116   open full text
• ESG Performance and Credit Risk: Evidence From Chinese Manufacturing Companies.
  Yanan Wang, Xiao Zhang, Michal Wojewodzki, Yuxin Jian, Fadey AbiDaoud.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3720-3746, July 2026. ", "\nABSTRACT\nThis study investigates the effect of corporate environmental, social, and governance (ESG) performance on credit risk using a sample of manufacturing firms listed on China's Shanghai and Shenzhen A‐share markets from 2009 to 2021. Employing fixed effects, the generalised method of moments, and instrumental variable models, we find that stronger ESG performance is significantly associated with lower credit risk, as measured by the distance to default. Mediation analysis reveals that this relationship operates primarily through enhanced profitability and improved external governance. In contrast, Tobin's Q acts as a negative channel, potentially reflecting market overvaluation and inefficiencies. ESG's impact also varies across firm types: the risk‐reducing effect is most pronounced among non‐state‐owned enterprises (NSOEs), firms based in eastern provinces, and those in the growth or decline stage of the corporate lifecycle. Further analysis shows that environmental (E) and social (S) pillars drive credit improvements, whereas the governance (G) score has an insignificant effect. Our findings provide theoretical and empirical insights into the ESG–credit risk nexus, highlighting the importance of sector‐specific, regionally sensitive ESG strategies in emerging markets.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70115   open full text
• Bank CSR Engagement, Institutional Environments, and Corruption.
  Mohammad Bitar, Hassan Obeid, Imane El Ouadghiri, Jonathan Peillex.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4091-4110, July 2026. ", "\nABSTRACT\nThis study examines the effect of bank engagement in corporate social responsibility (CSR) on corruption across 39 countries from 2002 to 2021. We build on the view that CSR enables banks to act as active agents influencing national corruption, rather than passive agents of institutional norms. Our results indicate that stronger bank CSR significantly reduces corruption, with robust findings across measures and specifications. CSR mitigates corruption through enhanced regulatory compliance, stakeholder protection, governance diversity, and improved information flows. It also complements formal institutions and informal societal norms, highlighting the potential of embedding CSR into banking regulation to advance both anti‐corruption and financial stability.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70136   open full text
• Power Play: How Bank Market Power Shapes Earnings Management in European SMEs.
  Xing Huang, Xiaodong Wang, Liang Han, Yun Shen, Liying Zhou.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3678-3704, July 2026. ", "\nABSTRACT\nThis study examines the effects of bank market power on borrowing firms' earnings management. Through the lens of banking relationships, we use uniquely matched data on a one‐to‐one banking relationship between 64,635 Small and Medium‐Sized Enterprises (SMEs) and 471 banks across 17 European countries between 2007 and 2015. We measure bank market power at a disaggregated level, and find an unfavourable effect of bank market power on SME earnings management where SMEs tend to engage in more earnings management when their primary bank possesses a greater level of market power. Such effects are more prominent for firms that are smaller in size, more illiquid, grow more slowly, and over the financial crisis period during which credit supply reduced and SMEs were less incentivised to manage earnings. Our findings contrast with recent empirical evidence from listed firms and bank market deregulation at an aggregated level in the US market. Our results shed new light on supporting evidence for the market power hypothesis.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70113   open full text
• The Impact of the 2016 EU Audit Reforms, Oversight, and Corruption on Earnings Management: Evidence From European Banks Using a Dynamic Panel Approach.
  Maria Christofidou, Epameinondas Katsikas, Dimitrios Koufopoulos, Konstantinos Spanos.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3663-3677, July 2026. ", "\nABSTRACT\nThis study investigates earnings management in European banks in the context of the 2016 EU audit directive. Using a dynamic panel of 134 banks over 2012–2023, we apply two‐step System‐GMM estimators with three profitability measures—Earnings Before Provisions and Taxes (EBPT), Return on Assets (ROA), and Return on Equity (ROE). The results show that earnings management was persistent before the directive but declined markedly thereafter. Profitability constrained manipulation in the pre‐directive period, but its influence largely disappeared as regulation emerged as the dominant disciplining force—except for EBPT, which gained importance after 2016. Capitalization reduced manipulation before the directive but lost significance afterward, while economic growth, which previously fuelled manipulation, was fully neutralised. Governance effects also shifted: institutional quality alone did not reduce manipulation, but the directive enhanced its effectiveness, whereas governance divergence showed weaker and less stable effects. These findings advance scholarly understanding of how regulation and governance interact to shape earnings management and highlight practical implications for policymakers, regulators, auditors and bank managers.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70112   open full text
• Capturing the Risk Dynamics of the A‐Share Market Based on the Markov Regime‐Switching Method.
  Min Liu, Chien‐Chiang Lee.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3581-3606, July 2026. ", "\nABSTRACT\nStock market uncertainty threatens investors' profit gains, affects asset pricing, and challenges financial stability. This research investigates the dynamics of China A‐share market risks represented by volatility, value at risk (VaR), and expected shortfall (ES) and then compares the A‐share market with the 12 major stock markets in the world. The novelty of this study is that it considers the structural breaks of the market under a non‐linear framework by incorporating a Markov regime‐switching process and quantile regression in the analysis. This study aims to improve the risk management strategies of investors, particularly those with a risk‐averse appetite or those interested in emerging countries. The results suggest that high volatility accompanied by high downside losses defines the nature of risk in the A‐share market. This finding provides empirical evidence supporting the view that the A‐share market is riskier than most of the selected markets both from the general risk and left‐tail risk perspectives. This study employs quantile regression to identify the global factors that may increase the likelihood of the A‐share market remaining volatile. The results show that the key driving force is price rather than return and volatility of the oil, gold, global stock, and US dollar markets. Moreover, global financial uncertainty and the 10‐year US treasury bond yield influence state probability. Nevertheless, the impact of global driving forces varies across quantiles. This study enriches the literature on the stock market by revealing a number of general and left‐tail risk dynamics and by identifying the underlying market regime‐switching process. This study is the first to identify the global driving forces affecting the state probability of the A‐share market.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70108   open full text
• The Impact of Value Jumps on Bond Spreads: Based on ChinaBond Valuation.
  Shaoyang Zhao, Pengfei Deng, Qingyuan Deng.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4334-4354, July 2026. ", "\nABSTRACT\nThis paper examines the impact of value jumps on bond liquidity and credit spreads, an area of growing importance in structured risk. Despite the recognition of the predictive role of value jumps in asset pricing, their impact on the bond market, particularly on liquidity spreads, remains less explored. Using ChinaBond Valuation, an authoritative third‐party valuation data, this study overcomes limitations posed by sparse transaction data and biased ratings in the developing credit bond market, and reveals that value jumps increase both bond liquidity and credit risk spreads, with downward jumps exerting a stronger influence. We identify that, value jumps do not lead to significantly higher spreads for bonds with inherently high default risk but for those opaque and illiquid, implying that value jumps in the bond market transmit more of a sentimental liquidity risk than substantive default risk. Meanwhile, we confirm that value jumps incorporate both public and private information, and extreme heterogeneous risk mainly elevates bond credit spreads.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70107   open full text
• An Analytical Approximation for European Options Under a Regime‐Switching Heston‐α Model.
  Wenting Chen, Xin‐Jiang He.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3550-3560, July 2026. ", "\nABSTRACT\nIn this paper, we propose a regime‐switching (R‐S) Heston‐α model and consider the analytical pricing of European options. With a constant elasticity of variance specification to reflect the level dependence between the high volatility and the volatile volatility and an R‐S mechanism to capture the impact of changing economic conditions, this model is proved, through an empirical study, to have much better pricing performance than the original Heston model. The non‐affine nature of the newly‐proposed model has however, precluded the use of most existing analytical approaches developed for affine models, and the R‐S mechanism has undoubtedly brought in additional difficulties in deriving analytical option pricing formula. Albeit the inherent mathematical difficulties, we have managed to derive an analytical approximation for the price of European options under such a complicated model, which allows the calibration of the model to be completed at an appropriate speed. Numerical experiments suggest that the newly derived formula has an acceptable degree of accuracy for general parameter settings. Empirical results also confirm the practicability of the newly‐proposed model to real financial markets.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70105   open full text
• Digital Washing and Executives' Opportunistic Stock Reduction.
  Qi Chen, Haoran Liang, Menghan Li, Qingze He.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3534-3549, July 2026. ", "\nABSTRACT\nWhile greenwashing has been widely studied, research on digital washing remains in its nascent stage. Using data from Chinese A‐share listed companies from 2011 to 2022, we investigate whether digital washing affects executives' opportunistic stock reduction. The results indicate that digital washing significantly intensifies executives' opportunistic stock reduction. Further analysis reveals that stock price overvaluation and strategic digital innovation are the channels through which digital washing facilitates executives' opportunistic stock reduction. This effect is concentrated in non‐state‐owned enterprises and firms with greater executive power and more optimistic analyst forecasts. However, institutional investor site visits help mitigate this effect. This study provides new evidence for the opportunistic behaviour of executives from the perspective of digital disclosure.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70104   open full text
• From Empire Building to Strategic Focus: Institutional Influence on Acquisition Discipline and Corporate Value.
  Chandra S. Mishra.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3503-3533, July 2026. ", "\nABSTRACT\nThis study investigates the relationship between institutional ownership and the firm's propensity for frequent acquisitions. Acting as monitors, institutional shareholders impose constraints on managerial discretion, reducing the likelihood of frequent acquisitions. Our finding challenges prior assumptions that institutional ownership invariably facilitates acquisitions. Instead, the analysis suggests that institutional investors prioritize acquisition discipline, curbing managerial tendencies toward an empire‐building strategy that may not align with shareholder value maximization. Institutional ownership, however, has a positive influence on related acquisitions. Banks and insurance companies, namely relational investors, positively influence the acquisition frequency, indicating some support for the career concerns hypothesis. Public pension funds and mutual funds are likely to restrain firms from undertaking frequent acquisitions. We find a positive relation between institutional ownership and firm value, which weakens with an increase in the acquisition frequency but becomes stronger with an increase in the frequency of related acquisitions. Most institutional investors support value‐enhancing acquisitions but oppose the company's propensity to make acquisitions frequently.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70103   open full text
• Quantifying Market Efficiency: Information Dissemination Through Social Media.
  Efstathios Polyzos, Aristeidis Samitas, Ilias Kampouris.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3480-3502, July 2026. ", "\nABSTRACT\nWe examine stock market efficiency using Twitter as a proxy for the dissemination of public information. We use a dataset 8,221,848 tweets as a source of timestamped information and perform three different topic extraction methodologies to mine the information that they carry on different types of trading days. Using the same approach, we build a set of classifiers to predict the market movements based on the tweets of the previous day and validate it using an independent sample on five indices of the New York Stock Exchange. Our best classifier can accurately predict 55.99% (45.51%) of bull (bear) trading days, suggesting that the rest of the market movements are either based on private information or are due to market anomalies, thus pointing to semi‐efficient market. By executing our approach on subperiods corresponding to financial turbulence, we show that market efficiency increases during such periods, since public information as proxied by Twitter can explain a greater percentage of market movements. We confirm the findings using counterfactual analysis. Our results add to the discussion on market efficiency and show that Twitter can accurately proxy information propagation towards investors, suggesting a new methodological tool to test for the efficient market hypothesis.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70102   open full text
• It Is Not Your Risk but It Is Your Problem: Peer Country Effects on Emerging Market Credit Default Swap Spreads.
  Mehmet Selman Colak, Sumeyra Korkmaz, Huseyin Ozturk, Muhammed Hasan Yilmaz.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3409-3432, July 2026. ", "\nABSTRACT\nIn this paper, we attempt to introduce peer effects as a new channel in pricing emerging markets credit default swap spreads and study the impact of peer effects on 17 countries for the period 2006–2022. Unlike spillover models, we exploit spatial econometrics to distinguish between direct (country‐specific) and indirect (non‐country‐specific) effects in the credit default swap spreads. We are motivated by the fact that the connectedness among emerging market credit default swaps is proportionally high based on the similarity concerning the dimensions of economic development, governance and uncertainty. Adopting a spatial modelling strategy allows us to consider such similarity to unravel non‐country‐specific channels driving the shifts in sovereign credit risk. On top of documenting significant spatial interactions, we find that indirect effects are roughly as important as the direct ones in explaining the credit default swap spread movements. Our findings are robust to a set of additional analyses and modelling choices. The findings underpin a plethora of attempts on the importance of coordinated policy actions in the international regulatory fora to alleviate sovereign risk. This paper also calls for careful use of credit default swap spreads as a sovereign credit risk indicator. After all, these measures are already a cost indicator but the idiosyncratic risk may be quite different.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70098   open full text
• The Intensive Role of FDI on Women's Empowerment in Developing Countries.
  Blaise Ondoua Beyene, Georges Ngnouwal Eloundou, Jacques Simon Song, Bruno Emmanuel Ongo Nkoa.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3384-3408, July 2026. ", "\nABSTRACT\nForeign direct investment (FDI) in developing countries has grown over the last two decades, fuelling an extremely fertile literature on gender inclusion in the economic, social and political spheres. This article assesses the effect of FDI on women's empowerment (WE) observed in 102 developing countries. Thus, considering two dimensions—namely, Women's Economic Empowerment (WEE) and Women's Political Empowerment (WPE)—we specify and estimate a static and dynamic panel data model using generalised least squares (GLS) and system generalised method of moments (S‐GMM) over the period 2002–2022. Two main results emerge. First, FDIs significantly increase the WE; notably, WPE and WEE. Second, the mediation analysis results show that the effects of FDI on WE are mediated by internet, mobile phone, female labour participation, female/male employment ratio and energy intensity. We propose to strengthen the consideration of gender in FDI attractiveness policies. Additionally, governments of developing countries must encourage and facilitate women's involvement in politics so that the decisions made have a direct impact on their daily lives.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70097   open full text
• Investor Site Visits, Discussion Contents, and Analyst Forecasts: A Machine Learning Approach.
  Jinyu Liang, Xiaogang Bi.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3360-3383, July 2026. ", "\nABSTRACT\nWe use machine learning to perform a textual analysis of 423,361 Q&As (questions and answers) involved in investor site‐visit reports, in order to explore the impact of information conveyed from them on analysts' forecast errors and revisions. We find that more performance‐ and operations‐related Q&A content discussed during site visits significantly reduces analysts' forecast errors and makes them have a lower degree of revisions. Furthermore, these relations are more pronounced when there are more institutional participants in the site visit. The results remain consistent after addressing endogeneity issues and using alternative calculations for an abnormally larger number of Q&As. Our paper supports the information digesting channel hypothesis of institutional investors and finds that questions raised by them are beneficial to analysts, no matter whether they participate in site visits, due to the timely and accurately conveying information to outside investors.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70094   open full text
• The Impact of Geopolitical Risk on Trade Credit.
  Wafa'a B. Al‐Yafei, Hamdi Bennasr.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3607-3630, July 2026. ", "\nABSTRACT\nIn light of escalating global geopolitical tensions, understanding how firms respond to external shocks has become a critical issue for policymakers, corporate managers, and investors. This study investigates the impact of geopolitical risk (GPR) on firms' reliance on trade credit (TC)—an essential form of short‐term financing, particularly when access to formal finance is constrained. Utilising a comprehensive dataset of 30,704 listed firms across 42 countries from 1990 to 2023, we empirically show that higher levels of GPR are associated with increased use of TC. We identify financial constraints as a key mechanism linking GPR to TC reliance and reveal that this effect is more pronounced among firms with strong environmental, social, and governance (ESG) performance, while it weakens for firms facing high cash flow risk or operating in highly competitive markets. This study offers novel empirical evidence on the strategic role of trade credit in crisis adaptation. Additionally, it offers original insights into the role of geopolitical threats (GPT) in shaping firm‐level financial behaviour and highlights the importance of ESG strength in enhancing financial resilience during heightened levels of GPR. The results carry practical implications for corporate managers, policymakers, and stakeholders, highlighting trade credit's critical function during periods of geopolitical uncertainty.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70109   open full text
• What Role Do Finance Ministers Play in Political Business Cycles? Evidence‐Based on a New African Dataset.
  Christine Olivia Strong.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3003-3026, July 2026. ", "\nABSTRACT\nThis study investigates how the personal characteristics of finance ministers influence political budget cycles in Africa. Using a new dataset covering 300 finance ministers across 23 countries from 1980 to 2020, we find that political budget cycles primarily take the form of increased government consumption during election years. Ministers with prior central banking experience are less likely to amplify spending in election years, effectively curbing political budget cycles. These results remain consistent after accounting for institutional quality, ministerial tenure, and other confounding factors. The findings contribute to the literature by showing that the appointment of finance ministers in African countries shapes fiscal discipline during elections.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70072   open full text
• Unlocking Innovation Through ESG: How Development Stages Shape the Impact.
  Wenjing Xu, Xuan Zhang, Jilong Chen, Shiyu Xu, Yuanqing Niu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4410-4427, July 2026. ", "\nABSTRACT\nAs global attention on sustainable development grows, Environmental, Social, and Governance (ESG) performance has become a critical factor influencing corporate strategies. This study investigates the dynamic impact of ESG on corporate innovation, focusing on patent development as a key measure. By analysing data from publicly listed firms in China (2009–2022), the findings reveal that strong ESG performance significantly enhances innovation output, especially in high‐tech and sustainability‐driven industries. However, the impact of ESG varies across different stages of a firm's innovation lifecycle. A stronger effect is observed after firms achieve key innovation milestones, such as obtaining high‐tech enterprise certification or reaching peak patent output. Before these milestones, the relationship between ESG and innovation is less pronounced, as firms in early stages may prioritise R&D and immediate financial goals over ESG initiatives. ESG practices drive innovation by alleviating financial constraints, enhancing operational efficiency, and optimising resource allocation. These effects are most pronounced during periods of otherwise low innovation activity, thereby fostering long‐term growth. Furthermore, ESG's impact is stronger in larger, privately owned firms and in high‐tech industries. This study contributes to the literature by providing a stage‐dependent understanding of ESG's influence on innovation, offering valuable insights for policymakers and corporate managers on the strategic integration of ESG to drive sustainable growth.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70140   open full text
• Female Board Directorships, the CEO–Employee Pay Ratio, and Firm Performance.
  Muhammad Usman, Muhammad Khan, Ammar Ali Gull, Rizwan Mushtaq, Alaa Mansour Zalata.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4034-4056, July 2026. ", "\nABSTRACT\nBased on the premises of the social role theory, we investigate whether board gender composition may influence firm‐level pay inequality by improving the ability of boards to oversee managers and counter their influence on the compensation‐setting process. Using the data of Chinese listed firms over the period 2007–2022, we investigate the relationship between female board directorships, the CEO–employee pay ratio (pay inequality) and firm performance. Consistent with social role theory, we find that firms with women directors on their boards have higher CEO–employee pay ratios, which have a positive impact on firm performance. We find these results to be robust by using different measures of female board directorships, alternative sample compositions and alternative estimation methods and by addressing any potential endogeneity concerns. Overall, our findings support that women directors are effective in deciding the level of pay inequality that is linked to improved firm performance.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70133   open full text
• Green Finance, Biased Technical Progress and Carbon Reduction From the Perspective of Inequality.
  Danyang Di, Guoxiang Li, Zhiyang Shen, Malin Song.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4002-4015, July 2026. ", "\nABSTRACT\nThe early realisation of carbon peaking and the reduction of carbon peaks in high‐carbon regions are top priorities for achieving ‘dual carbon’ goals. Green finance (GRF) provides an important instrument for strengthening financial support for the low‐carbon transition in high‐carbon regions. This paper examines how GRFs can mitigate carbon inequality from the perspectives of capital‐ and energy‐biased technical progress. The study revealed that the GRF helps reduce carbon emissions and alleviate carbon inequality, as it enhances more active carbon reduction behaviours in high‐carbon regions. The greater the degree of market incentives, environmental protection supervision and carbon inequality, the greater the strengthening of the reduction effect of GRFs on high‐carbon regions, thus narrowing the interregional carbon emission gap. GRF development can significantly improve capital‐biased and energy‐biased technical progress, enhance the advantage of carbon reduction in high‐carbon regions and alleviate carbon inequality. We provide theoretical support for the direction of technical progress by relying on factor endowment advantages.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70131   open full text
• Do Big Data Applications and Financial Innovation Lead to Enhanced Banking Performance? Evidence From the United Kingdom.
  Mandella Osei‐Assibey Bonsu, Yongsheng Guo.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3921-3947, July 2026. ", "\nABSTRACT\nBig data and financial innovations are vital to enhancing the performance of banking institutions. However, limited evidence exists on the effects of big data applications and financial innovation on bank performance. This study addresses this gap by constructing a theoretical framework linking big data applications and financial innovations to bank performance. The framework was empirically tested using questionnaire data from 150 branches of UK banking institutions between January and June 2023. Adopting hierarchical regression modelling, results show that both big data applications and financial innovations positively enhance customer satisfaction as well as financial and market performance within the banking sector. Moreover, big data applications positively impact financial innovations within banks. The study contributes to a deeper understanding of big data applications and provides valuable insights for promoting financial innovations within the banking industry.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70127   open full text
• Full Dollarisation and Economic Performance Revisited.
  John Thornton, Chrysovalantis Vasilakis.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3869-3886, July 2026. ", "\nABSTRACT\nThis paper examines the economic performance of fully dollarised economies compared to those with alternative monetary regimes. Using an extensive dataset covering 192 countries from 1980 to 2021, we employ a variety of econometric techniques, including joint maximum likelihood and propensity score matching, to address endogeneity and unobserved heterogeneity. Our findings show that fully dollarised economies exhibit higher and more stable GDP growth, alongside lower inflation and reduced volatility. These results are robust across multiple estimation methods and control groups. Contrary to previous studies, we demonstrate that full dollarisation may be consistent with relatively higher GDP growth as well as lower and more stable inflation rates, challenging the widely held view that it leads to poor economic performance.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70124   open full text
• Interplay Between Green Investment and Market Price Premia in Global Shipping.
  Yao Shi, Nikos C. Papapostolou, Malvina Marchese, Ioannis C. Moutzouris, Angelos Efstathiou.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3849-3868, July 2026. ", "\nABSTRACT\nExisting research emphasises that the driver of green investment is its future profitability. This paper shows that other investors' decisions also influence green investment. We take the example of scrubber installation in shipping, which is optional by regulation but has an established market for trading its underlying asset. It requires an initial capital expenditure but generates increased profitability due to fuel savings and higher freight income. However, the volatility of fuel prices and freight rates renders it challenging for investors to decide on the installation. To examine this dilemma, we develop and estimate a Vector Error Correction Model across the tanker and dry bulk shipping sectors from 2021 to 2024. The results indicate the existence of both short‐ and long‐run cointegrating relationships among the freight rate premium, fuel savings and the size of the scrubber‐fitted fleet. A 1% increase in the share of the scrubber‐fitted fleet decreases the freight rate premium by 1.4%–3.8% and fuel savings by 0.6%–1.9%. We are the first to provide empirical evidence regarding the peer effect of green investment on market price premia. When undertaking green investments, it is important to consider others' decisions as the potential oversupply of the asset can reduce its future profitability.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70123   open full text
• International Joint Ventures in the Digital Sector and Foreign Subsidiary Performance: Does Cultural Distance Matter?
  Yong Yang, Sushanta Mallick, Yan Wu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4355-4373, July 2026. ", "\nABSTRACT\nIn the context of multinational enterprises, the rapid pace of digitalisation has created new forms of international joint ventures between foreign subsidiaries and local firms. This paper examines whether different types of such partnerships influence subsidiary performance. Using data on over 40,000 foreign subsidiaries, we introduce a novel classification in the digital sector, distinguishing four types: digital speedier, digital exploiter, digital explorer and non‐digital partnerships. We find that digital speedier partnerships—where both subsidiaries and their local partners use digital technology intensively—achieve the highest profitability. However, this digital speedier partnership type is also most negatively affected by cultural distance, highlighting its relative ineffectiveness in managing cross‐border cultural differences. By contrast, digital explorer partnerships—formed by non‐digital subsidiaries with local digital partners—are less sensitive to cultural distance. This resilience stems from their complementary relationship, which facilitates more effective management of cultural differences.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70119   open full text
• Assessing the Role of Macroeconomic Policy Tools in Addressing Environmental Degradation in Developing Countries.
  Sardar Fawad Saleem, Muhammad Azam Khan, Muhammad Tariq.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3766-3781, July 2026. ", "\nABSTRACT\nThis study investigates the counter cyclical role of fiscal and monetary policies in promoting environmental sustainability across 15 developing countries over 2002–2020. Specifically, the study focuses on the impact of government expenditures (GE) and real interest rates (IR) on both ecological footprint (EF) and carbon emissions (CO2). Dynamic Seemingly Unrelated Regression method is used for estimating the coefficients. The findings reveal that expansionary fiscal policy (increase in GE) and contractionary monetary policy (increase in IR) contribute to preserving environmental quality, as measured by EF. Interestingly, when it comes to CO2, these macroeconomic policies appear to have a different effect, potentially impacting environmental quality negatively. These findings suggest that the effectiveness of these policies in achieving environmental sustainability shall be measured in terms of EF instead of CO2. In addition, empirical results highlight the significance of other variables, such as renewable energy use, GDP per capita, globalisation, and population, influencing the EF. Given the findings that expansionary fiscal policy (increased GE) and contractionary monetary policy (increased IR) both led to an increase in CO2 while decreasing the EF, it is recommended that developing countries pursue these policies. The decrease in EF is a more comprehensive measure of environmental sustainability, encompassing broader aspects of human demand on nature and overall environmental impact.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70117   open full text
• Dynamic Spillover Effects of Climate Policy Uncertainty on Energy and Carbon Markets.
  Ying Fu, Hua Liao.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3643-3662, July 2026. ", "\nABSTRACT\nAsynchronous and recurrently revised climate policies across major economies elevate global climate policy uncertainty (GCPU), making it a key driver of market‐wide risk. We study how GCPU propagates through internationally integrated energy and carbon markets. Using a time–frequency spillover framework combined with network analyses, we quantify return and volatility connectedness among GCPU, coal, oil, natural gas, clean energy, and carbon‐futures prices based on monthly data for 2012–2023. The total spillover index varies from roughly 20% to 55%, revealing pronounced time variation. Returns display comparatively stable dynamics, whereas volatility exhibits sharper, state‐dependent surges around major geopolitical and policy episodes. Roles are state contingent: GCPU tends to transmit risk to carbon and natural gas in turbulent regimes but becomes a net receiver when conditions are calm. We further find a rebalancing of transmission channels: clean energy assets increasingly seed spillovers into carbon pricing, while fossil‐fuel benchmarks remain the principal hubs, indicating an ongoing shift in the architecture of risk propagation. In summary, the evidence highlights (i) the importance of distinguishing return versus volatility‐driven transmission, (ii) the state dependence of GCPU, acting as a systemic risk source during turmoil, and (iii) the growing influence of clean energy signals on carbon prices. Our findings highlight the pivotal role of globally propagating policy risk in the climate transition and its implications for risk management in financial markets.\n\nJEL Classification: Q41\n"]

  July 17, 2026   doi: 10.1002/ijfe.70111   open full text
• Volatility Risk, Climate Risk and Green Corporate Bond Pricing in Greece.
  Athanasios Tsagkanos, Ioannis Ch. Mitropoulos.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3631-3642, July 2026. ", "\nABSTRACT\nThis study investigates the influence of idiosyncratic volatility, volatility risk, and climate risk on Greek corporate green bond returns and pricing. While existing literature often examines these risks in isolation or within traditional bond markets, our research focuses specifically on green bonds, an underexplored asset class. We first analyze the effect of idiosyncratic volatility on green bond returns. More importantly, we develop a novel five‐factor pricing model for green corporate bonds, integrating a volatility factor, a climate risk factor, and a bond market factor into a standard bond pricing framework. To account for varying macroeconomic conditions, particularly the pronounced inflationary cycles in Greece, we apply Markov Switching Regression. Our findings reveal that the impact of idiosyncratic volatility on Greek green bond returns is contingent on inflationary pressures. Furthermore, our five‐factor model demonstrates that under inflationary regimes, increased climate risk negatively affects green corporate bond valuations, while volatility risk becomes insignificant. Conversely, during non‐inflationary periods, investors respond positively to increasing climate risk and decreasing volatility risk. The proposed model effectively captures volatility and climate risk premia, offering a significant contribution to explaining the excess returns of green corporate bonds.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70110   open full text
• Economic Growth and Equity Returns Revisited—New Evidence in the Time and Frequency Domain.
  Volker Seiler.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4264-4288, July 2026. ", "\nABSTRACT\nThis paper takes a fresh look at the relationship between economic growth and stock returns in a sample of 10 OECD countries. The correlation coefficients show substantial variation over time, generally increasing in times of turmoil. To get a clearer picture of the economic growth–equity returns nexus, we take into account both the time and the frequency domain using Granger causality tests and cross wavelet analysis. The results point to stock market returns Granger‐causing changes in GDP per capita in the time as well as in the frequency domain. In line with this finding, the cross‐wavelet coherency plots indicate areas of joint periodicity at high and medium frequencies, especially following the great financial crisis and economic meltdown at the end of the first decade of the new millennium. The analysis of volatility transmission shows that these results are driven by volatility spillovers from the stock market to the real economy.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70080   open full text
• Does Climate Risk Exacerbate Corporate Greenwashing Behaviour? Evidence From China.
  Dan Ma, Chenhao Zhou, Danyu Zhu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4312-4329, July 2026. ", "\nABSTRACT\nUsing observations from Chinese A‐share listed companies during 2008 and 2021, the study finds that firms exposed to higher climate risk significantly reduce their greenwashing behaviour. This result holds after a series of robustness and endogeneity tests. Mechanism analysis shows that climate risk influences greenwashing by increasing systemic risk sensitivity, reducing managerial myopia and lowering corporate risk‐taking. The impact of climate risk weakens for heavily regulated polluters and in industries with more competition and higher greenwashing similarity, but strengthens in firms with greater ESG disagreement and stricter audit supervision, and in regions with stronger government intervention and better regional infrastructure. The overall results support the potential discipline mechanisms of climate risk, suggesting that strengthening climate risk awareness, oversight, and disclosure can curb corporate greenwashing.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70095   open full text
• The Impact of ESG Performance on Stock Mispricing.
  Zhonghua Cheng, Xiangwei Meng.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3325-3339, July 2026. ", "\nABSTRACT\nThis paper empirically analyses the impact of ESG on stock mispricing, focusing on a panel data set of 4784 listed corporations spanning 2010–2022. It reveals that ESG performance significantly corrects corporate stock mispricing via reputation and information mechanisms, while also exacerbating mispricing through accounting and investment mechanisms. However, the corrective effects of reputation and information prevail over the exacerbating effects of accounting and investment dynamics. Further heterogeneity analyses highlight that this effect is more significant in lightly polluting, privately held corporations, as well as those with boards of smaller or larger sizes. Expansion analyses indicate that while the quality and uncertainty surrounding ESG disclosures may exacerbate stock mispricing to some extent, they do not alter the overall effect.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70092   open full text
• Enhancing Market Predictability and Investment Decision‐Making: Machine Learning Models for Predicting Stock Market Crashes in China.
  Mingtao Zhou, Yong Ma, He Ni.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4289-4311, July 2026. ", "\nABSTRACT\nThis study aims to enhance the predictive accuracy of China's stock market crashes and optimise the investment decision‐making process by leveraging machine learning techniques and a diverse array of constructed aggregate factors. The empirical analysis validates the superior market‐timing capabilities of machine learning tools, particularly the feedforward neural network, in comparison to the conventional logistic regression model. This advancement, in turn, translates into nontrivial economic benefits for mean–variance investors across various portfolio types, even after accounting for trading costs. Moreover, our findings illuminate that stocks with small capitalisations, traded on the Shenzhen Stock Exchange, and within aggressive industry sectors exhibit heightened sensitivity to market crashes. Additionally, we identify substantial supplementary effects of aggregate market‐level characteristics in conjunction with well‐established macro factors. Notably, momentum, valuation and liquidity emerge as the most influential market‐level feature groups in predicting market crashes.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70091   open full text
• Higher‐Order Moment Spillovers Among Global ESG Stock Markets: The Impacts of Geopolitical Risks, Sustainability Uncertainty and Climate Policy Uncertainty.
  Jinxin Cui, Aktham Maghyereh.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3273-3306, July 2026. ", "\nABSTRACT\nThis paper investigates higher‐order moment risk spillovers across global ESG stock markets and examines their driving factors, with important implications for risk management and regulatory design. By integrating the Autoregressive Conditional Density (ARCD) model with a Time‐Varying Parameter Vector Autoregression (TVP‐VAR) extended joint spillover method, we document a clear risk spillover transmission hierarchy with progressively decreasing connectedness from volatility (65.53%) to skewness (46.17%) to kurtosis (43.08%). Our findings reveal distinctive regional patterns: while developed ESG markets dominate volatility transmission, European emerging ESG markets emerge as influential transmitters of higher‐moment risks. Time‐varying analysis demonstrates differentiated responses to major crises across risk dimensions. Through the time‐varying parameter structural vector auto‐regression with stochastic volatility (TVP‐SV‐VAR) approach, we show that geopolitical risks (GPR), sustainability uncertainty (ESGUI), and climate policy uncertainty (CPU) impact ESG moment‐based spillovers with varying intensity across different crisis contexts. These findings suggest that investors should adopt multi‐moment risk assessment frameworks beyond traditional volatility measures, while policymakers need differentiated regulatory approaches that account for regional variations in ESG risk dynamics and incorporate higher‐moment spillovers into financial stability monitoring.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70089   open full text
• The Impact of Changes in Real Income and the Real Effective Exchange Rate on Trade in Goods and Services.
  Tjeerd M. Boonman, Ioannis Litsios, Keith Pilbeam.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3233-3247, July 2026. ", "\nABSTRACT\nWe use foreign trade data on both imports and exports of goods and services among a group of 15 advanced economies to determine the incomes and price elasticities of demand for exports and imports of goods, services and goods and services combined in the long run. We find that changes in foreign and domestic income have, as expected, a positive long‐run impact on the demand for exports and imports, respectively, with the impact of income changes being typically greater on the demand for services than on the demand for goods. We also confirm that a depreciation in the real effective exchange rate leads to an increase in exports for most of the economies, while the impact on the demand for imports is mixed. Finally, we find a large degree of heterogeneity in the income and price elasticities of demand for trade in goods and services among the 15 economies.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70087   open full text
• Biodiversity Scores and Corporate Profitability.
  Zhang‐HangJian Chen, Xiang Gao, Kees G. Koedijk, Qian Wei.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3216-3232, July 2026. ", "\nABSTRACT\nIn sustainable finance, firm‐level international quantitative evidence is sparse. We address this gap by investigating how firms' biodiversity contributions impact financial performance globally. Our analysis leverages Robeco's 2010–2023 Sustainable Development Goal (SDG) scores. This dataset is unique in that it directly measures biodiversity efforts related to SDG 14 (Life Below Water) and SDG 15 (Life on Land), aligns with the EU Taxonomy, and enables cross‐country and industry comparisons. Our empirical results reveal a significant negative link between biodiversity contributions and short‐term financial performance. This is partially explained by heightened liquidity demands from biodiversity investments. Developed‐country firms and those in Industrials or Utilities outperform in biodiversity conservation. Small firms experience stronger negative effects. Theoretically, our study enriches the sustainability framework by linking biodiversity inputs to financial characteristics through the legitimacy and stakeholder theories. Practically, it guides investors to consider liquidity risks, warns firms to balance biodiversity investments with working capital, and encourages regulators to incentivise developed countries while supporting the capacity of developing countries. The bottom line is to reconcile short‐term costs with long‐term resilience.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70086   open full text
• Green Factory Certification and Firms' Synergistic Gains in Pollution Abatement and Carbon Reduction: Market and Government Perspectives.
  Kai Wan, Xiaolin Yu, Tsangyao Chang.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3201-3215, July 2026. ", "\nABSTRACT\nAs an emerging voluntary environmental regulation in China, the green factory certification policy raises a crucial research question: How can the coordinated control of multiple pollutants be effectively achieved? This paper examines the impact and underlying mechanisms of green factory certification on firms' coordinated efforts in carbon reduction and pollution abatement, drawing on both market‐based and government‐led logics. Using a sample of A‐share listed firms in China from 2011 to 2021, we integrate hand‐collected data on 1031 green‐certified factories. The study finds that the green factory certification policy significantly promotes the coordinated advancement of pollution reduction and carbon mitigation in enterprises. This policy effect is driven by the dual governance of market and government logic. Through market mechanisms, it channels investors' green preferences and stimulates green technological innovation, while through government mechanisms, it increases government subsidies and improves state‐firm relations, thereby enhancing policy effectiveness. Further analysis reveals that firms' greenwashing motives may weaken these synergistic gains. However, the non‐binding mechanism of the voluntary programme and the binding mechanism of mandatory environmental regulation can generate complementary effects, amplifying the environmental benefits of the green factory initiative. These effects are more pronounced in cleaner industries.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70085   open full text
• Do Multinational Affiliates Globalise Labour Market Decisions of Parent Firms? The Role of Global Value Chains and the Digital Sector.
  Yan Wu, Mei Yu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4247-4263, July 2026. ", "\nABSTRACT\nDrawing on a firm‐level panel dataset of more than 6000 multinational parent companies and over 20,000 of their foreign subsidiaries, we find a positive and significant effect of foreign subsidiary size on parent company employment, indicating the connectedness of value chains across countries. This result is robust when we use a falsification exercise to rule out a common shock concern in the estimation. We emphasise the positioning of subsidiaries' activities that benefit parent companies in terms of employment effect. Specifically, we find that labour markets are more internationally connected when foreign subsidiaries are part of vertically integrated foreign direct investment. Moreover, the employment effect is more pronounced when companies are in the digital sector, indicating that digitalisation is conducive for companies that operate internationally. Besides, we find that the connectedness of labour markets weakens in times of heightened uncertainty, including the recent global pandemic.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70079   open full text
• Predicting Financial Distress With ESG‐Driven Deep Learning and Risk‐Based Stratification.
  Jiaming Liu, Yongli Li, Jianing Yu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 3075-3097, July 2026. ", "\nABSTRACT\nThis study contributes to the financial distress prediction literature by integrating Environmental, Social and Governance (ESG) information into predictive modelling alongside traditional financial indicators. Using a comprehensive panel of 6882 firm‐year observations from publicly listed Chinese firms, we assess the incremental predictive value of ESG variables under both raw and deep‐learned representations. We develop a two‐stage modelling framework that first applies supervised deep representation learning to construct a latent ESG risk index, and then stratifies firms into risk regimes for regime‐specific classification. Empirical results demonstrate that incorporating ESG information, jointly with financial data, significantly improves out‐of‐sample prediction accuracy and AUC across multiple machine learning algorithms, under various multicollinearity thresholds and sampling strategies. These findings illustrate the importance of structure‐aware ESG integration in capturing the conditional, non‐linear and forward‐looking aspects of corporate financial vulnerability. By offering a rigorous approach, this study provides new insights for developing advanced early‐warning systems in credit risk and financial stability assessment.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70077   open full text
• Financial Literacy, Financial Development and Economic Growth.
  Spyridon Boikos, Theodore Panagiotidis, Georgios Voucharas.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4213-4227, July 2026. ", "\nABSTRACT\nWhile significant progress has been made in exploring the importance of financial literacy, its impact on economic growth and financial development from a macroeconomic point of view remains thinly understood. This paper provides fresh evidence on the relationship between financial literacy, financial development and economic growth. We utilise a novel dataset for 61 countries over the period 1999–2014 and employ a panel quantile regression model. We provide strong evidence that higher financial literacy levels lead to higher GDP per capita growth, and the size of the impact is higher at lower quantiles of the conditional growth distribution. As financial development increases, its positive impact on economic growth diminishes, indicating an inverted U‐shaped relationship. High levels of financial literacy mitigate the diminishing returns of financial development on GDP per capita growth by an average of 7.41%. Interestingly, in higher quantiles of the conditional growth distribution, the mitigating effect increases to 9.23%.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70074   open full text
• Nothing Comes From Nothing: Value Judgement of Strategic Investors and IPO Pricing in Chinese STAR Market.
  Zhiyu Lin, Zhonghua Xie, Hongquan Zhu.
  International Journal of Finance & Economics. July 17, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 3, Page 4127-4149, July 2026. ", "\nABSTRACT\nDoes the value judgement of strategic investors who commit to follow‐on investment prior to stock issuance affect IPO pricing? Focusing on the mandatory introduction of strategic investors in IPOs on China's Science and Technology Innovation Board (the STAR Market), we examine whether their value judgement impacts IPO pricing. We find that stocks not favoured by strategic investors, as indicated by undersubscription, tend to exhibit poorer post‐IPO returns and weaker firm performance. The value assessments of strategic investors influence both institutional investor subscriptions and large‐block purchases, which in turn affect post‐IPO stock performance. Causality and robustness tests support the reliability of our findings. This study highlights the signalling role and evaluative influence of strategic investors in IPOs, offering valuable insights for other emerging markets.\n"]

