Pub Date : 2026-02-10DOI: 10.1016/j.frl.2026.109638
Jingyuan Hou, Luogang Chen
{"title":"Managerial digital background and corporate investment efficiency","authors":"Jingyuan Hou, Luogang Chen","doi":"10.1016/j.frl.2026.109638","DOIUrl":"https://doi.org/10.1016/j.frl.2026.109638","url":null,"abstract":"","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"177 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152618","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109633
Ali Kemal Çelik , Ömer Yalçınkaya , Yakup Söylemez , Hakan Cavlak
This study highlights the heterogeneity of climate risk across sectors by analyzing the spillover effects of global climate risks—distinguished as physical and transition risks—on sectoral stock markets in the US using quantile vector autoregression (QVAR) and spillover indices. The quantitative analysis, based on evidence from the S&P 500 and its subsector indices, identifies strong contagion effects observed in both the lower and upper quantiles, revealing that climate risks have acquired systemic characteristics. The findings indicate that climate risks have become a key determinant of financial stability not only during crisis periods but also under all market conditions, and that the sensitivity across sectors varies considerably.
{"title":"Spillover effects of climate risks on stock markets: A sectoral analysis","authors":"Ali Kemal Çelik , Ömer Yalçınkaya , Yakup Söylemez , Hakan Cavlak","doi":"10.1016/j.frl.2026.109633","DOIUrl":"10.1016/j.frl.2026.109633","url":null,"abstract":"<div><div>This study highlights the heterogeneity of climate risk across sectors by analyzing the spillover effects of global climate risks—distinguished as physical and transition risks—on sectoral stock markets in the US using quantile vector autoregression (QVAR) and spillover indices. The quantitative analysis, based on evidence from the S&P 500 and its subsector indices, identifies strong contagion effects observed in both the lower and upper quantiles, revealing that climate risks have acquired systemic characteristics. The findings indicate that climate risks have become a key determinant of financial stability not only during crisis periods but also under all market conditions, and that the sensitivity across sectors varies considerably.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109633"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152614","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109642
Lukas Reichmann
In this Paper I determine the driving factors for successful stock pairs to further improve the pairs selection process while utilizing cointegration methods. I test my selection based on regression coefficients on two different trading approaches which both are based on cointegration, but handle identical pairs selections in consecutive periods differently. This is tested against the standard selection procedure based on the sum of squared distances. According to my findings I can identify the possible driving forces for successful stock pair selection and generate more competitive returns.
{"title":"Pairs trading — Selection via scoring systems","authors":"Lukas Reichmann","doi":"10.1016/j.frl.2026.109642","DOIUrl":"10.1016/j.frl.2026.109642","url":null,"abstract":"<div><div>In this Paper I determine the driving factors for successful stock pairs to further improve the pairs selection process while utilizing cointegration methods. I test my selection based on regression coefficients on two different trading approaches which both are based on cointegration, but handle identical pairs selections in consecutive periods differently. This is tested against the standard selection procedure based on the sum of squared distances. According to my findings I can identify the possible driving forces for successful stock pair selection and generate more competitive returns.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109642"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152612","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109636
Ficawoyi Donou-Adonsou, Neleen Leslie-Piper
This study investigates the impact of Buy Now, Pay Later (BNPL) usage, social media exposure, and their interaction on consumer financial stress, using a large, nationally representative dataset of U.S. households. Financial stress is measured by self-reported financial insecurity, credit card debt, and the use of check-cashing services. To address endogeneity and strengthen causal inference, the study employs a triangulated identification strategy that combines Propensity Score Matching, Doubly Robust Estimation, Extended Regression Models, and Conditional Mixed Process estimation. Across all methods, BNPL and social media independently exacerbate financial stress, while their joint exposure—conceptualized as digital co-exposure—compounds these effects, particularly by increasing unsecured debt and reliance on alternative financial services. For example, the propensity score matching results indicate that joint exposure to BNPL use and social media increases financial insecurity by approximately 0.34 points and unsecured debt by about 1.46 points, relative to comparable non-users. These findings support a behavioral amplification mechanism in which algorithmic targeting and frictionless credit access jointly erode financial self-regulation. For financial practitioners, the results underscore the importance of integrating behavioral and digital indicators into risk models, especially when assessing younger or financially vulnerable consumers. The study also informs regulatory and design interventions, including mandatory BNPL credit reporting, algorithmic transparency, and the use of digital nudges to mitigate impulsive spending. As fintech and social media ecosystems increasingly converge, understanding their interactive influence is essential for promoting consumer financial resilience.
