Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112138
Wei Yun , Jie Cao , Shangbin Liu
This study empirically investigates the effect of intermediate import diversification on firm innovation and its underlying mechanisms, based on data from Chinese listed companies between 2000 and 2016. The findings indicate that diversification of imported intermediate goods, as measured by both the variety of imported products and the diversity of source countries, significantly enhances firms' innovative capabilities. Specifically, knowledge source diversity serves as a crucial mechanism through which import diversification promotes firm innovation. The policy implications highlight the importance of acquiring heterogeneous knowledge by expanding the diversification of intermediate goods imports.
{"title":"Intermediate import diversification, knowledge source diversity and firm innovation: Micro-level evidence from Chinese listed companies","authors":"Wei Yun , Jie Cao , Shangbin Liu","doi":"10.1016/j.econlet.2024.112138","DOIUrl":"10.1016/j.econlet.2024.112138","url":null,"abstract":"<div><div>This study empirically investigates the effect of intermediate import diversification on firm innovation and its underlying mechanisms, based on data from Chinese listed companies between 2000 and 2016. The findings indicate that diversification of imported intermediate goods, as measured by both the variety of imported products and the diversity of source countries, significantly enhances firms' innovative capabilities. Specifically, knowledge source diversity serves as a crucial mechanism through which import diversification promotes firm innovation. The policy implications highlight the importance of acquiring heterogeneous knowledge by expanding the diversification of intermediate goods imports.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112138"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143165744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112169
Tuyue Chen , Congming Mu , Shengzhuo Tang
We consider the impacts of tax cuts and financing cost subsidies on liquidity management of environmentally and financially constrained firms. Tax cuts are relatively effective at achieving the goal of providing value to firms, promoting investment and paying more dividends. Financing subsidies lead firms to issue more equity and hold less cash on average. Moreover, financing subsidies are more effective in reducing asset sales but tax cuts are more effective in promoting positive investment. Tax cuts facilitate efficient improvement in social welfare.
{"title":"The effects of tax cuts and financing subsidies on environmentally and financially constrained firms","authors":"Tuyue Chen , Congming Mu , Shengzhuo Tang","doi":"10.1016/j.econlet.2025.112169","DOIUrl":"10.1016/j.econlet.2025.112169","url":null,"abstract":"<div><div>We consider the impacts of tax cuts and financing cost subsidies on liquidity management of environmentally and financially constrained firms. Tax cuts are relatively effective at achieving the goal of providing value to firms, promoting investment and paying more dividends. Financing subsidies lead firms to issue more equity and hold less cash on average. Moreover, financing subsidies are more effective in reducing asset sales but tax cuts are more effective in promoting positive investment. Tax cuts facilitate efficient improvement in social welfare.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112169"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112182
Graham Gardner , Kayleigh McCrary , Melissa K. Spencer
In the 2022 U.S. midterm elections, Democratic candidates lost fewer than predicted seats and stymied an expected red wave. News coverage and polling data represent this surprise Democratic success as a result of voters’ response to the Supreme Court overturning Roe v. Wade. Using county-level vote data, we find that the decrease in Republican vote margin in 2022 can be explained by demographic and economic factors. However, relative to the national average, the Republican vote margin decreased by 4.8 percentage points more in states with abortion-related ballot measures. Our results indicate that abortion ballot measures have effects on election outcomes of a magnitude large enough to determine competitive races.
{"title":"Abortion ballot measures affect election outcomes","authors":"Graham Gardner , Kayleigh McCrary , Melissa K. Spencer","doi":"10.1016/j.econlet.2025.112182","DOIUrl":"10.1016/j.econlet.2025.112182","url":null,"abstract":"<div><div>In the 2022 U.S. midterm elections, Democratic candidates lost fewer than predicted seats and stymied an expected red wave. News coverage and polling data represent this surprise Democratic success as a result of voters’ response to the Supreme Court overturning <em>Roe v. Wade</em>. Using county-level vote data, we find that the decrease in Republican vote margin in 2022 can be explained by demographic and economic factors. However, relative to the national average, the Republican vote margin decreased by 4.8 percentage points more in states with abortion-related ballot measures. Our results indicate that abortion ballot measures have effects on election outcomes of a magnitude large enough to determine competitive races.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112182"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166073","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We obtain simple and intuitive expressions for the information matrix test for the multinomial logit model that resemble a multivariate heteroskedasticity test à la White (1980) applied to the conditionally demeaned value of the outer product of the generalised residuals.