  July 17, 2026   doi: 10.1002/ijfe.70139   open full text
• Stock Market Efficiency During Major Health Crises: International Evidence.
  Kung‐Cheng Ho, Pan Zikui, Yujing Gong, Weixing Cai.
  International Journal of Finance & Economics. July 16, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn our research, we analyse the effects of six major global health crises on the stock markets across 38 regions, including both developed and emerging capital markets. We assess stock market efficiency through the lens of price delay. Diverging from the prevailing views in the literature, our findings suggest that pandemic periods are associated with improved stock price efficiency. This aligns with but challenges previous studies by offering new insights into the dynamic responses of financial markets during global health emergencies. Furthermore, we provide evidence consistent with the investor attention channel and the liquidity channel. We also observe that in regions with stronger government capacity, higher internal stability, and lower corruption levels, the improvement in price efficiency is more pronounced after pandemics. Our empirical results remain robust after endogeneity checks, generalized method of moments (GMM) estimation, using alternative measures of price efficiency, and updating data selection criteria. This research uncovers surprising impacts of pandemics on stock markets and provides valuable insights for investors and policymakers alike.\n"]

  July 16, 2026   doi: 10.1002/ijfe.70261   open full text
• Firm New Quality Productive Forces in China: Do Research and Development Experience Directors on Boards Matter? Moderators of Financial Stability and Taoism.
  Penghui Dai, Nada Korac Kakabadse, Filipe Morais.
  International Journal of Finance & Economics. July 16, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nFostering firm new quality productive forces (FNQPF) is important for China's high‐quality economic development. Using a panel dataset of Chinese listed firms from 2008 to 2023, this study examines how research and development (R&D) experience directors affect FNQPF and whether this relationship depends on financial stability and regional Taoist influence. The results show that R&D experience directors positively affect FNQPF, and that this positive relationship is stronger for firms with higher financial stability and for firms located in regions with stronger Taoist influence. Mechanism analysis suggests that alleviating financial constraints represents one potential channel. Heterogeneity analyses show that the relationship is more pronounced in the Middle region, high‐tech firms, and old firms. Instrumental variable analysis and robustness tests provide additional evidence consistent with the main findings. This study extends resource dependence theory by demonstrating how board‐level R&D expertise, financial conditions, and regional informal cultural environments jointly relate to FNQPF development.\n"]

  July 16, 2026   doi: 10.1002/ijfe.70270   open full text
• Trade Policy Uncertainty and Corporate Exports: Do Government Subsidies and State Ownership Matter?
  Muhammad Arif Khan, Meng Bin, Irfanullah, Taimoor Hassan.
  International Journal of Finance & Economics. July 15, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the causal association between trade policy uncertainty (TPU) and corporate export (Exp) and how government subsidies and state ownership moderate this relationship. Utilising annual data from the Chinese listed firms between 2003 and 2023, the findings reveal a significant adverse influence of TPU on corporate exports. This adverse effect is weaker for firms receiving government subsidies and state‐owned firms. Additional analyses indicate that the negative influence of TPU on exports is less pronounced for large‐sized firms during the post‐Belt and Road Initiative (BRI) and pre‐COVID‐19 periods. The findings highlight the diverse responses of firms to TPU and underscore the pivotal role of government subsidies and state ownership in sustaining export performance. These findings offer significant implications for emerging market economies aiming to formulate more resilient international trade strategies and policies.\n"]

  July 15, 2026   doi: 10.1002/ijfe.70266   open full text
• Institutional Environment and Political Connections: New Cross‐Country Evidence.
  Wai‐Yan Wong, Chwee‐Ming Tee, Chee‐Wooi Hooy.
  International Journal of Finance & Economics. July 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines whether the prevalence of political connections is influenced by the quality of institutional environments. Using data from 90 countries in 2019, this study found that the institutional environment is significantly associated with political connections globally. Specifically, political connections are less prevalent in countries with strong institutional environments. The result is robust across various sub‐samples of non‐US firms, as well as developed and developing nations, and countries with heavy military influence.\n"]

  July 14, 2026   doi: 10.1002/ijfe.70263   open full text
• Global Oil and Gas Stocks: Anomalies, Systematic Risks and Mispricing.
  Nader Virk, Mohsin Sadaqat, Hilal A. Butt, Giulia Fantini.
  International Journal of Finance & Economics. July 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe analyse anomaly and factor risk premia in the global oil and gas (OG) sector, which plays a central role in the global economy through its importance for energy supply, industrial production, and capital markets. Using firm‐level and portfolio data, we examine whether cross‐sectional return patterns reflect systematic risk compensation or characteristic‐driven mispricing. Our OG‐specific portfolios and factors isolate sectoral return dynamics from oil price fluctuations. We document several persistent anomalies. However, only a subset translates into priced factor exposures, indicating that systematic risk dominates valuation in the sector. Time‐series results show that OG‐specific factors explain return variation beyond conventional global benchmarks, while cross‐sectional evidence reveals that priced factor exposures are primarily driven by market, size, value, and profitability and investment factors. The pricing impact of the latter two factors is sensitive to construction method and definition of firm profitability and investment. Nevertheless, most characteristic effects disappear once portfolios are diversified. Overall, pricing in the global OG sector appears more closely aligned with efficient, risk‐based mechanisms than with sentiment‐driven valuation.\n"]

  July 12, 2026   doi: 10.1002/ijfe.70264   open full text
• Heterogeneous Impact of Green Bonds on Environmental Quality: A Cross‐Country Analysis of the Load Capacity Factor.
  Kamila Tomczak, Emre Unlu, Mehmet Pinar.
  International Journal of Finance & Economics. July 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the impact of green bonds on environmental sustainability for a panel of 15 countries from 2014 to 2024, using the load capacity factor (LCF) as the main proxy for environmental quality, with biocapacity, ecological footprint, and CO2 emissions per capita used as additional environmental indicators. Empirically, we employ a panel data framework combining fixed effects estimation with instrumental variable generalized method of moments (IV‐GMM), using lagged values of the endogenous regressors and an external shift‐share instrument based on global green bond issuance to address potential endogeneity and reverse causality concerns. To account for cross‐sectional dependence, standard errors are corrected using Driscoll–Kraay estimators. In addition, we apply panel quantile regression techniques at the 10th, 50th, and 90th percentiles to examine heterogeneous effects across the distribution of environmental performance. The results show that higher green bond issuance significantly improves LCF and biocapacity, while reducing the ecological footprint and CO2 emissions. These effects are robust across model specifications and are stronger in countries with higher levels of environmental performance and greater environmental pressures. The findings highlight the central role of green finance in supporting the transition to more sustainable development.\n"]

  July 12, 2026   doi: 10.1002/ijfe.70265   open full text
• Fiscal Cyclicality and Debt Sustainability: Evidence From Over a Century of Data.
  Christos Chrysanthakopoulos, Franciscos Koutentakis, Athanasios Tagkalakis.
  International Journal of Finance & Economics. July 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nUsing a historical fiscal dataset for a group of 11 economies over the period 1880–2022, we examine debt sustainability and fiscal policy cyclicality and assess the factors influencing fiscal behaviour. We find that positive and statistically significant responses of primary balances to debt emerge in specific historical episodes and particular macroeconomic regime conditions, including the interwar era and the period from the 1990s up to the global financial crisis, while several regime settings such as low real interest rate environments, high inflation episodes and below the average growth regimes exhibit weak, insignificant, or even negative response to rising debt. We also document a transition from acyclical to countercyclical fiscal policy in the post‐war era. These findings are robust to alternative estimation techniques and to specifications that incorporate the interest–growth differential. A country‐level analysis reveals substantial heterogeneity, with economically meaningful deviations concentrated in specific historical episodes rather than reflecting persistent patterns. Finally, we identify economic development, democratic institutions, country size, bankruptcies, and interest rate fluctuations as key determinants of fiscal policy outcomes.\n"]

  July 12, 2026   doi: 10.1002/ijfe.70259   open full text
• Not All Bubbles Are Alike: Crash Risk and Speculative Regimes in Precious Metals.
  Adrian Cantemir Călin, Radu Lupu.
  International Journal of Finance & Economics. July 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe examine the economic consequences of speculative bubble regimes in precious metals markets. Using daily prices for gold, silver, platinum and palladium over 1990–2025, we first identify bubble episodes with recursive right‐tailed unit root tests and subsequently quantify post‐peak losses using forward‐looking maximum drawdowns. We then assess whether bubble persistence predicts crash severity and whether bubble states contain information about the probability of extreme downside events. Our results show that bubble duration is not systematically associated with the magnitude of subsequent losses, suggesting that longer‐lasting speculative episodes do not necessarily end in deeper corrections. However, substantial heterogeneity emerges across metals in the frequency of severe crashes. Most importantly, conditional probability estimates and logistic regressions indicate that severe drawdowns are significantly more likely during bubble regimes than during normal periods. Being in a bubble state increases the odds of a hard crash by approximately 70%, with particularly strong effects observed for silver and platinum. These findings imply that the primary risk signal lies in the presence of a bubble regime rather than in its persistence. Bubble indicators therefore provide economically meaningful early warnings of tail risk, with direct implications for risk management and portfolio allocation in commodity markets.\n"]

  July 12, 2026   doi: 10.1002/ijfe.70267   open full text
• The Effect of Cross‐Listing on Industry Performance in Emerging Economies.
  Akinola Olakunle, Hadiza Said, Amangeldi Kenjegaliev.
  International Journal of Finance & Economics. July 10, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe examine cross‐listing effects for 61 emerging market firms across five industries: Energy, Utilities, Materials, Food Beverages and Tobacco (FBT), and Insurance listed on US exchanges from 2004 to 2023, applying the Callaway and Sant'Anna doubly robust estimator. Comparing two‐way fixed effects (TWFEs) against doubly robust estimates quantifies a 0.1229 percentage point WACC bias that standard difference‐in‐difference (DiD) methods introduce when cross‐listing timing is heterogeneous. Three findings emerge. First, regulatory tightening amplifies rather than deters cross‐listing benefits for strategic sectors: FBT and Energy record monotonically increasing valuation and financing effects from pre‐Sarbanes‐Oxley Act through post‐Dodd‐Frank Act, directly contradicting Doidge et al. Second, market volatility outcomes by sector structural type, defensive sectors benefit more under stress, commodity sectors under stability, and Utilities reverses sign on both channels, establishing VIX sensitivity as a structural characteristic rather than a transient effect. Third, strategic sectors activate valuation and financing channels simultaneously whilst defensive sectors activate them sequentially, connecting the first two findings. Positive Tobin Q effects are confirmed in four of five industries; WACC effects are sector‐differentiated rather than universally directional.\n"]

  July 10, 2026   doi: 10.1002/ijfe.70262   open full text
• Green Governance and Investment Efficiency in the US Firms: The Role of ESG Performance and Financial Constraints.
  Yousif Abdelbagi Abdalla, Ayman Abdalla Mohammed Abubakr, Adam Yahya Jafeel, Mohammed Hersi Warsame, Marwa Abdalla Alboushra.
  International Journal of Finance & Economics. July 08, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the relationship between environmental, social and governance (ESG) practices, investment efficiency and the moderating effect of financial constraints among S&P 1500 firms from 2010 to 2023. Using generalised method of moments (GMMs) estimators to address endogeneity and heterogeneity, we employ three investment inefficiency proxies and two financial constraint measures (the SA and WW indices). ESG scores are negatively associated with investment inefficiency, suggesting improved capital allocation and this relationship becomes stronger under higher levels of financial constraints. Governance practices are associated with the largest reduction in inefficiency, followed by social and environmental practices.\n"]

  July 08, 2026   doi: 10.1002/ijfe.70260   open full text
• Power of Rhetoric: How Corporate Rhetorical Nationalism Reshapes Institutional Investment Choices?
  Jinhai Wang, Tianquan Jin, Xinye Liang.
  International Journal of Finance & Economics. July 06, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nA growing body of research shows that firms are making increasing use of rhetorical nationalism. Using 2007–2024 China A‐share data, we examine how corporate rhetorical nationalism affects institutional investors' stock preferences. Results show rhetorical nationalism significantly increases overall institutional holdings, particularly among long‐term investors. Rhetoric about territorial sovereignty and national renewal strongly boosts institutional holdings, while anti‐foreign themes have a limited effect. Using institutional theory, we find rhetorical nationalism works through two channels: helping firms get resources and reducing risks. However, corporate nationalist rhetoric also pushes foreign investors away, which may hurt China's global trade integration. Our findings suggest investors should consider local culture in their strategies. Policymakers need to balance openness with national identity.\n"]

  July 06, 2026   doi: 10.1002/ijfe.70254   open full text
• Beta Uncertainty, Disagreement and Mutual Fund Investor Learning.
  Jiaxun Song.
  International Journal of Finance & Economics. July 03, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper documents a negative relationship between beta uncertainty and the sensitivity of mutual fund flows to past performance. We interpret beta uncertainty as the potential difference in the interpretation of common information, which captures disagreement among investors arising from heterogeneous prior beliefs. Within a Bayesian learning framework, such disagreement weakens posterior belief updating and limits investors' inference about managerial skill from realized returns. Consistent with these predictions, we empirically show that higher beta uncertainty significantly lowers flow‐performance sensitivity. This effect is stronger when investors' priors are more heterogeneous and is more consistent with disagreement rather than ambiguity aversion. Learning from funds with lower beta uncertainty is more valuable, thereby strengthening investors' incentives to learn.\n"]

  July 03, 2026   doi: 10.1002/ijfe.70256   open full text
• Does Green Finance Policy Contribute to Corporate Green Innovation? Evidence From a Quasi‐Natural Experiment in China.
  Yanwei Lyu, Yangyang Bai, Jinning Zhang, Xiaolei Chen.
  International Journal of Finance & Economics. July 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the impact of the Green Finance Reform and Innovation Pilot Zones policy (GFP) on corporate green innovation (CGI). The results show that GFP significantly promotes CGI, including both substantive and strategic green innovation, with a larger effect on strategic green innovation. This effect is more pronounced in large firms, firms with environmentally conscious managers, non‐heavily polluting firms, and high‐tech firms. Mechanism analyzes show that green investment, agency costs, and green agency costs are important channels through which GFP promotes CGI. In addition, external market attention serves as an informal governance mechanism, significantly enhancing the policy impact, particularly for substantive green innovation. The findings provide useful policy implications for improving GFP and fostering CGI.\n"]

  July 01, 2026   doi: 10.1002/ijfe.70251   open full text
• Born in the Shadows: The Lasting Effect of Informal Beginnings on Firm Financial Transparency.
  Anand Dubey, Krishna Dixit.
  International Journal of Finance & Economics. July 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines whether firms' informal beginnings leave a persistent imprint on financial transparency after formalisation. Drawing on imprinting theory, we argue that the opacity norms, accounting capability deficits, and regulatory avoidance strategies developed during firms' informal beginnings persist following formalisation, systematically reducing the likelihood that informally founded firms adopt transparent financial reporting practices. Using World Bank Enterprise Surveys data from more than 200,000 formal firms in over 160 countries, we find that firms that began operations informally are 6.7 percentage points less likely to have externally audited financial statements, representing a 13% reduction relative to the sample mean. This result is robust to alternative model specifications, exclusion of influential countries, instrumental variable estimation, and sensitivity analyses based on unobservable selection bounds. Heterogeneity analysis further reveals that the effect is concentrated among firms in low‐ and middle‐income economies and manufacturing sectors, and attenuates with firm age, consistent with gradual organisational learning. In contrast, firm size and foreign ownership do not significantly mitigate the imprinting effect. Our findings suggest that policies aimed at promoting financial transparency cannot rely on formalisation alone. Instead, early‐stage incentives for formal registration, coupled with investments in improving institutional quality, are needed to prevent opacity norms from becoming embedded in firms' organisational structures.\n"]

  July 01, 2026   doi: 10.1002/ijfe.70258   open full text
• Unravelling Financial Fragility of Global Markets Using Machine Learning.
  Vasilios Plakandaras, Rangan Gupta, Qiang Ji.
  International Journal of Finance & Economics. June 30, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe study investigates systemic financial risk in global markets, attributing it to geopolitical instability, climate risks, and economic uncertainties. Utilising a state‐of‐the‐art machine learning heterogeneous panel regression framework capable of capturing cross‐sectional dependencies and nonlinear patterns, we examine financial stress across multiple economies, including China, the U.S., the U.K., and 10 EU nations. Through extensive out‐of‐sample rolling window analysis, we show that while geopolitical uncertainty enhances short‐term predictions, long‐term risk forecasting is better achieved using financial and economic data. The study underscores the limitations of conventional regression models in capturing financial risk dynamics and suggests that machine learning‐based panel regressions provide a more nuanced and accurate forecasting tool. The findings bear significant policy implications, highlighting the necessity for regulatory bodies to reassess risk frameworks and the role of climate‐related disclosures in financial markets.\n"]

  June 30, 2026   doi: 10.1002/ijfe.70248   open full text
• A Two‐Step Procedure for Generating Domestic and Asymmetric Trade Costs When Data Are Scarce.
  Arman Mazhikeyev.
  International Journal of Finance & Economics. June 30, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe practice of domestic trade cost measurement faces several challenges related to data quality, methodology and theory; but the major issue is that of data scarcity. Due to these facts, both domestic and asymmetric trade costs have been ignored despite being a feature of modern trade models. This paper offers a two‐step procedure to tackle these limitations and fill the gaps between theory and practice. The results of this work show that domestic trade costs proportionally grow with economic size, and that international trade costs are highly asymmetric especially when trading pair sizes differ. A key strength of the method is its applicability in data‐constrained contexts, as it enables the recovery of domestic and international trade costs using internal trade data from a single benchmark country. Rather than introducing a novel use of trade flows, the method's contribution lies in its structured two‐step calibration approach, which enables asymmetric and domestic trade cost recovery without relying on gravity estimation or requiring internal trade datasets from all countries.\n"]

  June 30, 2026   doi: 10.1002/ijfe.70246   open full text
• Foreign Investor Governance and Overlapping Membership on Board Committees: Evidence From Chinese Banks.
  Feng Wei, Binyan Ding.
  International Journal of Finance & Economics. June 30, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe examine whether and how foreign investor governance influences overlapping membership on board committees. Using manually collected data on Chinese listed banks from 2007 to 2024, we find that foreign investor governance is positively associated with overlapping membership on board committees in Chinese banks. The results are robust to lagging the independent variables by 1 year, two‐stage least squares, Heckman two‐stage analysis, and a battery of sensitivity tests. This positive effect is more pronounced in banks with poorer information environments, less capital, and more foreign investors from civil law countries. Furthermore, foreign investor governance improves bank asset quality by promoting overlapping membership on board committees. Finally, the role of foreign investor governance in promoting overlapping membership on board committees is more evident when the bank assigns stronger monitors to multiple board committees, assigns members to multiple board monitoring committees, is a joint‐stock commercial bank, or has higher foreign bank governance. Our findings highlight the role of foreign investors in shaping board committee membership arrangements, providing banks with the opportunity to better arrange board committee members in line with foreign investors' monitoring expectations.\n"]

  June 30, 2026   doi: 10.1002/ijfe.70255   open full text
• Developing a Z‐ESG Score Model for Assessing Corporate ESG Performance.
  Edward I. Altman, Francesco Baldi, Claudia D'Ippolito, Antonio Salvi.
  International Journal of Finance & Economics. June 28, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this study we develop a novel, unique ESG rating model that exploits the logic of the Z‐score by Altman (1968) to discriminate between ESG performing and non‐ESG performing firms using indicators of ESG performance for each of the three pillars (Environmental, Social, Governance) in place of financial ratios. We name our model the Z‐ESG rating model. Based on a sample of 325 European listed firms, we build a multiple discriminant analysis model to estimate the Z‐ESG score for each firm and confirm these results by employing a logistic regression to determine respective probabilities of being ESG performing. Z‐ESG scores are then converted into agency‐equivalent rating classes through a Z‐ESG rating matrix. Multiple implications can be envisaged for researchers and practitioners: asset managers may use the Z‐ESG rating model to identify new investment opportunities and build appropriate ESG‐performing portfolios; risk managers may exploit the Z‐ESG metrics to assess the current ESG positioning of a firm and monitor its evolving path; credit risk managers can link the Z‐ESG score of a firm to its Z‐score to measure the impact of its ESG performance on its probability of default; bank managers may better price green (or ordinary) loans based on the Z‐ESG score of the borrowers; chief sustainability officers of companies can self‐assess the degree of their ESG performance and design a sustainability strategy that targets a desired Z‐ESG rating; corporate boards may include the Z‐ESG metrics as an additional element of their executive compensation policy.\n"]

  June 28, 2026   doi: 10.1002/ijfe.70249   open full text
• Trust in Annual Reports: The Role of Corporate Online Interactions With Investors.
  Qianwei Ying, Junyao Zhang, Muyan Liu, Jinsong Liu.
  International Journal of Finance & Economics. June 25, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines whether and how corporate online interactions with investors shape trust in annual reports. We focus on annual report comment letters, through which regulators publicly question the credibility of firms' disclosures, providing a suitable setting to observe investor trust. We find that sustained high‐quality interactions significantly mitigate the negative market reaction to comment letters, suggesting that such interactions strengthen investor trust. These results are robust to instrumental variable estimation, the Heckman two‐stage model and additional sensitivity analyses. Mechanism analyses indicate that high‐quality interactions enhance trust primarily by conveying credible signals of lower agency costs. Consistent with a signalling mechanism, high‐quality responses to negative inquiries have stronger effects on investor trust, while short‐term interactions play a limited role. The trust effect is concentrated among firms whose investors rely more on such signals. Further analysis shows that investor trust rapidly collapses when subsequent response letters reveal underlying problems and is reinforced when such problems are absent. Finally, high‐quality interactions are associated with more favourable regulatory recognition. Overall, the findings highlight the importance of high‐quality online communication in strengthening investor trust and offer implications for capital market participants.\n"]

  June 25, 2026   doi: 10.1002/ijfe.70253   open full text
• The Green Path to Fintech Innovation: How Corporate Environmental Commitment and CEO Social Capital Shape the Future.
  Mushahid Hussain Baig, Obaid Gulzar, Jalal Khan, Jin Xu.
  International Journal of Finance & Economics. June 22, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn light of the expanding body of literature examining the interplay between corporate environmental behaviour and technological innovation, this study explores the relationship between corporate environmental commitment (CECO) and fintech innovation (FINO), focusing on the moderating role of CEO social capital (CEO‐COM). Using a sample of 1049 A‐share listed firms in China over the period of 2014–2022, this study addresses endogeneity concerns and ensures robustness. The findings show that firms with stronger CECO are more likely to adopt fintech solutions to improve transparency, fulfill regulatory responsibilities, and address shareholder expectations. The results also show that CEO‐COM significantly moderates this relationship by enabling access to resources and aligning organisational goals and objectives. Disaggregated results by ownership type indicate that the impact of CECO on FINO is more pronounced in state‐owned firms, likely due to their alignment with government policies. These findings offer valuable insights for managers and policymakers to promote sustainability‐driven innovation through technology.\n"]

  June 22, 2026   doi: 10.1002/ijfe.70250   open full text
• Capital Flows, Reserves, and Exchange Rate Dynamics: Evidence From Emerging and Advanced Economies.
  Nguyen Thi Hong Vinh.
  International Journal of Finance & Economics. June 22, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWhile research on the real effective exchange rate (REER) has traditionally emphasised trade and policy channels, evidence on how disaggregated capital inflows and foreign exchange reserves shape REER dynamics remains mixed. Using panel data for 70 economies over 2001–2024, this study estimates two‐step system GMM models to examine how capital inflow composition affects the REER and then applies a dynamic panel threshold model to test whether the reserve buffer mechanism depends on financial development. The results show clear composition effects across inflow categories. Foreign direct investment is positively associated with REER appreciation mainly in developing economies, consistent with spending‐pressure and Dutch‐disease mechanisms. Foreign portfolio investment also exerts appreciation pressures across all samples, with larger effects in developing economies. By contrast, other investment is negatively associated with the REER in advanced economies and in the pooled sample but statistically weak in developing economies. The reserve results reveal a nonlinear, state‐dependent relationship, with reserves acting as a more effective buffer only above estimated financial‐development thresholds. Policy implications include managing capital inflow composition and calibrating reserve strategies to the level of financial development to safeguard external stability.\n"]

  June 22, 2026   doi: 10.1002/ijfe.70252   open full text
• Sustainability Incentives and Value Creation in Corporate Acquisitions.
  Athanasios Tsekeris.
  International Journal of Finance & Economics. June 22, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nUsing an extended international sample of domestic and cross‐border mergers and acquisitions (M&A), this paper provides the first comprehensive examination of the role of ESG‐linked executive compensation in the market for corporate control. The findings show that linking executive pay to ESG objectives is associated with significantly stronger post‐acquisition Environmental, Social, and Governance performance. In addition, ESG‐incentivized acquirers are more likely to finance transactions through green bond issuance, highlighting an important channel through which sustainability considerations shape corporate investment and financing decisions. Improved ESG ratings are, in turn, associated with economically meaningful increases in firm value following deal completion, with Environmental and Governance dimensions emerging as key drivers of value creation. However, these value gains are not immediately reflected in stock market reactions at the time of deal announcement, indicating that investors do not fully incorporate the long‐term benefits of ESG‐linked incentives contemporaneously. The findings are robust to multiple approaches addressing selection bias and endogeneity. The paper contributes to the literature on executive compensation, M&A, and sustainability.\n"]

  June 22, 2026   doi: 10.1002/ijfe.70247   open full text
• Stock Price Deviations From Fundamentals Levels: Mis‐Valuation due to Investor Overconfidence?
  Stella N. Spilioti, Andrianos E. Tsekrekos.
  International Journal of Finance & Economics. June 16, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe use the Residual Income Valuation Model to obtain fundamental values for sample stocks in six Eurozone markets. We then estimate the deviation between the fundamental values and actual stock prices. Subsequently, we examine whether these deviations can be systematically explained by business cycle trends, trends in local economic sentiment, global market‐related uncertainty and developments in global energy prices. We find that market volatility, proxied by the CBOE Volatility Index (VIX), is an important factor, along with energy prices. Findings are similar when a second proxy for price deviations, based on Cochrane's (1994) methodology, is employed. Impulse Response Functions indicate that a shock increase in VIX tends to reduce the deviation between fundamental and actual stock prices in sample markets. We argue that the VIX serves as a contrarian indicator of market overconfidence, such that higher VIX levels are associated with lower investor overconfidence and, consequently, with smaller price deviations from their fundamental values. Conversely, lower VIX levels (i.e., heightened overconfidence) are associated with larger price deviations.\n"]

  June 16, 2026   doi: 10.1002/ijfe.70241   open full text
• Risk Forecasting in Shipping Exchange‐Traded‐Fund (ETF) Markets.
  Christos Katris, Manolis G. Kavussanos, Stergiani (Stella) A. Moysiadou.
  International Journal of Finance & Economics. June 15, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis article examines the risk properties of freight‐derivative‐based exchange‐traded funds (ETFs), focusing on the Breakwave Dry Bulk Shipping ETF (BDRY), and evaluates the accuracy of Value‐at‐Risk (VaR) and Expected Shortfall (ES) forecasts across a range of econometric models. Motivated by the growing financialisation of shipping markets and the emergence of ETFs as accessible freight‐risk instruments, the study addresses a gap in the literature, which has largely focused on physical freight rates and derivatives rather than securitised exposures. Using daily data from 2020 to 2025, we implement Historical Simulation, GARCH‐type models with alternative distributions, Extreme Value Theory, and forecast combination methods, and assess performance using regulatory backtesting frameworks. The results show that models incorporating time‐varying volatility and heavy‐tailed distributions outperform simpler specifications, while forecast combination approaches consistently deliver strong performance across VaR and ES measures. ES forecasting remains particularly challenging, especially at extreme confidence levels, highlighting significant model risk. Evidence from stylised investment strategies confirms the economic value of accurate tail‐risk measurement. The findings have important implications for portfolio management and financial regulation, supporting the use of model averaging and robust backtesting in the context of derivative‐based ETFs and Basel III/IV risk frameworks.\n"]

  June 15, 2026   doi: 10.1002/ijfe.70240   open full text
• Latin American Central Banks Governance: Exploring Trade‐Offs, Conflicts of Interest, Performance, and Board Members' Characteristics.
  Bruno Léo, Teresa Proença, Carlos F. Alves.
  International Journal of Finance & Economics. June 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis article examines the governance of Latin American central banks, focusing on trade‐offs arising from multiple mandates, governance design, and central bank board characteristics. The analysis combines a qualitative review of central bank statutes with an original panel dataset covering eight Latin American central banks over the period 2004–2023. Using fixed‐effects panel regressions, the study explores how governance arrangements and board composition are associated with inflation outcomes, the inflation target level, and the inflation target interval. The results indicate that governance design is primarily associated with differences in the structure of inflation‐targeting frameworks rather than with inflation levels. Higher levels of central bank independence are consistently associated with narrower inflation target intervals, which may reflect tighter control over short‐run inflation deviations. Board member characteristics display selective associations: political affiliation and board heterogeneity are linked to inflation outcomes in some specifications, while academic qualifications, gender composition, and professional background are more closely related to the calibration of inflation‐targeting instruments, particularly the inflation target interval. These associations are stronger for continuous measures of policy design than for binary indicators of inflation target achievement, which are more closely related to macroeconomic conditions and inflation persistence. Overall, the findings suggest that central bank governance in Latin America operates mainly through institutional design and policy calibration rather than through immediate adjustments in inflation outcomes.\n"]

  June 14, 2026   doi: 10.1002/ijfe.70244   open full text
• Spillover Effects of Global Commodities Under VIX Shocks: Evidence From Dynamic Quantile Network Model.
  Zongrun Wang, Wanping Yang, Xiaohang Ren, Zudi Lu.
  International Journal of Finance & Economics. June 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAmid intensifying global economic uncertainty, commodity markets have become a sensitive indicator of economic vitality. This study first employs the LASSO‐VAR‐DY model to build a spillover matrix and then uses a dynamic quantile network econometric model to analyze the impact of VIX shocks on global commodity markets. Results show that commodities display significant volatility and inter‐category differences. The VIX index triggers pronounced asymmetric spillover effects, more so in extreme markets. Global commodity prices are spatially linked, with stronger spillover effects during price increases or violent market fluctuations. The impact of commodities' own lags also exhibits significant quantile heterogeneity. These findings enhance macro‐level understanding of systemic risk transmission in commodity markets, help reduce market uncertainty and maintain financial stability, and offer theoretical support for investors and policymakers.\n"]

  June 14, 2026   doi: 10.1002/ijfe.70245   open full text
• Climate‐Related Extreme Events, Firm Value and Stock Price Crashes.
  Saeedeh Mehrabi, Mahmoud Lari Dashtbayaz, Taqi Bin Abdul Redha Bin Ali Al Abdwani, Mahdi Salehi.
  International Journal of Finance & Economics. June 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study evaluated the correlation between Climate‐Related Extreme Events (CREE), firm value, and stock price crash risk, examining whether CREE affects firm value and crash risk. We analysed 142 companies listed on the Tehran Stock Exchange over 11 years (2012–2022) using the Generalized Least Squares (GLS) method with fixed effects. The findings show a significant negative correlation between CREE and firm value in the year following CREE, and a significant positive relationship between CREE and stock price crash risk. This research addresses an underexplored dimension in the literature by focusing on the direct, quantifiable impacts of climate‐induced natural disasters (floods, droughts, earthquakes) on stock market behaviour in a sanctions‐affected, climate‐vulnerable emerging economy (Iran). Unlike most prior studies emphasizing ESG performance or carbon emissions, this paper provides contextualized empirical evidence from a unique institutional setting characterized by state‐led economic structures, limited access to international financial markets, and high exposure to extreme weather events. The findings offer insights for similar contexts, particularly other emerging economies facing climate vulnerability and sanctions (e.g., Russia, Venezuela), while cautioning against direct generalization to developed or institutionally dissimilar emerging markets. The geographical focus on a Middle Eastern emerging market with distinct structural characteristics (sanctions, state ownership concentration, limited climate disclosure mandates) contributes novel contextual evidence to the climate‐finance literature, complementing prior research on developed Western economies. However, given Iran's unique institutional features, our findings should be interpreted as contextualized evidence rather than universally generalizable conclusions. The results suggest that CREE can decrease firm value and increase stock price crash risk, an important finding given that investors reward companies addressing environmental concerns with higher stock prices.\n"]

  June 12, 2026   doi: 10.1002/ijfe.70243   open full text
• Climate Risks and Supply Chain Resilience: Do Executive Compensation Incentives and External Market Attention Matter?
  Zhao Liu, Haiyan Li, Nohade Nasrallah, Yi‐Shuai Ren.
  International Journal of Finance & Economics. June 09, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nBased on the dynamic capability theory, we examine how climate risks (CR) affect supply chain resilience (SCR) using data from China's A‐share‐listed companies (2013–2023). The results show that CR significantly enhances SCR. Additionally, CR enhances SCR primarily through three paths: expanding supply chain financing, enhancing supply chain efficiency, and fostering supply chain collaborative innovation. Meanwhile, executive monetary compensation incentives and external market attention both amplify the positive effect of CR on SCR, while equity incentives show no significant moderating role. Heterogeneity analysis reveals that CR exerts a greater influence on SCR among firms with superior ESG performance, greater supply chain transparency, larger trade credit financing, and lower industry competition. Sub‐item testing indicates that the positive impact primarily stems from transition risks. Collectively, this study extends the research frontier at the intersection of CR and SCR and provides actionable guidance for firms navigating climate challenges.\n"]

  June 09, 2026   doi: 10.1002/ijfe.70235   open full text
• Digital Literacy and Household Debt: Evidence From Rural China.
  Weixing Wu, Yifei Li, Lina Zhang.
  International Journal of Finance & Economics. June 09, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAs rural digital infrastructure improves, digital literacy is emerging as a critical form of human capital for sharing the dividends of the digital economy, profoundly influencing the financial behaviour of rural households. Based on data from the China Rural Revitalization Survey (CRRS), this paper examines the impact of the enhancement of rural households' digital literacy on their household debt. The core finding is that enhanced digital literacy significantly boosts the probability and the magnitude of rural household debt. We subsequently identify two important mechanisms. Firstly, higher digital literacy is associated with a significant decrease in subjective income satisfaction, which in turn motivates households to debt to bridge perceived psychological disparity. Secondly, our findings indicate that enhanced digital literacy incentivizes households to increase their debt to capitalize on e‐commerce opportunities. Further heterogeneity analyses reveal that the stimulating effect of digital literacy on rural household debt is stronger among economically advantaged rural households, in villages with developed logistics, and in non‐suburban rural regions.\n"]

  June 09, 2026   doi: 10.1002/ijfe.70238   open full text
• How Does AI Empower Corporate ESG Practices? Mechanisms Based on Information Processing Theory.
  Qin Zhu, Shanshan Jiang, Anna Min Du.
  International Journal of Finance & Economics. June 08, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn the context of the latest technological revolution and industrial transformation, Artificial Intelligence (AI) provides new impetus for the development of corporate ESG practices. This study, based on data from 2630 A‐share listed companies in China from 2010 to 2022, examines the impact of AI on corporate ESG performance and its mechanisms of action and explores the moderating effects of capital market financing environment. The results reveal that AI can notably enhance the ESG performance of listed companies in China. This finding is proven robust after robustness tests, including machine learning models. Based on information processing theory, the study further constructs a framework for mechanism analysis across the environmental, social, and governance dimensions. The results show that AI enhances corporate ESG performance through three channels: improving green innovation rate, enhancing price markup capabilities, and reducing agency costs. Heterogeneity analysis reveals that the enabling effects of AI on corporate ESG performance are more pronounced for technology‐intensive firms, non‐highly polluting firms, and firms in highly competitive industries. Further research suggests that optimization of the external capital market financing environment facilitates the empowering effect of AI on corporate ESG performance. This study provides practical insights for enterprises to effectively advance sustainable development through “AI+ ESG”, for regulatory bodies to refine sustainable governance systems, and for capital markets to innovate in financial services for technology.\n"]

  June 08, 2026   doi: 10.1002/ijfe.70242   open full text
• Alternative Data for Realised Volatility Forecasting: Limit Order Book and News Stories.
  Eghbal Rahimikia, Ser‐Huang Poon.
  International Journal of Finance & Economics. June 08, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe examine whether two major alternative data sources, limit order book information and firm‐specific news, provide incremental predictive information for daily realised volatility forecasting within the HAR‐family, using a parsimonious framework to ensure practical implementation and comparability. The framework is designed for practical real‐time forecasting, requiring minimal changes to the benchmark specification and no auxiliary models. Relative to a strong benchmark, both sources contain incremental predictive information, although the gains are more consistent for firm‐specific news, which emerges as the most reliable signal. The news volume measure delivers the most robust improvements overall, while sentiment‐based measures provide less consistent gains, indicating that news arrival matters more than news tone; within the order book, depth measures contribute more to forecasting performance than slope measures. Predictive gains are strongest on high volatility days, and a trade‐off between performance on normal and high volatility days is evident across signals.\n"]

  June 08, 2026   doi: 10.1002/ijfe.70239   open full text
• “Digital Prosperity” or “Digital Worry”: Family Digitization and Financial Asset Allocation.
  Rusen Zhang, Shancheng Hu.
  International Journal of Finance & Economics. June 07, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines how household digitalization affects financial asset allocation in the digital economy era. Using data from the 2017 and 2019 China Household Finance Survey (CHFS), we construct a household digitalization index based on digital access and usage. Employing a fixed effects model, we find that digitalization significantly increases both the share and variety of risky financial assets while reducing the share of risk‐free assets in household portfolios. These results suggest that digitalization leads to greater portfolio diversification, particularly toward riskier investments. Mechanism analysis indicates that digitalization operates through improved financial literacy, relaxed liquidity constraints, and expanded income sources. Our findings provide micro‐level evidence that the development of the digital economy can enhance the efficiency of household financial asset allocation.\n"]

  June 07, 2026   doi: 10.1002/ijfe.70237   open full text
• Exchange Rates and Sovereign Risk: A Nonlinear Approach Based on Local Gaussian Correlations.
  Reinhold Heinlein, Gabriella D. Legrenzi, Scott M. R. Mahadeo.
  International Journal of Finance & Economics. June 07, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe empirically assess the interlinkages between sovereign risk, measured in terms of CDS spreads, and exchange rates for a sample of emerging markets. Our period of analysis includes episodes of severe stress, such as the Global Financial Crisis, the COVID‐19 pandemic, and the Ukrainian War. Exploiting recent developments in local Gaussian partial correlation analysis and the associated nonlinear Granger causality tests, we are able to uncover linkages between assets across different segments of their joint distributions. Disentangling the effect of global factors, we show that the information on sovereign risk of other emerging economies is more relevant for the sovereign risk‐exchange rate relationship than the state of developed markets' risk for all countries in our sample and for all segments of the assets distribution. The same considerations apply for the movements of the US dollar relative to other currencies, where changes in emerging market currencies are of particular interest. Nonlinear Granger causality tests show bi‐directional causality for most countries, confirming the importance of multiple transmission channels. Taken together, our results highlight the importance of understanding the interlinkages between sovereign risk and exchange rates across their entire joint asset returns distribution, which can guide policymakers in debt and currency management, with coordinated regional responses potentially proving more effective than individual national actions. In terms of portfolio management, our documented bidirectional causality is valuable for predicting currency fluctuations based on sovereign risk, supporting hedging and investment strategies in periods of financial stress.\n"]

  June 07, 2026   doi: 10.1002/ijfe.70236   open full text
• Watershed Services and Corporate Green Innovation.
  Qingyang Zhao, Xuejiao Zhang, Samar S. Alharbi, Linqing Zheng.
  International Journal of Finance & Economics. June 05, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nExtensive research finds that Payments for Watershed Services (PWS) yield positive ecological and economic effects. However, prior studies have yet to investigate whether Gamble‐based Payments for Watershed Services (GPWS) generate similar positive outcomes. Using a sample of Chinese A‐share listed firms located in provinces that signed GPWS agreements during 2009–2023, this paper employs a staggered DID approach to examine the effect of GPWS on corporate green innovation. We document asymmetric upstream–downstream effects: GPWS promotes green innovation among upstream firms while impeding such innovation in downstream firms. This asymmetry arises because GPWS strengthens environmental regulations and increases environmental subsidies in upstream regions, while weakening environmental regulations and reducing environmental subsidies in downstream regions. Moreover, GPWS exerts a stronger inhibitory effect on green innovation in downstream firms than its promotive effect in upstream firms.\n"]