{"title":"Digital traps: The compounding impact of BNPL and social media on consumer financial stress","authors":"Ficawoyi Donou-Adonsou, Neleen Leslie-Piper","doi":"10.1016/j.frl.2026.109636","DOIUrl":"10.1016/j.frl.2026.109636","url":null,"abstract":"<div><div>This study investigates the impact of Buy Now, Pay Later (BNPL) usage, social media exposure, and their interaction on consumer financial stress, using a large, nationally representative dataset of U.S. households. Financial stress is measured by self-reported financial insecurity, credit card debt, and the use of check-cashing services. To address endogeneity and strengthen causal inference, the study employs a triangulated identification strategy that combines Propensity Score Matching, Doubly Robust Estimation, Extended Regression Models, and Conditional Mixed Process estimation. Across all methods, BNPL and social media independently exacerbate financial stress, while their joint exposure—conceptualized as digital co-exposure—compounds these effects, particularly by increasing unsecured debt and reliance on alternative financial services. For example, the propensity score matching results indicate that joint exposure to BNPL use and social media increases financial insecurity by approximately 0.34 points and unsecured debt by about 1.46 points, relative to comparable non-users. These findings support a behavioral amplification mechanism in which algorithmic targeting and frictionless credit access jointly erode financial self-regulation. For financial practitioners, the results underscore the importance of integrating behavioral and digital indicators into risk models, especially when assessing younger or financially vulnerable consumers. The study also informs regulatory and design interventions, including mandatory BNPL credit reporting, algorithmic transparency, and the use of digital nudges to mitigate impulsive spending. As fintech and social media ecosystems increasingly converge, understanding their interactive influence is essential for promoting consumer financial resilience.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109636"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152647","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109628
Meng Wang , Yixue Duan , Guang-Zhao Yang
This paper investigates the impact of weather alerts on stock market performance. Following an alert, next-day firm-level returns decline significantly, turnover increases, and short-horizon volatility rises. Alerts announced the day before trading are associated with lower average returns over the subsequent five trading days. These patterns are consistent with precautionary trading and heightened uncertainty. Stronger alerts, especially orange warnings, generate larger market responses. Alerts that are more closely related to weather-induced sentiment also produce stronger effects. We further show that investor attention increases sharply after alerts, as measured by firm-level search intensity. Our findings provide firm-level evidence on the link between weather risk and financial market behavior.
{"title":"Weather alerts and stock market reactions: Evidence from China","authors":"Meng Wang , Yixue Duan , Guang-Zhao Yang","doi":"10.1016/j.frl.2026.109628","DOIUrl":"10.1016/j.frl.2026.109628","url":null,"abstract":"<div><div>This paper investigates the impact of weather alerts on stock market performance. Following an alert, next-day firm-level returns decline significantly, turnover increases, and short-horizon volatility rises. Alerts announced the day before trading are associated with lower average returns over the subsequent five trading days. These patterns are consistent with precautionary trading and heightened uncertainty. Stronger alerts, especially orange warnings, generate larger market responses. Alerts that are more closely related to weather-induced sentiment also produce stronger effects. We further show that investor attention increases sharply after alerts, as measured by firm-level search intensity. Our findings provide firm-level evidence on the link between weather risk and financial market behavior.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109628"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146187309","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109632
Thaddeus Neururer , George Papadakis
We examine how different types of bundled managerial guidance affect uncertainty levels around earnings announcements. To measure changes in uncertainty, we use both changes in implied volatilities and methods that decompose the implied volatility term structure. Unlike prior studies, we find little evidence that earnings guidance is associated with investor uncertainty. Our results instead indicate that other forms of bundled guidance are associated with lower uncertainty levels. Revenue, capital expenditure, and earnings before interest, taxes, depreciation, and amortization guidance are strongly associated with reductions in investor uncertainty, even when firms provide earnings guidance.
