Pub Date : 2026-03-01Epub Date: 2026-02-10DOI: 10.1016/j.frl.2026.109634
Haiyan Dong, Yu Shen
While recent evidence finds negative consequences of the public scrutiny following index inclusion, we investigate its potential benefits for corporate governance. Utilizing the cutoff rules between the CSI 300 and CSI 500 indices, this paper employs a Regression Discontinuity Design (RDD) to identify the causal effect of CSI 300 inclusion on Enterprise Risk Management (ERM) adoption. We find that CSI 300 inclusion significantly promotes ERM adoption, primarily through a “monitoring effect” manifested in increased analyst coverage, media attention, and investor attention. Furthermore, this effect is significantly stronger for firms that attract more stock forum discussions and had received regulatory penalties prior to their initial index inclusion. Our findings suggest that public scrutiny following CSI 300 inclusion can serve as an important catalyst for improving fundamental governance structures, thereby highlighting a significant but previously overlooked determinant of corporate risk governance.
{"title":"The monitoring effect of CSI 300 inclusion: Evidence from enterprise risk management adoption","authors":"Haiyan Dong, Yu Shen","doi":"10.1016/j.frl.2026.109634","DOIUrl":"10.1016/j.frl.2026.109634","url":null,"abstract":"<div><div>While recent evidence finds negative consequences of the public scrutiny following index inclusion, we investigate its potential benefits for corporate governance. Utilizing the cutoff rules between the CSI 300 and CSI 500 indices, this paper employs a Regression Discontinuity Design (RDD) to identify the causal effect of CSI 300 inclusion on Enterprise Risk Management (ERM) adoption. We find that CSI 300 inclusion significantly promotes ERM adoption, primarily through a “monitoring effect” manifested in increased analyst coverage, media attention, and investor attention. Furthermore, this effect is significantly stronger for firms that attract more stock forum discussions and had received regulatory penalties prior to their initial index inclusion. Our findings suggest that public scrutiny following CSI 300 inclusion can serve as an important catalyst for improving fundamental governance structures, thereby highlighting a significant but previously overlooked determinant of corporate risk governance.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109634"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152613","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-11DOI: 10.1016/j.frl.2026.109641
Tongtong Sun , Qiang Fu
This paper explores the relationship between digital trade (DT), financial accessibility, and cross-border capital flows based on data from China's A-share listed companies between 2010 and 2023. The conclusions of this paper are as follows: DT has a positive impact on cross-border capital flows; the positive influence of DT on cross-border capital flows exhibits heterogeneity across firms at different stages of their life cycle; and financial accessibility plays a mediating role between DT and cross-border capital flows. This study not only enriches the theoretical research on DT and cross-border capital flows but also provides useful references for relevant policy formulation and optimizing corporate operational strategies.
{"title":"Digital trade, financial accessibility, and cross-border capital flows","authors":"Tongtong Sun , Qiang Fu","doi":"10.1016/j.frl.2026.109641","DOIUrl":"10.1016/j.frl.2026.109641","url":null,"abstract":"<div><div>This paper explores the relationship between digital trade (DT), financial accessibility, and cross-border capital flows based on data from China's A-share listed companies between 2010 and 2023. The conclusions of this paper are as follows: DT has a positive impact on cross-border capital flows; the positive influence of DT on cross-border capital flows exhibits heterogeneity across firms at different stages of their life cycle; and financial accessibility plays a mediating role between DT and <em>cross-border capital flows. This study not only enriches the theoretical research on DT and cross-border capital flows but also provides useful references for relevant policy formulation and optimizing corporate operational strategies.</em></div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109641"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146160147","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study explores how ESG controversies affect to the cost of debt and equity. On a sample of 474 non-financial firms listed on the STOXX Europe 600 from 2016 to 2023, we show that ESG controversies significantly affect both categories of financing costs. The effects vary across ESG sub-pillars and are influenced by factors such as country-level regulatory quality, firm size, and default probability. Furthermore, based on Legitimacy Theory, we identify market uncertainty as a key transmission channel: ESG controversies raise questions about a firm’s legitimacy to operate, prompting stakeholder concerns about future conduct, regulatory fines, and profitability, ultimately worsening financing conditions.