  June 05, 2026   doi: 10.1002/ijfe.70233   open full text
• Behavioural Incentives and Frequent Acquisitions: Insights Into Risk and Wealth Dynamics.
  Chandra S. Mishra.
  International Journal of Finance & Economics. June 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates how acquisition frequency influences acquirer risk and how this relationship is moderated by managerial wealth vested in the firm. Drawing on the behavioural agency model, we argue that managers use frequent acquisitions to reduce firm‐specific risk exposure when their personal wealth is significantly tied to firm performance. Using a panel of U.S. firms, we employ multiple empirical strategies—including probit models, recursive bivariate probit, and semi‐parametric estimation—to examine the association between acquisition frequency, managerial wealth, and two measures of acquirer risk: asset return volatility and cash flow volatility. Frequent acquirers are significantly less risky than non‐frequent acquirers, and the relationship between managerial wealth and risk is inverted U‐shaped among frequent acquirers, but not among infrequent acquirers. These findings suggest that executives with high levels of vested wealth initially tolerate more risk but later prioritise diversification to protect their holdings. This study offers novel insights by integrating behavioural agency theory with empirical acquisition strategy and firm risk models. It contributes theoretically by demonstrating that frequent acquisitions serve as managerial risk‐management tools and empirically by identifying nonlinear effects of managerial wealth on acquisition behaviour and risk outcomes.\n"]

  June 01, 2026   doi: 10.1002/ijfe.70234   open full text
• The Impact of Economic Growth on Insurance (Growth).
  Nicholas Apergis, Thomas Poufinas, Panagiotis Kimpouropoulos.
  International Journal of Finance & Economics. June 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper investigates the impact of economic growth on insurance (growth), focusing on the outflow side of the insurance activity, as captured by benefits (including commissions and expenses). The findings provide evidence that economic growth does exert a positive, statistically significant impact on the benefit side of insurance (growth) for all relevant metrics (claims, commissions and expenses) and all insurance branches (total, life and non‐life), which constitutes the main novelty of the paper and its contribution to the extant literature. At the same time, it reaffirms that economic growth posts a positive, statistically significant effect on the acquisition side of insurance (growth) for all pertinent variables (total, life and non‐life premia, total, life and non‐life penetration). The results remain robust for pre−/post‐ and during the 2008‐crisis periods, the pre−/post‐ and during the 2020‐pandemic periods, as well as the pre‐ and post‐ Solvency II era and different county‐income tranches (lower, upper, and higher). The same holds true when economic policy uncertainty and geopolitical risks are considered. All these are also fresh discoveries of the paper and additions to the existing research. Consumption and R&D are shown to work as transition mechanisms between economic growth and insurance growth, while they also receive support from panel causality tests. This constitutes the primary theoretical innovation of the study. The findings imply that policymakers need to address key economic and financial economic matters to facilitate insurance growth.\n"]

  June 01, 2026   doi: 10.1002/ijfe.70232   open full text
• Currency Network Dynamics and Renminbi Spillover Effects in the Asia‐Pacific Region.
  Xing Li, Yikang Tang, Xin Li, Zhanyong Zou, Shulin Xu.
  International Journal of Finance & Economics. June 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe evolutionary mechanisms of regional currency networks and the sources of core currency influence remain critical yet underexplored questions in international finance. While existing literature examines exchange rate spillovers, it rarely investigates the hierarchical structure of currency networks or the differentiated roles various currencies play. Using daily exchange rate data for 13 Asian currencies and 4 international currencies from 2000 to 2023, this paper employs a time‐varying parameter factor‐augmented vector autoregressive model with elastic network regularisation, combined with social network analysis, to systematically examine the structural dynamics of Asian currency networks. The findings reveal a four‐stage evolution of expansion, disruption, reorganisation, and re‐disruption, which closely aligned with major economic and geopolitical events. The Renminbi functions as an “influential core” primarily through trade scale and economic size, whereas the Singapore dollar serves as a structural “bridge currency” during financial crises. Panel regressions confirm that bilateral trade intensity and capital account openness are key drivers of Renminbi spillovers. This study provides the first empirical distinction between two types of currency core status, offering new evidence for understanding regional currency networks and Renminbi internationalisation.\n"]

  June 01, 2026   doi: 10.1002/ijfe.70229   open full text
• Responsible Investing and Investment Efficiency Based on Time‐Inconsistent Preferences.
  Junjie Wang, Qing Xu, Jinqiang Yang, Jun Yang.
  International Journal of Finance & Economics. May 29, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper integrates time‐inconsistent preferences and ESG investment into a dynamic q‐theory framework. We demonstrate that time‐inconsistent preferences induce systematic under‐investment, with the magnitude of inefficiency critically dependent on a firm's reputation. Productivity volatility (σ$$ \\sigma $$) systematically reshapes corporate strategies: rising σ$$ \\sigma $$ reduces investment but increases ESG expenditure. Reputation mediates a strategic trade‐off: low‐reputation firms suffer investment crowding‐out from ESG spending, while high‐reputation firms leverage ESG as a buffer against volatility‐induced distortions. These findings unify the reputation repair hypothesis and buffer effect under a dual‐regime strategy driven by reputation heterogeneity.\n"]

  May 29, 2026   doi: 10.1002/ijfe.70230   open full text
• Carbon Performance, Climate Governance, and Equity Risk.
  Malafronte Irma, Pereira John, Rakeeb Fathima Roshan.
  International Journal of Finance & Economics. May 28, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the relationship between carbon performance, climate governance, and equity risk. Using a sample of companies listed in the S&P500 index for the period 2009–2023, our results show that better carbon performance reduces equity risk, indicating that proactive carbon management reduces uncertainty and is beneficial to firms. Likewise, companies that embrace climate governance practices benefit from lower equity risk, thus providing incentives towards incorporating climate change issues at board level. While both factors individually contribute to lower equity risk, specifically total and unsystematic risk, their combined benefit is less than the sum of the individual effects, suggesting that firms may benefit from focusing on one factor when the other is already well developed. This evidence, built on solid measures and a comprehensive analysis, provides recommendations to companies and policymakers towards enhancing carbon policies and strengthening climate governance commitment, which are rewarded by the financial markets in terms of lowering equity risk.\n"]

  May 28, 2026   doi: 10.1002/ijfe.70231   open full text
• Institutional Diversity in Banking and Economic Complexity.
  Beniamino Pisicoli.
  International Journal of Finance & Economics. May 24, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this paper, we test whether institutional diversity in banking systems is beneficial to economic complexity, using data for Italian provinces in the period 1998–2017. We compute different indexes that consider diversity from an ownership, institutional, business model and competition point of view and find that higher diversity has a positive role on economic complexity. Results come from system‐GMM estimation, are not influenced by the financial cycle and are robust to changes in the lag structure, dependent variables, specification and spatial dependence. They point to the beneficial role of banking diversity for innovation and growth of local ecosystems.\n"]

  May 24, 2026   doi: 10.1002/ijfe.70228   open full text
• The Sector Liquidity Timing Ability of Bond Mutual Funds.
  Zhengnan Yin, Niall O'Sullivan, Meadhbh Sherman, Yuting Chen.
  International Journal of Finance & Economics. May 19, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe investigate whether bond mutual fund managers exhibit market liquidity timing skills in the U.S. corporate bond market. At the portfolio level, we find only weak evidence that bond funds adjust their overall market exposure in anticipation of changes in corporate bond market liquidity. In contrast, when liquidity timing is examined through sector allocation strategies across investment grade, high‐yield, and mortgage‐backed securities (MBS) sectors, we find strong evidence of high‐yield sector liquidity timing ability—fund managers overweight high‐yield bonds as corporate bond market liquidity improves. Using individual fund level analysis, we find that top‐ranked bond funds demonstrate market liquidity timing skills with respect to both the overall market and all three sectors. Bootstrap analyses indicate that these liquidity timing skills of bond fund managers are unlikely to be driven by luck. Moreover, we find evidence of persistence in sector liquidity timing ability over time, especially for high‐yield sector timing. Finally, these sector liquidity timing strategies help predict future fund performance.\n"]

  May 19, 2026   doi: 10.1002/ijfe.70224   open full text
• Effect of Supply Chain Finance on Supply Chain Trade.
  Ha Van Doan, Thang Ngoc Doan.
  International Journal of Finance & Economics. May 18, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nGlobal value chains are increasingly exposed to geopolitical tensions, policy uncertainty, and institutional weaknesses, making supply‐chain trade more fragile. Existing studies largely view supply chain finance (SCF) as a tool for easing liquidity constraints, while its role under political and institutional risk remains underexplored. This study examines how SCF‐proxied by factoring activity in source countries‐affects participation in supply‐chain trade, measured by domestic value added embodied in gross exports. Using a gravity framework combined with a Rajan–Zingales identification strategy and a dataset of about 1.76 million country‐pair–industry observations across 75 countries from 1995 to 2020, we find that SCF significantly promotes supply‐chain trade, especially in industries with higher technological dependence on external liquidity. Crucially, the effect is stronger when destination countries face greater political risk, investment risk, or economic uncertainty. This pattern suggests that factoring not only eases cash‐flow constraints but also enables exporters to transfer payment and country risk to financial intermediaries. Even during systemic financial crises, SCF plays a stabilizing role. Overall, the findings highlight SCF as a key mechanism for enhancing resilience in global value chains, rather than merely a source of working capital.\n"]

  May 18, 2026   doi: 10.1002/ijfe.70227   open full text
• Competition and Incentives in the Mutual Fund Industry: Evidence From Product Development Strategies.
  Andreas Ørpetveit.
  International Journal of Finance & Economics. May 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nDespite extensive evidence of how competition in the mutual fund industry affects fees and performance outcomes, less is known about its effect on the incentives of market participants. This paper examines how competition drives product development in mutual fund families. The results show that greater industry competition encourages fund families to focus more on enhancing product quality than altering the fund base. Quality development increases the performance of family‐affiliated funds, ultimately benefiting investors. Based on these results, I argue that competition helps mitigate conflicts of interest associated with the family‐based structure of the industry.\n"]

  May 14, 2026   doi: 10.1002/ijfe.70225   open full text
• The Impact of Customer Environmental Pressure Perception on Supplier Greenwashing: Evidence From Environmental Tone in Annual Reports.
  Yunge Hu, Duo Wang, Yanxi Li, Delin Meng.
  International Journal of Finance & Economics. May 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAmid growing global environmental challenges, supply chains have become a critical conduit for the transmission of environmental pressures. However, existing research presents theoretical divergences regarding the effectiveness of customer environmental pressure transmission, primarily due to the neglect of customers' subjective cognitive appraisal of such pressures. Grounded in the cognitive appraisal theory of stress, this study constructs an environmental pressure perception index by analysing the tone of annual report texts, aiming to elucidate the impact and underlying mechanism of customer environmental pressure perception on suppliers' greenwashing. Using a sample of Chinese A‐share listed companies from 2009 to 2022, we find that customer environmental pressure perception significantly curbs the extent of supplier greenwashing. Mechanism analysis reveals that customer environmental pressure perception inhibits greenwashing through two pathways: improving the quality of suppliers' environmental information disclosure and increasing their environmental investments, with these two pathways exhibiting a chain‐mediating effect. Heterogeneity analysis indicates that this inhibitory effect is more pronounced when customers exhibit high information disclosure quality, when suppliers are private enterprises, or when supply chain dependency is strong. By emphasising the pivotal role of subjective perception rather than objective pressure, this study not only offers a cognitive appraisal perspective to explain theoretical disputes concerning pressure transmission within supply chains, but also provides important implications for enterprises and policymakers in effectively mitigating greenwashing and enhancing the overall green performance of supply chains.\n"]

  May 14, 2026   doi: 10.1002/ijfe.70226   open full text
• Effect of Remittances on Economic Growth: Role of Governance Quality and Financial Crises.
  Mekki Hamdaoui, Radhia Amairia, Ramzi Ben Abdejlil.
  International Journal of Finance & Economics. May 13, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the non‐linear relationship between remittances and economic growth, considering the influencing effects of governance quality and financial crises. Using a balanced panel of 48 countries from 1984 to 2016, we explore both direct and indirect channels of remittance impact through panel regressions and the Bayesian Model Averaging (BMA) approach to identify the main determinants of growth. In addition, we employ both Autoregressive Distributed Lag (ARDL) and cross‐sectionally augmented ARDL (CS‐ARDL) models to evaluate long‐term effects and deal with endogeneity and cross‐sectional dependence. The results indicate that governance regularly boosts GDP per capita in both developed and developing countries. However, remittances stimulate growth in developing nations but may have a negative effect in developed economies. Furthermore, in developing countries, the positive impact of remittances is partially offset by improved governance, suggesting a substitution effect. Financial instability negatively affects growth, particularly in developing economies, reducing remittances' benefits. In addition, remittances' influence on economic growth is more sensitive to financial stability in developed countries and governance quality in developing countries. This emphasises the importance of considering distinctive characteristics of each country in evaluating remittances' effects on its economic growth.\n"]

  May 13, 2026   doi: 10.1002/ijfe.70222   open full text
• How Is FinTech Shaping Household Portfolio Behaviour?
  Victor Murinde, Athina Petropoulou.
  International Journal of Finance & Economics. May 13, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines how FinTech adoption influences household portfolio allocation across major advanced economies. Using a flow‐of‐funds framework and the Almost Ideal Demand System (AIDS), we model household demand for currency, deposits, loans, debt securities, and equity in the United States, United Kingdom, Euro Area, Japan and Australia. We construct a composite FinTech index capturing household‐level digital financial participation and use it to test three hypotheses reflecting the payments, lending, and investment channels of FinTech. The results show clear cross‐country heterogeneity. FinTech increases the share of deposits in Australia and the Euro Area, raises household loan shares in the US, UK, and Japan, and in the US leads to a shift away from debt securities and toward equity. Overall, FinTech plays a measurable role in reshaping household balance sheets, with effects that vary across economies.\n"]

  May 13, 2026   doi: 10.1002/ijfe.70218   open full text
• Economic Policy Uncertainty and Gambling Preference: Evidence From the Asia‐Pacific Stock Markets.
  Khoa Dang Duong, Linh Thi Diem Truong, Tran Ngoc Huynh, Trang Ngoc Doan Tran, Hieu Thi Thanh Nguyen.
  International Journal of Finance & Economics. May 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines how economic policy uncertainty and gambling preference affect stock returns in nine Asia‐Pacific markets. Our study obtains stock data in nine Asia‐Pacific markets from July 2002 to December 2018. We use portfolio sorting and Two‐Stage Least Squares regressions to examine the MAX anomaly in stock returns. Our findings indicate that a percentage increase in MAX reduces stock returns by 0.2022%. The MAX anomaly is also more pronounced in developed markets than in emerging markets, even after controlling for EPU. Additionally, our results suggest that a percentage increase in Economic Policy Uncertainty is associated with a 0.007% increase in stock returns. Furthermore, the results show that EPU weakens the effect of the MAX anomaly on stock returns. Our findings remain robust across Press Freedom Index partitions, price limit mechanisms, and when substituting EPU with WUI. Our findings align with asymmetric information, noise traders, anchoring, the risk–return trade‐off, asset pricing, real options theories, and prior literature. Our study offers practical implications for policymakers and investors to improve market efficiency and address stock price manipulation, thereby reducing the MAX effect across Asia‐Pacific markets.\n"]

  May 12, 2026   doi: 10.1002/ijfe.70223   open full text
• Forecasting Global Equity Markets: The Evolving Predictive Power of U.S. Excess Returns.
  Yangli Guo, Feng Ma, Tiangyang Wang.
  International Journal of Finance & Economics. May 11, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nRecent disruptive events have renewed interest in whether U.S. excess returns predict movements in global equity markets. This study investigates the asymmetric predictive effects of positive versus negative U.S. excess returns and assesses whether economically motivated constraints enhance forecasting performance. We find that, although the U.S. remains an important driver of international markets, its dominance has weakened. Predictability is markedly asymmetric: negative U.S. excess returns exhibit stronger and more persistent predictive power, and imposing economic constraints—specifically, the CT constraint that truncates negative return forecasts at zero and the PTV constraint that limits forecasts by bounding the implied Sharpe ratio within a plausible range—further improves forecast accuracy. Cumulative squared forecast error evidence shows that U.S. spillovers intensify during recessions, and the predictive advantage of negative U.S. returns remains pronounced at longer horizons, with the PTV constraint delivering additional gains in long‐horizon forecasts. Importantly, these statistical improvements translate into economic value: in a mean–variance asset‐allocation exercise, constrained forecasts generate economically meaningful utility gains relative to benchmark strategies. Finally, the predictive power of U.S. returns is substantially weaker in BRICS markets than in developed economies. Overall, our results indicate that global market interconnectedness is evolving, highlighting the importance of international diversification for policymakers concerned with cross‐border shock transmission.\n"]

  May 11, 2026   doi: 10.1002/ijfe.70217   open full text
• Timing Consequences of Seasoned Equity Offerings to Financial Disclosure Quality: Quasi‐Experimental Evidence.
  Ammar Hussain, Jiashun Huang.
  International Journal of Finance & Economics. May 11, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines how the timing of seasoned equity offerings (SEOs) at favourable valuations affects managerial concerns about accruals‐based earnings manipulation. This study is based on quarterly panel data of Chinese A‐share non‐financially listed firms from 2002Q1 to 2023Q1. Employing the fuzzy regression discontinuity design based on ‘price ratio’ as a valuation benchmark for the SEO timing, we provide causal estimates at different event times. We find that SEO timing induced by favourable market valuation (when the share price reaches or crosses the recent offering price) is economically associated with a 6.25% significant decline in accruals‐based disclosure quality before SEO. However, this impact is insignificant for SEOs and their forward‐looking periods. We empirically illuminate the theoretical channels that make this influence more pronounced. The specific reference point for SEO timing highlights its consequences for financing decisions by providing a timely warning and quantifying the implications for regulatory bodies regarding financial transparency.\n"]

  May 11, 2026   doi: 10.1002/ijfe.70221   open full text
• How Does the VAT Retention and Refund Reform Affect Supply Chain Resilience? Evidence From China.
  Jing Zeng, Jiayin Chen, Kam C. Chan.
  International Journal of Finance & Economics. May 07, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAs global supply chains face mounting instability, building resilience becomes increasingly valuable for firms. Drawing on data from Chinese firms (2012–2022) and leveraging the 2018 VAT retention and refund reform (VATRR) as a natural experiment, we analyse how VATRR affects supply chain resilience (SCR). The results indicate that the VATRR has a significant positive effect on firms' SCR. The analysis of underlying mechanisms shows this effect operates through three pathways: reduced financial constraints, higher innovation, and increased specialisation. Moreover, the evidence suggests the effect is more salient among small, young, non‐state‐owned firms, those in the eastern region, and capital‐technology‐intensive firms. Our research has important policy implications for developing countries to guide them in strengthening their SCR through tax policy.\n"]

  May 07, 2026   doi: 10.1002/ijfe.70216   open full text
• Import‐Driven Pathways to RMB Internationalisation: Evidence From Network Analysis.
  Youzhe Wang, Wenxin Liu, Zhengtao Cheng.
  International Journal of Finance & Economics. May 07, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAgainst the backdrop of profound global economic restructuring and the growing diversification of the international monetary system, exploring the role of trade channels in promoting RMB internationalisation holds significant theoretical and practical importance. This paper examines how expanding imports affects the international influence of the RMB and explores the underlying mechanisms. Using a network topology approach and a high‐dimensional time‐varying parameter vector autoregression (HD‐TVP‐VAR) model, we measure the RMB's international influence and analyse the impact of import scale on it. The results show that expanding imports significantly enhances the RMB's influence in relevant regions, with the strongest effects observed in resource‐intensive and capital‐intensive industries. Mechanism analysis reveals that import expansion strengthens the RMB's international influence through channels such as boosting market confidence, improving bargaining power, and enhancing supply chain stability. Furthermore, the paper finds that the continued expansion of RMB internationalisation exerts a ‘double‐edged’ effect on China's domestic systemic financial risk, while simultaneously mitigating global systemic financial risk and enhancing macroeconomic resilience of other economies.\n"]

  May 07, 2026   doi: 10.1002/ijfe.70220   open full text
• Can Core Competence Help Enterprises Reduce Corporate Fraud?
  Changling Sun, Zilan Bi, Kam C. Chan, Jinglu Zhao.
  International Journal of Finance & Economics. May 07, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper empirically examines the impact of core competence on corporate fraud by constructing the measurement index of core competence through textual analysis, using Chinese A‐share listed companies from 2007 to 2022 as a research sample. It is found that: core competence can effectively reduce corporate fraud, and the conclusions still hold under a series of robustness tests. The mechanism test reveals that core competence can reduce performance pressure, improve internal control quality and enhance external attention, thereby reducing the motivation and opportunity for misconduct and binding corporate fraud. Further study finds that: the binding effect of core competence on corporate fraud is more significant in non‐state‐owned enterprises and enterprises in a well‐established external legal environment. Core competence is more significant in reducing disclosure violations and operational violations compared to executive violations. The findings of this paper not only enrich the literature on the economic consequences of core competence and the factors influencing corporate fraud, but also have significant theoretical and practical implications for how to avoid corporate fraud.\n"]

  May 07, 2026   doi: 10.1002/ijfe.70219   open full text
• Does Inflation Targeting Enhance Economic Performance? Evidence From Asian Economies.
  Chandan Sethi, Bibhuti Ranjan Mishra.
  International Journal of Finance & Economics. May 06, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines whether inflation targeting (IT) policies improve the macroeconomic performance of 28 Asian economies from 1998 to 2023. Specifically, it assesses the impact of IT on inflation, GDP growth, exchange rates and unemployment. The study employs two econometric methods: propensity score matching (PSM) and panel‐corrected standard errors (PCSE). The findings suggest that adopting an IT regime can significantly reduce inflation and exchange rate volatility. However, IT has no significant effect on GDP growth. In contrast, results reveal a positive, statistically significant impact on unemployment, suggesting potential short‐run labour‐market trade‐offs associated with disinflationary policies. These findings contribute to the ongoing debate on the effectiveness of IT by highlighting that its impact on real economic variables may vary across estimation approaches and underlying assumptions.\n"]

  May 06, 2026   doi: 10.1002/ijfe.70211   open full text
• Explaining Episodes of High Inflation: Demand‐ and Supply‐Side Drivers in Times of Uncertainty.
  Maria‐Eleni K. Agoraki, Nektarios Aslanidis, Georgios P. Kouretas.
  International Journal of Finance & Economics. May 05, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this paper, we investigate the extent to which uncertainty anticipates episodes of high inflation in 30 economies worldwide. Our analysis accounts for several factors, including inflation expectations, real global economic activity, and supply chain disruptions. Using an instrumental variable (IV) approach, we identify exogenous variations in country‐level uncertainty by tracking uncertainty in large global economies, which is particularly relevant for small open economies. The results indicate that periods of high uncertainty are generally associated with low inflation. Importantly, our research reveals two distinct mechanisms through which uncertainty affects inflation. Uncertainty has a negative effect on demand‐driven inflation, while its effect on supply‐driven inflation is positive.\n"]

  May 05, 2026   doi: 10.1002/ijfe.70215   open full text
• Stock Market Volatility Predictability: A Transfer Entropy‐Determined Model‐Switching Strategy.
  Xueqing Wang, Ying Yuan, Yong Qu.
  International Journal of Finance & Economics. May 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis article proposes a Transfer Entropy‐Determined Model‐Switching (HAR‐TEDMS) strategy within the HAR‐RV framework to improve the predictive accuracy of stock market volatility. The core mechanism of the HAR‐TEDMS model is based on transfer entropy, which is used to identify whether the market is in a state of dependence or independence by examining the significance of information transmission between the oil implied volatility index (OVX) and the stock implied volatility index (VIX). This mechanism enables the model to dynamically switch between incorporating interactive or independent information from OVX and VIX, thereby effectively adapting to different market states. Empirical results reveal the superior forecasting performance of the HAR‐TEDMS model across different forecasting horizons. Furthermore, we confirm that the predictive ability of the HAR‐TEDMS model is primarily reflected in its capability to capture asymmetric information transmission and its adaptability to turbulent environments. This novel HAR‐TEDMS model enhances the understanding of information transmission mechanisms across financial markets, underlining its potential value in guiding investment strategies.\n"]

  May 01, 2026   doi: 10.1002/ijfe.70210   open full text
• A Bullet on Bribe‐Givers: Corporate Bribery and the Cost of Debt.
  Yuetong Li, Xiaojia Zheng.
  International Journal of Finance & Economics. April 30, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the ramifications of corruption penalties on corporate debt financing. By employing the implementation of China's Amendment to the Criminal Law in 2015, we show that the heightened penalties for bribery significantly reduce firms' debt financing costs located in regions with higher levels of corruption. This reduction stems from decreased entertainment expenses and alleviated financial distress of firms. Furthermore, such mitigating effect is more pronounced in firms located in regions with weaker legal institutions and non‐coastal cities, or operating in fiercely competitive markets. We also find that firms increase charitable donations following the enactment of the Criminal Law, suggesting a shift from clandestine corruption towards more subtle philanthropic endeavours to maintain relationships with the government.\nJEL Classification: M10, M41, G30\n"]

  April 30, 2026   doi: 10.1002/ijfe.70214   open full text
• Do Private and Public Capital Flows Respond Differently to Income Inequality? Evidence From Emerging Markets and Developing Economies.
  Jorge Carrera, Gabriel Montes‐Rojas, Mariquena Solla, Fernando Toledo.
  International Journal of Finance & Economics. April 24, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nInequality dynamics influence portfolio decisions in both the private and public sectors. In the private sector, increased inequality facilitates covering the fixed costs associated with participating in international financial markets. As society becomes more unequal, a larger proportion of the population can afford to operate in global markets in both directions to take debt and acquire external assets. In the public sector, inequality affects government policies and preferences, particularly fiscal policy and debt dynamics. In this paper we study the link between inequality and capital flows, taking advantage of a new database that differentiates private and public sectors. Higher income inequality is associated with higher total capital inflows and outflows and higher net flows. These patterns are stronger for private flows. Private outflows are more sensitive to financial openness than private inflows.\n"]

  April 24, 2026   doi: 10.1002/ijfe.70212   open full text
• Industry Portfolio Volatility Connections and Industry Portfolio Returns.
  Michael Ellington, Michalis Stamatogiannis, Yawen Zheng.
  International Journal of Finance & Economics. April 24, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper tracks dynamic connections that form among daily US industry portfolio return volatilities using a Bayesian time‐varying parameter VAR model. Market participants often focus on sectors to filter vast amounts of information, and this focus results in cross‐industry return predictability. We characterise connections that form over the short‐, medium‐ and long‐term, analysing their role as indicators of sectoral uncertainties. These volatility‐based connections create a network structure that reflects co‐movement across different industries. By capturing these network dynamics, we assess their usefulness in predicting US industry portfolio returns. Our results show that network connections contain economically meaningful information for future industry portfolio returns, offering significant gains in both point and density forecasts.\n"]

  April 24, 2026   doi: 10.1002/ijfe.70208   open full text
• Mitigating Tax Avoidance: The Role of Board Interpersonal Diversity in the United Kingdom.
  Eric O. Boahen, Emmanuel C. Mamatzakis, Lorenzo Neri, Antonella Russo.
  International Journal of Finance & Economics. April 21, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates how the board's interpersonal diversity is associated with company tax avoidance behaviour. The ‘Out of Africa’ theory of human origin, which assesses how individual attributes (including cognitive capabilities, capacities and problem‐solving style) and interpersonal trust are shaped by human evolution, forms the basis of the interpersonal diversity scale. A broad literature affirms how diversity in cognitive skills and interpersonal trust enhances board performance and monitoring mechanisms within the board members. In this study, we analyse how the interpersonal diversity of the board members for UK firms over the period 1999 to 2019 mitigates agency problems and tax avoidance. Our main finding shows interpersonal diversity is associated with lower tax avoidance. These results emphasise the importance of the composition of boards with members from diverse genetic backgrounds. This could be encouraged through disclosure requirements, guidelines or incentives for companies to diversify their board composition.\n"]