{"title":"Information matrix tests for multinomial logit models","authors":"Dante Amengual , Gabriele Fiorentini , Enrique Sentana","doi":"10.1016/j.econlet.2025.112180","DOIUrl":"10.1016/j.econlet.2025.112180","url":null,"abstract":"<div><div>We obtain simple and intuitive expressions for the information matrix test for the multinomial logit model that resemble a multivariate heteroskedasticity test à la <span><span>White (1980)</span></span> applied to the conditionally demeaned value of the outer product of the generalised residuals.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112180"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166077","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112152
Jun Wang , Xing Chen
This study improves existing methods for measuring inconsistency in analyst reports by incorporating the standard deviations of standardized earnings forecasts, target prices, stock recommendations, and textual sentiment. We find that report inconsistency is driven by forecast complexity and analysts’ independence, with inconsistent reports exhibiting higher forecast errors and stronger short-term market reactions. Moreover, we reconcile conflicting conclusions in the literature, showing that different methods of measuring report inconsistency lead to varying research outcomes.
{"title":"Measuring inconsistency in analyst reports","authors":"Jun Wang , Xing Chen","doi":"10.1016/j.econlet.2024.112152","DOIUrl":"10.1016/j.econlet.2024.112152","url":null,"abstract":"<div><div>This study improves existing methods for measuring inconsistency in analyst reports by incorporating the standard deviations of standardized earnings forecasts, target prices, stock recommendations, and textual sentiment. We find that report inconsistency is driven by forecast complexity and analysts’ independence, with inconsistent reports exhibiting higher forecast errors and stronger short-term market reactions. Moreover, we reconcile conflicting conclusions in the literature, showing that different methods of measuring report inconsistency lead to varying research outcomes.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112152"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166169","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112175
John O'Trakoun , Adam Scavette
We introduce a new recession indicator based on the Sahm rule methodology. The Scavette-O'Trakoun-Sahm-style (SOS) indicator uses the insured unemployment rate to correctly signal the past seven recessions since 1971. Additionally, our analysis suggests that the SOS improves upon the Sahm rule such that it has fewer (none) false positives and identifies recessions faster on average. Additionally, the SOS rule benefits from being available at a higher frequency (weekly) than the Sahm rule (monthly) and not subject to several sources of sampling bias such as incorrect responses or nonresponse. This suggests that the SOS indicator may be a desirable alternative for users of the Sahm rule: economists, journalists, and policymakers.
{"title":"A better Sahm rule? Introducing the SOS recession indicator","authors":"John O'Trakoun , Adam Scavette","doi":"10.1016/j.econlet.2025.112175","DOIUrl":"10.1016/j.econlet.2025.112175","url":null,"abstract":"<div><div>We introduce a new recession indicator based on the Sahm rule methodology. The Scavette-O'Trakoun-Sahm-style (SOS) indicator uses the insured unemployment rate to correctly signal the past seven recessions since 1971. Additionally, our analysis suggests that the SOS improves upon the Sahm rule such that it has fewer (none) false positives and identifies recessions faster on average. Additionally, the SOS rule benefits from being available at a higher frequency (weekly) than the Sahm rule (monthly) and not subject to several sources of sampling bias such as incorrect responses or nonresponse. This suggests that the SOS indicator may be a desirable alternative for users of the Sahm rule: economists, journalists, and policymakers.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112175"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166180","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyses the effect of supply constraints on international stock market volatility, while also considering its effect on stock returns. Using a higher-order nonparametric causality-in-quantiles test and daily data for China, France, Germany, Italy, Spain, the United Kingdom, the United States, and overall Europe, we find strong evidence of Granger causality flowing from supply constraints to the entire conditional distribution of stock returns and volatility. Notably, supply constraints positively predict stock volatility. This positive predictability remains robust when alternative measures are used, including monthly realized variance and different metrics of supply constraints. Our findings have significant implications for investors and policymakers.