{"title":"ESG controversies and the cost of debt and equity: Evidence from Europe","authors":"Daniele Arcidiacono , Giuseppe Fraccalvieri , Alessandra Caragnano , Domenico Frascati","doi":"10.1016/j.frl.2026.109657","DOIUrl":"10.1016/j.frl.2026.109657","url":null,"abstract":"<div><div>This study explores how ESG controversies affect to the cost of debt and equity. On a sample of 474 non-financial firms listed on the STOXX Europe 600 from 2016 to 2023, we show that ESG controversies significantly affect both categories of financing costs. The effects vary across ESG sub-pillars and are influenced by factors such as country-level regulatory quality, firm size, and default probability. Furthermore, based on Legitimacy Theory, we identify market uncertainty as a key transmission channel: ESG controversies raise questions about a firm’s legitimacy to operate, prompting stakeholder concerns about future conduct, regulatory fines, and profitability, ultimately worsening financing conditions.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109657"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147278908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-10DOI: 10.1016/j.frl.2026.109496
Shweta Bajpai , Jalaj Pathak , Kartik Yadav
Cybersecurity risk has become a material concern for firms, regulators, and auditors, yet credible ex-ante indicators of cyber vulnerability remain difficult to observe. This paper examines whether firms’ cybersecurity disclosures in 10-K filings convey forward-looking information about future cyber incidents and whether auditors incorporate such information into audit pricing and engagement decisions. Using a cosine-similarity measure that captures how closely a firm’s cybersecurity risk disclosures resemble those of firms that recently experienced cyber-attacks, we construct a disclosure-based proxy for ex-ante cyber risk. We find that a one-standard-deviation increase in this cosine index is associated with a 0.61-percentage-point increase in the probability of a subsequent cyber incident-approximately a 25% increase relative to the sample mean. We further show that higher disclosure-based cyber risk is associated with significantly higher audit fees (about 4.7%, or USD 130,000) and a greater likelihood of being audited by a Big Four firm. These findings suggest that auditors actively extract and price cyber-risk signals from narrative disclosures, rather than reacting only after cyber incidents occur. More broadly, our results highlight the growing role of mandatory risk disclosures as a forward-looking source of information about firms’ operational vulnerabilities.
{"title":"Cyber risk, 10-K report and audit fees","authors":"Shweta Bajpai , Jalaj Pathak , Kartik Yadav","doi":"10.1016/j.frl.2026.109496","DOIUrl":"10.1016/j.frl.2026.109496","url":null,"abstract":"<div><div>Cybersecurity risk has become a material concern for firms, regulators, and auditors, yet credible ex-ante indicators of cyber vulnerability remain difficult to observe. This paper examines whether firms’ cybersecurity disclosures in 10-K filings convey forward-looking information about future cyber incidents and whether auditors incorporate such information into audit pricing and engagement decisions. Using a cosine-similarity measure that captures how closely a firm’s cybersecurity risk disclosures resemble those of firms that recently experienced cyber-attacks, we construct a disclosure-based proxy for ex-ante cyber risk. We find that a one-standard-deviation increase in this cosine index is associated with a 0.61-percentage-point increase in the probability of a subsequent cyber incident-approximately a 25% increase relative to the sample mean. We further show that higher disclosure-based cyber risk is associated with significantly higher audit fees (about 4.7%, or USD 130,000) and a greater likelihood of being audited by a Big Four firm. These findings suggest that auditors actively extract and price cyber-risk signals from narrative disclosures, rather than reacting only after cyber incidents occur. More broadly, our results highlight the growing role of mandatory risk disclosures as a forward-looking source of information about firms’ operational vulnerabilities.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"91 ","pages":"Article 109496"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145957361","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2025-12-24DOI: 10.1016/j.frl.2025.109428
Juchao Hu, Shuguang Wang
As sustainable development increasingly gains global attention, corporate green transformation has become a key pathway toward high-quality economic growth. This study examines whether and how local fiscal autonomy influences firms’ green transformation from an institutional perspective of fiscal decentralization (FD). Using panel data from Chinese prefecture-level cities and nonfinancial listed firms, we construct a text-based index to quantify green transformation and apply a two-way fixed effects model for empirical analysis. The results reveal that FD significantly promotes green transformation, and the findings remain robust following various validity tests. Mechanism analysis reveals that FD indirectly facilitates green transformation by strengthening local environmental regulation and increasing executives’ political connections. Quantile regression analysis indicates significant heterogeneity, with positive effects primarily concentrated among firms with stronger green foundations. This study extends the understanding of FD at the micro level and provides empirical support for better alignment between fiscal reform and sustainability policy.