  April 21, 2026   doi: 10.1002/ijfe.70213   open full text
• Digital Financial Inclusion and Rural Household Debt Risks.
  Yunhui Wang, Yihua Chen.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2012-2026, April 2026. ", "\nABSTRACT\nTechnology is a double‐edged sword. Departing from extant literature that centres on urban households, this study is the first to document the long‐run dynamic effects of digital inclusive finance on rural household debt risk in China. Using four waves (2016–2020) of the China Family Panel Studies (CFPS), we identify both the impact and underlying mechanisms. Results indicate that digital inclusive finance (DFI) significantly raises rural households' leverage by fueling material aspirations and reducing income uncertainty. The effect is most pronounced in the central and western regions, among purely agricultural households, and among those owning two dwellings. This study contributes new empirical evidence on the relationship between DFI and debt risks among rural households, thus offering valuable insights for policymakers in developing countries striving to foster the development of DFI in rural areas.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70028   open full text
• Unveiling the Double‐Edged Sword: Assessing the Impact of Venture Capital Market Competition on Startup Success in China.
  Weiping Liang, Xiangyi Zhou, Wei Huang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1493-1511, April 2026. ", "\nABSTRACT\nThis paper investigates the influence of venture capital (VC) market competition on startup success using data from the Chinese VC market. By employing Bartik instrumental variables and the Heckman–Sørensen two‐step method to tackle endogeneity, we demonstrate that VC competition hampers the matching process between high‐quality startups and VCs, while promoting larger VC syndication. The adverse effects of VC competition on high‐quality startups result in a negative correlation with their probability of success. Moreover, our supplementary analysis reveals that the negative effects of VC competition on the success of high‐quality startups are attenuated within high‐tech industries. Conversely, VC market competition does not exhibit a significant impact on low‐quality startups. Consequently, policymakers face the challenge of striking a balance between fostering a competitive VC market and ensuring startup success.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70001   open full text
• Dynamic Persistence of Shocks to Stock Prices in Emerging Markets: Non‐Normal Distributions, Structural Changes and Asymmetry.
  Saban Nazlioglu, Ilhan Kucukkaplan, Sevket Pazarci, Asim Kar, Osman Varol.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1512-1529, April 2026. ", "\nABSTRACT\nThis study examines the persistence of shocks to stock prices in emerging markets, with accounting for non‐normal distributions, structural changes and asymmetry by means of the recent developments in the quantile autoregression models. The results, from the data covering the January 1988–January 2025 period for the stock price index of 24 emerging markets, show the importance of simultaneously accounting for these data properties in analysing the effects of shocks to stock prices. We find that the shocks tend to be temporary, demonstrating a mean‐reversion in stock prices of emerging markets, which provides implications for trading strategies, portfolio investment and risk management.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70002   open full text
• Does Fund Herding Help Stabilise Fund Flows? An Investigation in a Fund Mutual‐Holding Network Framework.
  Shuai Lu, Shouwei Li, Peter Teirlinck.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1557-1581, April 2026. ", "\nABSTRACT\nWe examine how fund herding affects fund flow performance by developing three herding measures based on a mutual‐holding network rather than merely identifying whether funds herd or not. We measure herding in terms of network connections, density, and peer influence to uncover latent patterns in fund herding. Our empirical findings reveal that fund herding is negatively linked to uncertainty in fund flows but positively related to fund flows. We also find that investor attention plays a key role in amplifying the herding effect on fund performance. Additionally, we show that the herding effect is not simply an attempt at window‐dressing. Lastly, we identify a “bellwether” effect, where herding tends to boost fund flows for successful funds while reducing flows for underperforming ones.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70004   open full text
• Earnings Quality and ESG Performance in Energy and Utilities: What Really Matters?
  Antonios Persakis, Athanasios P. Fassas, Dionisis Philippas.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1627-1659, April 2026. ", "\nABSTRACT\nThe paper investigates the controversial relationship between firms' earnings quality and environmental, social and governance (ESG) performance, focusing on the energy and utility sectors given their significant regulatory pressures, environmental impact, and capital‐intensive nature, which render ESG performance particularly important for financial reporting practices. Using a cross‐country dataset of firms in these sectors, we empirically assess whether ESG performance amplifies or dampens earnings quality, extending our framework to incorporate CEO power and board strength, with respect to a comprehensive set of firm‐specific and country‐level controls. We show that a higher level of ESG commitment is positively associated with improved earnings quality, suggesting that ethical engagement and transparency enhance the integrity of financial reporting. We find that CEO power weakens the positive relationship between ESG commitment and earnings quality, as managerial discretion may facilitate earnings management practices that obscure the firm's underlying financial condition. In contrast, strong boards amplify earnings quality by enhancing effective oversight and promoting corporate accountability. Nevertheless, board effectiveness is subject to the inherent trade‐offs between maintaining legitimacy, addressing diverse stakeholder interests, and meeting economic needs. We conclude that ESG initiatives are substantially shaped by internal corporate governance structure and firm‐specific operational characteristics.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70007   open full text
• Appeasing Stockholders at the Expense of Stakeholders: Do Contingencies Matter?
  Ali Uyar, Cemil Kuzey, Habiba Al‐Shaer, Abdullah S. Karaman.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1660-1681, April 2026. ", "\nABSTRACT\nIn this study, we investigate whether dividend growth is associated with both sustainability reporting and assurance. In doing so, we aim to highlight whether appeasing stockholders more may damage stakeholder communication or not. Besides, we explore whether firm growth opportunity, free cash flow and firm risk moderate between dividend growth and sustainability reporting and assurance. We hope to shed light on firm strategies balancing the stockholders' and stakeholders' interests concurrently. We fetched the data for the period between 2002 and 2019 and ran country‐industry‐year fixed‐effects logistic regression. The findings indicate that dividend growth diminishes the likelihood of disseminating a sustainability report and assuring the sustainability report; however, this significant link is validated in the recent period (i.e., 2011–2019) rather than the earlier period (i.e., 2002–2010). Furthermore, while firms paying greater dividends with higher growth opportunities avoid assurance practice only, risky firms avoid both sustainability reporting and report assurance. Contrary to expectations, free cash flow does not significantly influence sustainability reporting and assurance practices of the firms paying greater dividends relative to the prior period. However, further analyses revealed a very significant difference between Anglo‐Saxon versus non‐Anglo‐Saxon countries.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70008   open full text
• The Effect of Corporate Leverage Regulation on Innovation: Evidence From a Quasi‐Natural Experiment in China.
  Xiaofang Xu, Moran Jia, Yu Lu.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1711-1734, April 2026. ", "\nABSTRACT\nThis study examines the impact of Corporate Leverage Regulation (CLR) on corporate innovation. Innovation is key to firm performance and sustainable competitiveness, which may be affected by a firm's financial risk, and deleveraging is an essential measure to mitigate corporate financial risk. Taking advantage of the quasi‐natural experiment of CLR in China, which requires over‐indebted state‐owned companies to reduce their debt ratio, we examine the effects of the reduction in financial leverage on corporate innovation. We find that firms are more likely to enhance their innovation efficiency after CLR, which has a significant increase in corporate innovation outputs, while no significant increase in innovation inputs, and this increase is more pronounced for firms with a higher proportion of institutional investors, a lower degree of digital transformation, and less media attention. These findings suggest that appropriate government guidance and intervention to reduce excessive financial leverage risk is helpful for corporations to maintain sustainable growth and stay competitive in their industry. We also document that managerial myopia reduction, resource allocation efficiency improvement, and accounting information quality enhancement are the channels through which CLR affects firm innovation. Furthermore, we find that CLR significantly increases the value of firms. Taken together, our results suggest that a decrease in leverage has a causal effect on firms' innovation efficiency.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70011   open full text
• The Financial Accelerator Mechanism: Time‐Varying Frequency‐Dependent Evidence From the C&I Loan Market.
  Marco Gallegati, Edoardo Gaffeo.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1822-1832, April 2026. ", "\nABSTRACT\nEmpirical identification of the financial accelerator mechanism using aggregate data has proven difficult due to measurement challenges and the unobservability of the external finance premium, defined as the wedge between the cost of external finance and the opportunity cost of internal funds. We address this challenge by developing a novel empirical strategy which exploits the frequency‐dependent properties of the financial accelerator and uses survey‐based credit standards—rather than interest rate spreads—as a proxy for the external finance premium. The time‐frequency analysis of U.S. commercial and industrial loan market data—comprising loan growth, rate spreads, credit standards, and aggregate net worth—over a period marked by significant regulatory and structural changes in the financial system, provides three main results. First, credit standards provide a more informative proxy for the external finance premium than loan rate spreads. Second, the relationship between net worth and credit conditions is frequency‐dependent, with the strongest effects concentrated at business cycle frequencies (4–10 years). Third, the financial accelerator becomes empirically relevant only after the early 1990s, coinciding with the onset of financial deregulation and increasing agency frictions. These findings suggest that the strength and observability of the financial accelerator mechanism are both frequency‐ and time‐dependent, becoming more pronounced in the post‐deregulation era of U.S. financial history.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70017   open full text
• Do off‐Site R&D Institutions Matter for Corporate Exploratory Innovation?
  Chen Cheng, Jinghao Mu, Guanchun Liu.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1880-1898, April 2026. ", "\nABSTRACT\nThis study examines the effect of off‐site R&D institutions on exploratory innovation based on the emerging economy of China. The results using a sample of listed firms from 2009 to 2019 show that off‐site R&D institutions can significantly enhance exploratory innovation and firms engaged with off‐site R&D institutions exhibit 58.2% higher exploratory innovation than those without off‐site R&D institutions. To enhance the robustness of the finding, we employ robustness checks using difference‐in‐differences, placebo test, and propensity score matching methods. Further mechanism tests demonstrate that the positive productivity effect is attributed to knowledge base expansion, increased knowledge diversity, and the promotion of R&D cooperation, which is consistent with the knowledge diffusion channel. Our findings contribute to a more comprehensive understanding of technology diffusion across regions in a typical country that is engaged in technology catch‐up.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70020   open full text
• Did Liquidity Limits Amplify Money Market Fund Redemptions During the COVID Crisis?
  Peter G. Dunne, Raffaele Giuliana.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2863-2877, April 2026. ", "\nABSTRACT\nRegulation of Money Market Funds (MMFs) in the EU requires some categories of MMFs to consider applying liquidity management tools if they breach a minimum ‘weekly’ liquidity requirement. Anticipation of the application of such tools is a plausible amplifier of run risks. Using a larger European dataset than previously studied, we assess whether proximity to liquidity thresholds explains differences in redemptions both at the start of the COVID‐19 crisis and in the following months. We assess this effect for MMFs subject to and exempt from the liquidity regulation. The evidence shows that outflows can be robustly associated with proximity to minimum liquidity requirements in the peak of the crisis for funds required to consider suspending redemptions if breaches occur. In the post‐crisis phase the redemption‐liquidity relationship does not appear to be specifically related to mandated consideration of the suspension of redemptions. The evidence supports consideration of countercyclical liquidity requirements or buffers that are more usable in times of stress.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70021   open full text
• Decoding the Role of Corruption in Economic Freedom and CO2 Emissions Nexus: A Disaggregated Analysis From BRICS and N‐11.
  Rafi Farooq, Amir Rahman, Khalid Ashraf Chisti.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1917-1932, April 2026. ", "\nABSTRACT\nThe current study examines the effect of economic freedom on overall CO2 emissions, territorial CO2 emissions, consumption CO2 emissions, and how the control of corruption moderates this relation. The study is based on a combined sample of BRICS and Next‐11 economies as well as on disaggregated analysis for the two blocks covering the period of 26 years (1995–2020). Employing a range of econometric techniques, including Driscoll and Kraay with fixed effects method, panel quantile regression, and panel threshold regressions, the study found a positive impact of economic freedom on overall CO2 emissions and a negative impact on Territorial and Consumption‐based CO2 emissions and this relationship remaining unchanged although coefficients reduced with the moderation of corruption control. The heterogeneous impact of economic freedom in low and high‐carbon emitting countries is being revealed, and a threshold effect of economic freedom, which depends on the income levels (GDP per capita), is also discovered. Towards the end, the study offers key stakeholders some policy recommendations and suggestions.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70023   open full text
• Rural Commercial Bank's Efficiency on Supporting Rural Revitalization in China: Do Leverage Implementation and Green Finance Matter?
  Yue Li, Zariyawati Mohd Ashhari, Nazrul Hisyam Ab Razak, Wei Ni Soh, Xianghua Tang, Kuan Kang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1933-1956, April 2026. ", "\nABSTRACT\nThis paper provides an in‐depth examination of the role of rural financial institutions in rural development under deleveraging and greening externalities orientating China's economic transition. Specifically, we examine the impacts of leverage implementation and green finance on the multi‐dimensional efficiency (i.e., financial, social and comprehensive) of rural commercial banks (RCBs) in the following distinct ways. First, we account for the symmetric and asymmetric relationships between leverage and efficiency through a comparable analysis of using the ARDL model and the NARDL model, which follow dynamic heterogeneous panel data modelling by Shin et al. Second, we investigate the relationship between green finance and efficiency in an identical manner. Third, in order to capture potential nonlinearity, we quantify macroprudential green finance to ascertain its threshold effect on the leverage‐efficiency association by using the Hansen model. Our results depict that RCBs' efficiency, regardless of the dimensions involved, responds asymmetrically to changes in their leverage in both the long and short runs, while their asymmetric response to changes in green finance occurs solely in the long run. This finding is further corroborated by intuitive results of the cumulative sum of squares simulation and consolidates the observed financial accelerator effects in symmetric relationships. Additionally, the threshold role of macroprudential green finance triggers nonlinearity in associations of leverage with social and comprehensive efficiency. This finding suggests that, in light of the development of green finance, minor adjustments to macroprudential regulation below the threshold can facilitate micro prudence for RCBs' deleveraging.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70024   open full text
• Climate Risk and Risk‐Taking of Rural Financial Institutions in China.
  Xiaoming Zhang, Luping He, Chien‐Chiang Lee.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1957-1978, April 2026. ", "\nABSTRACT\nThe research identifies the impact of climate risk on the risk‐taking of rural financial institutions in China and its mechanism, using 279 rural financial institutions from 2011 to 2021 as the research sample. Results show that climate risk significantly increases the risk‐taking of rural financial institutions, and agricultural economic development plays a mediating effect in the impact of climate risk on the risk‐taking of rural financial institutions. The impact of climate risk on the risk‐taking of rural financial institutions in China is more pronounced among financial institutions that have higher climate policy uncertainty and larger government environmental expenditures. Finally, the impact of climate risk on the risk‐taking of rural financial institutions in northern China is greater than that in southern China.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70025   open full text
• Rural–Urban Digital Divide: Evidence From Indian States.
  Rashmi Arora, Nikhil Sapre.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2912-2932, April 2026. ", "\nABSTRACT\nThe Indian economy has achieved significant progress in recent years, with the country expected to contribute about 16% of the global growth. However, at the sub‐national level, economic development has been quite disparate over the decades, with widening inequality between the richer western and southern states and other parts of the country. Moreover, the pandemic has revealed sharp inequalities in access to digital technology, especially in regards to school education, finance, and health. In this study, we examine the digital divide in India between rural and urban areas at the sub‐national level. Specifically, our study constructs Digital Infrastructure Index (DII) and Digital Skills Index (DSI) for a sample of 18 Indian states, separately for rural and urban populations within each state. We then measure the rural–urban digital divide for both indices separately. Further, we examine the relationship between the indices and socio‐economic indicators. Our findings suggest that the “Digital India” growth story is far from equitable and that the low‐income states and the rural population deserve greater attention.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70045   open full text
• Financial Contagion: Detecting Non‐Simultaneous Breaks in DCC‐GARCH Models.
  Farah Mugrabi.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2638-2663, April 2026. ", "\nABSTRACT\nThis paper proposes a three‐step segmentation procedure (TSSP) for detecting non‐simultaneous structural breaks in return volatility and correlations within DCC–GARCH models, using the supremum Lagrange multiplier (SupLM) test to isolate multiple parameter shifts. By detecting breaks in unconditional correlations, our method identifies potential shift‐contagion episodes. Monte Carlo simulations demonstrate the TSSP's robust performance in detecting and locating both successive and common breaks affecting different subsets of parameters. Empirical application to equity and government bond returns in advanced and emerging economies reveals volatility shifts linked to the Global Financial Crisis and shift‐contagion associated with the European Sovereign Debt Crisis, and the post‐Covid‐19 pandemic interest rate hikes alongside the war in Ukraine in 2022.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70064   open full text
• Analysis of Spatial Evolution of Inclusive Finance at the County Level: A Comparative Study of Traditional and Digital Finance.
  Qiaoling Fu, Ying Zhang, Zeyun Yang, Xiangyu Zhang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2621-2637, April 2026. ", "\nABSTRACT\nIn light of the increasing relevance of inclusive finance in reducing economic inequality, this study explores the developmental patterns of both traditional and digital inclusive finance at the county level within China. Utilising panel data from 1867 counties from 2014 to 2020, alongside the ‘Peking University Digital Financial Inclusion Index’, the paper examines the progression of these two forms of finance. By applying the Thiel index model and spatial econometric model, the research analyses the convergence and divergence between traditional and digital inclusive finance. The findings reveal: (1) Between 2014 and 2020, both traditional and digital inclusive finance experienced notable growth. The digital finance index surged by 147.64% at its median, surpassing the 71.21% growth of traditional finance. Nevertheless, a regional imbalance persists, with eastern areas showing more advancement than western ones. (2) Over 70% of regional disparities are attributed to factors within provinces. While digital inclusive finance saw fast convergence until 2016, its pace decelerated sharply thereafter. (3) Significant spatial clustering and correlation are observed in county‐level inclusive finance. In 2020, Moran's I index for digital finance was 0.215, indicating stronger spatial interdependence compared to traditional finance. Convergence is notably quicker in the western regions and poorer counties, with rates of 0.195 for traditional finance and 0.161 for digital finance in these areas. This study stands out by offering a detailed comparison of the spatial evolution and convergence of both types of inclusive finance, with particular attention to the influence of neighbouring regions. This approach sheds light on the spatial and temporal dynamics of financial inclusion in China, providing key insights for policymakers aiming to foster balanced regional growth and improve financial inclusion.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70063   open full text
• Financial Well‐Being: A Combined Analysis of Objective and Subjective Factors and Institutional Context.
  Helena Susana Amaral Geraldes, Ana Paula Matias Gama, Mário Augusto.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2593-2620, April 2026. ", "\nABSTRACT\nThis study analyses how financial literacy, financial inclusion, and financial resilience relate to financial well‐being, controlling for individual objective characteristics and contextual factors. Relying on the 2020 Organisation for Economic Co‐operation and Development International Survey of Adult Financial Literacy, it uses individual‐level data of 17,789 respondents from 16 countries and applies a multilevel model. Results indicate that financial literacy, financial inclusion, and financial resilience enhance financial well‐being. They also show that men, those who are younger, those with higher levels of education, and those who are employed have comparatively greater financial well‐being. Further, the study accounts for contextual‐level factors by adopting the sociodemographic (S), technological (T), economic (E), and political (P) spheres (STEP) approach, which shows that technological and political spheres are related to financial well‐being. These findings highlight the need for combined analyses of multiple factors to explain financial well‐being, which is deeply entrenched in local contexts with implications for policy issues related to the access to relevant resources that drive higher levels of financial well‐being.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70062   open full text
• The Impact Mechanism of CEO Social Capital on Corporate Governance.
  Yamin Xie, Ze Yuan.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2536-2567, April 2026. ", "\nABSTRACT\nCorporate governance in emerging markets often faces challenges due to inadequate institutional enforcement, making informal mechanisms essential supplements. This study examines how CEO social capital serves as an adaptive relational resource that influences corporate governance. Using a comprehensive panel dataset of Chinese A‐share listed firms from 2008 to 2022, the paper constructs multidimensional indices of CEO social capital and corporate governance. By employing a multi‐way fixed effects model along with instrumental variable and propensity score matching methods, the analysis addresses endogeneity concerns. Empirical findings indicate that CEO social capital significantly enhances corporate governance, with consistent effects across various model specifications. Mechanism analyses reveal that CEO social capital improves corporate governance by reducing agency costs, alleviating financing constraints and lowering the cost of equity. Further moderation analyses suggest that financial slack and risk‐taking amplify the governance‐enhancing effect of CEO social capital, while CEO turnover diminishes it. Heterogeneity tests show that the positive effect is more pronounced in non‐state‐owned and non‐high‐tech firms, while it diminishes in state‐owned and high‐tech enterprises. Theoretically, this study reconceptualises CEO social capital from an individual attribute to an embedded governance resource, advancing research on institutional evolution and cultural embeddedness. Practically, the findings underscore the importance of social capital in executive selection and incentive structures, inform investor assessments of governance quality and provide policy insights for integrating formal and informal mechanisms in institutional design to promote sustainable governance. Overall, this paper confirms the critical role of CEO social capital in corporate governance and outlines its contextual boundaries, offering new theoretical and practical pathways for understanding institutional embeddedness and sustainable development in emerging markets.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70060   open full text
• Intraday and Overnight Causality in Time and Frequency Domains: Evidence From Stock Returns and Volatility.
  Xiaojun Zhao, Mingxuan Lv, Xin Wen, Jingqi Xu.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2508-2535, April 2026. ", "\nABSTRACT\nThis paper investigates the causal links between the overnight returns (volatility) and the intraday returns (volatility) series of the S&P 500, DAX and SSE by using a new multiscale nonlinear Granger causality analysis framework. We discover a bidirectional and nonlinear Granger causality between the two series, indicating that robust predictive information can be derived from the other series. To explore the driving force behind nonlinear causality, the original returns (volatility) series are analysed through multiscale decomposition with ensemble empirical mode decomposition (EEMD), fine‐to‐coarse reconstruction and nonlinear Granger causality testing. By counterfactual inference in the time‐frequency domain, we find that statistical causality is driven by specific time‐frequency component(s) of the original series. We also find trading volume serves as an important transmission channel for nonlinear Granger causality. These observations suggest both short‐ and long‐term investment implications, providing meaningful insights for equity market investors in terms of yield and risk management.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70059   open full text
• Household Indebtedness and the Effectiveness of Fiscal Policy.
  Dooyeon Cho, Dong‐Eun Rhee.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2492-2507, April 2026. ", "\nABSTRACT\nThis study investigates whether the level of household debt significantly influences the effectiveness of fiscal policy. Our analysis, which uses heterogeneous panel data from 24 OECD economies, shows that the output effects of fiscal policy are ineffective in economies with high debt levels. However, its positive effects are more pronounced in economies with low debt levels. Departing from previous studies that focus on tax policy or crisis episodes, we provide macro‐level evidence that household debt systematically weakens fiscal policy transmission through the consumption channel. Our findings indicate that households with high debt levels may be more cautious about their spending behaviour, even in the presence of fiscal stimuli, due to concerns about their debt burden and future financial obligations. The results reveal that the effect of household debt on consumer behaviour is predominantly driven by precautionary saving motives rather than liquidity constraints, aligning more closely with the “wealthy hand‐to‐mouth” framework than traditional models. Overall, our study suggests that the level of household debt influences the effectiveness of fiscal policy, specifically, its ability to stimulate or affect consumer spending.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70058   open full text
• Do Lenders and Donors Value Transparency? Evidence From Financial Organisations in the Social Sector.
  Hubert Tchakoute Tchuigoua.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2431-2454, April 2026. ", "\nABSTRACT\nDrawing on the information asymmetry perspective, this study examines whether lenders and donors reward the transparency of financial organisations with a social mission such as microfinance institutions (MFIs). Using panel data econometrics on an unbalanced sample of 6338 MFI year observations for 1322 MFIs from 83 countries, our analysis reveals a positive correlation between transparency ratings, subsidies, and private debt. Greater transparency is associated with both market and non‐market financing, as MFIs with higher levels of transparency attract more capital from lenders at below‐market rates. Greater transparency helps MFIs attract capital at lower costs, especially in regulated environments and mature microfinance markets. Moreover, MFIs with high levels of transparency tend to have lower leverage in contexts where loan contracts are well enforced. This suggests that the relationship between transparency and leverage is context‐dependent.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70054   open full text
• Digital Payments and Overspending: A Study of Payment Biases and Spending Behaviour Using Mental Accounting Perspective.
  Mohay Ud Din Shah, Ikram Ullah Khan, Mehboob Ul Hassan, Qingyu Zhang, Safeer Ullah Khan.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2417-2430, April 2026. ", "\nABSTRACT\nWe survey 1208 payers through online questionnaires to examine the impact of mental accounting on consumers' vulnerability to payment biases in Pakistan. Using a mental accounting perspective, we evaluate the direct effects of current and future payment methods on consumer spending behaviour. Furthermore, it scrutinises the interaction role of Digital Financial Literacy (DFL) on the link between current payment methods and spending behaviour and government support between future payment methods and spending behaviour. Survey‐based questionnaires were used to gather data through purposive sampling. Smart‐PLS 4 results show that current and future payment methods significantly affect spending behaviour, with digital payments having a more pronounced impact than cash payments. Our findings also disclose that DFL profoundly moderates the relationship, while government support moderates only between future digital payments and spending behaviour. This study presents a comprehensive model that serves as a guideline for policymakers aiming to promote a cashless society and contributes to a better understanding of prudent spending behaviour.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70053   open full text
• Should Practitioners Apply a Truncated Process for Pricing and Hedging?
  Sharif Mozumder, Ghulam Sorwar, M. Kabir Hassan, M. Humayun Kabir, Farzana Afroz.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2396-2416, April 2026. ", "\nABSTRACT\nThis paper implements the deterministic volatility function (DVF) in the context of the truncated Black‐Scholes (TBS) model, which is identified as the truncated practitioners' Black‐Scholes (PTBS) model, and compares the pricing and hedging performance with the Black‐Scholes (BS), TBS, practitioners' BS (PBS) models. Using the S&P500 index call options data, we find that the PTBS model outperforms all in‐sample and out‐of‐sample regardless of moneyness. On weekly counts, the success rates of the PTBS model are significantly higher for both the in‐the‐money (ITM) and out‐of‐the‐money (OTM) options. The weekly approximation errors of delta and delta‐gamma approximations against full valuation for the PTBS model are lower than those of other models, and the PTBS model is more accurate and stable. The findings are robust to alternative sample variations.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70050   open full text
• Dynamic Effects of U.S. Monetary Policy, Unconventional Tools, and Trade Integration.
  Chokri Zehri, Abdullah Alsadan, Wissem Ajili Ben Youssef, Latifa Saleh Iben Ammar.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2365-2375, April 2026. ", "\nABSTRACT\nThe study examines the contagion and asymmetric impact of US monetary policy (USMP) on emerging market economies' (EMEs) domestic interest rates. We apply an Autoregressive Distributed Lag error correction model with structural breaks from 2020 to 2023. This model is applied to 26 EMEs. Our findings reveal a substantial influence of large‐scale asset purchases (a quantitative easing tool) and the 10‐year Treasury yield (a long‐term conventional tool) on EMEs' interest rates across both long‐ and short‐term perspectives. Furthermore, we identify an asymmetric effect, with the impact of USMP varying across EMEs, particularly pronounced in countries with extensive trade connections to the USA. Our results highlight the swift response of EMEs to USMP changes, especially in the short term. The study presents policy recommendations to help EMEs manage the effects of changes in USMP.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70048   open full text
• Impact of FinTech on Stock Price Liquidity.
  Irfan Ullah, Khalil Jebran, Mohib Ur Rahman.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2332-2364, April 2026. ", "\nABSTRACT\nWe examine whether and how financial technology (FinTech) influences stock price liquidity. FinTech was measured using the digital finance index from the Institute of Digital Finance of Peking University (PKU‐digital finance IIC), the Shanghai Finance Institute and Ant Financial Services Company. By using a sample of Chinese listed firms from 2011 to 2022, results from ordinary least squares regression indicate that FinTech is positively associated with stock price liquidity. The relationship between FinTech and stock price liquidity is more pronounced in the presence of higher media coverage, analysts' following, and in non‐state‐owned enterprises but weaker when economic policy uncertainty is higher. The findings remain consistent with alternative measures of FinTech, omitted variables problems and endogeneity issues. Results provide insights that the development of FinTech increases financial transparency, which promotes the information environment, thereby increasing stock liquidity. Findings contribute to the literature on the governance role of FinTech in influencing stock liquidity.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70047   open full text
• A Novel DTW‐TMFG Network Analysis of Emerging Blockchain Market in China.
  Hairong Lan, Liukai Wang, Yuncai Ning.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2313-2331, April 2026. ", "\nABSTRACT\nAlthough the blockchain industry has attracted significant supportive policies and venture capital in recent years, existing research primarily focuses on technological developments and application scenarios, largely overlooking the industrial structure which is crucial to the investment development of the industry. To gain a nuanced understanding of the industrial structure and facilitate its investment management, this study examines 84 listed blockchain enterprises in China, from 2017 to 2022, exploring their industrial structure from the financial information‐based network perspective. A novel industrial network, DTW‐TMFG, is proposed to describe both the macro industrial structure and the micro corporate characteristics. The empirical findings reveal heterogeneous influence and dependence across blockchain firms, as well as the prominent geographical unevenness, characterised by the dominance of the developed East and the weakened West, among which Beijing and Guangdong Province have basically formed blockchain industry clusters. Furthermore, the proposed network structure demonstrates robustness against random attacks. Some strategic insights from these macro and micro findings are provided to help stakeholders take informed actions to foster industrial investment and ensure the stable development of the blockchain industry.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70046   open full text
• Analyst Reports and Corporate Financial Distress Prediction.
  Jie Sun, Jie Li, Zichen Wang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2690-2712, April 2026. ", "\nABSTRACT\nSecurity analysts publish research reports on publicly listed companies periodically, providing crucial information for capital market participants. By extracting quantitative variables of stock recommendations and earnings forecasts and qualitative variables of readability and negative tone from analyst reports, this study examines the impact of analyst report information on corporate financial distress prediction (FDP). Using the asymmetric bagging method for handling imbalanced data and a light gradient boosting machine ensemble classifier, we construct several FDP models by stepwise incorporating the quantitative and qualitative variables from analyst reports, alongside benchmark variables such as financial ratios, corporate governance and analyst report attention, to investigate the incremental effect of analyst report information on corporate FDP. Empirical results based on a sample of Chinese listed firms from 2013 to 2021 show that the inclusion of analyst report variables significantly improves the performance of corporate FDP models. We further find that these variables exhibit heterogeneous abilities to identify the different types of financial distress arising from distinct reasons. Feature importance results indicate that qualitative attributes of analyst reports, particularly negative tone and readability, receive higher relative importance than traditional quantitative signals. Further interaction effect analysis indicates that high‐quality analyst reports exhibit relatively stronger predictive power for financial distress. Following the convergence of International Financial Reporting Standards, the predictive power of quantitative information in analyst reports weakened, while qualitative content demonstrated a stronger ability to predict financial distress.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70066   open full text
• Exploring the Information Acquisition Mechanism in a Bond Market: Evidence From Peer Effects in Bond Covenant Design in China.
  Chunqiang Zhang, Tingting Yu, Kam C. Chan, Hengguang Wu, Wenbing Wang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2293-2312, April 2026. ", "\nABSTRACT\nUsing a sample of corporate bonds issued by Chinese A‐share listed firms from 2007 to 2023, we study whether industry peer effects in bond covenant design exist and, if they do, the mechanisms through which they work as well as their economic consequences. We document that a firm's bond covenants index is positively affected by the average bond covenant index of its peers in the same industry. The findings remain intact after accounting for regional, underwriter and firm characteristics. Additional analysis suggests that the peer effects work through peer firms acquiring information about each other. Moreover, the peer effects are more salient in state‐owned firms or when the underwriters' reputation is lower. In contrast, when the firms' customer concentration is high, firms operate in a better information environment, or firms face less industry competition, industry peer effects in bond covenant design significantly diminish. Finally, we find that industry peer effects in corporate bond covenant design reduce the credit spread of a bond and improve the issuer's firm value. Overall, we not only broaden the scope of the research on industry peer effects but also advance the literature on the determinants of bond covenants.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70044   open full text
• The Black‐Box of ESG Scores From Rating Agencies: Do They Genuinely Reflect Sustainability Practices, or Are They Disproportionately Shaped by Financial Performance?
  Philipe Balan, Jorge Antunes, Peter Wanke, Yong Tan, Ali Meftah Gerged.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2275-2292, April 2026. ", "\nABSTRACT\nThis study examines the environmental, social and governance (ESG) scoring methodologies used by Bloomberg and S&P Global through the lens of Data Envelopment Analysis (DEA). It addresses a notable gap in the literature by identifying the underlying factors that shape ESG scores and providing practical insights for companies seeking to understand or improve their sustainability ratings. Our comparative analysis reveals clear differences between the two rating agencies. While Bloomberg's raw ESG scores are generally higher than those of S&P Global, the DEA‐normalised results tell a different story. Bloomberg applies stricter internal benchmarks, resulting in lower efficiency scores. In contrast, S&P's lower raw scores convert into higher DEA efficiencies, suggesting a more lenient, peer‐based benchmarking approach that tends to cluster firms near the top regardless of their absolute ESG performance. A particularly striking finding is that 99% of ESG scores from both agencies correlate with net income, highlighting a strong connection between financial performance and ESG ratings. Our regression analysis supports this, showing that firms with better financial outcomes tend to receive higher ESG scores. However, we also find that companies with growing cash reserves—often indicative of reinvestment and expansion—may be penalised, receiving lower ESG scores. This suggests a potential bias against firms prioritising long‐term growth over immediate returns. This study lays the groundwork for future research aimed at refining ESG datasets and expanding the scope of analysis.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70043   open full text
• New Evidence on Factors Affecting Labour Shares in OECD Countries.
  George Agiomirgianakis, Maria Grydaki, George Sfakianakis.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2249-2274, April 2026. ", "\nABSTRACT\nThis paper aims at contributing to the ongoing discussion about the causes of the declining trend of labour shares globally and the repercussions on income inequality by considering an inclusive set of labour share determinants consisting of factors reflecting monetary aspects, productivity, globalisation, competitiveness, human capital, and institutional dimensions. To examine the determinants of labour shares and the implications on income inequality, we focus on a panel of 30 OECD countries over 29 years, retrieving data from Penn World Table 10.01, OECD, and Worldwide Governance databases. We estimate a generalised method of moments (GMM) dynamic panel model to account for the potential endogeneity stemming from TFP, credit expansion, and FDI. Relevant policy implications from our results pertain mostly to social cohesion issues—all the more at the current juncture when non‐accommodative monetary policies are implemented at a large scale internationally.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70042   open full text
• Plaintiff Litigation, Institution, and Startup Financing.
  Yanan Feng, Bin Hao, Shumin Qiu, Haoxiang Zhang, Haoyu Xu.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2899-2911, April 2026. ", "\nABSTRACT\nPrior research has yielded mixed findings regarding the impact of patent litigation on firm financing, with evidence suggesting that patent litigation can influence VCs' perceptions of a start‐up's prospects in both positive and negative ways. Drawing on the institution‐based view, we argue that VCs' interpretation of plaintiff litigation largely rests on the institutional environment in which litigations are launched. Focusing on the context of transition economies, we propose that plaintiff litigation in such environments conveys information about start‐ups' competence in dealing with ambiguous institutions and in developing advanced technologies. We thus hypothesise that plaintiff litigation is positively related to the receipt of investment from high‐status VCs. Our empirical study shows that plaintiff litigation increases the receipt of investments from high‐status VCs by 1.86% in transition economies. Further analyses suggest that the relationship between plaintiff litigation and VC status is more significant in regions with lower anti‐corruption or a higher percentage of state‐owned enterprises (SOEs); the results also show that this relationship is significant in coastal regions and regions with great market heat, yet insignificant in non‐coastal regions and regions with low market heat.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70041   open full text
• Risk Aversion and Economic Policy Uncertainty Impacts on Investor Attention: Evidence From International Stock Markets Indices.
  Stephanos Papadamou, Athanasios P. Fassas, Nikoletta Poutachidou.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2878-2898, April 2026. ", "\nABSTRACT\nThis paper examines the relationship between economic policy uncertainty, risk aversion, and investors' attention for 15 equity indices across Asia, Europe, and North America. Our empirical results indicate that both risk aversion and economic uncertainty significantly increase the Google Search Volume across all equity indices. Additionally, we employed a Bayesian Panel VAR Model to explore causal relationships between risk aversion and investor attention. The impulse response analysis reveals that a positive shock in variance risk premium consistently triggers an increase in Google Search Volume across stock markets over the following month. These findings suggest that during periods marked by high economic policy uncertainty and elevated risk aversion, investors intensify their internet searches to acquire more specific information about stock indices.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70040   open full text
• Dynamic Connectedness Between a Corporate Bond Market With WTI, Geopolitical and Financial Volatility: Spillover From Post‐COVID‐19 and Russian‐Ukrainian Clash.
  Umer Shahzad, Kamel Si Mohammed, Mohammad Sharif Karimi.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2194-2207, April 2026. ", "\nABSTRACT\nThis study investigates the dynamic connectedness between the USA's corporate bond market (CB) and various factors, including WTI, financial uncertainty, and geopolitical risks. We employ two advanced techniques to analyse these relationships: TVP‐Vector autoregressive (TVP‐VAR) and VAR connectedness. Specifically, we focus on two significant events, the Russian‐Ukrainian conflict (RUC) and the COVID‐19 pandemic (C19P), to provide insights into the behaviour of the CB during these critical periods against the oil prices and uncertainties. The empirical analysis reveals compelling findings, particularly concerning the extreme events and the magnitude of effects observed. We find a significant increase in interconnections over the time impacts during these two events, lending support to using an asymmetric and heterogeneous product over the time‐varying. Furthermore, we observe that the influence of the GPR and the VIX factors is more robust when uncertainty rises rather than decreases, indicating temporary events. Policymakers and macroprudential authorities can benefit from these findings, as they emphasise the need to adapt to a changing monetary policy and reduce reliance on energy volatility to make informed decisions in a rapidly evolving financial landscape.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70037   open full text
• Cryptocurrency Momentum: Is It an Illusion?
  Klaus Grobys, Syed Jawad Hussain Shahzad.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2180-2193, April 2026. ", "\nABSTRACT\nRecent literature explores the profitability of various cryptocurrency momentum trading strategies and proposes cryptocurrency momentum as a pricing factor (Liu et al.). How risky is this factor‐based investment strategy for crypto‐investments? We answer this question by examining the distributional characteristics (hence, riskiness) of six cryptocurrency momentum trading strategies. The empirical evidence suggests that the realised variances of cryptocurrency momentum strategies are governed by power laws. The statistical tests derived from block bootstraps indicate that the population mean and variance of the momentum factor realised variances are statistically not defined. Contrary to the belief that cryptocurrency momentum trading strategies produce generous payoffs, our results imply that, in real life, we might not be able to realise these risk premiums. We conclude that the performance metrics evaluating the profitability of cryptocurrency momentum strategies, using variance as an input, are not informative. We also find cross‐sectional dependence amongst the tail risk of momentum strategies based on different formation periods.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70036   open full text
• Exploring the Connectedness Between Green Bonds and Financial Markets and Its Drivers During Recent Crises: New Evidence From a TVP‐VAR Extended Joint Connectedness Approach and Wavelet Coherence Analysis.
  Wafa Abdelmalek, Molka Khemakhem.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2160-2179, April 2026. ", "\nABSTRACT\nThis paper applies the TVP‐VAR extended joint connectedness model to investigate the time‐varying connectedness between green bonds, conventional bonds, stocks, clean energy, and commodities from January 2018 to April 2024, which includes the COVID‐19 pandemic, the Russia–Ukraine conflict, and the Israel–Palestine war. Empirical results show that the dynamic connectedness between green bonds and financial markets is time‐varying and intensifies significantly during the pandemic. Moreover, the volatility stock index VIX emerges as the primary driver of this connectedness. Additionally, green bonds are resilient to market turmoil and can serve as a hedging tool for many markets, especially agricultural and energy commodities.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70035   open full text
• Reindustrialization Through AI and Automation? Productivity and Sectoral Employment in Advanced Economies.
  Pedro Bação, Joshua Duarte, Ana Figueiredo, Marta Simões.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2118-2143, April 2026. ", "\nABSTRACT\nThis article examines the possible impact of AI, via associated productivity improvements, on sectoral employment dynamics across 36 sectors within 30 advanced economies over the period 1996–2021. Using a robust empirical framework, we employ both fixed effects and generalised method of moments estimators to account for employment persistence and endogeneity concerns. Our results suggest a divergent impact of technological progress on employment between secondary and tertiary sectors. Specifically, we find that productivity gains in secondary sectors, such as manufacturing, are associated with increased employment, whereas tertiary sectors exhibit employment contractions. These findings indicate that widespread adoption of AI and automation could contribute to reindustrialisation in advanced economies, as labour shifts from tertiary to secondary sectors. Policy implications include the need for proactive labour market policies focused on reskilling, workforce transitions, and adaptive safety nets to mitigate potential disruptions.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70033   open full text
• The Impact of Digital Transformation on Corporate Cost Stickiness: Evidence From China's Agriculture‐Related Listed Companies.
  Wenbing Luo, Yuxin Yu, Mingjun Deng.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2063-2081, April 2026. ", "\nABSTRACT\nThe transition to digital operations represents a critical driver in advancing the digital economy's quality growth. Within this context, the agricultural sector—encompassing farming, forestry, livestock, and fisheries—holds particular significance as a foundational pillar of national economic development, making its digital transformation especially consequential. This study examines the nexus between digital adoption and cost stickiness using a sample of Chinese agriculture‐related listed companies from 2007 to 2021. Empirical findings reveal that digital initiatives markedly mitigate cost stickiness. Further heterogeneity analysis demonstrates three key insights: the stickiness‐reducing effect is more pronounced in NSOEs compared to SOEs; companies with relatively dispersed equity and low institutional shareholding ratios exhibit stronger responsiveness to digital‐driven cost optimisation; stable operating environments amplify digitalisation's efficacy in curbing cost stickiness. The study offers actionable insights for policymakers and agricultural companies navigating digital modernisation pathways.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70030   open full text
• Foreign Residency Rights and Corporate Bond Yield Spreads.
  Zhong‐qin Su, Yiting Zhu, Hongmin Jin, Meiting Wu.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2027-2062, April 2026. ", "\nABSTRACT\nWe investigate the effect of ultimate controllers' foreign residency rights on corporate bond yield spreads. Using data on Chinese listed firms from 2010 to 2021, this study reveals a positive association between foreign residency rights and corporate bond yield spreads. The positive relationship is robust across different measures of foreign residency rights, estimation methods and after considering potential endogeneity issues. We propose two potential channels for the positive effect of foreign residency rights on corporate bond yield spreads: increasing firms' earnings management and taking more risk. Further, stronger external governance and internal governance alleviate the positive effects of foreign residency rights on corporate bond yield spreads. Additional analyses indicate that ultimate controllers with overseas residency rights are associated with more bond covenants, higher bank loan spreads and shorter loan maturity. Overall, our results indicate that corporate bondholders are fully aware of the expropriation risk created by controllers' foreign residency rights. Thus, investors and regulators in emerging markets should pay attention to controllers' foreign residency rights.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70029   open full text
• Corporate Climate Risk Disclosure and Institutional Investor Holdings.
  Feng Zhao, Siting Geng, He Xiao.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1754-1779, April 2026. ", "\nABSTRACT\nThis study investigates the impact of corporate climate risk disclosure on institutional investor shareholdings. The empirical results show that the disclosure of climate risk increases institutional investor ownership. The economic mechanism behind this finding is that climate risk disclosure reduces stock price crash risk, improves stock performance and promotes corporate reputation. Heterogeneous tests indicate that the positive relationship between the disclosure of climate risk exposure and institutional investor ownership is more pronounced for firms with a higher analyst following, non‐state‐owned firms, and after the 2015 New Environmental Protection Law. Further analyses show that institutional investors specifically focus on firms' disclosures on climate‐related technology opportunities and strategic transformation information. This study is among the first to provide market‐wide empirical evidence in the emerging market on how institutional investor ownership is affected by corporate climate risk disclosure, which further contributes to the mixed findings of how the financial market perceives climate risk information.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70014   open full text
• Effects of Financial Agglomeration on Green Technology Innovation: Evidence From the Yangtze River Delta in China.
  Yunfeng Yan, Aodong Jiao, Yun Zhang, Sajid Anwar.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2950-2963, April 2026. ", "\nABSTRACT\nThis study examines the effect of financial agglomeration on green technology innovation and its spatial spillovers across 27 cities in China's Yangtze River Delta from 2009 to 2023. Financial agglomeration significantly promotes green technology innovation, with heterogeneous effects shaped by local conditions. This positive impact is amplified in cities facing tighter financing constraints and those with stronger human capital infrastructure. In contrast, more stringent environmental regulations weaken the marginal effect of financial agglomeration on innovation. We also found positive spatial spillovers: financial agglomeration in one city promotes green innovation in neighbouring areas. The results highlight the importance of aligning financial development with local institutional and structural conditions. Policymakers should enhance the allocative efficiency of financial clusters, invest in human capital, and improve cross‐city coordination to support green innovation diffusion.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70055   open full text
• Golden Returns From Green Investments: The Impact of Corporate Environmental Behaviour on Product Market Performance.
  Changchun Pan, Yuhang Song, Yuzhe Huang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2933-2949, April 2026. ", "\nABSTRACT\nIn the context of advancing the global economic green transition, advocating for and deepening green investment is a topic of common concern for all. This study utilises panel data from heavily polluting listed companies in China's A‐share market from 2003 to 2022 to examine the impact, mechanisms, and differences of corporate green investment on product market performance. We found that compared to competitors, the more green investments a company makes, the better its product market performance. Specifically, for every standard deviation increase in corporate green investment, product market performance improves by approximately 2%. The primary mechanisms driving this result are reduced operating costs and enhanced social reputation brought about by green investments, rather than improvements in technological innovation. This effect is more pronounced in companies with a higher proportion of executives with strong environmental backgrounds, those receiving more government financial subsidies, and those facing stronger regional environmental regulations. Furthermore, the improvement in product market performance due to green investment also significantly boosts operational performance and market value. Our research uncovers the golden returns of green investment, which is of great significance for expanding green investment scale and achieving sustainable economic development.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70052   open full text
• Material ESG Performance and Bid Premium in Merger and Acquisition Deals.
  Ndubuisi Ezenwa, Ibrahim Ayoade Adekunle, Robin Maialeh.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2376-2395, April 2026. ", "\nABSTRACT\nThis study examines the firm‐level and country‐level environmental, social, and governance (ESG) performance on bid premiums in cross‐border mergers and acquisitions (M&A) transactions. We document considerable variations in bid premiums. Higher carbon emissions are associated with higher bid premiums, suggesting that acquirers may perceive high‐emission firms as opportunities for restructuring or seek to exploit regulatory inefficiencies. In contrast, fossil fuel consumption (FFC) is linked to lower bid premiums, reflecting investor concerns over potential carbon transition risks. Strong institutional frameworks, particularly in regulatory quality and government effectiveness, are significant drivers of higher bid premiums, highlighting the importance of stable governance in M&A valuations. While cross‐border transactions generally reduce bid premiums due to transaction costs and information asymmetry, firms involved in cross‐border deals with block‐holder ownership tend to receive higher premiums, emphasising the strategic value of foreign firms with stable block‐holder ownership. ESG performance consistently enhances bid premiums, reinforcing the competitive advantage sustainability can provide in corporate transactions. Our findings contribute to the literature by offering a more comprehensive understanding of how institutional and macroeconomic factors, alongside firm‐level ESG performance, shape M&A pricing decisions, particularly in a globalised and volatile market context.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70049   open full text
• Time‐Varying Efficiency and Predictability in Cryptocurrency Markets: Forward‐Looking Dynamics.
  Darko B. Vukovic, M. Kabir Hassan, Vyacheslav Zinovev, Elena Moiseevna Rogova, Mohammed Shakib.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2229-2248, April 2026. ", "\nABSTRACT\nThis study investigates the time‐varying efficiency of major cryptocurrencies—Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and XRP—within the framework of the adaptive market hypothesis (AMH). We introduce a forward‐looking method by integrating predicted data into the Dominguez–Lobato (DL) and generalised spectral (GS) testing frameworks as part of Martingale Difference Theory (MDT). Our strategy allows us to forecast potential future inefficiencies in the market, advancing the traditional retrospective analyses (based on historical perspective) prevalent in the literature. We employ and test forecasted data to identify potential future shifts in market efficiency, as an extension of the Martingale difference hypothesis (MDH). The results indicate that cryptocurrency markets do not maintain a static level of efficiency but adapt over time, with varying degrees of predictability and inefficiency. The random forest (RF) model demonstrates the ability to forecast breaks in market efficiency.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70039   open full text
• Climate Transition Risk, ESG Rating Divergence and Portfolio Performance: Evidence From Composite Scores and Climate‐Adjusted Factor Models.
  Ahmed Bouteska, Murad Harasheh, Giovanni Esposito.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2208-2228, April 2026. ", "\nABSTRACT\nThis study investigates how ESG rating divergences and climate transition risks jointly influence portfolio performance. Using a newly constructed composite Environmental (E) score derived from principal component analysis (PCA) across three leading ESG providers (Eikon, RobecoSAM, Sustainalytics), we build industry‐adjusted portfolios for 389 US firms across 10 sectors, including agriculture and industrial sectors. We augment traditional Fama–French factor models with forward‐looking climate transition risk proxies, including carbon intensity, stranded asset exposure, sectoral vulnerability (Battiston index) and transition Value‐at‐Risk (tVaR) under NGFS climate scenarios. Our findings reveal that ESG score disagreements materially affect portfolio construction and return dynamics. After controlling for rating inconsistencies, high‐ESG portfolios consistently generate negative alphas relative to low‐ESG portfolios, with the economic magnitude of underperformance intensifying as the investment horizon extends from short‐ to long‐term. This underperformance persists even after adjusting for both traditional risk factors and transition‐specific risk exposures. The results highlight the importance of harmonising ESG ratings and integrating climate risk measures when evaluating the financial materiality of sustainability investments. The study offers practical implications for institutional investors navigating ESG integration under rising regulatory and climate policy pressures.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70038   open full text
• Bitcoin Prices: Configurational Effects of Technological Drivers, Macroeconomic Fundamentals and Economic Agents' Expectation.
  Jeevananthan Manickavasagam, Kanagaraj Ayyalusamy, Firoz Bhaiyat, Shilpi Jha, Tinu Jain, Surendra Poddar.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2098-2117, April 2026. ", "\nABSTRACT\nThis study aims at bridging critical gaps in the existing cryptocurrency research by exploring combinations of technological, macroeconomic and behavioural factors, namely, economic agents' expectations and the size of influence that each of them has on the Bitcoin price movements. In contrast to the existing studies that focused on individual determinants and estimated aggregate effects thereof, in this study, fuzzy‐set qualitative comparative analysis (fsQCA) is applied to determine configurations of drivers to determine the Bitcoin price and used necessary condition analysis (NCA) to quantify the magnitude of the effects using the monthly data between 2011 and 2022. Findings show that economic agents' expectations such as OECD's Business Confidence Index, Consumer Confidence Index and Composite Leading Indicator emerge as influential variables of Bitcoin, surpassing traditional drivers like Gold and Financial Stress Index. Among these, Business Confidence Index and Composite Leading Indicator exhibit a very large effect on Bitcoin prices, and from the technology variable group, Average Block Size exhibits a very large effect on Bitcoin prices. fsQCA indicates that nine distinct configurations contribute to high Bitcoin prices and eight configurations lead to low Bitcoin prices, thus depicting equifinality in Bitcoin price determination. These insights can provide policymakers and investors with a better understanding of the Bitcoin price dynamic by finding out necessary variables and equifinal pathways towards either high or low prices, thus promoting better risk management activities, as well as regulatory approaches to this highly dynamic asset class.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70032   open full text
• ESG Performance, Family Ownership, and Corporate Risk‐Taking: The Moderating Role of the CSR Committee.
  Zahra Adardour, Slimane Ed‐Dafali, Hicham Sbai, Khaled Hussainey.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1979-1994, April 2026. ", "\nABSTRACT\nIn today's dynamic business landscape, the importance of ESG factors in shaping risk management strategies has gained increasing attention. Within this context, corporate governance mechanisms play a key role in enhancing the effectiveness of ESG efforts and linking them to improved risk management. This research explores the potential relationship between ESG performance and firm risk while examining the moderating effect of family ownership and CSR committees. Based on 671 firm‐year observations from 61 French listed companies in the SBF120 index over the period 2012–2022, we performed EGLS regression analysis and robustness models to reinforce the validity and reliability of our results. Our findings indicate that ESG performance has a negative and significant impact on firm risks, specifically liquidity and default risks, as measured by cash and leverage. Firms with higher ESG scores tend to exhibit lower default and liquidity risks, suggesting that strong ESG practices contribute to better financial stability. Particularly, the effect of ESG performance in reducing firm risks is stronger in non‐family firms compared to family firms. In addition, the CSR committee has a significant and positive moderating role in reinforcing the impact of ESG performance in mitigating firm risks. These results are important for both businesses and investors, as ESG performance can lead to more stable cash flows and lower corporate debt, thereby improving investors' confidence and companies' financial resilience.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70026   open full text
• Excess Remuneration, Governance, and Risk‐Taking in Islamic Banks.
  Tastaftiyan Risfandy, M. Kabir Hassan.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1899-1916, April 2026. ", "\nABSTRACT\nWe comprehensively investigate the impact of remuneration on the governance of Islamic banks pertaining to the board of directors (BOD), Shariah supervisory board (SSB), executives, and the chief executive officer (CEO). The research in this area is still muted, especially using samples of Islamic banks and involving all board member types. Using the hand‐collected data of dollar remuneration on those board members, we estimate their ‘normal’ remuneration, and we find that all board types, including the CEO, are over‐remunerated from USD 20,790–305,920. However, in further investigation, we find that the excess remuneration in the directors and SSB favours the Islamic banks, particularly to lessen the risk‐taking incentive. Our result highlights the importance of Islamic banks' two‐layer governance system, which has a role in preventing excessive risk‐taking behaviour. Supporting the ‘efficiency wage hypothesis’, the good remuneration design for the directors and Shariah scholars will attenuate the agency problems in the context of Islamic banks. Regarding executives and the CEO, we do not find a significant impact of the excess remuneration. This is likely because the Islamic banking industry faces a number of restrictions due to its presence as a heavily regulated financial institution and the voluminous Shariah requirements that must be fulfilled in its operations.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70022   open full text
• Firm Digitalisation Empowers ESG Performance‐Evidence From China.
  Lin Wang, Lingyao Kong, Huixiang Zeng.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1860-1879, April 2026. ", "\nABSTRACT\nWith the deepening of the concept of green development, it is important to explore how firm digitalisation improves the environmental, social responsibility, and corporate governance (ESG) performance of firms to achieve sustainable development. This study examines the impact of firm digitalisation on ESG performance and its mechanisms using sample data of Chinese A‐share listed firms from 2011 to 2023. The results show that firm digitalisation can significantly improve ESG performance, and both management ability as an internal governance mechanism and institutional investors as an external governance mechanism can reinforce this improvement. A mechanism test reveals that improvements in the quality of internal control, total factor productivity, and information transparency are potential channels. Moreover, the effect of digitalisation on ESG performance is more significant for firms with a low supplier concentration and high government subsidies. The effect of digitalisation on ESG performance improvement is more significant for firms located in regions with a high environmental regulation intensity and a good level of digital economy development. In addition, compared to the corporate governance (G) dimension, digitalisation is more effective in improving environmental (E) and social responsibility (S) performance. This study, based on stakeholder theory and upper echelons theory, reveals the mechanisms and boundaries through which firm digitalisation enhances ESG performance, providing a reference for leveraging digital technologies to empower ESG governance and promote high‐quality corporate development.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70019   open full text
• The Return Power of Analyst Reports: Definition, Factor and Strategy.
  Yongli Li, Baoqiang Zhan, Tianchen Wang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1833-1859, April 2026. ", "\nABSTRACT\nAnalyst reports are crucial in financial markets, providing information that guides investment decisions. However, existing research on their profitability and impact, especially over different time horizons, remains inconclusive. This study introduces a novel metric, ‘return power’, to assess the performance of analyst reports in both short‐ and long‐term contexts. We find that analyst reports serve as the short‐term ‘news’ and the long‐term ‘information’, each influencing stock returns differently. Using a dataset of 249,576 analyst reports from the Chinese stock market (2007–2022), we empirically examine key factors—such as broker's status, broker's prior performance, and investors' or analysts' attention—that affect return power at different time horizons. Based on these findings, we design investment strategies utilising both regression models and eight other well‐known machine learning techniques. Our results show that the regression‐based strategy outperforms other machine learning models and a market index, consistently providing superior risk‐adjusted returns across various transaction costs. This study confirms the profitability of analyst reports and offers a practical framework for report‐driven investment strategies.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70018   open full text
• Caught in a Debt Trap: Financial Distress and Corporate Production Decisions.
  Yanan Li, Wenjun Wang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1805-1821, April 2026. ", "\nABSTRACT\nThe research investigates the causal effects of financial distress on corporate production within the oil industry framework. The identification strategy capitalises on the exogenous shock from the 2014 oil price collapse and pre‐existing firm‐level variations in debt maturity structures. Employing a difference‐in‐difference methodology, the study reveals that firms facing greater rollover risk in 2014 significantly expanded production in the post‐crisis period. This effect is particularly pronounced among firms with lower cash reserves, higher capital intensity, and increased levels of secured debt. The findings offer policy insights into the dramatic declines in commodity prices witnessed during the oil crisis and its subsequent impact.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70016   open full text
• Herding and Anti‐Herding Behaviour in the UK, French and German Stock Markets Before and During the Covid Pandemic.
  Dimitrios Asteriou, Paraskevi Katsiampa, Keith Pilbeam, Alexander Tziamalis.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1780-1804, April 2026. ", "\nABSTRACT\nThis paper studies herding and anti‐herding behaviour in three European stock markets before and during the Covid‐19 pandemic by employing both static and dynamic analysis. We examine four different questions related to herding behaviour: (i) Did herding behaviour increase during the pandemic? (ii) Does herding behaviour respond differently in up and down market conditions? (iii) Is herding behaviour related to the volume of trading activity? and (iv) Does herding behaviour increase in periods of high market volatility? We find that, contrary to much of the existing literature, there is very little evidence of herding activity, and if anything, we find the evidence points to anti‐herding behaviour during the Covid‐19 pandemic.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70015   open full text
• US Economic Policy Uncertainty and the Exchange Market Pressure of Large Emerging‐Market Economies: Evidence From GETS‐VAR and Bayesian Quantile Regression Methods.
  Hasan Güngör, Ifedolapo Olabisi Olanipekun, Godwin Olasehinde‐Williams, Ojonugwa Usman.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2473-2491, April 2026. ", "\nABSTRACT\nIntegrating emerging market economies into global financial and economic relations can expose them to external shocks. This paper explores the connection between the US economic policy uncertainty (USEPU) and exchange market pressure (EMP) in nine major emerging markets from 2000 to 2019. To achieve this objective, we use the general‐to‐specific vector autoregressive (GETS‐VAR) and Bayesian quantile regression methods. The empirical results reveal that USEPU predicts changes in the EMP of large emerging market economies, except for Turkey. However, no feedback causal effect from EMP to USEPU was observed. Also, the long‐run steady‐state effects and cumulative impulse responses show that an increase in USEPU intensifies the EMP in Brazil, India and Mexico. Furthermore, our findings reveal that the positive impact of USEPU is heterogeneous leading to asymmetric patterns across the distribution of EMP.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70057   open full text
• The Relationship Between Energy Metal Price Volatility and Clean Energy Assets.
  Philip Igeland, Mona El Yadini, Gazi Salah Uddin, Muhammad Yahya, Ali Ahmed, Axel Hedström.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1735-1753, April 2026. ", "\nABSTRACT\nCurrently, global economies are grappling with the challenges posed by aggressive climate actions aimed at reducing greenhouse gas emissions. These efforts are further complicated by high fuel prices, economic instability, inflationary pressures, and concerns about energy security, all of which are straining the global energy sectors. A proposed solution is a shift towards clean energy alternatives, but the technologies coupled with clean energy heavily rely on energy metals. This has led to increasing demand for these resources. Thus, the relationship between renewable energy metals and the price and volatility of clean energy assets needs to be explored. We analyse the volatility characteristics of the various clean energy sub‐sectors, regional indices, and oil prices and assess their dependence on renewable energy metals. Empirical results indicate that volatility in energy metal prices significantly influences the volatility of all clean energy indices, with the US lithium price having the most pronounced impact. These findings highlight the critical role of energy metal prices as risk determinants in the clean energy sectors. The success of the transition to clean energy may depend on the stability of energy metal markets. This underscores the need for stakeholders to ensure the continued availability and demand stability of these vital resources in our pursuit of clean energy.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70013   open full text
• Using Deep Learning Conditional Value‐at‐Risk Based Utility Function in Cryptocurrency Portfolio Optimisation.
  Xinran Huang, Linzhi Tan, Haozhe Su, Jeremy Eng‐Tuck Cheah.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2845-2862, April 2026. ", "\nABSTRACT\nOne of the critical risks associated with cryptocurrency assets is the so‐called downside risk, or tail risk. Conditional Value‐at‐Risk (CVaR) is a measure of tail risks that is not normally considered in the construction of a cryptocurrency portfolio. In this paper, we propose a new approach to portfolio construction based on a deep learning CVaR utility function. This approach is designed to address the issue of tail risk. We evaluate the performance of this approach in comparison to other portfolio construction techniques, including the naïve, minimum variance and mean‐variance portfolios. Our findings indicate that the proposed approach outperforms traditional optimisation models.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70012   open full text
• Economic Policy Uncertainty, Investor Sentiment and Industry Stock Market Volatility in China: A Quantile Regression Approach.
  Peng Guo, Luzhu Tian, Jing Shi.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1682-1710, April 2026. ", "\nABSTRACT\nFrom an industry perspective, we apply the quantile regression to investigate the impact of investor sentiment (IS) and China's/the US economic policy uncertainty (EPU) on Chinese stock market volatility. Considering the structural break of the stock market, we found that China's and the US EPU/IS and their interaction effects had a significant impact on China's stock market volatility at the market level. Moreover, there was an asymmetric dependence between China's and the US EPU/IS and stock market volatility, and the dependence structure was time‐varying. At the industry level, the impact of the EPU on industry stock market volatility was highly heterogeneous, and its significance mostly occurred in the upper and lower tails. China's and the US EPU/IS can exacerbate industry stock market volatility in bullish and bearish markets. In addition, China's and the US EPU/IS and their interaction effects are heterogeneous and asymmetric, and the effects change with the break point. Finally, the US EPU has a great impact on the industry stock market. However, its scope and degree of influence are gradually decreasing. Our findings shed new light on the relationship of the EPU, IS and stock market volatility in China.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70010   open full text
• Reporting ESG Initiatives and Gender Diversity in Germany: Implications for Stock Liquidity.
  Ahmed Hassanein, Nader Elsayed.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2824-2844, April 2026. ", "\nABSTRACT\nAdopting multiple theoretical perspectives, this study separately and jointly examines the impacts of reporting Environmental, Social, and Governance (ESG) initiatives and gender diversity in boardrooms on corporate stock liquidity. Using a sample of non‐financial firms listed on the Frankfurt CDAX from 2010 to 2023, the study investigates whether ESG reporting enhances stock liquidity and how gender diversity moderates this relationship. To assess ESG reporting, we utilise Refinitiv Workspace ESG scores, while gender diversity and stock liquidity are measured through various indices. The results demonstrate that firms with higher ESG reporting experience higher stock liquidity, with governance disclosure having the most substantial impact. Likewise, firms with greater gender‐diverse boards exhibit higher stock liquidity. Besides, gender diversity in the boardroom positively moderates the effect of ESG reporting and its components on stock liquidity, implying that as gender diversity increases within a company, the influence of ESG reporting on enhancing stock liquidity becomes more pronounced. The results signify the roles of ESG reporting gender diversity in enhancing stock liquidity and investor confidence, and provide theoretical and practical implications for firms, investors, and policymakers to promote sustainable corporate practices and enhance market liquidity.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70009   open full text
• Hedging With Gold, Correlation Cycles and Risk Aversion: Evidence From Global Economic Sectors.
  Geoffrey M. Ngene, Ann Nduati Mungai, M. Kabir Hassan.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1606-1626, April 2026. ", "\nABSTRACT\nWe investigate (i) the variation of gold's hedging, safe haven and diversification properties across dynamic correlation cycles and 11 global sector equities, and (ii) the joint impact of risk aversion and global crisis events on asymmetric dynamic conditional correlation (ADCC) between gold and each sector. Contrary to evidence based on linear models, we find that (i) gold is consistently a strong hedge in the low ADCC cycle and largely an effective diversifier at moderate ADCC cycles. (ii) Gold is predominantly a strong safe haven during low and moderate ADCC quantiles. (iii) Risk aversion is inversely related to sector‐gold ADCC, especially in the lower ADCC quantiles. Moreover, crisis events such as COVID‐19, the global financial crisis (GFC) and the European sovereign debt crisis (ESDC) amplify the impact of risk aversion on ADCC. (iv) Investors derive a marginal utility loss for hedging defensive sectors such as healthcare, consumer staples and utilities, requiring relatively lower gold allocation than cyclical sectors. Our results have important implications for dynamic portfolio allocation and risk management decisions.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70006   open full text
• ESG and Firm Value: The Moderating Effects of Corporate Transparency and Institutional Environment.
  Qing Li, Chengcheng Liu, Yu‐En Lin.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1582-1605, April 2026. ", "\nABSTRACT\nUsing a panel sample of firms across 53 countries and regions, we empirically explore the association between ESG performance and firm value and how it varies in different information and institutional environments. We find that ESG performance improves firm value across countries and regions. Moreover, both corporate transparency and developed markets positively moderate the relationship between ESG performance and firm value. Notably, we provide evidence that the positive moderating effect of transparency only exists in the low divergence of environmental, social, and governance performance and high accounting conservatism. We also find that corporate transparency and agency costs are mediating mechanisms through which ESG signals improve firm value. Based on signalling theory, our analysis suggests that ESG performance is an effective signal for investors, and corporate transparency and developed markets reduce the signalling costs and processing costs of ESG signals.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70005   open full text
• Evaluating Innovation Output of Companies Backed by Corporate, Independent and Syndicated Venture Capital.
  Fatima Shuwaikh, Sabrina Khemiri, Souad Brinette, Joakim Zebulon Börrén Dias.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1530-1556, April 2026. ", "\nABSTRACT\nThis paper examines how Corporate Venture Capital (CVC), Independent Venture Capital (IVC) and Venture Capital Syndicate (VCS) promote innovation among startups. Drawing on a dataset of 4406 venture‐backed deals in North America, spanning 1998–2019, it explores how the configurations of investors and their contextual factors influence innovation output. The findings show that syndicated and CVC‐backed ventures outperform IVC‐backed ventures. Syndicates with a larger membership are positively associated with innovation outcomes based on resource pooling and knowledge sharing; contextual factors, such as location and technology fit, environmental munificence and absorptive capacity have a positive moderating effect on the relationship between VC type and innovation outcomes. This research adds to both academic knowledge and practical implications, offering entrepreneurs, investors and policymakers' actionable insights about how to facilitate innovation, improve venture funding and enhance innovation management to ultimately strengthen the innovation ecosystem.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70003   open full text
• Information Dissemination or Collusion: Embedded Underwriters and Bond Issue Pricing.
  Yun‐Lang Wu, Zhu Ding, Jun Huang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2780-2803, April 2026. ", "\nABSTRACT\nWe explore the role of underwriters embedded in relationship networks in nascent capital markets. Using a sample of bonds issued by Chinese listed companies from 2016 to 2022, we find that lead underwriters with business and geographic ties to the issuers can reduce initial bond yield spreads. Greater underwriter embedded intensity in issuers' relationship networks is associated with lower bond yield spreads. This association is attributable to the information dissemination effect of embedded underwriters, and potential collusive behaviour has been suppressed by strengthened regulation. Further analyses reveal that the source of this information advantage is that the embedded underwriters obtain more proprietary information from the issuers, and are better able to interpret the public information. In the long term, underwriter embeddedness also reduces issuers' ex post default probability. Collectively, our study explains the information advantages of embedded intermediaries and demonstrates the governance function of financial regulation in capital markets with imperfect institutions.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70096   open full text
• Does Geopolitical Risk Matter for the Success of Initial Coin Offerings?
  Aristogenis Lazos, Laurent Pataillot.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2754-2779, April 2026. ", "\nABSTRACT\nThis study investigates the effect of country‐specific geopolitical risk (GPR) on initial coin offering (ICO) success. The findings of this study reveal a positive relation. A plausible explanation may lie in prospect theory. When losses are more likely to take place, investors are risk‐seeking and may overweight the low probability of hitting a big win in their pursuit of high returns. As a result, they may invest in high GPR ICOs that, in turn, may have a positive effect on their success. High GPR ICOs that employ the know your customer scheme, however, exhibit a lower likelihood of success.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70070   open full text
• Fintech and Dividend Payouts: Evidence From China.
  Kun Wang, Bozhou Li, Lu Qiao, Zhiyi Xia.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2964-2979, April 2026. ", "\nABSTRACT\nThe rapid development of financial technologies (fintech) has significantly transformed the Chinese financial industry, which practitioners and academics well recognise. This study investigates how innovative technologies influence firm dividend policies. Utilising data from Chinese‐listed firms spanning 2011–2022, we find a positive relationship between fintech development and firm cash‐dividend payments. The results remain robust across various tests, including difference‐in‐differences, regional exclusions, and alternative measures. Mechanism analysis reveals that fintech developments alleviate firms' financial constraints, thereby enhancing their capacity to distribute cash dividends. Our further analysis does not support the monitoring channel through which digital finance influences dividend policies. We find no significant impact of fintech on stock dividends and share repurchases, suggesting that fintech has less influence on flexible payout methods. Our study provides novel insights into understanding payout policies in the context of ongoing technological advancements in the financial sector.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70068   open full text
• Expectations and Speculation in the US Natural Gas Market.
  Christina Anderl, Guglielmo Maria Caporale.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2713-2728, April 2026. ", "\nABSTRACT\nThis paper aims to assess the role of expectations as a determinant of the real price of natural gas in the US. Three specifications of a structural VAR (SVAR) model are estimated to identify an expectations‐driven speculative demand shock. The first includes natural gas inventories, consistently with the theory of storage; the second the risk‐adjusted futures spread; the third functional shocks defined as shifts in the entire risk‐adjusted natural gas futures term structure. The results of the third model suggest that speculative demand shocks have sizeable effects on the real price of natural gas. A shock decomposition exercise shows that increases in the price of natural gas are driven primarily by changes in the curvature of its futures term structure, which indicates that medium‐term expectations or large differences between short‐ and long‐term expectations are the main determinant of increases in the spot price of natural gas. It appears that speculative demand shocks are most relevant for the price of natural gas in the model with functional shocks, where they account for around 40% of its variation.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70067   open full text
• The Effect of Geopolitical Risk on the Volatility of Connectedness Between Carbon Neutrality and Energy Markets: Evidence From China.
  Yingyue Sun, Yu Wei, Lin Ren.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2568-2592, April 2026. ", "\nABSTRACT\nAs China plays a pivotal role in shaping global energy trends, the healthy development of energy markets faces formidable challenges, making the achievement of carbon neutrality, particularly, crucial. Unfortunately, geopolitical risk (GPR) introduces significant uncertainties for the interactions between China's carbon neutrality process and energy markets. To this end, we explore the connectedness between China's carbon neutrality index and energy futures prices from both return and risk perspectives using the TVP‐VAR method. Additionally, we analyse the impact mechanisms and predictive effects of GPR on the volatility of this connectedness applying the GARCH‐MIDAS method. Our empirical findings reveal several key insights. First, the GPR drives the volatility in connectedness between China's carbon neutrality index and energy futures prices, particularly, within the petrochemical industry, while the opposite impact is observed in certain coal‐related sectors. Moreover, the models indicate that poor GPR predictive effects are primarily evident in industries with a close link to coal energy in their production processes. Secondly, the risk connectedness of China's carbon neutrality index and energy futures prices contains more implicit information and is more responsive to GPR shocks compared to return connectedness. This explains why the GPR is less effective in forecasting the volatility of risk connectedness. Finally, the global GPR is more helpful than the China‐specific GPR in forecasting the volatility of connectedness in China's carbon neutrality index and energy futures prices. These insights reveal the potential vulnerability of China's carbon neutrality and energy markets to GPR, offering actionable guidance for strengthening risk management strategies.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70061   open full text
• Financial Technology and Environmental Performance: International Evidence.
  Charilaos Mertzanis, Asma Houcine, Athanasios Pavlopoulos, Apostolos Vetsikas, Ilias Kampouris.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2664-2689, April 2026. ", "\nABSTRACT\nThis study examines the impact of FinTech market growth on environmental performance across 58 countries (2013–2020), using Environmental Performance Index data and comprehensive FinTech finance metrics from the BIS. Findings reveal a consistently positive and statistically significant relationship, robust across fixed‐effects models, lagged specifications, alternative FinTech measures and instrumental variable techniques. FinTech enhances environmental outcomes by facilitating green finance, improving ESG transparency, enabling real‐time environmental monitoring and promoting energy efficiency through digital tools. The effect is especially pronounced in countries with strong institutional effectiveness. This research contributes new international evidence to the FinTech‐sustainability nexus, highlighting the diverse transmission channels and the role of governance in leveraging FinTech for environmental improvements.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70065   open full text
• CFO's Famine Experience and Earnings Management: The Moderating Effect of the CEO Power.
  Radwan Alkebsee, Abdullah Muhammad Dhrubo, Adeeb Alhebri, Redhwan Aldamari, Ebrahim Mohammed Al‐Matari.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2729-2753, April 2026. ", "\nABSTRACT\nThis study examines the impact of CFOs' famine experience on earnings management practices in China. Using data from Chinese listed firms over the period 2010–2021, we document a negative association between CFOs' famine experiences and earnings management practices (accruals and real activities). These findings are in line with the imprinting theory assumption that early life experiences imprint and shape individuals' personalities and behaviours. We also find that CFOs with such formative experience are likely to enhance financial reporting quality by reducing earnings management in firms with less powerful CEOs, while it diminishes in firms with CEOs who have strong control over the firm. The results remain consistent and robust after addressing endogeneity concerns. This study contributes to the existing literature in this regard.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70069   open full text
• Practice What You Preach: A Multilevel Perspective on Stock Exchanges' Female Directorship.
  Faten Ben Slimane, Laura Padilla‐Angulo.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2804-2823, April 2026. ", "\nABSTRACT\nStock exchanges, as organisations, have traditionally been male‐dominated and run as old boys' clubs; however, they increasingly face societal pressures for board gender diversity. Despite these pressures, the gender diversity of exchange boards remains low. Surprisingly, although exchanges are expected to set an example for corporate governance practices, their board gender strategies have been underexamined. Drawing on institutional theory and the strategic response approach, we use a unique hand‐collected firm‐level dataset comprising a representative sample of stock exchanges worldwide and covering a 25‐year period to investigate the predictors of exchanges' compliance with those pressures, adopting a multilevel approach. We find that mandatory quotas, having a female CEO, and the representation of directors with solid business backgrounds positively impact gender diversity. We also find that national culture plays a role.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70000   open full text
• Mergers and Acquisitions and Brexit: A Natural Experiment.
  Di Luo, Tapas Mishra, Mamata Parhi, Zhuang Zhang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2082-2097, April 2026. ", "\nABSTRACT\nWe study the impact of Brexit uncertainty on one of the most important forms of corporate investment: mergers and acquisitions (M&As). Brexit provides us with an ideal natural experiment to explore the real effects of economic uncertainty and understand the underlying transmission mechanism. We document a significant decline in the number of M&A deals for UK firms after Brexit compared to EU firms. This inhibiting effect is amplified by the channels of real options, foreign trade, and financial constraints. Overall, our results provide for deeper understanding of this unprecedented uncertainty in Brexit policy on local M&A activity. Policy makers are urged to respond.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70031   open full text
• Expansionary and Contractionary Fiscal Multipliers in the United States.
  George Kapetanios, Panagiotis Koutroumpis, Christopher Tsoukis, Ekaterina Glebkina.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2144-2159, April 2026. ", "\nABSTRACT\nWe estimate the fiscal (spending) multiplier using quarterly US data, 1981Q3–2024Q4. We define government spending shocks as actual minus expected expenditure growth, the latter obtained from the Survey of Professional Forecasters. We employ the Jordà local projections method, coupled with state dependence of parameters, with smooth transition between states. A key testable hypothesis is that the positive and negative spending shocks have numerically (as well as qualitatively) different effects. We find that multipliers of shocks differ qualitatively (in terms of cyclicality) as well as quantitatively. Multipliers are almost always above unity (and often well above). Importantly, we uncover evidence that negative shocks have stronger effects over longer periods of time in the case of the FEC multipliers and likely with the PVIR‐FM multipliers, too. Pooled‐shock estimation can seriously bias results. Additionally, there is strong evidence that the two types of shock produce almost uniformly significantly different estimated coefficients of our key estimable equation.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70034   open full text
• Effect of Prudential Policies on Sovereign Bond Markets: Evidence From the ASEAN‐4 Countries.
  Joshua Aizenman, Gazi Salah Uddin, Tianqi Luo, Ranadeva Jayasekera, Donghyun Park.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 2455-2472, April 2026. ", "\nABSTRACT\nThis paper examines the effects of prudential policies on the sovereign vulnerability of ASEAN‐4 countries. We measure sovereign vulnerability within the network connectedness of sovereign bonds between ASEAN‐4 countries (Indonesia, Malaysia, the Philippines and Thailand) and six other countries (the US, the UK, the European Union, China, India and Japan) from 2012 to 2022. Local projections (LPs) are employed to estimate the dynamic effects of prudential measures. The effects are analysed across various prudential instruments, including reserve requirements, capital requirements, capital buffers, loan‐to‐value ratio caps and concentration limits. The results suggest that markets with tighter prudential policies are significantly less exposed to the sovereign shocks of other economies. The efficacy period of prudential policy in mitigating sovereign vulnerability becomes significant after seven quarters. Capital requirements and concentration limits show immediate effects, while reserve requirements operate with a longer delay.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70056   open full text
• Sustainability Performance and Corporate Risk: Evidence From the Tourism Industry.
  Omneya Abdelsalam, Antonios Chantziaras, Vassiliki Grougiou, Stergios Leventis, Nikolaos Tsileponis.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, Volume 31, Issue 2, Page 1995-2011, April 2026. ", "\nABSTRACT\nWe investigate the impact of sustainability performance (Refinitiv Environmental, Social, and Governance [ESG] scores) on corporate risk (CR). We apply stakeholder theory and the resource‐based view to an international sample of 247 tourism firms from 2002 to 2018. We demonstrate a negative association between ESG and CR, which is more pronounced when pension funds act as the controlling shareholders. We reveal that tourism firms with stronger ESG performance have statistically and economically significantly less risk of volatile earnings and a lower probability of failure than their counterparts with poor ESG. Our findings are robust to endogeneity and model misspecification. Overall, we add new evidence suggesting that ESG generates value and concrete positive outcomes for tourism firms, an effect moderated by the identity of controlling shareholders.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70027   open full text
• Environmental Courts and Corporate ESG Greenwashing.
  Zhonghua Cheng, Yanhao Yang.
  International Journal of Finance & Economics. April 13, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nEnvironmental courts serve as a pivotal judicial mechanism for addressing corporate ESG greenwashing. Based on data from China's A‐share listed corporations from 2009 to 2023, this study employs a double machine learning (DML) model to empirically examine the causal effect of environmental courts on corporate ESG greenwashing. The findings indicate that: (1) Environmental courts significantly curb corporate ESG greenwashing, a result that holds across a series of robustness checks. (2) Heterogeneity tests suggest that the inhibitory effect manifests more strongly in large corporations, corporations without political connections, technology‐based corporations, and polluting corporations. (3) Mechanism tests reveal that environmental courts mainly operate through four pathways: refining judicial review standards, strengthening guidance from case precedents, enhancing judicial review capacity, and intensifying judicial accountability.\n"]