{"title":"Supply chain constraints and the predictability of the conditional distribution of international stock market returns and volatility","authors":"Elie Bouri , Oguzhan Cepni , Rangan Gupta , Ruipeng Liu","doi":"10.1016/j.econlet.2025.112176","DOIUrl":"10.1016/j.econlet.2025.112176","url":null,"abstract":"<div><div>This paper analyses the effect of supply constraints on international stock market volatility, while also considering its effect on stock returns. Using a higher-order nonparametric causality-in-quantiles test and daily data for China, France, Germany, Italy, Spain, the United Kingdom, the United States, and overall Europe, we find strong evidence of Granger causality flowing from supply constraints to the entire conditional distribution of stock returns and volatility. Notably, supply constraints positively predict stock volatility. This positive predictability remains robust when alternative measures are used, including monthly realized variance and different metrics of supply constraints. Our findings have significant implications for investors and policymakers.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112176"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166184","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112207
Yasser Eliwa , Mohamed E. Elmaghrabi
This paper examines how the investment horizon of institutional investors influences ESG decoupling (ESGD), using a sample of 36,055 firm-year observations from 41 countries over the period 2005 to 2023. Our findings reveal that long-term institutional investors significantly reduce ESGD, whereas short-term investors show no significant effect. This suggests that regulatory frameworks should incentivize long-term institutional ownership to enhance corporate accountability and promote more sustainable ESG practices.
{"title":"Investment horizons and ESG decoupling: Distinct roles of long-term and short-term institutional investors","authors":"Yasser Eliwa , Mohamed E. Elmaghrabi","doi":"10.1016/j.econlet.2025.112207","DOIUrl":"10.1016/j.econlet.2025.112207","url":null,"abstract":"<div><div>This paper examines how the investment horizon of institutional investors influences ESG decoupling (ESGD), using a sample of 36,055 firm-year observations from 41 countries over the period 2005 to 2023. Our findings reveal that long-term institutional investors significantly reduce ESGD, whereas short-term investors show no significant effect. This suggests that regulatory frameworks should incentivize long-term institutional ownership to enhance corporate accountability and promote more sustainable ESG practices.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112207"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143167011","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112201
He Huang, Yancheng Qiu
Using transaction-level U.S. corporate bond data, we document a significant negative relationship between geopolitical risk changes and credit spreads, driven by a disproportionate rise in cash-flow-matched Treasury yields. This finding cannot be explained by macroeconomic factors or uncertainty channels.
{"title":"Does geopolitical risk raise or lower corporate credit spreads?","authors":"He Huang, Yancheng Qiu","doi":"10.1016/j.econlet.2025.112201","DOIUrl":"10.1016/j.econlet.2025.112201","url":null,"abstract":"<div><div>Using transaction-level U.S. corporate bond data, we document a significant negative relationship between geopolitical risk changes and credit spreads, driven by a disproportionate rise in cash-flow-matched Treasury yields. This finding cannot be explained by macroeconomic factors or uncertainty channels.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112201"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143127960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112130
Yuan Zhong , Xiaobing Lai , Lei Tan
This study examines the impact of regulatory distance on silent donations. The findings indicate a significant positive correlation between regulatory distance and corporate silent donations, confirming the distance decay effect. Besides, political connections strengthen the relationship between regulatory distance and silent donations, while media attention and analyst scrutiny limit this positive relationship. The above impacts are more pronounced in non-state-owned enterprises, highly competitive industries, and heavily polluting sectors.
{"title":"Silent generosity: The impact of regulatory distance on silent donations","authors":"Yuan Zhong , Xiaobing Lai , Lei Tan","doi":"10.1016/j.econlet.2024.112130","DOIUrl":"10.1016/j.econlet.2024.112130","url":null,"abstract":"<div><div>This study examines the impact of regulatory distance on silent donations. The findings indicate a significant positive correlation between regulatory distance and corporate silent donations, confirming the distance decay effect. Besides, political connections strengthen the relationship between regulatory distance and silent donations, while media attention and analyst scrutiny limit this positive relationship. The above impacts are more pronounced in non-state-owned enterprises, highly competitive industries, and heavily polluting sectors.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112130"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143131234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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