{"title":"Does fiscal decentralization promote corporate green transition?","authors":"Juchao Hu, Shuguang Wang","doi":"10.1016/j.frl.2025.109428","DOIUrl":"10.1016/j.frl.2025.109428","url":null,"abstract":"<div><div>As sustainable development increasingly gains global attention, corporate green transformation has become a key pathway toward high-quality economic growth. This study examines whether and how local fiscal autonomy influences firms’ green transformation from an institutional perspective of fiscal decentralization (FD). Using panel data from Chinese prefecture-level cities and nonfinancial listed firms, we construct a text-based index to quantify green transformation and apply a two-way fixed effects model for empirical analysis. The results reveal that FD significantly promotes green transformation, and the findings remain robust following various validity tests. Mechanism analysis reveals that FD indirectly facilitates green transformation by strengthening local environmental regulation and increasing executives’ political connections. Quantile regression analysis indicates significant heterogeneity, with positive effects primarily concentrated among firms with stronger green foundations. This study extends the understanding of FD at the micro level and provides empirical support for better alignment between fiscal reform and sustainability policy.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"91 ","pages":"Article 109428"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145823834","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-24DOI: 10.1016/j.frl.2026.109571
Ruochen Li , Shuyu Xue , Quansheng Xuan , Xue Cui
This study explores the role of environmental, social, and governance (ESG) investment in mitigating fund risk and enhancing portfolio resilience, using Chinese mutual fund data from 2009 to 2022. We find that ESG investment in funds significantly decreases fund risk. The risk-reduction benefits are more pronounced for funds that are signatories to the Principles for Responsible Investment (PRI). Moreover, ESG-integrated funds exhibit lower risk and greater resilience during periods of adverse markets and heightened ESG-related attention. We further show that ESG investment is associated with lower tail risk, lower ambiguity, and higher net returns. These findings highlight the significance of ESG investing as a strategic tool for strengthening portfolio resilience and promoting financial stability.
{"title":"The risk-reducing effect of ESG investment: Evidence from mutual funds","authors":"Ruochen Li , Shuyu Xue , Quansheng Xuan , Xue Cui","doi":"10.1016/j.frl.2026.109571","DOIUrl":"10.1016/j.frl.2026.109571","url":null,"abstract":"<div><div>This study explores the role of environmental, social, and governance (ESG) investment in mitigating fund risk and enhancing portfolio resilience, using Chinese mutual fund data from 2009 to 2022. We find that ESG investment in funds significantly decreases fund risk. The risk-reduction benefits are more pronounced for funds that are signatories to the Principles for Responsible Investment (PRI). Moreover, ESG-integrated funds exhibit lower risk and greater resilience during periods of adverse markets and heightened ESG-related attention. We further show that ESG investment is associated with lower tail risk, lower ambiguity, and higher net returns. These findings highlight the significance of ESG investing as a strategic tool for strengthening portfolio resilience and promoting financial stability.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109571"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075699","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-22DOI: 10.1016/j.frl.2026.109563
Daoju Peng , Siyu Du , Jing Li , Jianfu Shen
We examine the pricing effect of climate policy uncertainty on green bonds in a transitional economy with rapidly developing green financing market. We find a significant relationship between green premium and climate policy uncertainty in China. When climate policy uncertainty is high, the yield difference between green bonds and their conventional “twin” bonds (green premium) increases, suggesting that investors in China demand higher compensation during these periods rather than perceiving green bonds as a valid hedge against policy uncertainty. This effect is more pronounced for green bonds issued in climate sensitive regions (northern regions), with higher green credibility (certified by third party), and higher exposure to climate policy (issued in large sizes), suggesting a weaker signaling of certification and high risk of green projects during periods with heightened climate policy uncertainty. Our results are robust across alternative model specifications, macroeconomic factors and various fixed effects. Two channels, financial market development and green commitment, are identified through which local conditions buffer the impact of CPU on green bond premium.