  April 13, 2026   doi: 10.1002/ijfe.70207   open full text
• Customer Geographical Proximity and Corporate Financialisation: Evidence From China.
  Yan Zhao, Kun Su.
  International Journal of Finance & Economics. April 10, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the impact of customer geographical proximity on corporate financialisation. The results show that customer geographical proximity exacerbates corporate financialisation rather than alleviates it. Moreover, this impact can be achieved by reducing corporate profitability and enhancing the turnover of firms' working capital. Furthermore, the findings also suggest that the impact of customer geographical proximity on corporate financialisation is more pronounced in firms with higher levels of earnings management, whereas good corporate governance can help to reduce this effect. Our study provides substantial evidence for understanding corporate financialisation at the supply chain level and offers specific policy implications for the governance of corporate financialisation.\n"]

  April 10, 2026   doi: 10.1002/ijfe.70209   open full text
• Stock Returns, ESG Performance and Divergence of Social Attention.
  Tianyu Mu, Yun Tang, Hongbo Duan.
  International Journal of Finance & Economics. April 02, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nGrowing social attention has become an increasingly salient force shaping firms' sustainable development. However, the impacts of divergent social attention remain unclear. By categorizing social attention into retail attention and public attention, this study examines their distinct impacts on stock returns and environmental, social, and governance (ESG) performance. Retail attention temporarily boosts stock returns by reducing information asymmetry but leads to long‐term decreases in returns as the effect diminishes, while public attention consistently results in a decline in stock returns over time. The study reveals an inverted U‐shaped relationship between social attention and ESG performance. In sub‐dimensions, retail attention works on the governance pillar while public attention focuses more on both the social and governance pillars. Moreover, high levels of social attention do not improve green development; instead, they reduce stock returns of brown firms. This study provides a feasible solution on how firms respond to the impact of social attention in pursuit of sustainable transition.\n"]

  April 02, 2026   doi: 10.1002/ijfe.70206   open full text
• Transforming for Tomorrow: Corporate Digital Innovation, CSR, and Sustainability in the Face of ESG Risks.
  Kamran Mohy‐ud‐Din, Muhammad Shahbaz.
  International Journal of Finance & Economics. March 31, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the role of corporate digital innovation in bolstering corporate resilience in the face of escalating sustainability‐related challenges. Specifically, our study examines whether corporate digital innovation serves as strategic buffers that strengthen sustainability performance. Utilising a panel dataset of annual observations from 920 firms based in G5 countries from 2014 to 2024, our analysis encompasses 10,120 firm‐year observations. Our findings suggest that corporate digital innovation potentially contributes to advancing sustainable futures. Additionally, our study highlights the crucial role of CSR committees in reinforcing the relationship between corporate investments in patents and the implementation of effective sustainability strategies. Our results demonstrate that these committees significantly strengthen this relationship, thereby enhancing the efficacy of digital innovation. Moreover, global CSR reporting is shown to enhance firms' capacities to navigate uncertainties associated with evolving sustainability policies. In addition, emissions performance and ESG ratings show a strong response to patent evaluation when innovation expenditures exceed the threshold level of 3.467%. Furthermore, high‐tech exports are found to significantly influence environmental performance and mitigate carbon emissions when innovation expenditure thresholds surpass 2.717% and 3.467%, respectively. Collectively, these findings suggest that robust digital innovation practices contribute to corporate value creation in the face of ESG risk.\n"]

  March 31, 2026   doi: 10.1002/ijfe.70199   open full text
• Natural Disasters and Household Participation in Financial Assets: Evidence From China.
  Chufu Wen, Fenghua Wen, Zhijian (James) Huang.
  International Journal of Finance & Economics. March 29, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the impact of natural disaster experience on household participation in financial assets in China. Our findings show that exposure to natural disasters significantly reduces both the likelihood and investment level in risky financial assets, including stocks, mutual funds and wealth management products, whereas participation in low‐risk assets such as savings remains largely unaffected. Further analysis identifies increased household financial distress and reduced risk tolerance as the primary channels through which disaster experience affects financial behaviour. Heterogeneity analyses reveal that the negative impact on stock and mutual fund participation is more pronounced among households with higher liquidity and those of Han ethnicity. Moreover, the decline in mutual fund participation is stronger among households with weaker social networks, suggesting that social capital may play a buffering role in mitigating disaster‐induced risk aversion.\n"]

  March 29, 2026   doi: 10.1002/ijfe.70194   open full text
• Does Market Power Fuel the Systemic Stability of Alternative Financial Systems?
  Aamina Khurram, Abdullah Iqbal, Vasileios Pappas, Mohammad Abweny.
  International Journal of Finance & Economics. March 29, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the bidirectional relationship between competition and systemic risk in dual financial systems where Islamic and conventional financial institutions operate side by side. Using a sample of publicly listed financial institutions from the Asia‐Pacific, Gulf Cooperation Council (GCC), and Middle East and North Africa (MENA) regions from 2000 to 2019, we estimate systemic risk through ΔCoVaR and competition using the Lerner index. Employing a panel vector autoregressive framework, we analyse how this relationship evolves across different economic phases, with particular focus on the Global Financial Crisis (GFC). We find that lower competition is consistently associated with reduced systemic risk, with this effect being stronger—by approximately 25%—in conventional financial institutions. Notably, the competition–risk relationship is asymmetric and time‐varying. Put simply, competition enhances stability pre‐crisis; it amplifies systemic risk during the GFC, especially in the conventional sector. Post‐crisis, this fragility effect persists in conventional institutions but dissipates in Islamic ones. Our findings contribute to the literature on competition, systemic risk, and comparative banking by highlighting how alternative financial models and economic conditions jointly shape financial stability.\n"]

  March 29, 2026   doi: 10.1002/ijfe.70202   open full text
• Assessing the Effect of Information Sharing in the Farm Credit Market: Evidence From Developing Countries.
  Emile S. Sonehekpon, Rose Fiamohe.
  International Journal of Finance & Economics. March 28, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper investigates the effect of financial information sharing on agricultural credit across 60 developing countries. We first develop a simple theoretical model that elucidates how enhanced information flow, via private credit bureaus and public credit registries, can mitigate information asymmetries and improve lending decisions in the farm credit market. The model predicts that when financial institutions have access to shared borrower information, they are more likely to increase credit provision to agricultural enterprises. To empirically validate these predictions, we employ panel data covering the period 2013–2020, sourced from the FAO, World Development Indicators, Worldwide Governance Indicators, and the World Bank's Doing Business database. Using the System Generalised Method of Moments (GMM) estimator to address potential endogeneity and dynamic effects, we find robust evidence that information sharing significantly enhances agricultural credit availability. This effect is particularly pronounced in the long term, suggesting that sustained improvements in information infrastructure yield cumulative benefits for agricultural finance. Our findings underscore the importance of policy frameworks that promote the development and integration of credit information systems. By facilitating transparency and reducing credit risk, such systems can strengthen the relationship between financial institutions and agricultural enterprises, ultimately supporting broader agricultural development goals.\n"]

  March 28, 2026   doi: 10.1002/ijfe.70201   open full text
• Integrating Sustainability Into Portfolio Selection With Risk‐Utility Profiling.
  Ranadeva Jayasekera, Jelena Stankevičienė, Ramūnas Pranauskas, Rasa Subačienė, David Charles George Liney.
  International Journal of Finance & Economics. March 28, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nModern portfolio theory (MPT) traditionally focuses on the risk–return trade‐off, often overlooking investors' sustainability preferences. This paper introduces a unified portfolio‐selection framework, which we term green portfolio theory (GPT), integrating environmental, social and governance (ESG) considerations alongside classical risk aversion. We calibrate investor preferences for risk, return and sustainability using an extended profiling instrument, then embed these parameters within a single objective function that jointly evaluates expected return, risk and ESG impact. Individual absolute risk aversion (λ) is determined using the Arrow–Pratt measure of absolute risk aversion. The resulting optimisation yields a three‐dimensional efficient frontier, illustrating how varying sustainability weights modify optimal asset allocations. Empirical illustrations demonstrate that investors with stronger ESG preferences tend to accept modest reductions in expected return, with the marginal rate of substitution between risk, return and sustainability determined by individual preference parameters. We also propose a coupled utility parameter SHAIRP (specific Hamilton adjusted impact return preference), that quantifies the return ‘sacrifice’ investors are willing to make in order to achieve a concrete sustainability improvement and this is loosely derived from W. D. Hamilton's work on kin selection in evolutionary biology and genetics. Our framework provides a practical methodology for constructing portfolios that align financial objectives with ethical imperatives and enables asset managers to design investment products in accordance with emerging regulatory requirements for responsible investing. By extending traditional MPT to account for sustainability, we offer robust guidance for investors and advisors navigating the evolving landscape of sustainable finance.\n"]

  March 28, 2026   doi: 10.1002/ijfe.70189   open full text
• Does Digital Banking Promote Remittance Receipts? Evidence From Developing Countries.
  Syed Ali Abbas, Eliyathamby A. Selvanathan, Saroja Selvanathan.
  International Journal of Finance & Economics. March 27, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn the realm of technological advancement, like many sectors, the financial sector swiftly embraced digital transformation to help facilitate financial transactions, especially remittance receipts. The digitalisation of the banking sector has made transfers and access to funds quite easier, faster, and more economical by reducing transaction costs. This paper examines the impact of digital banking on remittance flows using the World Bank's Global Findex (2014, 2017, and 2021) surveys and panel macroeconomic data for 53 developing countries. Applying the panel corrected standard errors and instrumental variable two‐stage least square (IV‐2SLS) estimation techniques, the findings suggest a non‐linear (inverted U‐shaped) relationship between digital banking and remittances, that is these private (external financial) flows initially increase at low levels of digital banking while at the higher level of digitalisation, remittances start decreasing. Controlling the heterogeneity and endogeneity, in addition, the results suggest that exchange rate depreciation (of the home country's currency) increases remittance inflows. Moreover, remittance receipts increase with (the development of) human capital and (per capita) income of developing countries.\n"]

  March 27, 2026   doi: 10.1002/ijfe.70205   open full text
• Waves Across the Atlantic: How Macro and Monetary Releases Ripple Through Euro Area Markets.
  Rokas Kaminskas, Linas Jurkšas.
  International Journal of Finance & Economics. March 26, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe provide evidence regarding how European and US macroeconomic and monetary policy events affect euro area markets. By analysing over 170 macroeconomic indicators from 2002 to 2024, we assess the impacts across different events, countries and time periods. We rely on a high‐frequency impact identification strategy and estimate the effects of releases on market variability and the directional effects of surprises across different markets. We find that, compared to European data releases, US events tend to have a more pronounced effects on euro area markets. On average, monetary and employment events induce the strongest repricing in euro area financial markets. In most of the specifications, exchange rate and long‐term sovereign yields were more sensitive to macroeconomic releases, while short‐term bonds and stock prices were impacted much less frequently.\n"]

  March 26, 2026   doi: 10.1002/ijfe.70196   open full text
• Digital Dividend or Digital Divide: Can Fintech Bridge the Wealth Gap Amid Public Health Emergencies? a Comparative Research of Urban and Rural China.
  Chuna Chen, Zhuomin Tan, Song Liu.
  International Journal of Finance & Economics. March 25, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAs a significant driver of financial innovation, can fintech provide protection for household wealth during major public health events? This paper utilises data from the China Household Finance Survey (CHFS) from 2015 to 2021 to construct Difference‐in‐Differences and Triple Difference models to assess the effectiveness of fintech in mitigating the adverse wealth impacts on urban and rural families during the COVID‐19 pandemic. The research indicates that: (1) the pandemic has exacerbated the pre‐existing wealth inequality between urban and rural families in China; (2) following the outbreak, fintech alleviated the negative impacts on urban family wealth, but did not significantly affect rural family wealth, thereby widening the inequality exacerbated by the digital divide; (3) the factors driving this digital divide include disparities in financial literacy between urban and rural residents, which lead to unequal access to the benefits of fintech.\n"]

  March 25, 2026   doi: 10.1002/ijfe.70195   open full text
• Interdependence of Venture Capital Screening Criteria: A Decision Support Framework.
  Norah Almubarak, Tarifa Almulhim.
  International Journal of Finance & Economics. March 23, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nStudies of the Venture Capital (VC) screening process traditionally assume that VC criteria are independent of other criteria. However, these criteria may interact and influence each other in cause‐and‐effect relationships. Therefore, there is a need to understand the interdependence of VC screening criteria. In this study, a decision support framework is proposed for VC screening criteria, based on the Decision‐Making Trial and Evaluation Laboratory (DEMATEL) method and Intuitionistic Fuzzy Set (IFS) theory (IFS‐DEMATEL). Building on prior work on VC investors, we identify a holistic list of 20 evaluation criteria in seven categories (founding team, product or service, financial, market, environmental, social, and governance characteristics). The IFS‐DEMATEL method is used to identify the relative importance attached by VC investors to different criteria, pinpoint the most significant criteria, and explicate the cause‐and‐effect relationships between criteria. Finally, the proposed framework is used to empirically examine VC screening criteria based on a case study involving VC experts/investors from the UK and the US. We find that environmental protection, the team and working environment, and profitability are the most influential criteria; that is, they have the greatest impact on the other criteria. This study both enhances the VC screening literature and makes an important practical contribution by proposing and illustrating a decision support framework capable of addressing VC screening decisions in complex and imprecise real‐world scenarios.\n"]