{"title":"Bundled guidance types and changes in expected volatility","authors":"Thaddeus Neururer , George Papadakis","doi":"10.1016/j.frl.2026.109632","DOIUrl":"10.1016/j.frl.2026.109632","url":null,"abstract":"<div><div>We examine how different types of bundled managerial guidance affect uncertainty levels around earnings announcements. To measure changes in uncertainty, we use both changes in implied volatilities and methods that decompose the implied volatility term structure. Unlike prior studies, we find little evidence that earnings guidance is associated with investor uncertainty. Our results instead indicate that other forms of bundled guidance are associated with lower uncertainty levels. Revenue, capital expenditure, and earnings before interest, taxes, depreciation, and amortization guidance are strongly associated with reductions in investor uncertainty, even when firms provide earnings guidance.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109632"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146153263","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 : 2026-02-10DOI: 10.1016/j.frl.2026.109637
Hua Li , Luying Liu , Ningning Xia , Mengkang Yu
This paper tackles the key challenge of estimating high-dimensional covariance matrices for portfolio optimization by proposing a new framework that combines the Spiked Covariance Model with expected-utility maximization. We develop spectrally corrected estimators for the Optimal Expected Utility and Global Minimum Variance portfolios via a parameterized inverse-covariance formulation, with parameters chosen to maximize asymptotic out-of-sample expected utility—directly linking statistical estimation to financial performance. Extensive Monte Carlo simulations and an empirical study on S&P 500 constituents (2010–2024) show that our approach consistently outperforms standard benchmarks, including the sample covariance and linear/nonlinear shrinkage methods, delivering superior and more stable out-of-sample results in high-dimensional settings.
{"title":"High-dimensional expected utility portfolios under the spiked covariance model","authors":"Hua Li , Luying Liu , Ningning Xia , Mengkang Yu","doi":"10.1016/j.frl.2026.109637","DOIUrl":"10.1016/j.frl.2026.109637","url":null,"abstract":"<div><div>This paper tackles the key challenge of estimating high-dimensional covariance matrices for portfolio optimization by proposing a new framework that combines the Spiked Covariance Model with expected-utility maximization. We develop spectrally corrected estimators for the Optimal Expected Utility and Global Minimum Variance portfolios via a parameterized inverse-covariance formulation, with parameters chosen to maximize asymptotic out-of-sample expected utility—directly linking statistical estimation to financial performance. Extensive Monte Carlo simulations and an empirical study on S&P 500 constituents (2010–2024) show that our approach consistently outperforms standard benchmarks, including the sample covariance and linear/nonlinear shrinkage methods, delivering superior and more stable out-of-sample results in high-dimensional settings.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109637"},"PeriodicalIF":6.9,"publicationDate":"2026-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146152616","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 : 2026-02-09DOI: 10.1016/j.frl.2026.109625
Yunpeng Cai , Yang Yu , Yue Ma , Hong Chen
This study examines whether ESG performance restrains corporate financialization in China. Using a panel of Chinese listed firms from 2010 to 2022, we find that ESG performance reduces firms’ financial asset holdings. The results are robust to alternative measures, firm and time fixed effects, and a battery of endogeneity tests. Channel evidence suggests that ESG operates by dampening peer-driven investment, improving internal governance, and disciplining product-market competition. The effect is stronger among mature firms, firms with greater growth opportunities, and those facing higher environmental uncertainty. These findings clarify the governance role of ESG in emerging markets.
{"title":"Can ESG construction enable enterprises to move from virtual to real?","authors":"Yunpeng Cai , Yang Yu , Yue Ma , Hong Chen","doi":"10.1016/j.frl.2026.109625","DOIUrl":"10.1016/j.frl.2026.109625","url":null,"abstract":"<div><div>This study examines whether ESG performance restrains corporate financialization in China. Using a panel of Chinese listed firms from 2010 to 2022, we find that ESG performance reduces firms’ financial asset holdings. The results are robust to alternative measures, firm and time fixed effects, and a battery of endogeneity tests. Channel evidence suggests that ESG operates by dampening peer-driven investment, improving internal governance, and disciplining product-market competition. The effect is stronger among mature firms, firms with greater growth opportunities, and those facing higher environmental uncertainty. These findings clarify the governance role of ESG in emerging markets.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"93 ","pages":"Article 109625"},"PeriodicalIF":6.9,"publicationDate":"2026-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146187310","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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