{"title":"Climate policy uncertainty and green premium: Evidence from China","authors":"Daoju Peng , Siyu Du , Jing Li , Jianfu Shen","doi":"10.1016/j.frl.2026.109563","DOIUrl":"10.1016/j.frl.2026.109563","url":null,"abstract":"<div><div>We examine the pricing effect of climate policy uncertainty on green bonds in a transitional economy with rapidly developing green financing market. We find a significant relationship between green premium and climate policy uncertainty in China. When climate policy uncertainty is high, the yield difference between green bonds and their conventional “twin” bonds (green premium) increases, suggesting that investors in China demand higher compensation during these periods rather than perceiving green bonds as a valid hedge against policy uncertainty. This effect is more pronounced for green bonds issued in climate sensitive regions (northern regions), with higher green credibility (certified by third party), and higher exposure to climate policy (issued in large sizes), suggesting a weaker signaling of certification and high risk of green projects during periods with heightened climate policy uncertainty. Our results are robust across alternative model specifications, macroeconomic factors and various fixed effects. Two channels, financial market development and green commitment, are identified through which local conditions buffer the impact of CPU on green bond premium.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109563"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075703","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2025-12-20DOI: 10.1016/j.frl.2025.109414
Li Liu , Miaomiao Chui , Liang Ma
Amid increasingly stringent environmental regulations, the influence of green finance on promoting corporate and regional sustainability has gained growing attention, yet its underlying mechanisms and effective boundaries are insufficiently explored. This study constructs an analytical framework linking green finance, patient capital, and sustainable development using Chinese listed-firm and provincial data from 2010 to 2022 to examine whether green finance enhances corporate sustainability and regional sustainable development, and mediating mechanism of patient capital. The empirical results reveal that green finance significantly strengthens firms’ sustainable development capacity and environmental, social, and governance performance, while also improving regional sustainability. Patient capital—measured using relational debt and long-horizon institutional ownership—is a crucial transmission channel. In addition, green finance exhibits an inverted U-shaped effect, with stronger impacts in regions with a lower sustainability baseline and diminishing marginal effects in more developed regions. The results reveal the internal financial–governance mechanism through which green finance operates under environmental regulation and provides empirical evidence for optimizing the scale of green finance and designing region-specific green policy tools. Our findings provide valuable insights for refining long-term green transition strategies.
{"title":"Financial support for sustainability under environmental regulation: The role of patient capital","authors":"Li Liu , Miaomiao Chui , Liang Ma","doi":"10.1016/j.frl.2025.109414","DOIUrl":"10.1016/j.frl.2025.109414","url":null,"abstract":"<div><div>Amid increasingly stringent environmental regulations, the influence of green finance on promoting corporate and regional sustainability has gained growing attention, yet its underlying mechanisms and effective boundaries are insufficiently explored. This study constructs an analytical framework linking green finance, patient capital, and sustainable development using Chinese listed-firm and provincial data from 2010 to 2022 to examine whether green finance enhances corporate sustainability and regional sustainable development, and mediating mechanism of patient capital. The empirical results reveal that green finance significantly strengthens firms’ sustainable development capacity and environmental, social, and governance performance, while also improving regional sustainability. Patient capital—measured using relational debt and long-horizon institutional ownership—is a crucial transmission channel. In addition, green finance exhibits an inverted U-shaped effect, with stronger impacts in regions with a lower sustainability baseline and diminishing marginal effects in more developed regions. The results reveal the internal financial–governance mechanism through which green finance operates under environmental regulation and provides empirical evidence for optimizing the scale of green finance and designing region-specific green policy tools. Our findings provide valuable insights for refining long-term green transition strategies.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"91 ","pages":"Article 109414"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145796062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-02DOI: 10.1016/j.frl.2025.109464
Young Hoon Choi, Dongwon Ryu, Jun Young Byun, Yosep Na, Jae Wook Song
This paper proposes a Generative Adversarial Network (GAN)–based framework for risk-neutral option pricing that learns the empirical distribution and temporal structure of log-return noise. By extracting and modeling stochastic noise from historical returns, the framework generates risk-neutral price paths for option valuation and delta prediction. We evaluate three state-of-the-art GAN architectures, including TimeGAN, QuantGAN, and SigCWGAN, against Monte Carlo simulation, the Black–Scholes–Merton, and Heston models across market regimes, maturities, moneyness levels, and option types. Empirical results show that QuantGAN and SigCWGAN accurately replicate key distributional and autocorrelation properties of return noise and consistently outperform benchmark models in option pricing, particularly in stable market environments and around at-the-money regions where pricing accuracy is most critical. Across a broad range of market conditions, these models deliver lower pricing errors and higher statistical confidence measures than traditional benchmarks. While pricing performance deteriorates during periods of abrupt volatility shifts, GAN-based models remain competitive overall. In contrast, improvements in delta prediction are limited, especially near mid-delta regions where payoff curvature is steepest. Overall, the findings demonstrate that learning stochastic noise offers an effective and flexible data-driven alternative for risk-neutral option pricing, while reliable sensitivity estimation requires models that jointly capture distributional features and local dynamic responses of the underlying asset.