  March 23, 2026   doi: 10.1002/ijfe.70204   open full text
• Motive and Opportunity: Order Choice in a Limit Order Book With Dispersed Information.
  James Steeley, Charles Schnitzlein, Patricia Chelley‐Steeley.
  International Journal of Finance & Economics. March 20, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe test predictions of market microstructure theory relating to the determinants of order choice in a limit order book where information is dispersed among traders. Using an experimental limit order book, with a large state space, we find that informed traders exhibit patience, compatible with the ‘waiting game’ behaviour described in Foster and Viswanathan. In responding to expected profits, informed traders prefer limit orders that disguise their information as predicted by Roşu and Riccó et al.\n"]

  March 20, 2026   doi: 10.1002/ijfe.70200   open full text
• The Contribution of International Remittance to Financial Development in Developing Countries: A Further Investigation.
  Canh Phuc Nguyen, Nguyen Doan, Luis Chavez‐Bedoya, Christophe Schinckus.
  International Journal of Finance & Economics. March 20, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study analyses the impact of international remittances on financial development in 105 developing countries from 2003 to 2021. Using a two‐step system GMM estimator, we find that remittances have a significant negative effect on overall financial development. This effect is robust across most dimensions, negatively influencing the depth and efficiency of both financial institutions and markets. A key exception is financial access, where remittances have a positive effect, promoting financial inclusion. Our main contribution is identifying three transmission channels that explain this negative result. Using three‐stage least squares (3SLS) estimation, we show that remittances reduce domestic savings and stimulate the shadow economy, both of which hinder financial development. Conversely, they also promote entrepreneurial activity, which supports it. The net effect, however, remains negative. Furthermore, we show that this effect is conditional on national characteristics. The negative impact is stronger in countries with a colonial history, a civil law system, high FDI, high natural resource rents and a highly dependent population. It is weaker, or even positive, in linguistically homogeneous countries and in those with a large agricultural sector. These findings suggest that the mixed evidence in the literature is caused by the offsetting nature of these channels and contingent national factors. We conclude that policymakers must implement targeted strategies to direct remittances away from informal activities and consumption and towards formal investment and entrepreneurship to harness their developmental potential.\n"]

  March 20, 2026   doi: 10.1002/ijfe.70203   open full text
• Shock Absorbers or Amplifiers? How Do Firms Transmit Shocks in a Polycrisis Era?
  Miaomiao Tao, Jianda Wang, Xiaohang Ren, Ruijun Bu.
  International Journal of Finance & Economics. March 20, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe explore how fluctuations in global oil prices and geopolitical tensions reshape the spread of financial risk among firms worldwide. We separate these shocks into short‐, medium‐ and long‐term effects using oil price data and a global political risk index. We demonstrate that major events like COVID‐19 and the Russia–Ukraine conflict contributed significantly to escalated cross‐border risk propagations. Energy‐exporting countries such as the United Arab Emirates became central to the global risk network due to their role in energy markets. Interestingly, long‐term shifts in oil prices and political risks are the main drivers of rising firm‐level risk spillovers, while short‐ and medium‐term changes help offset some of the risk. Geopolitical tensions have a stronger impact on energy firms than oil price changes. Developed‐country firms show stronger, more significant responses to oil and geopolitical shocks than developing‐country firms. Strong firms can reduce some risk spillovers, but this effect weakens during prolonged geopolitical or energy shocks.\n"]

  March 20, 2026   doi: 10.1002/ijfe.70197   open full text
• Bank Income Smoothing, Societal Patriarchy and Policy Uncertainty.
  Tanveer Ahsan, Saqib Aziz, Akanksha Jalan, Fazal Muhammad, Dhoha Trabelsi.
  International Journal of Finance & Economics. March 19, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nUsing a sample of 745 banks from 26 OECD countries over the period 1997–2023, we investigate the moderating effects of societal patriarchy on bank income smoothing (IS), amidst policy uncertainty (PU). Results indicate that in periods of high PU, banks operating in highly patriarchal societies tend to curtail the use of loan loss provisions (LLP) to smooth their income. Specifically, the moderating effect of patriarchy is attenuated in a low uncertainty environment, while in periods of financial crisis marked by high uncertainty, income smoothing rises dramatically. Moreover, better governance frameworks tend to limit income smoothing behaviour in banks, highlighting the significance of robust monitoring and governance. Our results survive the Placebo test, GMM estimation and instrument variable analysis, hence remain robust to concerns of endogeneity and reverse causality.\n"]

  March 19, 2026   doi: 10.1002/ijfe.70191   open full text
• Leading the Chain, Lifting the Output: The Chain Leader System Policy and Supply Chain Participants' Productivity.
  Jun Hu, Xinli Xie, Liang Wang, Daifei Yao.
  International Journal of Finance & Economics. March 17, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the impact of China's chain leader system (CLS)—a novel, institutionalised form of public–private partnership (PPP)—on corporate total factor productivity (TFP). The CLS formalises state–enterprise collaboration by appointing government officials as “chain leaders” and designating key firms as “chain masters” to jointly coordinate industrial chain development. We construct a mathematical theoretical model to analyse the system's effects on firm‐level productivity. Leveraging a staggered difference‐in‐differences research design, we find that the implementation of the CLS significantly enhances firm‐level TFP. The effect is more pronounced when provincial officials serve as chain leaders, when state‐owned enterprises (SOEs) act as chain masters, and in regions characterised by strong financial and economic developments. Moreover, productivity gains are especially salient in technology‐intensive sectors, highly competitive industries, non‐SOEs, and firms with a high degree of specialisation. Mechanism analysis further reveals that the CLS strengthens industrial chain integration, reduces coordination costs, alleviates financing constraints, improves access to commercial credit, and promotes R&D investment and collaborative innovation. These findings highlight the effectiveness of structured PPP mechanisms in improving industrial governance and fostering productivity in emerging economies.\n"]

  March 17, 2026   doi: 10.1002/ijfe.70198   open full text
• Revisiting and Extending Our Understanding of Market Responses to Unconventional Monetary Policy.
  Yong Joo Kang, Young Ho Eom, Woon Wook Jang.
  International Journal of Finance & Economics. March 16, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe revisit and extend Hattori et al. by quantitatively assessing the magnitude and direction of market responses to the US Federal Reserve's expansionary unconventional monetary policy announcements during the 2008 global financial crisis. Unlike Hattori et al., who examined the equity tail risk, we extend their analysis by investigating the impact on market participants' risk aversion using the real‐world probability density obtained via the Ross recovery theorem. Risk aversion is proxied using the variance and skew risk premiums that are obtained from higher moments of both the real‐world and risk‐neutral distributions. We show that expansionary unconventional monetary policy announcements had a significant mitigating effect on risk aversion. Furthermore, we show that quantitative easing announcements had a more significant impact on risk aversion than forward guidance announcements. This provides quantitative support regarding the difference in transmission channels between than forward guidance and quantitative easing announcements.\n"]

  March 16, 2026   doi: 10.1002/ijfe.70192   open full text
• Can Banking Intermediates Crowd Out Their High‐Tech Promising Successors? A Financial Stress Perspective.
  Nikolaos A. Kyriazis, Konstantinos A. Dimitriadis, Panayiotis Theodossiou.
  International Journal of Finance & Economics. March 15, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines the evolving relationship between large U.S. Financial institutions and Big Tech firms amid rising financial stress driven by global crises, including the COVID‐19 pandemic, the Russia‐Ukraine war, and inflationary shocks. Using weekly data from January 2013 to December 2024, the study employs the Quantile‐VAR (Q‐VAR) framework and the Financial Stress Index (FSI) to evaluate net pairwise and extended joint connectedness across various market regimes. Findings reveal that most Big Tech stocks affect financial stress but this reverses in bull markets. Bank stocks’ causal footprint on financial stress is obvious in all conditions and Morgan Stanley concentrates and leads systemic causality in bull markets. Overall, Big Tech stocks display weaker connection with the FSI but play a major role in bear markets, the Covid‐19 and the Russia‐Ukraine war crises. The results suggest that technology firms are poised to play an increasingly dominant role in financial intermediation, potentially merging with or replacing traditional banks, especially during future crises, offering critical insights for investors, regulators, and policymakers.\n"]

  March 15, 2026   doi: 10.1002/ijfe.70183   open full text
• Impact of Sovereign Debt Maturity on Fiscal Sustainability.
  António Afonso, José Alves, Oļegs Matvejevs, Oļegs Tkačevs.
  International Journal of Finance & Economics. March 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study is the first to investigate the impact of the term structure of public debt on fiscal sustainability. We adopt the widely used backward‐looking measure of fiscal sustainability—fiscal responsiveness as proposed by Bohn. Using data from De Graeve and Mazzolini and focusing on a sample of 19 most developed countries, we demonstrate that sovereign borrowing with maturity above 10 years significantly reduces fiscal responsiveness. Conversely, public debt with maturity between 3 and 5 years is associated with the highest responsiveness of the primary balance to public debt. The findings indicate that the increase of long‐term public debt since the beginning of this century has contributed to reducing fiscal responsiveness by half. Furthermore, unconventional monetary policy, by suppressing yields at longer maturities, has likely played a key role in the discovered relationship.\n"]

  March 14, 2026   doi: 10.1002/ijfe.70193   open full text
• Pre‐ and Post‐COVID Digital Financial Service Adoption and Income Inequality: A Disaggregated Analysis Based on Education and Geography.
  Romanus Osabohien, Oluwayemisi Kadijat Adeleke, Ngwengeh Brendaline Beloke, Musa Abdu, Mamdouh Abdulaziz Saleh Al‐Faryan.
  International Journal of Finance & Economics. March 14, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThe COVID‐19 pandemic has accelerated the adoption of digital financial services (DFS), but its impact on income inequality remains underexplored, especially when considering the role of education and geography. This study investigates the implications of COVID‐19 driven digital financial service adoption, educational level on income inequality, with a specific focus on the unique dynamics within Central Africa (Cameroon), Southeast Asia (Malaysia), and West Africa (Nigeria). Using the Global Financial inclusion data, the study engaged the logit and marginal effect regression. Result shows that digital financial transactions (DFTs), particularly digital payments made is a significant driver of upward income mobility across Nigeria, Cameroon, and Malaysia, both before and after COVID‐19. Also, the pandemic increased existing inequalities along gender and education lines but improved financial digitization, thereby raising the effects of digital payments on upward income mobility from 14 to 15 percentage points pre‐COVID to 18–22 percentage points post‐COVID. The findings further show that the individuals' ability to convert digital access into income gains was significantly contingent upon gender, educational level, and location. Educated individuals and urban residents benefited more from financial digitization in terms of upward income mobility, whereas women recorded stronger income gains post‐COVID, suggesting narrowing gaps in digital finance benefits. However, receiving digital payments showed more context‐specific effects, significant in Cameroon pre‐COVID and in Nigeria post‐COVID, highlighting variation in remittances, social transfers, and institutional responses. The study concludes by recommending present and future financial digitalization policies which would help prioritise the provision and security of digital payment technologies. Also, the policies must move beyond accelerating access to strengthening digital capability. Likewise, given the significant gains recorded by women, policies must continue to support female digital inclusion through tailored interventions including gender‐responsive financial products and women‐focused outreach. Lastly, the significant urban–rural divide requires massive public investment in closing the digital infrastructure gap.\n"]

  March 14, 2026   doi: 10.1002/ijfe.70184   open full text
• Do Credit Ratings Matter for Stock Price Crash Risk? New Evidence From China.
  Chien‐Chiang Lee, Yizhong Wu, Chi‐Chuan Lee, Diyun Peng.
  International Journal of Finance & Economics. March 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThrough a large sample of China's firms, this research assesses whether and how firms' credit ratings affect future stock price crash risk (SPCR). Evidence reveals that credit ratings can negatively affect SPCR. The negative effect is consistently more pronounced when stock price synchronisation is higher and is stronger in firms with low institutional investor shareholding, suggesting that domestic credit rating agencies have the potential to enhance the information environment while simultaneously reducing regulatory costs. Moreover, the impact is more pronounced for firms with low media coverage, firms with low audit quality, and in state‐controlled firms. Through our research, policymakers and investors should pay more attention to credit ratings that help play the information intermediary role of credit rating agencies.\n"]

  March 12, 2026   doi: 10.1002/ijfe.70190   open full text
• The Shielding Effect of Foreign Managers: Evidence From Chinese Listed Companies During the U.S.‐China Trade War.
  Bo Pu, Tong Qi, Jiezhou Ying.
  International Journal of Finance & Economics. March 10, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study applies a difference‐in‐differences approach to evaluate the impact of managers' foreign experience on the long‐term performance of firms during the U.S.‐China trade war. Empirical evidence indicates that Chinese publicly listed firms with American managers outperform their counterparts. They exhibit higher total assets, investment, and operational efficiency after the trade war. This pattern is not observed among managers from other countries. Further investigation reveals that firms affected by U.S. policy, including those in high‐tech sectors and state‐owned enterprises, do not gain advantages from the presence of American managers. The baseline effects differ among firms based on their varying degrees of foreign exposure. The effects increase when firms undertake exports and direct investment in the United States and have larger foreign shareholdings. Moreover, our findings indicate that American managers maintain relationships with U.S. customers after the trade war, enabling firms to mitigate the adverse impacts more effectively.\n"]

  March 10, 2026   doi: 10.1002/ijfe.70162   open full text
• Alleviating Related Party Transactions Through Corporate Social Responsibility.
  Muhammad Usman, Alaa Mansour Zalata, Ammar Ali Gull, Nanyan Dong.
  International Journal of Finance & Economics. March 10, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nUsing a sample of Chinese firms from 2010 to 2021, we examine whether corporate social responsibility (CSR) influences firms' propensity to engage in related‐party transactions (RPTs)—an intriguing yet underexplored relationship. We find robust evidence that CSR‐oriented firms are less likely to permit RPTs. Our results further indicate that RPTs conducted by more CSR‐oriented firms are viewed favourably by the market and are associated with higher subsequent market value. In contrast, RPTs among other firms correlate with reduced market value, suggesting that CSR‐oriented firms only allow efficient RPTs to meet legitimate needs and align with strategic value‐maximisation objectives. Additional analysis reveals that ownership structure and firm‐level governance quality moderate the CSR‐RPTs relationship. These findings remain robust to alternative RPT measures and are not driven by endogeneity concerns.\n"]

  March 10, 2026   doi: 10.1002/ijfe.70177   open full text
• Corporate Sustainability Practices, Governance, and Risk‐Taking: Global Evidence.
  Tanveer Bagh, Elie Bouri, Hammad Riaz, Kainat Iftikhar.
  International Journal of Finance & Economics. March 10, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the effect of environmental, social, and governance performance (ESGP) on corporate risk‐taking (CRT) in a sample of 8492 firms from 52 countries over the period 2011–2023. Using a robust methodology comprising high‐dimensional fixed effects, propensity score matching, generalised method of moments, and instrumental variables, our results show the following. Firstly, firms with higher environmental, social, and governance (ESG) standards are less inclined to take excessive business risks, and this association strengthens through strong internal and external corporate governance mechanisms. Secondly, ESGP alleviates financing constraints and improves audit reputation and transparency, enhancing ESGP's impact on CRT. Thirdly, regional and country‐specific factors such as ESG disparities, institutional quality, ownership structures, ESG readiness, and levels of development play an important role in shaping the effectiveness of ESG across diverse contexts. The study further decomposes total firm risk into systematic and idiosyncratic components using asset pricing models, revealing that firms with high ESGP exhibit lower beta, reduced idiosyncratic risk, and lower Fama–French three‐factor idiosyncratic risk levels. This supports the view that ESGP enhances corporate resilience, reduces uncertainty, and serves as an effective tool for managing both market‐wide and firm‐specific risks. Our study extends the corporate sustainable finance, governance, and risk management literature, offering crucial policy insights aligned with the global sustainable development agenda.\n"]

  March 10, 2026   doi: 10.1002/ijfe.70187   open full text
• Media Scrutiny, Monitoring and Corporate Financialisation: How Media Shapes Corporate Financialisation in China.
  Simeng Lyu, Muneer M. Alshater, Siyuan Zhao, Yuanyuan Guo, Yanshuang Li.
  International Journal of Finance & Economics. March 08, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nDoes media coverage encourage or restrain corporate financialisation in emerging markets? Focusing on China, and contrary to common assumptions, this study demonstrates that media coverage significantly inhibits corporate financialisation, particularly amid policies prioritising the ‘real economy’. This core finding withstands extensive robustness checks. Using a quantitative content analysis of media coverage of Chinese non‐financial companies and regression analysis using data from 2008 to 2022, we propose and find evidence for two underlying mechanisms: media coverage enhances external monitoring and operational efficiency within firms. The inhibitory impact is amplified for state‐owned enterprises (SOEs), companies located in the eastern region, and firms operating under high competitive pressure. Notably, this impact is primarily driven by positive media coverage, which emerges as the key factor behind the suppression of corporate financialisation. This research provides novel empirical evidence on the disciplinary role of media in curbing corporate financialisation within a major emerging market, contributing significantly to the literature on corporate finance and media economics.\n"]

  March 08, 2026   doi: 10.1002/ijfe.70145   open full text
• Researcher–Entrepreneur Relationship and Performance of Innovative Startups.
  Yangguang Huang, Helen Hui.
  International Journal of Finance & Economics. March 04, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nMany innovative startups are joint ventures between researchers and entrepreneurs, who collaborate in R&D and product commercialization. Government policies such as grants, subsidies, and patent licensing fees act as Pigouvian subsidies, incentivizing R&D by bridging the gap between the social and private returns of innovation. However, these subsidies may inadvertently strengthen the researcher's bargaining power within the researcher–entrepreneur relationship, leading to reduced research effort and skewed equity allocation that can undermine startup performance. Our findings suggest that addressing both external market failures and internal researcher–entrepreneur frictions requires a comprehensive policy portfolio. Conventional Pigouvian subsidies to innovation must be complemented with policies on startup governance and the entrepreneur labor market.\n"]

  March 04, 2026   doi: 10.1002/ijfe.70171   open full text
• Technological Evolution in Fintech: A Decadal Scientometric and Systematic Review of Developments and Criticisms.
  Muhammad Imran Qureshi, Nohman Khan.
  International Journal of Finance & Economics. March 03, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study aims to classify pivotal fintech innovations and explore the prospects and pitfalls associated with emerging fintech services extensively discussed in the literature. We conducted a multistage systematic review of research published on fintech over the past decade from a technological perspective. Using the Preferred Reporting Items for Systematic Reviews and Meta‐Analyses (PRISMA) framework, we meticulously selected 947 records for a scientometric analysis of fintech research. This analysis revealed four main literature clusters based on keyword co‐occurrence identified through R software: blockchain technology and cryptocurrency, financial inclusion, peer‐to‐peer (P2P) technologies, and artificial intelligence, aligned with developments in fintech. Subsequently, a systematic literature review was performed within each cluster. After applying rigorous inclusion and exclusion criteria, 121 research articles from Scopus and Web of Science (WoS) databases were included for the second stage of the systematic review and synthesis. The findings highlight that fintech plays a crucial role in promoting economic growth, reducing poverty, and addressing income inequality, particularly in low‐income groups, while facing significant regulatory and technological challenges. Ethical considerations and robust regulatory frameworks are essential for sustainable development, especially in blockchain and cryptocurrency sectors, where concerns over security, trust, and skilled human support are prevalent.\n"]

  March 03, 2026   doi: 10.1002/ijfe.70180   open full text
• Household Consumption Intentions by Income Group During Monetary Policy Easing and Tightening.
  Helder Ferreira de Mendonça, Daniel Pereira dos Anjos.
  International Journal of Finance & Economics. February 27, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe investigate how the monetary policy interest rate affects Brazilian households' consumption intentions under two distinct regimes: monetary easing and tightening cycles. Using data from low‐ and high‐income households, we assess both the magnitude and the dynamics of this relationship. Overall, the evidence highlights two central findings. First, during the easing cycle, increases in the policy rate reduce households' consumption intentions, with a stronger effect among high‐income households. Second, during the tightening cycle, the relationship between the policy rate and consumption intentions becomes positive, and the divergence across income groups widens. We also document a temporal asymmetry: Under the easing cycle, the impact of a policy rate increase fades within 6 months, whereas during the tightening cycle, the effects of rate hikes persist for up to 12 months. These findings underscore the state‐dependent and income‐level dimensions of monetary transmission.\n"]

  February 27, 2026   doi: 10.1002/ijfe.70188   open full text
• Heterogeneous Market Efficiency in Cryptocurrency Markets: A Multi‐Frequency Memory‐Based Approach.
  Shuyue Li, Tapas Mishra, Larisa Yarovaya.
  International Journal of Finance & Economics. February 26, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nEmpirical cryptocurrency researchers frequently use concepts of mean reversion, trend and cointegration to characterise price dynamics and tests of market inefficiency. This paper introduces a broader memory‐driven framework to examine how the concept of market efficiency has evolved over time, especially by characterising varied mean‐reversion strategies with slow‐paced error corrections to identify a semi‐strong market efficiency in crypto markets. We find strong evidence that market efficiency in Bitcoin (BTC) and Ethereum (ETH) is heterogeneous and time‐varying across all frequencies. Event shocks and structural breaks exert substantial influence on abrupt changes in efficiency, while results at the 240‐min sampling interval show robustness. The findings suggest that policymakers should time interventions to mitigate lag effects, release policy during low‐leverage periods and closely monitor the two distinct waves of efficiency breaks as well as cross‐frequency risk exposure. For practitioners, linking efficiency dynamics to trading strategies can enhance risk management and statistical arbitrage opportunities, while scholars can build advanced regime‐switching models informed by these empirical patterns. This paper provides new insight into price patterns and market efficiency dynamics, contributing to the understanding of the complex interplay between event shocks, structural breaks and regime switching of market efficiency in cryptocurrency markets.\n"]

  February 26, 2026   doi: 10.1002/ijfe.70179   open full text
• Does Climate Finance Influence Environmental Sustainability?
  Monica Singhania, Renuka Prasad.
  International Journal of Finance & Economics. February 25, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nClimate Finance has gained prominence as a vital instrument to support the global transition towards environmental sustainability. While existing studies primarily emphasise carbon dioxide reduction, relatively little is known about how climate finance affects broader ecological outcomes and the role of adaptation finance. This study examines the influence of climate finance—disaggregated into mitigation and adaptation flows—on multiple sustainability indicators across 33 Asian economies from 2000 to 2021. Environmental outcomes are measured through carbon dioxide, methane and nitrous oxide emissions, as well as the ecological footprints and the load capacity factor, thereby providing a multidimensional view of sustainability. To address endogeneity and dynamic effects, the analysis employs a dynamic panel approach using the two‐step system generalised method of moments. The results indicate that climate finance significantly reduces methane and nitrous oxide emissions, while enhancing the load capacity factor; its effects on carbon dioxide emissions and the ecological footprint remain limited. Adaptation finance has a stronger positive impact on ecological sustainability than mitigation finance, underscoring the importance of a balanced allocation between the two components. Economic growth, trade openness and industrial activity continue to increase environmental pressures, which calls for stronger governance frameworks and improved institutional mechanisms to ensure effective use of climate finance. By extending the scope beyond CO2‐centric analyses and distinguishing between mitigation and adaptation flows, this study contributes fresh evidence to the climate finance literature. The findings carry important implications for policymakers, emphasising the need to align financial allocations with the Paris Agreement and Sustainable Development Goals to achieve lasting sustainability outcomes.\n"]

  February 25, 2026   doi: 10.1002/ijfe.70181   open full text
• Two Shades of Green? Gender Differences in Environmental Concern and Activism.
  Hava Orkut, Caroline Perrin.
  International Journal of Finance & Economics. February 25, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines gender differences in environmental concern and activism using data from the World Values Survey. The results indicate that women are more likely than men to be concerned about the environment, but are less likely to engage in environmental activism. The study further explores potential channels underlying women's lower participation in environmental activism and shows that women tend to prioritise non‐environmental causes in their leisure time. Moreover, family responsibilities and work commitments limit women's ability to translate environmental concern into activism, reinforcing the concern–action gap. These results highlight a prioritisation effect, whereby women reallocate civic engagement toward more role‐congruent activities, such as women's groups, rather than disengaging per se.\n"]

  February 25, 2026   doi: 10.1002/ijfe.70172   open full text
• What Can We Learn From Energy Consumption on Excess Stock Return Prediction?
  Fei Lu, Feng Ma, M. I. M. Wahab.
  International Journal of Finance & Economics. February 25, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nStock market return prediction has long been a focal point within the realm of financial research. This study introduces a novel series of energy consumption indicators, predicated on economic constraints, to forecast stock market excess returns. Empirical results indicate that these newly constructed indicators are instrumental in predicting excess returns. Moreover, the combination models consistently outperform other competing models, especially under the constraint method based on the Sharpe ratio. We also highlight that energy consumption indicators maintain robust performance during periods of financial turbulence, such as the financial crisis and the COVID‐19 pandemic, with a notable emphasis on non‐renewable energy consumption from the commercial sector. Our findings offer valuable insights into forecasting stock market returns from an energy consumption perspective.\n"]

  February 25, 2026   doi: 10.1002/ijfe.70174   open full text
• The Relationship Among Climate Policy Uncertainty and Energy Markets: Fossil Versus Renewable and Low‐Carbon Assets.
  Dimitrios Asteriou, Anastasia Dimiski.
  International Journal of Finance & Economics. February 24, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper investigates the intricate relationship between climate policy uncertainty (CPU) and energy market dynamics, focusing on fossil‐based and renewable/low‐carbon energy assets. Utilising a comprehensive dataset spanning from April 1987 to December 2023, comprising monthly observations of CPU, stock market returns, spot oil prices and various energy commodity futures, we employ time series regressions to analyse the effects of CPU on market returns. Our findings reveal that fossil‐based energy assets are significantly and negatively impacted by changes in CPU, while renewable and low‐carbon energy assets exhibit minimal or negligible effects. Moreover, we identify a heightened negative impact of CPU during periods of increased uncertainty, underscoring investor sensitivity to abrupt spikes in climate policy uncertainty, particularly in fossil‐based energy sectors. Robustness analysis confirms the efficacy of the CPU index as a reliable indicator, emphasising the importance of using comprehensive metrics to assess the influence of climate policy uncertainty on financial markets. Our study underscores the necessity for policymakers and industry stakeholders to recognise the implications of climate policy uncertainty on energy markets and prioritise efforts to establish clear and consistent policy frameworks to facilitate the transition to a more sustainable energy landscape.\n"]

  February 24, 2026   doi: 10.1002/ijfe.70186   open full text
• On the Role of the European Banking Sector in Mitigating Climate Change.
  John Hlias Plikas, Dimitrios Kenourgios.
  International Journal of Finance & Economics. February 24, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe explore the role of the European banking sector in mitigating climate change through five transmission channels: (1) Banking Sector; (2) Environmental; (3) Economic; (4) Social and (5) Governance, considering both the direct and indirect effects. Utilising bank‐level data from 2010 to 2023, covering 77 banks under the Single Supervisory Mechanism (SSM) across 19 EU countries, we identify key drivers influencing carbon footprint. Direct effects through the banking sector channel reveal that the carbon footprint of bank loans, NPL ratio, bank capital to asset and loan disbursements contribute to carbon footprint, while bank regulatory capital to risk‐weighted assets, green bonds and return on assets reduce it. Bank capital and return on assets emerge as pivotal factors since they can be utilised in driving eco‐friendly investments. Regarding the indirect effects, through the environmental channel, energy consumption contributes to carbon footprint, while environmental protection investments of the total economy and renewable energy consumption reduce it. Through the economic channel, economic growth (GDP) and consumption of goods and services increase the carbon footprint. In the social channel, income inequality also contributes to the carbon footprint. Finally, the strength of the legal rights index, operating through the governance channel, reduces the carbon footprint.\n"]

  February 24, 2026   doi: 10.1002/ijfe.70182   open full text
• Time Varying Efficiency and Asymmetric Extreme Risk Spillover Effects: Evidence From the Chinese and US Stock Markets.
  Wenhao Xie, Guangxi Cao.
  International Journal of Finance & Economics. February 23, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this study, we employ the term Adjusted Market Inefficiency Magnitude (AMIM) to quantify the efficiency of the Chinese and American stock markets and further use the conditional quantile‐based connectedness approach to investigate the extreme risk spillover between the Chinese and American stock markets under different shock scales. Our results show that the stock markets in China and the United States are efficient for most periods, and the efficiency has time‐varying characteristics. Extreme events have a certain impact on the efficiency. The risk spillover from the US stock market to the Chinese stock market dominates and exhibits time‐varying characteristics. The Chinese stock market has stronger external spillover ability during extreme rises, while the US stock market has stronger external spillover ability during extreme declines. The total spillover index and directional spillover index exhibit a U‐shaped characteristic under different quantiles. The spillover‐out (spillover‐in) level in extreme states is stronger than that in normal states, and the spillover effects in extreme rising and falling states are asymmetric, with a larger total spillover level in extreme falling states. The impact of the COVID‐19 and the Russia‐Ukraine war on extreme risk spillovers between the Chinese and American stock markets is very weak. These findings offer valuable insights for financial regulators in systemic risk mitigation and for investors in strategic asset allocation.\n"]

  February 23, 2026   doi: 10.1002/ijfe.70185   open full text
• An Investigation of the Relationship Between Central Bank Unconventional Monetary Policy and Bitcoin Activity.
  Niamh Wylie, Martha O'Hagan‐Luff.
  International Journal of Finance & Economics. February 23, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis article investigates whether the unconventional monetary policy (UMP) measures pursued by the Federal Reserve, the Bank of England, the Bank of Japan, and the European Central Bank since the Global Financial Crisis (GFC) are associated with an appetite for cryptocurrency. Previous studies, which almost exclusively focus on the relationship between cryptocurrency price effects and UMP, do not find evidence to support this relationship, but cryptocurrency prices have been found to be heavily manipulated. This research extends beyond price effects by examining underlying activity metrics for the most established cryptocurrency, bitcoin. It uses a novel dataset sourced from Twitter (rebranded X) to capture the reaction by social media users to UMP activity by the main central banks. Applying ARDL‐OLS modelling, we find evidence to support a significantly positive relationship between social media attention surrounding Quantitative Easing and Negative Interest Rate Policy and bitcoin‐related activity, and consistent with previous studies, no association with bitcoin returns. Our results may imply that perceived interference in the fiat monetary system is connected to the growing network effect of bitcoin, in part as a resistance movement against the power of institutional authority, reflecting an erosion of trust in central banks. Policy implications are discussed.\n"]

  February 23, 2026   doi: 10.1002/ijfe.70175   open full text
• The Effects of International Board Diversity on Working Capital.
  Ofra Bazel‐Shoham, Matthew Imes, Zaheer Khan, Amir Shoham, Shlomo Y. Tarba.
  International Journal of Finance & Economics. February 23, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nBy focusing on working capital ratios, this paper examines the impact of international board diversity on the firm's working capital. This study is based on an S&P 1500 index sample of 13,716 firm‐year observations drawn between 2005 and 2025. The findings show that the presence of international directors on corporate boards reduces working capital ratios. The results are robust to a battery of empirical tests, including a novel instrumental variable test of the first pronoun drop in the languages spoken in the county where the corporation is headquartered. In addition, we find that the channel by which board international diversity impacts working capital holdings is the institutional collectivist culture of the directors' home country. This finding is consistent with Cushion Theory, which assumes that culturally collective societies tend to take higher risks than individualistic ones.\n"]

  February 23, 2026   doi: 10.1002/ijfe.70178   open full text
• Risk Transmission and Co‐Movements Between Financial Markets and Commodity Markets in the COVID‐19 Period.
  V. Moutinho, H. Oliveira, M. Neves, J. Monteiro.
  International Journal of Finance & Economics. February 18, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study examines risk transmission and co‐movements between financial markets (G7 countries and China) and commodity markets (gold and oil) during the COVID‐19 crisis. Daily closing prices for major equity indices (CAC40, CSI300, DAX30, FTSE100, MIB, NIKKEI, TSX and S&P500) and futures prices for gold, brent and WTI were analysed using DCC–MGARCH, VaR and CoVaR models. The results indicate that oil markets (WTI and brent) faced the highest risk exposure, underscoring their vulnerability to extreme economic shocks, while gold, despite some sensitivity, generally acted as a safe‐haven asset. CoVaR analysis revealed significant systemic risk transmission, with gold amplifying risk for European indices (FTSE and CAC40) and energy markets showing even stronger spillovers, particularly with the CSI. At the 1% confidence level, Asian markets like CSI and Nikkei demonstrated the highest sensitivity to commodity price shocks, while S&P 500 exhibited the lowest, reflecting the diversification benefits of mature financial markets.\n"]

  February 18, 2026   doi: 10.1002/ijfe.70160   open full text
• Drivers of Cashless Payment Decision in Vietnam.
  Chi H. P. Ho, Kiet T. Nguyen, Tu D. Quach, Vang Q. Dang.
  International Journal of Finance & Economics. February 18, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWhile sufficient infrastructure is a prerequisite for a cashless economy, understanding what drives individuals to choose cashless payment methods over cash at points of sale where both options are available remains underexplored. This study investigates the factors influencing cashless payment decisions in Vietnam, a developing country where cash dominates, accounting for 86% of transactions. Using survey data from 405 individuals in Ho Chi Minh City and Can Tho City, collected pre‐COVID‐19, the research applies conditional logistic regression to analyse choices across six common points of sale venues offering both payment options. Results reveal that younger individuals under 40 years old, women, higher‐income earners, students, office workers, and those who trust in payment safety are more likely to opt for cashless methods. Unlike prior studies that focus on specific payment tools, such as credit cards, this paper examines all cashless forms, offering a broader perspective. The findings suggest policies to enhance trust, target youth, and incentivise businesses, contributing to Vietnam's digital economy goals.\n"]

  February 18, 2026   doi: 10.1002/ijfe.70173   open full text
• Corporate Climate Risk and Greenwashing Behaviour: Evidence From China.
  Jilong Chen, Yikai Han, Yating Li, Cunwei Sha, Yang Zhao.
  International Journal of Finance & Economics. February 18, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWith the growing severity of environmental challenges, climate risk and ESG information disclosure have emerged as critical issues in contemporary corporate governance. This paper examines the impact of climate risk on corporate greenwashing, using panel data from Chinese A‐share listed firms during 2009–2022. We provide causal evidence that higher climate risk significantly increases the likelihood of greenwashing. Mechanism tests show that this effect operates through multiple channels, including higher cost of equity capital, weakened supply chain stability, intensified regulatory scrutiny, and heightened stakeholder pressure. Moreover, we find that environmental regulation positively moderates this relationship, revealing unintended consequences of policy interventions. Heterogeneity analysis further indicates that the impact of climate risk on greenwashing is stronger among firms that are less environmentally friendly, with fewer female directors, greater institutional ownership, stronger analyst attention, and higher baseline levels of greenwashing. These findings enrich the literature on climate finance and ESG disclosure by identifying climate risk as a driver of greenwashing. They also offer practical implications for regulators, capital markets, and corporate governance in curbing greenwashing and promoting credible sustainable practices.\n"]

  February 18, 2026   doi: 10.1002/ijfe.70176   open full text
• How Does International Investment Affect National Innovation?
  Shufeng Cong, Lee Chin, Sanjar Mirzaliev, Piratdin Allayarov, Huiyu Zheng.
  International Journal of Finance & Economics. February 13, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the impact of international investment on national innovation, focusing on the role of inward foreign direct investment (IFDI), outward foreign direct investment (OFDI), and two‐way foreign direct investment (DFDI). Analysis of cross‐country panel data from 2011 to 2023 using the double machine learning method reveals that IFDI significantly promotes national innovation through technology transfer and competitive pressure. In contrast, OFDI and DFDI demonstrate a more limited direct impact on innovation. The results of propensity score matching–difference‐in‐differences show that ASEAN's Regional Comprehensive Economic Partnership policies boost national innovation. Additionally, mechanism tests show that economic freedom moderates the relationship between international investment and national innovation. Greater economic freedom alleviates market access barriers and promotes the integration of foreign investment into the local innovation ecosystem, thereby amplifying the positive impact of IFDI. The analysis also points out that the relationship between international investment and innovation varies across regions and levels of development, with the impact of IFDI being stronger in developing countries and Asian countries. The study therefore emphasises the importance of tailoring international investment strategies to specific economic and regional circumstances to maximise their contribution to national innovation. Policymakers should focus on improving the quality of inward investments, supporting outward investment for technology acquisition, and promoting a balanced two‐way investment system to ensure innovation‐driven growth.\n"]

  February 13, 2026   doi: 10.1002/ijfe.70170   open full text
• Stringent Financial Regulation and the Upgrading of Corporate Labour Skill Structures.
  Guoyue Zhu, Zhaojie Xue, Yunsheng Mi.
  International Journal of Finance & Economics. February 12, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nAs China's first unified financial regulatory policy, the effectiveness of the New Asset Management Regulations (NAMR) remains to be fully explored. Although existing literature has examined the economic consequences of NAMR implementation, limited attention has been paid to its impact on labour skill structures. High‐quality human capital is the core driving force behind the development of real‐sector firms' main businesses and serves as crucial evidence for evaluating the effectiveness of NAMR implementation. This study investigates the impact of NAMR on firms' labour skill structures using data from Chinese A‐share listed companies from 2014 to 2021, employing a difference‐in‐differences model. The findings indicate that NAMR implementation has promoted the upgrading of firms' labour skill structures. This effect is more pronounced in firms led by CEOs with financial backgrounds, in non‐state‐owned enterprises, and in regions with higher levels of marketization. Mechanism analysis reveals that NAMR promotes the upgrading of firms' labour skill structures through the ‘financing constraint effect’ and the ‘investment substitution effect’. Furthermore, the enhancement of labour skill structures following NAMR implementation is found to further improve firm value and productivity. These findings provide meaningful insights for policymakers and stakeholders seeking to strengthen financial regulation and promote high‐quality corporate development.\n"]

  February 12, 2026   doi: 10.1002/ijfe.70169   open full text
• The Effect of CSR Report Similarity on CSR Performance.
  Yiqing Tan.
  International Journal of Finance & Economics. February 08, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study explores the effect of corporate social responsibility (CSR) report similarity on CSR performance. Using a dataset of Chinese companies, this research shows that CSR performance improves with an increasing degree of CSR report similarity. Specifically, this study reveals that this positive association is driven by reducing socially irresponsible activities and is driven by both improving external CSR and internal CSR. However, this research shows that when companies have more comparable reports, the effects of CSR practices on enhancing financial performance and decreasing the degree of stock return volatility are lower. The findings provide implications for policymakers that mandating a standardised CSR disclosure framework can harmonise reporting practices to enable stakeholders to benchmark firms effectively, thus fostering long‐term sustainability.\n"]

  February 08, 2026   doi: 10.1002/ijfe.70159   open full text
• Returnee Directors and Related Party Transactions.
  Muhammad Abubakkar Siddique, Fangjun Wang, Alaa Mansour Zalata, Daniel Gyimah, Muhammad Usman.
  International Journal of Finance & Economics. February 06, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this study, we investigate whether returnee directors (Chinese nationals with foreign experience serving as directors) mitigate opportunistic related party transactions (RPTs), a relatively under‐investigated area of research. Using a large dataset of Chinese listed firms, we find that firms with returnee directors are significantly less likely to engage in RPTs (especially abnormal RPTs); this is because returnee directors' international experience and relative independence enable them to serve as effective monitors. This effect is more pronounced in non‐state‐owned firms and those with weak internal governance. Notably, we find that RPTs in firms with returnee directors are associated with improved firm performance. This suggests that returnee directors, while curbing opportunistic RPTs, may facilitate efficient RPTs that enhance firm value. Furthermore, our analysis reveals that independent returnee directors exert a more significant influence in constraining RPTs compared to executive returnee directors. Our findings remain consistent after a battery of robustness tests.\n"]

  February 06, 2026   doi: 10.1002/ijfe.70158   open full text
• Development of an Aggregate Model for Cyber Risk Assessment Using Deep Neural Network and Structural Equation Modelling.
  Steward Doss, N. Raveendran.
  International Journal of Finance & Economics. February 05, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nInsurers and reinsurers providing capacity to cyber insurance risks have now realised that current pricing models, though effective to date, do not accurately estimate an actuarially fair premium. Increased cyber risk exposure from connected devices, the volume of unstructured data, limited loss experience, and evolving risk complexity have contributed to the challenges of accurately modelling cyber risks. Most current models are based on reported or economic losses collected from secondary sources. The urgent need to develop a hybrid pricing model that integrates loss exposures and qualitative risk perceptions for cyber insurance policies is evident. This paper proposes a machine‐learning approach for modelling cyber risks using neural networks. We developed a model that accurately estimates the probability of loss for various cyber risks across industry segments. We developed a multilayer neural network model to predict the likelihood of cyber risk. We used a structural equation model to examine the aggregate effects of cyber risk on associated exposures. The outputs of both models can be used to estimate the organisation's financial liability and determine appropriate insurance coverage. Our findings show that system vulnerability, user awareness, and cyber risk mitigation significantly affect cyber risk exposure, and that the models' predictive ability is statistically significant. Furthermore, the results of these models were highly useful in building cyber risk resilience and developing actuarial pricing for the selected sectors or industries.\n"]

  February 05, 2026   doi: 10.1002/ijfe.70166   open full text
• How Does Vulnerability Framing by Microfinance Institutions Leverage Funding Success in Crowdfunding?
  Ana Paula Matias Gama, Ricardo Emanuel‐Correia, Fábio Duarte, Mário Augusto.
  International Journal of Finance & Economics. February 04, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study draws on framing theory to investigate how microfinance institutions (MFIs) strategically construct a vulnerability‐oriented organisational identity and how this framing influences their funding decisions during the pre‐campaign phase of prosocial crowdfunding. Using a unique dataset of 334,852 microloans issued by 140 MFIs across 59 countries on the Kiva platform, we distinguish between MFIs exclusively listed on Kiva and those also featured on Mix Market. Our findings reveal a pronounced funding bias among MFIs that do not emphasise vulnerability in their framing. In contrast, MFIs that adopt a prognostic vulnerability frame tend to reverse this bias—particularly those solely reliant on Kiva. While both types of MFIs demonstrate some capacity to mitigate funding inequality, the effect is significantly more pronounced among those exclusively listed on Kiva. Our results also point to a potential mission drift, possibly incentivised by Kiva's vulnerability badge system, which may reward financial stability over genuine outreach to vulnerable borrowers. Overall, the findings underscore the central role of institutional framing in shaping MFIs' funding strategies and access to capital for marginalised entrepreneurs in the pre‐campaign phase.\n"]

  February 04, 2026   doi: 10.1002/ijfe.70167   open full text
• Revisiting the Nexus Between Trade Liberalisation and Income Inequality: The Case of Sub‐Saharan African Countries.
  Guivis Zeufack Nkemgha, Le Roi Nso Fils, Ulrich Kevin Kamwa.
  International Journal of Finance & Economics. February 01, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper examines the impact of trade liberalisation on income inequality across 24 Sub‐Saharan African (SSA) countries from 2000 to 2020. Using IV‐Tobit and 2SLS models, we consistently find that greater trade openness significantly exacerbates inequality in the region. Critically, we document an inverted U‐shaped relationship between trade and inequality—similar to the Laffer Curve—but this mitigating effect is only observed in high‐income, less corrupt, and democratic SSA countries. In addition, trade openness demonstrates a dual, contradictory effect on inequality: the disruptive impact on employment significantly outweighs the mitigating effect of the education channel. This disparity underscores that without robust labour market and social protection policies, the negative employment consequences of trade liberalisation will dominate the potential equalising gains from human capital development.\n"]

  February 01, 2026   doi: 10.1002/ijfe.70164   open full text
• Corporate Social Responsibility, Resource Curse and Crash Risk: New Evidence From International Stock Markets.
  Shi Teng, Yu‐En Lin, Siyang Wang.
  International Journal of Finance & Economics. January 30, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis study investigates the relationship between corporate social responsibility (CSR) and stock price crash risk in the context of the resource curse. We find that CSR mitigates stock price crash risk. Based on institutional theory, stakeholder theory and agency theory, using a large firm‐level panel dataset spanning 52 countries, we find that CSR generally mitigates stock price crash risk. What's more, resource dependence negatively moderates this relationship, weakening CSR's risk‐mitigating effect. Further analysis of resource‐dependent developing countries reveals that CSR is associated with higher crash risk in environments characterised by poor institutional quality and high corruption. Our results highlight the critical role of institutional quality and corruption control in enabling CSR to fulfil its risk‐reducing potential in resource‐dependent economies.\n"]

  January 30, 2026   doi: 10.1002/ijfe.70163   open full text
• Geopolitical Risk and Bank Stability in the MENA Region: The Moderating Role of Diversification and Financial Flexibility.
  Dexiang Wu, Ahmed Rashed, Ahmed A. Elamer.
  International Journal of Finance & Economics. January 29, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nWe investigate the impact of geopolitical risk on bank stability in the Middle East and North Africa (MENA) region. We further examine how internal strategic factors—namely, bank diversification and financial flexibility—moderate this relationship, potentially serving as buffers against external political shocks. Using a balanced panel of 107 listed MENA banks from 2007 to 2023, comprising 1819 bank‐year observations, we employ panel corrected standard error (PCSE) and robustness checks. It utilises both accounting‐based (Z‐score and NPL) and market‐based (distance‐to‐default and long‐term earnings volatility) indicators of bank stability. We incorporate the Caldara and IacovielloGeopolitical Risk Index and its growth rate to capture both level and momentum effects of geopolitical risks. The findings demonstrate a statistically significant negative relationship between geopolitical risk and bank stability. However, banks with higher levels of diversification and financial flexibility are more resilient to geopolitical shocks, highlighting their moderating role in turbulent geopolitical environments. We further conduct additional tests showing that asset diversification partially and complementarily mediates the adverse effect of geopolitical risk on bank stability. Robustness analyses reveal that strong institutional governance provides critical buffers that enable banks to absorb geopolitical shocks and sustain financial stability. Moreover, crisis‐specific tests indicate that global and regional shocks (e.g., global financial crisis, Arab Spring, COVID‐19 and Russia–Ukraine War) significantly intensify the negative GPR–stability relationship. Geopolitical risk erodes bank stability, particularly in weakly governed and resource‐dependent economies, highlighting banks' heterogeneous vulnerability to external shocks. This paper emphasises the importance of internal strategic buffers in regions prone to political volatility and provides actionable insights for bank executives, regulators and policymakers.\n"]

  January 29, 2026   doi: 10.1002/ijfe.70165   open full text
• Economic Policy Uncertainty and Income Inequality Across Europe.
  Don Bredin, Stilianos Fountas, Paraskevi Tzika.
  International Journal of Finance & Economics. January 27, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nThis paper investigates the impact of Economic Policy Uncertainty (EPU) on income inequality across a broad set of European countries from 1995 to 2022, with a particular focus on the core‐periphery divide. Applying both time series and panel data methodologies—including Vector Autoregressions (VAR), panel VAR and local projections—we assess how economic uncertainty influences inequality dynamics. Our findings reveal three key insights. First, uncertainty shocks significantly affect income inequality in nearly all countries, and the effect is time‐varying. Second, the effect is heterogeneous across countries but varies: uncertainty tends to reduce inequality in core European countries such as Belgium, Germany, Ireland and the Netherlands, while mainly increasing it in periphery and intermediate countries like France, Greece, Italy and Spain. Third, panel analysis confirms this asymmetry, showing more persistent and positive inequality effects in periphery countries. These results suggest that income inequality in Europe's periphery is more vulnerable to economic uncertainty, underscoring the importance of stable policy environments and targeted fiscal responses.\n"]

  January 27, 2026   doi: 10.1002/ijfe.70161   open full text
• Performance of Excess Cash Holding Portfolios: Evidence From the United Kingdom.
  Gbenga Adamolekun, Edward Jones, Hao Li.
  International Journal of Finance & Economics. January 27, 2026
  ["International Journal of Finance &Economics, EarlyView. ", "\nABSTRACT\nIn this study, we investigate the impact of excess cash holdings on the performance of UK portfolios during periods of high economic uncertainty from 1980 to 2018. We argue that macro‐level uncertainty poses significant risks to firms. A high level of uncertainty also enhances the value of cash holdings, as cash‐rich firms are more likely to demonstrate financial flexibility and overcome financial constraints. Consistent with our prediction, we document that portfolios with high cash holdings outperform those with low cash holdings by 7% after adjusting for the Fama–French 25 portfolio sort. Our results are robust after adjusting for asset pricing factors. Our empirical evidence suggests that the trade‐off between the benefit of carrying and the cost of holding excess cash depends on the macro‐level of uncertainty, highlighting the value of cash as a safe haven during such times. In evaluating how limits to arbitrage affect the outperformance of excess cash holding portfolios, we find that the effect dissipates for stocks with high transaction costs. Furthermore, we document that the outperformance of the excess cash holding portfolio is pronounced during periods of low investor sentiment. In general, the study's results are economically meaningful for investors.\n"]

  January 27, 2026   doi: 10.1002/ijfe.70153   open full text
• Debt spikes, blind spots, and financial stress.
  Laura Jaramillo, Carlos Mulas‐Granados, Joao Tovar Jalles.
  International Journal of Finance & Economics. October 18, 2017
  Are blind spots of public debt spikes sizable? And how do they affect financial stress indicators? This paper tackles these questions empirically, using information from 179 episodes of public debt spikes between 1945 and 2014. We find that large public debt spikes are neither driven by high primary deficits nor by output declines but instead by stock‐flow adjustments. These blind spots in debt dynamics are sizable in both advanced economies and emerging markets and could amount to more than 20% of gross domestic product in the median episode. These public debt spikes increase financial stress indicators significantly, in particular when a large share of public debt is held by domestic commercial banks. Enhanced transparency and better debt forecasting tools could help address financial market tensions resulting from blind spots in debt dynamics.

  October 18, 2017   doi: 10.1002/ijfe.1598   open full text
• US macroannouncements and international asset pricing.
  Ding Du.
  International Journal of Finance & Economics. October 17, 2017
  The world capital asset‐pricing model is the benchmark model in international finance. However, recent research finds that the premium on the world market factor is insignificant. In this paper, we investigate if the world market risk premium is particularly significant on US macroeconomic announcement days. Empirically, we apply the methodology to daily country exchange‐traded funds. Our findings suggest that although the world market risk premium is insignificant on nonannouncement days, it is strongly significant on US macroeconomic announcement days. In addition, we find that US monetary policy announcements are the most important macroeconomic announcements to drive the world market risk premium. Our findings are consistent with the notion of monetary policy uncertainty and the empirical literature that connects policy uncertainty with systematic risk.

  October 17, 2017   doi: 10.1002/ijfe.1592   open full text
• On the stock market reactions to fiscal policies.
  Pasquale Foresti, Oreste Napolitano.
  International Journal of Finance & Economics. October 16, 2017
  In this paper, a panel analysis is employed to investigate the effects of fiscal policies on stock market indexes in 11 members of the Eurozone. Many studies have focused on the effects of monetary policy on the stock market, whereas the number of contributions studying the effects of fiscal policy on the stock market is surprisingly limited. Therefore, we know little, if any, on the sign and stability of the stock market reaction to fiscal policies. Our results show that fiscal policies influence the stock market and that, following an increase (decrease) in public deficit, stock market indexes go down (up). Nevertheless, further analysis shows that the signs of the estimated stock market reactions are not constant over time and that they change according to the surrounding macroeconomic scenario.

  October 16, 2017   doi: 10.1002/ijfe.1584   open full text
• The assessment of the United States quantitative easing policy: Evidence from global stock markets.
  Jung‐Bin Su, Ken Hung.
  International Journal of Finance & Economics. October 16, 2017
  This study assesses the performance of the quantitative easing policy implemented by the United States (US) on the stock markets with a framework of structure break. The empirical results show that the business cycle or the value of gross domestic production has a negative impact on the stock markets for most of the countries even if both gross domestic production and many stock prices are procyclical. Moreover, the purchases of US Treasury securities and mortgage‐backed securities respectively affect the stock markets synchronously and laggardly. Notably, they both have a positive impact on the stock markets during the study period. Finally, during the after structure break period, the volatility can be easily affected by bad news, and the investors have the lower profit or even the greater loss and bear the greater risk and variation of risk owing to the global financial crisis caused by the US. On the basis of the above findings, some policy implications are offered in this study.

  October 16, 2017   doi: 10.1002/ijfe.1590   open full text
• On equity risk prediction and tail spillovers.
  Panos Pouliasis, Ioannis Kyriakou, Nikos Papapostolou.
  International Journal of Finance & Economics. October 16, 2017
  This paper studies the impact of modelling time‐varying variances of stock returns in terms of risk measurement and extreme risk spillover. Using a general class of regime‐dependent models, we find that volatility can be disaggregated into distinct components: a persistent stable process with low sensitivity to shocks and a high volatility process capturing rather short‐lived rare events. Out‐of‐sample forecasts show that, once regime shifts are accounted for, accuracy is improved compared to the standard generalized autoregressive conditional heteroscedasticity or the historical volatility model. Volatility plays an important role in controlling and monitoring financial risks. Therefore, by means of a risk management application, we illustrate the economic value and the practical implications of risk control ability of the models in terms of value at risk. Finally, tests for predictability in co‐movements in the tails of stock index returns suggest that large losses are strongly correlated, supporting asymmetric transmission processes for financial contagion in the left tail of return distributions, whereas contagion in reverse direction (gains) is weak.

  October 16, 2017   doi: 10.1002/ijfe.1594   open full text
• The importance of firm level multinationality in the country versus industry debate.
  Cormac Mullen, Jenny Berrill.
  International Journal of Finance & Economics. October 13, 2017
  We conduct the most comprehensive empirical analysis that exists to date of the effect multinationality has on the explanatory power of country and industry factors in international diversification. We investigate the impact the size, scope, and location of a company's international sales has on country versus industry factors, analysing 1,276 firms from Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Spain, the UK, and the US over the 15‐year period, 1998–2012. We find that the magnitude of the country factor is greater than the magnitude of the industry factor for the period as a whole but that a company's level of international sales has a greater impact on the magnitude of its industry factor than the magnitude of its country factor. Counter‐intuitively, we find stocks with lower sales exposure to their country of origin have a higher country factor, and we show the existence of both a strong local and international industry factor. Our results suggest country‐of‐origin diversification may no longer be sufficient to exploit country‐specific risk and the country factor has become a “country classification” factor.

  October 13, 2017   doi: 10.1002/ijfe.1597   open full text
• Central bank swap lines and CIP deviations.
  William A. Allen, Gabriele Galati, Richhild Moessner, William Nelson.
  International Journal of Finance & Economics. October 12, 2017
  We study the use of U.S. dollar central bank swap lines as a tool for addressing dislocations in the foreign currency swap market against the USD since the global financial crisis. We find that the use of the Federal Reserve's USD central bank swap lines was mainly related to tensions in U.S. money markets during times of financial crisis, and less to tensions that were confined to foreign exchange swap markets. In particular, we find that the use of USD central bank swap lines did not react significantly to the recent period of persistent deviations of covered interest parity since 2014. These results are consistent with the view that the Federal Reserve was guided by enlightened self‐interest when providing swap lines to foreign central banks, in order to reduce dislocations in U.S. financial markets and support financial stability. In recent years, foreign exchange swap markets have not functioned properly, but it appears that now that the crisis is over, the Federal Reserve and other central banks have decided against trying permanently to fill the gap left by the dysfunction in the commercial foreign exchange swap market.

  October 12, 2017   doi: 10.1002/ijfe.1596   open full text
• Economics blogs sentiment and asset prices.
  Vincenzo Farina, Antonio Parisi, Ugo Pomante.
  International Journal of Finance & Economics. October 11, 2017
  One of the most important research streams in finance is to understand the determinants of stock market dynamics. Using a large amount of linguistic data regarding 960,808 posts during a 5‐year time period (from March 1, 2008, to August 31, 2013), we develop an economics blogs pessimism indicator (considered as a proxy for either investor sentiment or risk aversion), and we show its validity to build performing trading strategies.

  October 11, 2017   doi: 10.1002/ijfe.1591   open full text
• Corporate governance structure and efficiencies of cooperative banks.
  Nobuyoshi Yamori, Kozo Harimaya, Kei Tomimura.
  International Journal of Finance & Economics. October 11, 2017
  How to discipline managers of cooperative structured financial institutions (co‐ops) is considered a critical issue by the Japanese financial regulatory authorities because co‐ops play a significant role in the domestic banking market, especially for small and medium‐sized enterprises. This paper seeks to clarify whether the effect of the governance‐related variables on firm performance varies across stock and cooperative banks in Japan. We consider regional banks as a proxy of stock banks and Shinkin banks, one of the representative co‐ops, as a proxy of cooperative banks. We use cost and profit efficiency scores obtained from stochastic frontier analysis as performance measures. The results in this paper confirmed that having a large number of board members has negative effects on efficiency measures for both stock and cooperative banks. On the other hand, the presence of outside directors has a significant effect on efficiency measures for cooperative banks, whereas such variables have no significant effect for stock banks. These results suggest that outside directors' discipline is more necessary for cooperative banks than for stock banks, which are under strong pressure from shareholders. For cooperative banks, a high ratio of representative council members, which is the most important decision‐making body for Shinkin banks, has negative effects on efficiency measures. Our findings support the current proposals of the financial regulatory authorities' council to appoint outside directors to the board as a means for strengthening governance of the co‐ops.

  October 11, 2017   doi: 10.1002/ijfe.1593   open full text
• Mean and variance equation dynamics: Time deformation, GARCH, and a robust analysis of the London housing market.
  Steve Cook, Duncan Watson.
  International Journal of Finance & Economics. October 06, 2017
  The potential relationship between time deformation and generalized autoregressive conditional heteroscedasticity (GARCH) is examined. Despite time deformation and GARCH being mean and variance equation phenomena, respectively, they are argued herein to share a common motivation relating to the examination of changes in the temporal evolution of time‐series processes. Via extensive simulation analysis, a close connection between the two concepts is established. It is found that the presence of GARCH can result in the spurious detection of time deformation, particularly when examining the heavy‐tailed distributions and volatile data typically considered in empirical finance. It is shown that although the application of heteroskedasticity corrected covariance matrix estimators often increases, rather than corrects, the detected oversizing of the tests of time deformation, the application of GARCH filters does provide a solution to size distortion. The findings of the experimental analysis are drawn upon to provide a robust empirical examination of the London housing market where evidence of overwhelming and widespread nonlinearity is detected in the form of time deformation. The implications of these findings for the conduct of future, and the interpretation of previous, research are discussed.

  October 06, 2017   doi: 10.1002/ijfe.1589   open full text
• Determinants of long‐ versus short‐term bank credit in EU countries.
  Haelim Park Anderson, Claudia Ruiz‐Ortega, Thierry Tressel.
  International Journal of Finance & Economics. October 02, 2017
  This paper empirically examines the determinants of credit at different maturities across countries of the European Union during the last decade. We document the lengthening of maturities since the early 2000s and whether these patterns were driven by similar factors in advanced and emerging market economies. Before the 2008 crisis, long‐term credit expanded faster than short‐term credit in most countries of our sample and contracted less than short‐term credit after 2008. We find that foreign liabilities were more important sources of funding in emerging market countries than in advanced economies. In addition, aggregate demand mattered less for credit extension to firms in emerging market countries than in advanced countries.

  October 02, 2017   doi: 10.1002/ijfe.1583   open full text
• Mutual fund skill in timing market volatility and liquidity.
  Jason Foran, Niall O'Sullivan.
  International Journal of Finance & Economics. July 31, 2017
  We investigate both market volatility timing and market liquidity timing for the first time among UK mutual funds. We find strong evidence that a small percentage of funds time market volatility successfully, that is, when conditional market volatility is higher than normal, systematic risk levels are lower. The evidence around market liquidity timing ability is similar although it is slightly less prevalent compared to volatility timing. Here, funds lower the fund market beta in anticipation of reduced market liquidity. We also find a positive relation between liquidity timing ability and fund abnormal performance where skilled liquidity timers outperform unskilled timers by around 3% p.a.—though this finding is driven by poor liquidity timing funds going on to yield negative alpha. However, despite the evidence of volatility and liquidity timing ability among funds, we fail to find in support of persistence in this timing. We find little evidence supporting market return timing ability.

  July 31, 2017   doi: 10.1002/ijfe.1580   open full text
• Euro area time‐varying fiscal sustainability.
  António Afonso, João Tovar Jalles.
  International Journal of Finance & Economics. July 11, 2017
  We assess the time‐varying features of fiscal sustainability in the euro area via revisiting the empirical relationship between the primary budget surplus and the debt‐to‐GDP ratio. Focusing on a sample of 11 Euro‐area countries between 1999Q1 and 2013Q4 and by means of time series analyses, we find that (a) fiscal policy seems to have been sustainable in Belgium, France, Germany, and the Netherlands and a Ricardian (monetary dominant) regime might have been present; (b) debt exhibited a negative response following an innovation in the budget surplus in half of the sample; (c) the time‐varying coefficient model shows that the 2008–2009 global economic and financial crisis exerted a sizeable negative impact on fiscal sustainability; and (d) expenditure‐based fiscal rules are strong determinants of fiscal sustainability. All in all, we found some evidence against the Fiscal Theory of the Price Level.

  July 11, 2017   doi: 10.1002/ijfe.1582   open full text
• Alphas in disguise: A new approach to uncovering them.
  Venkata Chinthalapati, Cesario Mateus, Natasa Todorovic.
  International Journal of Finance & Economics. July 10, 2017
  Four‐factor Carhart alphas of passive indices should be zero, but recent empirical evidence shows otherwise. We propose an optimization algorithm that makes small (fixed) adjustments to the time series of the market, size, value, and momentum factors, which ensures a zero alpha for any (single) self‐designated benchmark index of a mutual fund. Our “adjusted factors” can then be used to estimate a mutual fund's “adjusted alpha.” We test this methodology on a sample of 1,281 active and 102 tracker U.S. equity mutual funds (reporting S&P 500 index as their prospectus benchmark). Our time series adjustment of the Carhart 4 factors leads to an increase (decrease) in a fund's “adjusted alpha” in periods of fund‐benchmark underperformance (outperformance). On the whole, our “adjusted alphas” of both active and tracker funds are statistically significantly negative. This is particularly pronounced for tracker funds.

  July 10, 2017   doi: 10.1002/ijfe.1581   open full text
• What drives differences of opinion in sovereign ratings? The roles of information disclosure and political risk.
  Huong Vu, Rasha Alsakka, Owain Gwilym.
  International Journal of Finance & Economics. April 27, 2017
  This paper investigates the causes of split sovereign ratings across S&P, Moody's, and Fitch for 64 countries from 1997 to 2011. We identify that split sovereign ratings are not symmetric, with S&P tending to be the most conservative agency. We find that opaque sovereigns are more likely to receive split ratings. Political risk plays a highly significant role in explaining split ratings and dominates economic and financial indicators. Out‐of‐sample model performance is enhanced by capturing political risk. Government information disclosure affects split ratings between Moody's and Fitch in emerging countries. The study implies an incentive for governments to reduce political uncertainty and to enhance transparency.

  April 27, 2017   doi: 10.1002/ijfe.1579   open full text
• The role of time‐varying return forecasts for improving international diversification benefits.
  Maria del Mar Miralles‐Quiros, Jose Luis Miralles‐Quiros.
  International Journal of Finance & Economics. April 12, 2017
  The aim of this study is to provide empirical evidence of the international diversification benefits obtained employing not only time‐varying volatility forecasts but also time‐varying return forecasts from a multivariate approach that considers the dynamic relationships in return series as well as in volatilities and correlations. To that end, instead of using market indexes from different investment areas, we employ exchange trade funds actively traded on the New York Stock Exchange in recent years. It avoids nonsynchronous problems as well as allowing us to allocate internationally on a daily basis for which this approach is especially appropriate. Our overall results show that using this technique, it is possible to obtain economic gains and outperform the common benchmark strategies, even when the costs associated with the daily rebalance of each portfolio are taken into account.

  April 12, 2017   doi: 10.1002/ijfe.1578   open full text
• How fat are the tails of equity market indices?
  Stoyan Stoyanov, Lixia Loh, Frank J. Fabozzi.
  International Journal of Finance & Economics. March 21, 2017
  Using a generalized autoregressive conditional heteroskedasticity model to explain away the volatility clustering of volatility effect and extreme value theory to analyse the residuals' left and right tails, we study the tail thickness of 22 developed and 19 emerging equity market indices. In‐sample and out‐of‐sample tests indicate that exponential tails of the residuals cannot be strongly rejected. We study the dispersion of extremes of developed and emerging markets, and we report a statistically significant tail asymmetry in both types of markets and a significant change in both tail risk and tail asymmetry of emerging markets after the financial crisis of 2008.

  March 21, 2017   doi: 10.1002/ijfe.1577   open full text
• Multilateral Loans and Interest Rates: Further Evidence on the Seniority Conundrum.
  Sven Steinkamp, Frank Westermann.
  International Journal of Finance & Economics. March 20, 2017
  During Europe's sovereign debt crisis, interest rate spreads have been highly correlated with the share of multilateral loans that were considered senior to private markets. As both variables are potentially endogenous, we follow 2 different approaches to analyze the direction of causality. First, we use a set of instrumental variable regressions where the differences between sovereign ratings serve as instruments. Second, we analyze a new panel survey dataset on seniority and interest rate expectations. In both approaches, we find evidence for the seniority conundrum, that is, a positive impact of multilateral loans on interest rate spreads.

  March 20, 2017   doi: 10.1002/ijfe.1575   open full text
• Eurozone cycles: An analysis of phase synchronization.
  Brigitte Granville, Sana Hussain.
  International Journal of Finance & Economics. March 16, 2017
  This paper analyses synchronization, both across and between business and financial cycles (growth and classical) in a subset of 10 countries representative of the Economic and Monetary Union. Employing an extended data set from 1960 to 2013, we find evidence of synchronization across financial cycles. In case of business cycles, we find contrasting results: There is significant synchronization across growth cycles but no evidence of a common classical cycle. This confirms, first, that economic and financial variables in the Economic and Monetary Union behave differently and, second, that synchronization in business cycles arises from synchronized deviations from the trend, but the underlying macroeconomic fundamentals are not in synch. Furthermore, we adopt a novel approach to break down our full sample period into smaller subperiods to follow the evolution of synchronization over time. Our results highlight the role played by the monetary union in further increasing macroeconomic divergences.

  March 16, 2017   doi: 10.1002/ijfe.1576   open full text
• Equity flows, stock returns and exchange rates.
  Angelos Kanas, Sotirios Karkalakos.
  International Journal of Finance & Economics. March 06, 2017
  We explore the effects of equity flows between U.S. and U.K. investors upon equity and exchange rate returns within a unified empirical framework on the basis of a trivariate vector autoregressive system that incorporates mean and volatility spillovers and allows for dynamic conditional correlations. Our findings are as follows: First, we reveal strong evidence of volatility spillovers across equity returns, exchange rate returns, and equity flows. Second, we find strong evidence that U.K. investors rebalance their portfolios by engaging in a positive feedback trading known in the literature as “trend chasing.” Third, we document strong dynamic effects from net flows to equity returns, illustrating a trading rule that portfolios are dynamically adjusted over a short‐run horizon influencing changes in stock returns. Last, correlation uncertainty appears to be reduced from the start of the 1990s onwards.

  March 06, 2017   doi: 10.1002/ijfe.1574   open full text
• Pricing the ECB's forward guidance with the EONIA swap curve.
  Matthieu Picault.
  International Journal of Finance & Economics. February 27, 2017
  On July 4, 2013, following several other major central banks, the European Central Bank (ECB) gave for the first time forward guidance on interest rates, which affected market participants' expectations of future interest rates in the context of a Zero Lower Bound. Using an ARMAX(1,1) model in which the effect of the communication of negative macroeconomic news was disentangled from the commitment positive shock, the impact of the forward guidance on money market interest rates is estimated through the Euro Overnight Index Average swap, also called overnight index swap, at maturities between 2 months and 10 years using abnormal returns from an event study. The results and robustness checks suggest that the ECB's guidance lowered overnight index swap rates for maturities within 10 months to 3 years. These results imply the existence of a commitment effect from the ECB's communication. In the context of decreasing market liquidity because of the 3‐year long‐term refinancing operation repayment, market participants priced the low period of interest rates until mid‐2016.

  February 27, 2017   doi: 10.1002/ijfe.1572   open full text
• Monetary policy and leverage shocks.
  Khandokar Istiak, Apostolos Serletis.
  International Journal of Finance & Economics. January 24, 2017
  The current mainstream approach to monetary policy in the United States is based on the new Keynesian model and is expressed in terms of the federal funds rate. It ignores the role of financial intermediary leverage (or collateral rates). But as the federal funds rate has reached the zero lower bound, the issue is whether there is a useful role of leverage in monetary policy and business cycle analysis. Motivated by these considerations and by recent financial intermediary asset pricing theories in this paper, we investigate the macroeconomic effects of broker–dealer leverage and the interdependence between monetary policy and broker–dealer leverage in the context of a structural vector autoregression model, using quarterly U.S. data over the period from 1967:1 to 2014:3. We address the simultaneity problem of identifying monetary policy and leverage shocks by using a combination of short‐run and long‐run restrictions. We also use the sign restriction approach to the identification of shocks to distinguish between leverage supply and leverage demand shocks, as one would expect the macroeconomic effects of these two types of leverage shocks to be quite different. Our results show that monetary policy and broker–dealer leverage demand shocks produce results that capture reasonable macroeconomic dynamics.

  January 24, 2017   doi: 10.1002/ijfe.1571   open full text
• Is there still a Berlin Wall in the post‐issue operating performance of European IPOs?
  Tiago Pinho Pereira, Miguel Sousa.
  International Journal of Finance & Economics. January 06, 2017
  This paper studies the post‐IPO operating performance of a sample of 555 European firms that went public between 1995 and 2006. Consistent with previous findings, we observe a decline in post‐issue operating performance of IPO firms. However, firms located in emerging European countries perform even worse after the IPO than firms located in developed European countries. Our results suggest that this less successful post‐issue operating performance by firms located in emerging countries can be explained by a more aggressive use of accruals and a better timing of the IPO in order to coincide with a period of high operating performance.

  January 06, 2017   doi: 10.1002/ijfe.1573   open full text
• Banking and Currency Crises: Differential Diagnostics for Developed Countries.
  Mark Joy, Marek Rusnák, Kateřina Šmídková, Bořek Vašíček.
  International Journal of Finance & Economics. November 07, 2016
  We identify a set of ‘rules of thumb’ that characterize economic, financial and structural conditions preceding the onset of banking and currency crises in 36 advanced economies over 1970–2010. We use the classification and regression tree methodology and its random forest extension, which permits the detection of key variables driving binary crisis outcomes, allows for interactions among key variables and determines critical tipping points. We distinguish between basic country conditions, country structural characteristics and international developments. We find that crises are more varied than they are similar. For banking crises, we find that low net interest rate spreads in the banking sector and a shallow, or inverted, yield curve is their most important forerunners in the short term. In the longer term, it is high house price inflation. For currency crises, high domestic short‐term rates coupled with overvalued exchange rates are the most powerful short‐term predictors. We find that both country structural characteristics and international developments are relevant banking‐crisis predictors. Currency crises, however, seem to be driven more by country idiosyncratic, short‐term developments. We find that some variables, such as the domestic credit gap, provide important unconditional signals, but it is difficult to use them as conditional signals and, more importantly, to find relevant threshold values. Copyright © 2016 John Wiley & Sons, Ltd.

  November 07, 2016   doi: 10.1002/ijfe.1570   open full text
• Corporate Governance, Bank Mergers and Executive Compensation.
  Yan Liu, Carol Padgett, Simone Varotto.
  International Journal of Finance & Economics. November 04, 2016
  Using a sample of US bank mergers from 1995 to 2012, we observe that the pre‐post merger changes in CEO bonus are significantly negatively related to the strength of corporate governance within the bidding bank. This suggests that bonus compensation is not consistent with the ‘optimal contracting hypothesis’. Salary changes, on the other hand, are not affected by corporate governance which is in line with ‘optimal contracting’. We also find that good governance is associated with more accretive deals for the bidder. Overall, our results are consistent with the notion that, unlike salary and long‐term compensation, bonus compensation is not aligned with value creation and is more vulnerable to CEO manipulation in banks with poor corporate governance. Copyright © 2016 John Wiley & Sons, Ltd.

  November 04, 2016   doi: 10.1002/ijfe.1565   open full text
• Benchmarking Judgmentally Adjusted Forecasts.
  Philip Hans Franses, Bert Bruijn.
  International Journal of Finance & Economics. October 26, 2016
  Many publicly available macroeconomic forecasts are judgmentally adjusted model‐based forecasts. In practice, usually only a single final forecast is available, and not the underlying econometric model, nor are the size and reason for adjustment known. Hence, the relative weights given to the model forecasts and to the judgement are usually unknown to the analyst. This paper proposes a methodology to evaluate the quality of such final forecasts, also to allow learning from past errors. To do so, the analyst needs benchmark forecasts. We propose two such benchmarks. The first is the simple no‐change forecast, which is the bottom line forecast that an expert should be able to improve. The second benchmark is an estimated model‐based forecast, which is found as the best forecast given the realizations and the final forecasts. We illustrate this methodology for two sets of GDP growth forecasts, one for the USA and one for the Netherlands. These applications tell us that adjustment appears most effective in periods of first recovery from a recession. Copyright © 2016 John Wiley & Sons, Ltd.

  October 26, 2016   doi: 10.1002/ijfe.1569   open full text
• Euro Effect on Trade in Final, Intermediate and Capital Goods.
  Inmaculada Martínez‐Zarzoso, Florian Johannsen.
  International Journal of Finance & Economics. October 13, 2016
  The aim of this paper is to provide fresh evidence on the effect of the adoption of the euro on exports of different types of goods. The novelty with respect to previous research is threefold. First, disaggregated trade data are used to allow for heterogeneous effects for final intermediate and capital goods. Second, we distinguish between the euro effect on the extensive and the intensive margins of trade. Finally, we estimate the impact of the Euro adoption controlling for exchange rate volatility, exchange rate movements and EU membership. This allows us to disentangle the effect of a common currency beyond the elimination of trade barriers and of any variation in the exchange rate. The main results indicate that the impact of the Euro on trade values (intensive margin) is around 9% for intermediates, 7% for final goods and it is negative for capital goods. Interestingly, the Euro effects on the extensive margin of trade are found to be negative and significant for the three types of goods, pointing to increasing specialization. Copyright © 2016 John Wiley & Sons, Ltd.

  October 13, 2016   doi: 10.1002/ijfe.1567   open full text
• Macro News and Commodity Returns.
  Guglielmo Maria Caporale, Fabio Spagnolo, Nicola Spagnolo.
  International Journal of Finance & Economics. October 11, 2016
  This paper adopts a vector autoregression‐generalized autoregressive conditional heteroscedasticity approach to model the dynamic linkages between both mean and variance of macro news and commodity returns (Gold, Corn, Wheat, Soybeans, Silver, Platinum, Palladium, Copper, Aluminium and Crude Oil) over the period 01/01/2001–26/09/2014. The chosen specification also controls for the effect of the exchange rate. The results can be summarized as follows. Mean spillovers running from news to commodity returns are positive with the exception of Gold and Silver. Volatility spillovers are bigger in size and affect most commodity returns. Both first‐moment and second‐moment linkages are stronger in the post‐September 2008 period. Overall, our findings confirm that commodities, despite not being financial assets, are sensitive to macro news (especially their volatility) and also suggest that the global financial crisis has strengthened such linkages. Copyright © 2016 John Wiley & Sons, Ltd.

  October 11, 2016   doi: 10.1002/ijfe.1568   open full text
• Financial Cycle, Business Cycle and Monetary Policy: Evidence from Four Major Economies.
  Yong Ma, Jinglan Zhang.
  International Journal of Finance & Economics. October 11, 2016
  Economists used to think that financial factors are not important in the business cycle, but the 2008 global financial crisis has made it apparent that financial cycle plays a much larger role in macroeconomic dynamics than anticipated. Against this background, economists endeavor to introduce financial factors into macroeconomic models. In this paper, we incorporate financial cycle into a four‐equation model to study the linkages and interactions between financial cycle, business cycle and monetary policy. The results suggest that financial cycle plays a significant role in the business cycle, and that financial cycle shock has become a main driving force for macroeconomic fluctuations, especially during times of financial instability. In addition, by comparing the performance of the finance‐augmented Taylor rule with that of the conventional Taylor rule, we find that both the financial system and the real economy will be better stabilized under the finance‐augmented Taylor rule. This result adds new evidence to the argument that monetary policy has an important role in safeguarding the financial system and that financial stability should be adopted as a target for monetary policy. Copyright © 2016 John Wiley & Sons, Ltd.

  October 11, 2016   doi: 10.1002/ijfe.1566   open full text
• Intraday Rallies and Crashes: Spillovers of Trading Halts.
  Bei Cui, Arie E. Gozluklu.
  International Journal of Finance & Economics. August 12, 2016
  This paper analyses a set of intraday rally and crash events at the firm level during the single‐stock circuit breaker program and documents the cross‐sectional spillover effects of such events on non‐halted stocks. We test whether such major price jumps, and subsequent trading halts, affect related stocks through the destabilizing eme price movements that trigger the circuit breakers at the firm level are accompanied by a massive surge in volume, spread and short‐term volatility, which gradually revert back to normal. Speculative strategies of arbitrageurs such as momentum and pairs trading cause cross‐sectional spillovers in volume and volatility during the trading halt. Copyright © 2016 John Wiley & Sons, Ltd.

  August 12, 2016   doi: 10.1002/ijfe.1556   open full text
• Real Effects of Inflation on External Debt in Developing Economies.
  Mark Assibey‐Yeboah, Sushanta Mallick, Mohammed Mohsin.
  International Journal of Finance & Economics. July 11, 2016
  This paper uses an intertemporal optimizing model with country‐specific risk premium to evaluate the real effects of inflation in a small open developing economy. In the model, a central bank targets inflation, and the consumer requires real balances in advance for consumption spending. We show that a positive inflation shock (either due to growth in money supply or depreciation of the domestic currency) yields a decrease in real output and consumption—as inflation creates a tax wedge in the intratemporal condition between consumption and leisure—leading to a decrease in the stock of real debt in domestic currency. Employing these theoretical predictions and using annual data from a set of six developing countries (Chile, Ghana, Indonesia, Kenya, Malaysia and Thailand), we estimate a sign‐restriction based structural vector autoregression model along with a panel vector autoregression model for robustness analysis. The empirical results support the trade‐off of inflation with reference to the key real variables including the external debt position, which is a significant result given the ambiguity in the empirical literature as to whether governments can escape from debt crisis via higher inflation. Copyright © 2016 John Wiley & Sons, Ltd.

  July 11, 2016   doi: 10.1002/ijfe.1553   open full text
• Determinants of Liquidity (Re)Allocation and the Decision to Cross‐List or Cross‐Delist.
  Roland Füss, Ulrich Hommel, Jan‐Carl Plagge.
  International Journal of Finance & Economics. June 06, 2016
  This paper examines the factors influencing the liquidity allocation between local and foreign dual listings. Based on a comprehensive data set covering the period between 2001 and 2011, empirical results suggest that the fraction of trading in the foreign listing decreases with a higher degree of stock market integration measured as the stock price correlation with the world market. Furthermore, the analysis of individual cross‐listings reveals that both an improvement of a country's state of economic development and a better regulatory environment significantly affect the allocation of trading. While an improvement in economic development increases both local and foreign liquidity, a strengthening of regulatory standards leads to a decrease in trading volumes at foreign exchanges. Finally, the liquidity share in the foreign listing is found to decrease over time, a trend that turns out to be driven by developing rather than by developed markets. Copyright © 2016 John Wiley & Sons, Ltd.

  June 06, 2016   doi: 10.1002/ijfe.1555   open full text
• Panel Data Models and the Uncovered Interest Parity Condition: The Role of Two‐Way Unobserved Components.
  Nils Herger.
  International Journal of Finance & Economics. June 01, 2016
  This paper endeavours to show how the specification of the regression testing the uncovered interest parity (UIP) condition can determine whether or not the hypothesized proportional relationship between international interest rate differences and exchange rate changes is rejected. Across major currencies, various terms to maturity, different data frequencies and the short as well as the long time horizon, single‐equation regressions partly reject the UIP condition. However, this ‘UIP puzzle’ tends to disappear when panel data regressions account, for example, for risk premiums by means of two‐way unobserved component specifications with random or fixed effects for both currencies and time periods. The closest concurrence with the UIP condition arises when specifying the time‐specific component as fixed effect, which provides a way to address the potential bias when unobserved exchange rate risk premiums correlate with interest rates. Copyright © 2016 John Wiley & Sons, Ltd.