{"title":"Learning standardized noise for risk-neutral option pricing via Generative Adversarial Networks","authors":"Young Hoon Choi, Dongwon Ryu, Jun Young Byun, Yosep Na, Jae Wook Song","doi":"10.1016/j.frl.2025.109464","DOIUrl":"10.1016/j.frl.2025.109464","url":null,"abstract":"<div><div>This paper proposes a Generative Adversarial Network (GAN)–based framework for risk-neutral option pricing that learns the empirical distribution and temporal structure of log-return noise. By extracting and modeling stochastic noise from historical returns, the framework generates risk-neutral price paths for option valuation and delta prediction. We evaluate three state-of-the-art GAN architectures, including TimeGAN, QuantGAN, and SigCWGAN, against Monte Carlo simulation, the Black–Scholes–Merton, and Heston models across market regimes, maturities, moneyness levels, and option types. Empirical results show that QuantGAN and SigCWGAN accurately replicate key distributional and autocorrelation properties of return noise and consistently outperform benchmark models in option pricing, particularly in stable market environments and around at-the-money regions where pricing accuracy is most critical. Across a broad range of market conditions, these models deliver lower pricing errors and higher statistical confidence measures than traditional benchmarks. While pricing performance deteriorates during periods of abrupt volatility shifts, GAN-based models remain competitive overall. In contrast, improvements in delta prediction are limited, especially near mid-delta regions where payoff curvature is steepest. Overall, the findings demonstrate that learning stochastic noise offers an effective and flexible data-driven alternative for risk-neutral option pricing, while reliable sensitivity estimation requires models that jointly capture distributional features and local dynamic responses of the underlying asset.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"91 ","pages":"Article 109464"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145893935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-05DOI: 10.1016/j.frl.2026.109474
Jiahao Cheng
Corporate corruption remains a significant challenge to governance and economic stability. This study investigates the efficacy of technological solutions by examining how financial regulatory technology (Fintech), within the broader context of corporate digital transformation, inhibits internal corruption. Using a panel dataset of Chinese publicly listed firms from 2013 to 2023, this study find robust evidence that the adoption of Fintech significantly curtails corruption. Crucially, this deterrent effect is amplified by the firm's digital transformation, indicating a powerful synergy between specific regulatory tools and systemic organizational change. The benefits, however, are not uniform. Heterogeneity analysis reveals that larger firms, with greater resources and more complex structures, derive more significant anti-corruption benefits from Fintech. Furthermore, the moderating effect of digital transformation is most pronounced in firms with high investment levels, which enables a more profound technological integration. These findings highlight that isolated technological solutions are insufficient; rather, a holistic digital strategy is key to enhancing corporate integrity.
{"title":"Corporate corruption governance: the inhibitory effect of digital transformation on fintech","authors":"Jiahao Cheng","doi":"10.1016/j.frl.2026.109474","DOIUrl":"10.1016/j.frl.2026.109474","url":null,"abstract":"<div><div>Corporate corruption remains a significant challenge to governance and economic stability. This study investigates the efficacy of technological solutions by examining how financial regulatory technology (Fintech), within the broader context of corporate digital transformation, inhibits internal corruption. Using a panel dataset of Chinese publicly listed firms from 2013 to 2023, this study find robust evidence that the adoption of Fintech significantly curtails corruption. Crucially, this deterrent effect is amplified by the firm's digital transformation, indicating a powerful synergy between specific regulatory tools and systemic organizational change. The benefits, however, are not uniform. Heterogeneity analysis reveals that larger firms, with greater resources and more complex structures, derive more significant anti-corruption benefits from Fintech. Furthermore, the moderating effect of digital transformation is most pronounced in firms with high investment levels, which enables a more profound technological integration. These findings highlight that isolated technological solutions are insufficient; rather, a holistic digital strategy is key to enhancing corporate integrity.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"91 ","pages":"Article 109474"},"PeriodicalIF":6.9,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145897361","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"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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