  June 01, 2016   doi: 10.1002/ijfe.1552   open full text
• Impact of Domestic Investor Protection on Foreign Investment Decisions: Evidence from Bond Markets.
  Elina Pradkhan.
  International Journal of Finance & Economics. May 26, 2016
  This study explores the relationship between domestic creditor protection and foreign investment decisions in bond markets. It also investigates how the difference between domestic and foreign creditor protections affects the foreign investment. The impact of domestic creditor protection on cross‐border investment in bonds is twofold. A high level of domestic creditor protection increases international diversification. At the same time, an efficient protection of creditor rights at home reduces the sensitivity of foreign investment to foreign creditor protection. These results hold most strongly for investing countries with high levels of domestic creditor protection. In addition, this study shows that the difference between domestic and foreign creditor protections matters for investment decisions: if domestic creditor protection is more efficient than foreign creditor protection, the sensitivity of foreign investment to foreign (domestic) creditor protection decreases (increases). Copyright © 2016 John Wiley & Sons, Ltd.

  May 26, 2016   doi: 10.1002/ijfe.1554   open full text
• Sovereign Credit Ratings in Developing Economies: New Empirical Assessment.
  Gabriel Caldas Montes, Diego S. P. Oliveira, Helder Ferreira Mendonça.
  International Journal of Finance & Economics. May 24, 2016
  This study contributes to understanding the main determinants of sovereign ratings for developing countries making use of information from Standard & Poor's, Moody's, and Fitch. Based on a sample of 40 countries for the period 1994 to 2013 and panel data approach, we extended previous works in the literature by including new economic aspects, as well as, new institutional and governance variables (e.g. inflation targeting, financial openness, democracy, corruption, etc.). The findings denote that, besides the traditional macroeconomic variables, adoption of inflation targeting, financial openness, democracy, law and order, and less corruption are important to improve the sovereign ratings. Copyright © 2016 John Wiley & Sons, Ltd.

  May 24, 2016   doi: 10.1002/ijfe.1551   open full text
• Danger Zones for Banking Crises in Emerging Markets.
  Paolo Manasse, Roberto Savona, Marika Vezzoli.
  International Journal of Finance & Economics. April 04, 2016
  This paper employs a recently developed statistical algorithm in order to build an early warning model for banking crises in emerging markets. The procedure creates many ‘artificial’ samples by iteratively perturbing the original data set and estimates many models from these samples. The final model is constructed by aggregation, so that, by construction, it is flexible enough to accommodate new data for out‐of‐sample prediction. Out of a large number (540) of candidate explanatory variables, ranging from macroeconomic variables to balance sheet indicators, our procedure selects a handful of indicators (and their combinations) that is sufficient to generate accurate out‐of‐sample predictions of banking crises. Using data covering emerging markets from 1980 to 2010, the model identifies two banking crisis' ‘danger‐zones’, e.g. economic configurations that are conducive to crises. The first occurs when high interest rates on bank deposits, possibly reflecting liquidity risks and solvency fears, interact with credit‐booms and capital flights; the second occurs when an investment boom is financed by a large rise in banks' net foreign exposure. We compare our model to models derived by standard econometric techniques, and find that our approach delivers much better out‐of‐sample predictions. Copyright © 2016 John Wiley & Sons, Ltd.

  April 04, 2016   doi: 10.1002/ijfe.1550   open full text
• International Sentiment Spillovers in Equity Returns.
  Deven Bathia, Don Bredin, Dirk Nitzsche.
  International Journal of Finance & Economics. February 23, 2016
  This paper examines the extent of spillovers from US investor sentiment on G7 aggregate market, value and growth stock returns. As a proxy for investor sentiment, we include individual investor survey, measured by the University of Michigan consumer confidence index and market sentiment measured by Baker and Wurgler composite sentiment index. Using monthly data for the period January 1991 to December 2013, our results indicate the presence of significant spillover effects of US investor sentiment on G7 stock returns. Our findings from generalized impulse response functions show that aggregate market and growth stocks of all non‐US G7 countries are significantly affected by the propagation of the US market sentiment. The financial crisis of 2007 has played a significant role in affecting value stock returns in these countries. Our findings further reveal that both the rational and irrational components of the US individual investor sentiment do not play any significant role in affecting international stock returns. Copyright © 2016 John Wiley & Sons, Ltd.

  February 23, 2016   doi: 10.1002/ijfe.1549   open full text
• What Does Rebalancing Really Achieve?
  Keith Cuthbertson, Simon Hayley, Nick Motson, Dirk Nitzsche.
  International Journal of Finance & Economics. February 17, 2016
  There is now a substantial literature on the effects of rebalancing on portfolio performance. However, this literature contains frequent misattribution between ‘rebalancing returns’, which are specific to the act of rebalancing, and ‘diversification returns’, which can be earned by both rebalanced and unrebalanced strategies. Confusion on this issue can encourage investors to follow strategies that involve insufficient diversification and excessive transactions costs. This paper identifies the misleading claims that are made for rebalanced strategies and demonstrates in theory and by simulation that the apparent advantages of rebalanced strategies over infinite horizons give an inaccurate impression of their performance over finite horizons. Copyright © 2016 John Wiley & Sons, Ltd.

  February 17, 2016   doi: 10.1002/ijfe.1545   open full text
• Asymmetric Monetary Policy Rules for an Open Economy: Evidence from Canada and the UK.
  Mustafa Caglayan, Zainab Jehan, Kostas Mouratidis.
  International Journal of Finance & Economics. February 17, 2016
  We present an analytical framework to examine the open economy monetary policy rule of a central bank under asymmetric preferences. The resulting policy rule is then empirically examined using quarterly data with regard to Canada and the UK from 1983q1 to 2007q4. Our empirical investigation shows that the open economy policy rule receives support from the data and that the monetary policy makers in the UK and Canada have asymmetric preferences. Robustness checks based on model calibration provide support for the suggested policy rule. Copyright © 2016 John Wiley & Sons, Ltd.

  February 17, 2016   doi: 10.1002/ijfe.1547   open full text
• The Risk Premium, Interest Rate Determination, and Monetary Independence Under a Fixed, but Adjustable, Exchange Rate.
  Kit Pasula.
  International Journal of Finance & Economics. February 17, 2016
  This paper examines interest rate determination and monetary independence in a small economy with a fixed exchange rate. The risk premium is determined endogenously in the stochastic, general‐equilibrium model. The sign of the risk premium and the magnitude of the interest rate depend on the specification of the policy rule for the future exchange rate. Increases in domestic credit can decrease, increase or have no effect on the interest rate. The offset coefficient can differ from −1 (the ‘trilemma’ may not hold), but numerical calculations indicate that the offset is close to −1. Under certain conditions, empirical analyses overestimate monetary independence. Copyright © 2016 John Wiley & Sons, Ltd.

  February 17, 2016   doi: 10.1002/ijfe.1548   open full text
• Convergence in Corporate Statutory Tax Rates in the Asian and Pacific Economies.
  Yang Chen, Juan Carlos Cuestas, Paulo José Regis.
  International Journal of Finance & Economics. February 15, 2016
  Countries in the Asia and Pacific region have shown many macroeconomic similarities during a period of economic integration. This paper argues that there may be one more macroeconomic feature to add to the list: strong statutory tax convergence. Using data on the statutory corporate tax rate in 15 countries from 1980 to 2014, we identify (i) a significant dynamic tax convergence pattern and (ii) three tax convergence clubs. The latter consist of the small tax haven economies of Hong Kong and Singapore, the East Asian countries (plus one) and the South and Southeast Asian and Oceania countries. These economies, within groups, have been reducing the tax gaps with their neighbours over time. Copyright © 2016 John Wiley & Sons, Ltd.

  February 15, 2016   doi: 10.1002/ijfe.1546   open full text
• The Role of a Changing Market Environment for Credit Default Swap Pricing.
  Julian S. Leppin, Stefan Reitz.
  International Journal of Finance & Economics. January 14, 2016
  This paper investigates the impact of a changing market environment on the pricing of credit default swaps (CDS) spreads written on debt from EURO STOXX 50 firms. A panel smooth transition regression reveals that parameter estimates of standard CDS‐pricing variables are time varying depending on current values of a set of variables such as the European Central Bank's systemic stress composite index, the Sentix index for the current and future economic situation and the VStoxx. These variables describe the market's transition between different regimes, thereby reflecting the impact of substantial swings in agents' risk perception on CDS spreads. Overall, our results confirm the importance of nonlinearities in the pricing of risk derivatives during tranquil and turbulent times. Copyright © 2016 John Wiley & Sons, Ltd.

  January 14, 2016   doi: 10.1002/ijfe.1543   open full text
• Current Account Reversals in Industrial Countries: does the Exchange Rate Regime Matter?
  Cosimo Pancaro, Christian Saborowski.
  International Journal of Finance & Economics. December 21, 2015
  This paper studies current account reversals in industrial countries across different exchange rate regimes. There are two major findings which have important implications for industrial economies with external imbalances: first, triggers of current account reversals differ between exchange rate regimes. While the current account deficit and the output gap are significant predictors of reversals across all regimes, reserve coverage, credit booms, openness to trade and the US short term interest rate determine the likelihood of reversals only under more rigid regimes. Conversely, the real exchange rate affects the probability of experiencing a reversal only under flexible arrangements. Second, current account reversals in advanced economies do not have an independent effect on growth. This result holds not only for industrial economies in general but also for countries with fixed exchange rate regimes in particular. Copyright © 2015 John Wiley & Sons, Ltd.

  December 21, 2015   doi: 10.1002/ijfe.1535   open full text
• Monetary Developments and Expansionary Fiscal Consolidations: Evidence from the EMU.
  António Afonso, Luís Martins.
  International Journal of Finance & Economics. December 17, 2015
  We provide new insights into the existence of expansionary fiscal consolidations in the Economic and Monetary Union, using annual panel data from 14 European Union countries, over the period of 1970–2013. Different measures were calculated for assessing fiscal consolidations, based on the changes in the cyclically adjusted primary balance. A similar ad hoc approach was used to compute monetary episodes. Panel estimations for private consumption show that, in some cases, when fiscal consolidations are coupled with monetary expansions, the traditional Keynesian signals are reversed in the cases of general government final consumption expenditure, social transfers and taxes. Keynesian effects prevail when fiscal consolidations are not matched by monetary easing. Panel probit estimations suggest that longer consolidations contribute positively to its success, whilst the opposite is the case for revenue‐based ones. Copyright © 2015 John Wiley & Sons, Ltd.

  December 17, 2015   doi: 10.1002/ijfe.1544   open full text
• Can High‐frequency Trading Strategies Constantly Beat the Market?
  Viktor Manahov.
  International Journal of Finance & Economics. November 25, 2015
  Policymakers are still debating whether or not high‐frequency trading (HFT) is beneficial or harmful to financial markets. We develop four artificial stock markets populated with HFT scalpers and aggressive high‐frequency traders using Strongly Typed Genetic Programming trading algorithm. We simulate real‐life HFT by applying Strongly Typed Genetic Programming to real‐time millisecond data of Apple, Bank of America, Russell 1000 and Russell 2000 and observe that HFT scalpers front‐run the order flow generating persistent profits. We also use combinations of forecasting techniques as benchmarks to demonstrate that HFT scalping strategies anticipate the trading order flow and constantly beat the market. Copyright © 2015 John Wiley & Sons, Ltd.

  November 25, 2015   doi: 10.1002/ijfe.1541   open full text
• Welfare and Stochastic Dominance for the Measurement of Banks' Domestic Systemic Importance: Analytical Framework and Application.
  Gaston Andrés Giordana.
  International Journal of Finance & Economics. November 24, 2015
  This paper proposes an analytical framework to rank alternative measures of banks' systemic importance in terms of their welfare impact. The advantage of our approach is that it does not require knowing the exact mathematical form of the underlying welfare function in the absence of a widely accepted model of systemic risk. The framework consists of two pillars. First, economic welfare is linked to the measured degree of systemic importance of banks. Second, the association between the concepts of stochastic and welfare dominance of distributions of the measured degree of systemic importance is defined. Then, the alternative measures can be welfare‐ranked by just establishing stochastic dominance relationships. An illustration is presented using Luxembourg data. Copyright © 2015 John Wiley & Sons, Ltd.

  November 24, 2015   doi: 10.1002/ijfe.1542   open full text
• The Pass‐through of Exchange Rate in the Context of the European Sovereign Debt Crisis.
  Nidhaleddine Ben Cheikh, Christophe Rault.
  International Journal of Finance & Economics. November 11, 2015
  This paper investigates whether exchange rate pass‐through (ERPT) into import prices is a nonlinear phenomenon for five heavily indebted Euro area countries, namely the so‐called GIIPS group (Greece, Ireland, Italy, Portugal and Spain). Using logistic smooth transition models, we explore the existence of nonlinearity with respect to sovereign bond yield spreads (versus the German bund) as an indicator of confidence crisis/macroeconomic instability. Our results provide strong evidence that the extent of ERPT is higher in periods of macroeconomic distress, that is, when sovereign bond yield spreads exceed a given threshold. For almost all the GIIPS countries, we reveal that the increase in macroeconomic instability and the loss of confidence during the recent sovereign debt crisis have entailed higher sensitivity of import prices to exchange rate movements. For instance, the rate of pass‐through in Greece is equal to 0.66% when the yield differential is below 2.13%, but beyond this threshold level, the sensitivity of import prices becomes higher and reaches full ERPT. Our findings raise the serious question of whether the exchange rate could be an effective tool to boost the trade balance and prevent deflationary threats when financial crisis hits. Copyright © 2015 John Wiley & Sons, Ltd.

  November 11, 2015   doi: 10.1002/ijfe.1539   open full text
• The Relative Predictability of Stock Markets in the Americas.
  Graham Smith, Aneta Dyakova.
  International Journal of Finance & Economics. November 03, 2015
  The degree of return predictability is measured for seven Latin American stock markets and those in Canada and the United States using three finite‐sample variance ratio tests. Daily data for the period beginning in February 1994 and ending in December 2011 are used in a fixed‐length rolling window to capture short‐lived predictability, track changes in predictability through time and rank markets by relative predictability. Overall, the degree of return predictability varies widely. The most predictable are those located in Chile and Peru; the least predictable are in Argentina and Brazil. Predictability has decreased for all of those stock markets examined, except those located in Ecuador and the United States. Predictability largely coincides with times of crisis. Copyright © 2015 John Wiley & Sons, Ltd.

  November 03, 2015   doi: 10.1002/ijfe.1536   open full text
• Linkages Between the US and European Stock Markets: A Fractional Cointegration Approach.
  Guglielmo Maria Caporale, Luis A. Gil‐Alana, James C. Orlando.
  International Journal of Finance & Economics. November 03, 2015
  This paper analyses the long‐memory properties of US and European stock indices, as well as their linkages, using fractional integration and fractional cointegration techniques. These methods are more general and have higher power than the standard ones usually employed in the literature. The empirical evidence based on them suggests the presence of unit roots in both the Standard and Poor's 500 Index and the Euro Stoxx 50 Index. Also, fractional cointegration appears to hold at least for the subsample from December 1996 to March 2009 ending when the global financial crisis was still severe; subsequently, the US and European stock markets diverged and followed different recovery paths, possibly as a result of various factors such as diverging growth and monetary policy. Establishing whether the degree of cointegration has changed over time is important because past literature has shown that diversification benefits arise when markets are not cointegrated. Copyright © 2015 John Wiley & Sons, Ltd.

  November 03, 2015   doi: 10.1002/ijfe.1537   open full text
• The Return of the Monday Effect in European Currency Markets: An Empirical Analysis of the Impact of the Economic Crisis on Market Efficiency.
  Peter J. Bush, John E. Stephens.
  International Journal of Finance & Economics. October 15, 2015
  This paper examines the relationship of multiple currencies, coupled with the Euro, to examine if there is evidence of the return of the Monday effect as a result of the recent global economic crisis. Each currency pair, which consists of the US dollar, Japanese yen, Great British pound, Canadian dollar, and Australian dollar, is compared with the Euro to find evidence to support the presence of the Monday effect. The currency pairs are tested in 1999–2004 as the first time period, again in 2005–2009 as the second time period, and then finally in 2010–2012 as the final time period, which represents the period impacted by the economic crisis. It is the authors' contention that the economic crisis that occurred after 2008 had a significant impact in the currency markets and that the Monday effect has become more pronounced because of a weakening of market efficiency. The results provide evidence that in the 2010–2012 period three currency pairs exhibit a statistically significant Monday effect. This Monday effect was not evident in either the 1999–2004 or the 2005–2009 periods, according to our analysis. This leads the authors to postulate that the economic crisis resulting from the mortgage meltdown has had a statistically verifiable effect on currency markets throughout the world. Copyright © 2015 John Wiley & Sons, Ltd.

  October 15, 2015   doi: 10.1002/ijfe.1534   open full text
• Bank Dividends, Real Gdp Growth And Default Risk.
  Angelos Kanas.
  International Journal of Finance & Economics. May 09, 2014
  We reveal evidence that the US aggregate bank dividends exercise a causal impact on the US real GDP growth during the period from the introduction of the Prompt Corrective Action framework in 1992 until the outburst of the subprime mortgage market crisis in 2007. Over this period, the positive signalling effects of bank dividends outperform the negative effect of dividends on default risk. During the pre‐Prompt Corrective Action and the recent post‐2007 periods, bank dividends do not affect GDP growth. This regime‐dependent relation is due to an asymmetric role of bank default risk. These findings are of interest to bank regulators in reassessing the role of bank dividends within Basel III and carry important policy implications as bank dividends constitute an important tool available to policy makers for strengthening real activity. Copyright © 2014 John Wiley & Sons, Ltd.

  May 09, 2014   doi: 10.1002/ijfe.1491   open full text
• The Impact Of Fallen Angels On Investment Grade Corporate Bonds Portfolios: Evidence From The European Market.
  Enrica Bolognesi, Marianna Ferro, Andrea Zuccheri.
  International Journal of Finance & Economics. May 09, 2014
  This work examines the impact on the price of corporate bonds denominated in Euro of a downgrade to high yield announced by Standard & Poor's and/or Moody's Investors Service. In particular, we observe the bond price behaviour around three events. The first event is the first downgrade announcement from one of the rating agencies, and we find significant cumulative abnormal returns before and at around the event. The second event is the downgrade announcement by the second rating agency: in this case, the security becomes a fallen angel and must leave the institutional portfolios constrained to investment grade (IG) securities. We record again a significant negative price reaction but larger than in the previous case and significantly higher when preceded by a widening of the credit spread in the corporate bonds market. Broadening the existing literature, we perform a third event study, focused on the subsequent bond deletion from an IG benchmark. In this case, our results show positive and significant excess returns after the month‐end index rebalancing, revealing a price reversal pattern of the fallen angel after its release from the index. This price rebound is the higher, whereas the stronger was the bond price pressure at the downgrade announcement. These insights offer some practical guideline for those professionals that manage IG and high‐yield portfolios. Copyright © 2014 John Wiley & Sons, Ltd.

  May 09, 2014   doi: 10.1002/ijfe.1496   open full text
• Cross‐Border Banking, Externalities And Sovereign Distress: Does The Euro Need A Common Banking Authority?
  Aitor Erce.
  International Journal of Finance & Economics. April 04, 2014
  This paper analyses the role of linkages between cross‐border banks and sovereigns in the spread of crises. After discussing evidence from past crises, I focus on the Euro Area. Banks from the Euro‐core played a key role in shedding the seeds for the transition from the US mortgage crisis to the Euro Area crisis. While national authorities supported their damaged banks, the Euro‐system's infrastructure allowed Euro‐core banks to undo intra‐area exposures with minor disruptions. Although this helped stabilize peripheral asset markets, the extent to which public funding replaced private one implied less macroeconomic correction and the current fiscal woes. The combination of cross‐border banking and national resolution schemes creates an externality on sovereigns, who are forced to contain the effects stemming from the balance sheet management of cross‐border banks. Weak public finances can easily push a banking crisis into a fiscal one. This negative externality is reinforced by Central Banks' mandate that limits fiscal cooperation. In the context of the Euro Area, to limit this problem, the Union should equip itself with a common bank resolution authority, which delinks banks and sovereigns. In addition, to limit the externality, macro‐prudential policy could set contributions for cross‐border operators in order to pre‐fund future bank rescues. Copyright © 2014 John Wiley & Sons, Ltd.

  April 04, 2014   doi: 10.1002/ijfe.1475   open full text
• Nonlinear Interdependence Between The Us And Emerging Markets' Industrial Stock Sectors.
  Taufiq Choudhry, Bashir Nur Osoble.
  International Journal of Finance & Economics. April 04, 2014
  This paper investigates the time‐varying, long‐run and short‐run dynamic relationships between stock industrial sectors of the US and three leading emerging markets/countries: Brazil, Malaysia, and South Africa between January 2000 and December 2009. A crucial empirical contribution of the study is the application of the nonlinear econometric time series techniques for the evaluation of the long‐run global relationships and causality linkages. Further contribution is the application of industrial sector indices rather than national indices. The results of the time‐varying analysis reaffirm the view that relationships between global financial markets tend to be quite volatile over time and particularly high in a time of high financial turbulence. Overall, the relatively weak interdependence between the US and the emerging markets' industry sectors suggests potential diversification benefits for investors in diversifying their portfolio investment across industrial sectors of emerging markets. Copyright © 2014 John Wiley & Sons, Ltd.

  April 04, 2014   doi: 10.1002/ijfe.1494   open full text
• Estimating Liquidity Risk Using The Exposure‐Based Cash‐Flow‐At‐Risk Approach: An Application To The Uk Banking Sector.
  Meilan Yan, Maximilian J. B. Hall, Paul Turner.
  International Journal of Finance & Economics. March 14, 2014
  This paper uses a relatively new quantitative model for estimating UK banks' liquidity risk. The model is called the exposure‐based cash‐flow‐at‐risk (CFaR) model, which not only measures a bank's liquidity risk tolerance but also helps to improve liquidity risk management through the provision of additional risk exposure information. Using data for the period 1997–2010, we provide evidence that there is variable funding pressure across the UK banking industry, which is forecasted to be slightly illiquid with a small amount of expected cash outflow (i.e. £0.06 billion) in 2011. In our sample of the six biggest UK banks, only the HSBC maintains positive CFaR with 95% confidence, which means that there is only a 5% chance that HSBC's cash flow will drop below £0.67 billion by the end of 2011. RBS is expected to face the largest liquidity risk with a 5% chance that the bank will face a cash outflow that year in excess of £40.29 billion. Our estimates also suggest Lloyds TSB's cash flow is the most volatile of the six biggest UK banks, because it has the biggest deviation between its downside cash flow (i.e. CFaR) and expected cash flow. Copyright © 2014 John Wiley & Sons, Ltd.

  March 14, 2014   doi: 10.1002/ijfe.1495   open full text
• Dislocations In The Won‐Dollar Swap Markets During The Crisis Of 2007–2009.
  Naohiko Baba, Ilhyock Shim.
  International Journal of Finance & Economics. March 14, 2014
  We analyse dislocations in the foreign exchange swap and cross‐currency swap markets between Korean won and US dollar from 2007 to 2009. A regime‐switching analysis of deviations from covered interest parity (CIP) identifies a crisis period starting in June 2007. Using an EGARCH model, we find that volatility index and the credit default swap spreads of Korean and US banks are the main factors explaining CIP deviations. We show that the Bank of Korea's US dollar loans of the proceeds of swaps with the US Federal Reserve were effective in reducing CIP deviations, whereas the provision of funds using its foreign reserves was not. Copyright © 2014 John Wiley & Sons, Ltd.

  March 14, 2014   doi: 10.1002/ijfe.1492   open full text
• Long‐Run Determinants Of The Brazilian Real: A Closer Look At Commodities.
  Emanuel Kohlscheen.
  International Journal of Finance & Economics. March 14, 2014
  We use cointegration analysis to show that the long‐run behaviour of the Brazilian Real effective exchange rate between January 1999 and September 2012 can largely be explained by the price variation of a basket of five commodities—that accounted for 51% of Brazilian export revenues in 2011. We estimate that a 10% variation in the real price of these five commodities moves the fundamental long‐run real exchange rate by almost 5%. Changes in interest rate differentials do not explain short or long term movements in the exchange rate during this period. Furthermore, we find that deviations of the real effective exchange rate from the long run equilibrium level have an estimated half‐life of approximately 8 months. The growing exports of oil and fuel and of iron ores, as well as the important oil discoveries in the pre‐salt layer, suggest that commodity prices will continue to influence the value of the Real in the future. Copyright © 2014 John Wiley & Sons, Ltd.

  March 14, 2014   doi: 10.1002/ijfe.1493   open full text
• Order Flows, Fundamentals And Exchange Rates.
  Kentaro Iwatsubo, Ian W. Marsh.
  International Journal of Finance & Economics. March 04, 2014
  We examine the links between end‐user order flows as seen by a major European commercial bank and macroeconomic fundamentals. We show that both exchange rate changes and flows are only weakly related to macroeconomic news announcements and hypothesize that ‘the cat is already out of the bag’ by the time the news is announced. Instead, order flows of financial and corporate customers reflect in real time the evolution of macroeconomies. The actions of the banks receiving the order flows in turn reveal the information to the market as a whole, which prices the exchange rate accordingly. By the time the news is announced, the exchange rate already contains the majority of the information. Copyright © 2014 John Wiley & Sons, Ltd.

  March 04, 2014   doi: 10.1002/ijfe.1490   open full text
• A Single Composite Financial Stress Indicator And Its Real Impact In The Euro Area.
  Mevlud Islami, Jeong‐Ryeol Kurz‐Kim.
  International Journal of Finance & Economics. December 28, 2013
  In this paper, we construct a single composite financial stress indicator (FSI), which aims to predict developments in the real economy in the euro area. Our FSI was shown to perform better than the Euro STOXX 50 volatility index for the recent banking crisis and the euro‐area sovereign debt crisis and to be able to serve as an early warning indicator for negative impacts of financial stress on the real economy. Copyright © 2013 John Wiley & Sons, Ltd.

  December 28, 2013   doi: 10.1002/ijfe.1483   open full text
• Is Correlation Puzzle Really Puzzling? Reassessing Motives Of Foreign Asset Holdings By Us Investors.
  Kenta Inoue.
  International Journal of Finance & Economics. December 28, 2013
  This paper addresses a correlation puzzle in the financial gravity literature by taking into account a return‐chasing motive previously under‐researched as determinants of cross‐border asset holdings. I estimate a financial gravity equation to explain US investors' behaviour and confirm that even with the return chasing motive, the correlation puzzle remains unsolved. Furthermore, the data give a limited support for the return‐chasing motive. I find that USA's foreign asset holdings cannot be well explained by the correlation structure and excess returns. Copyright © 2013 John Wiley & Sons, Ltd.

  December 28, 2013   doi: 10.1002/ijfe.1476   open full text
• The Impact Of The Euro Crisis On The Financial Performance Of European And North American Firms.
  Greg Filbeck, Kenneth Louie, Xin Zhao.
  International Journal of Finance & Economics. October 11, 2013
  In this paper, we investigate the impact of the changes in European percentage sales before and after the Euro crisis for both US‐based and European‐based companies, both overall and across industries. We find that larger firms are associated with a decrease in return on assets (ROAs) in the post‐crisis era; the largtest of these large firms are associated with an increase in ROAs after the crisis. In addition, European (North American) headquartered companies experience a statistically significant decrease (increase) in European sales after controlling for the additional control variables such as industry. Overall, we note that companies which have lower European sales and strategically move their sales out of Europe after crisis experienced an increase in ROA. This result is robust after controlling for endogeneity issues. Copyright © 2013 John Wiley & Sons, Ltd.

  October 11, 2013   doi: 10.1002/ijfe.1473   open full text
• Fixing The Phillips Curve: The Case Of Downward Nominal Wage Rigidity In The Us.
  Stefan Reitz, Ulf D. Slopek.
  International Journal of Finance & Economics. October 11, 2013
  Whereas microeconomic studies point to pronounced downward rigidity of nominal wages in the US economy, the standard Phillips curve neglects such a feature. Using a stochastic frontier model, we find macroeconomic evidence of a strictly nonnegative error in an otherwise standard Phillips curve in post‐war data on the US nonfinancial corporate sector. This error depends on growth in the profit ratio, output, and trend productivity, which should all determine the flexibility of wage adjustments. As the error usually surges during an economic downturn, the empirical model suggests that the downward pressure on inflation arising from higher unemployment in a standard Phillips curve framework is significantly cushioned. This might help to understand the robustness of inflation especially in the most recent past. In general, the cyclical dynamics of inflation appear to be more complex than captured by a conventional Phillips curve. Copyright © 2013 John Wiley & Sons, Ltd.

  October 11, 2013   doi: 10.1002/ijfe.1472   open full text
• Exchange Rate Misalignment Estimates—Sources Of Differences.
  Yin‐Wong Cheung, Eiji Fujii.
  International Journal of Finance & Economics. October 11, 2013
  We study the differences in currency misalignment estimates obtained from datasets derived from two different International Comparison Programme (ICP) surveys. A decomposition exercise reveals that year 2005 misalignment estimates are substantially affected by the ICP price revision. Furthermore, we find that differences in misalignment estimates are systematically affected by a country's participation status in the ICP survey and its data quality—a finding that casts doubt on the economic and policy relevance of these misalignment estimates. The findings are robust to the use of alternative datasets and specifications. The patterns of changes in estimated degrees of misalignment across individual countries, as exemplified by the Brazil, Russia, India and China economies, are highly variable. Copyright © 2013 John Wiley & Sons, Ltd.

  October 11, 2013   doi: 10.1002/ijfe.1474   open full text
• A Global Model Of International Yield Curves: No‐Arbitrage Term Structure Approach.
  Iryna Kaminska, Andrew Meldrum, James Smith.
  International Journal of Finance & Economics. February 22, 2013
  This paper extends a popular no‐arbitrage affine term structure model to jointly model bond markets and exchange rates across the UK, USA and euro area. Using a monthly data set of forward rates from 1992, we first demonstrate that two global factors account for a significant proportion in the variation of bond yields across countries. We also show that, for an explanation of country‐specific movements in yield curves, local factors are required. Although we implement a very general factor structure, we find that our global factors are related to global inflation and global economic activity, whereas local factors are closely linked to monetary policy rates. In this respect, our results are similar to previous work. But an important advantage of our joint international model is that we are able to decompose interest rates into risk‐free rates and risk premia. Additionally, we are able to study the implications for exchange rates. We show that whereas differences in risk‐free rates matter, to a large extent, changes in the exchange rate are determined by time‐varying exchange rate risk premia. Copyright © 2013 John Wiley & Sons, Ltd.

  February 22, 2013   doi: 10.1002/ijfe.1468   open full text
• The Relevance Of Accuracy For The Impact Of Macroeconomic News On Exchange Rate Volatility.
  HelinÄ LaakkOnen, Markku Lanne.
  International Journal of Finance & Economics. February 22, 2013
  We study whether the accuracy of news announcements matters for the impact of news on exchange rate volatility. We use high‐frequency EUR/USD returns and releases of 20 US macroeconomic indicators and measure the precision of news in three different ways. When the precision is defined by the size of the first revision of the previous month's figure, we find that precise news increases volatility significantly more than imprecise news. Also, news on indicators that are in general more precise increase volatility more than news on typically imprecise indicators. Finally, we use real‐time data to measure the ‘true’ precision of news and find that the size of the first revision of the previous month's figure is a reasonable signal of ‘true’ precision. Copyright © 2013 John Wiley & Sons, Ltd.

  February 22, 2013   doi: 10.1002/ijfe.1467   open full text
• Financial Integration And External Sustainability.
  Pascal Towbin.
  International Journal of Finance & Economics. December 07, 2012
  A stable net external position requires that the trade balance responds negatively to changes in the net external position. If financial integration makes financing external imbalances less costly, we expect slower external adjustment in more integrated economies. The study estimates theoretically founded trade balance reaction functions for a panel of 70 countries from 1970–2008. The empirical analysis finds that adjustment in integrated economies is slower. Consistent with the presented theory, the trade balance of integrated economies is more persistent, responds less strongly to net foreign assets and is more sensitive to fluctuations in net output. Under high integration, the response to the net external position is weak and close to the minimum required to ensure external sustainability. Copyright © 2012 John Wiley & Sons, Ltd.

  December 07, 2012   doi: 10.1002/ijfe.1469   open full text
• A Case For Interest Rate Inertia In Monetary Policy.
  Mikael Bask.
  International Journal of Finance & Economics. November 26, 2012
  We argue that it is not necessary for the central bank to react to the exchange rate to have a desirable outcome in the economy. Indeed, when the Taylor rule includes contemporaneous data on the variables in the rule, the central bank can disregard from the exchange rate as long as there is enough with interest rate inertia in monetary policy. The reason is that interest rate inertia and a reaction to the current nominal exchange rate change are perfect substitutes in monetary policy. Hence, we give a rationale for the central bank to focus on the interest rate change rather than the interest rate level to have a desirable outcome in the economy, which we define as a determinate rational expectation equilibrium that is stable under least squares learning. Copyright © 2012 John Wiley & Sons, Ltd.

  November 26, 2012   doi: 10.1002/ijfe.1470   open full text
• The Balance Sheet Channel In A Small Open Economy In A Monetary Union.
  João Sousa, Isabel Marques Gameiro.
  International Journal of Finance & Economics. September 19, 2012
  This paper uses a two‐country VAR approach to study the transmission of monetary policy shocks in Portugal, focusing in particular on the financial decisions of households, corporations (financial/non‐financial), the government and the rest of the world. We find that a monetary policy shock has a contractionary effect on economic activity and increases the financing needs of households and non‐financial corporations. The financial sector plays an important role, supplying the necessary funds to these sectors and thus facilitating their adjustment to the shock. We do not find much evidence of a significant systematic behaviour of the government or the rest of the world in response to monetary policy shocks. Copyright © 2012 John Wiley & Sons, Ltd.

  September 19, 2012   doi: 10.1002/ijfe.1464   open full text
• Financial System Sophistication And Unemployment In Industrial Countries.
  Horst Feldmann.
  International Journal of Finance & Economics. July 10, 2012
  By using data on 21 industrial countries from 1984 to 2006 and a large number of controls, this paper studies the unemployment effects of one major characteristic of the financial system: its level of sophistication, that is, the variety of financial institutions and instruments available to the economy. The paper finds that a higher level of sophistication is likely to reduce unemployment among the total labour force as well as among high‐skilled workers. The magnitude of both effects appears to be modest. By contrast, financial system sophistication does not appear to affect unemployment among low‐skilled workers. Copyright © 2012 John Wiley & Sons, Ltd.

  July 10, 2012   doi: 10.1002/ijfe.1466   open full text
• Exchange Rate Reversion Under Regimes Other Than Free Float.
  Luke Lin, Wenyuan Lin.
  International Journal of Finance & Economics. May 11, 2012
  Several studies indirectly point out that the exchange rate system may be one of the factors for establishing purchasing power parity (PPP). However, current researches on PPP have mainly focused on the recent floating period and need various statistical models to carry out. We use quantile autoregression technique to comprehensively examine the mean reversion properties of the New Taiwan Dollar (NTD), where the NTD was both in a fixed regime period and a managed floating system period. Empirical findings indicate that NTD showed comparatively faster recovery when subjected to a larger or positive disturbance from the market. Additionally, when NTD was in a fixed regime period, PPP was mostly established. But during the managed floating system period, it was only partially established. These results suggest that mean reversion of real exchange rate heavily depends on the regime effect. Copyright © 2012 John Wiley & Sons, Ltd.

  May 11, 2012   doi: 10.1002/ijfe.1465   open full text
• Financial Markets And International Risk Sharing In Emerging Market Economies.
  Martin Schmitz.
  International Journal of Finance & Economics. May 11, 2012
  In light of rapidly increasing foreign equity liability positions of emerging market economies, we test for a necessary condition of international risk sharing, namely for systematic patterns between idiosyncratic output fluctuations and financial market developments. Panel analysis of 22 emerging market economies shows strong evidence for pro‐cyclicality of capital gains on domestic stock markets both over short‐term and medium‐term horizons. This implies that domestic output fluctuations can be hedged through cross‐border ownership of financial markets. Copyright © 2012 John Wiley & Sons, Ltd.

  May 11, 2012   doi: 10.1002/ijfe.1463   open full text
• Overcrowding Versus Liquidity In The Euro Sovereign Bond Markets.
  Andrea Coppola, Alessandro Girardi, Gustavo Piga.
  International Journal of Finance & Economics. April 10, 2012
  With the adoption of a common currency, the degree of substitution between financial instruments supplied by EMU Member States to finance their national debts has risen. Providing the market for euro‐denominated government securities with a large volume of similar financial instruments is likely to increase liquidity and lower yields. By contrast, providing an excessive volume of the same instrument might increase the return demanded by investors. This paper aims at empirically assessing the balance between liquidity and overcrowding effects by EMU countries' issuance plans. Our results document a significant relationship between bunching in issues and bond yields. Copyright © 2012 John Wiley & Sons, Ltd.

  April 10, 2012   doi: 10.1002/ijfe.1454   open full text
• How Reliable Are De Facto Exchange Rate Regime Classifications?
  Barry Eichengreen, Raul Razo‐Garcia.
  International Journal of Finance & Economics. April 10, 2012
  We analyze disagreements over de facto exchange‐rate‐regime classifications using three popular de facto regime data series. While there is a moderate degree of concurrence across classifications, disagreements are not uncommon, and they are not random. They are most prevalent in middle‐income countries (emerging markets) and low‐income (developing) countries as opposed to advanced economies. They are most prevalent for countries with well‐developed financial markets, low reserves and open capital accounts. This suggests caution when attempting to relate the exchange rate regime to financial development, the openness of the financial account, and reserve management and accumulation decisions. Copyright © 2012 John Wiley & Sons, Ltd.

  April 10, 2012   doi: 10.1002/ijfe.1456   open full text
• Do Credit Rating Agencies Add Value? Evidence From The Sovereign Rating Business.
  Eduardo Cavallo, Andrew Powell, Roberto Rigobon.
  International Journal of Finance & Economics. March 21, 2012
  The debt crisis in several European Union nations has resulted in a set of downgrades in sovereign ratings, sparking a lively debate whether these opinions actually matter. Ratings and bond spreads may both be considered as noisy signals of fundamentals. Ratings only add value if, controlling for spreads and observable country fundamentals, they help explain other market variables. We employed a unique dataset of over 75 000 daily observations on emerging countries around rating actions by the three major agencies. We found that ratings do indeed add information, and this finding is robust to a variety of different tests. Copyright © 2012 John Wiley & Sons, Ltd.

  March 21, 2012   doi: 10.1002/ijfe.1461   open full text
• Spillovers Between Business Confidence And Stock Returns In Greece, Italy, Portugal, And Spain.
  Erdal Atukeren, Turhan Korkmaz, Emrah İ Çevik.
  International Journal of Finance & Economics. March 14, 2012
  This paper employs Hong's (2001) causality‐in‐mean and causality‐in‐variance tests to investigate the spillovers between business confidence and stock returns for the four economically distressed Southern European countries, namely Greece, Italy, Spain, and Portugal. The sample uses monthly data and covers the period from January 1988 to December 2010. Our causality‐in‐mean results indicate that there is feedback relationship between stock returns and business confidence in Portugal. The direction of causality‐in‐mean runs from business confidence to stock returns in Italy, but it is in the reverse direction in the case of Spain. Nevertheless, there is still evidence of a contemporaneous interaction between business confidence and stock returns in both Italy and Spain. On the other hand, causality‐in‐variance indicate the presence of volatility spillovers from business confidence to stock returns in Portugal, while a causal relationship is found in the current month in the case of Italy. Business confidence causes stock returns only in the mean in Greece. These results indicate that the stock market and business confidence relationship has its own idiosyncratic properties and that the stock market reactions to the current macroeconomic environment and expectations about the future developments might evolve differently in each country. Copyright © 2012 John Wiley & Sons, Ltd.

  March 14, 2012   doi: 10.1002/ijfe.1453   open full text
• European Central Bank Policy‐Making And The Financial Crisis.
  Janko Gorter, Fauve Stolwijk, Jan Jacobs, Jakob Haan.
  International Journal of Finance & Economics. March 07, 2012
  We estimated Taylor rule models for the euro area using Consensus Economics forecasts of inflation and output growth for the period 1998.6–2010.8. We first examined whether the recent financial crisis has affected European Central Bank (ECB) policies. Our results indicate that the ECB puts stronger emphasis on maintaining price stability than the earlier point estimates suggested. Next, we analysed whether economic developments in individual euro area countries affect ECB decisions. Despite the diverging economic developments in the countries in the euro area, notably during the recent financial crisis, we did not find support for the view that policy decisions have been influenced by regional developments. Copyright © 2012 John Wiley & Sons, Ltd.

  March 07, 2012   doi: 10.1002/ijfe.1452   open full text