Pub Date : 2025-01-05DOI: 10.1016/j.frl.2025.106758
Carlos Stahlhoefer Hoerlle, Eduardo Kazuo Kayo
This study investigates the impact of public debt on the financing policy of Brazilian listed companies. The capital structure behavior of 451 listed companies from 1999 to 2020 is empirically analyzed using unbalanced panel data estimated with fixed effects. The results suggest a negative relationship between public debt and corporate leverage during this period, with a more significant effect on long-term debt. These results are robust to the inclusion of potential confounding factors, omitted variables, and a difference-in-differences strategy.
{"title":"Public debt and corporate debt: Is there a crowding out effect in Brazil?","authors":"Carlos Stahlhoefer Hoerlle, Eduardo Kazuo Kayo","doi":"10.1016/j.frl.2025.106758","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106758","url":null,"abstract":"This study investigates the impact of public debt on the financing policy of Brazilian listed companies. The capital structure behavior of 451 listed companies from 1999 to 2020 is empirically analyzed using unbalanced panel data estimated with fixed effects. The results suggest a negative relationship between public debt and corporate leverage during this period, with a more significant effect on long-term debt. These results are robust to the inclusion of potential confounding factors, omitted variables, and a difference-in-differences strategy.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"36 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936148","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 : 2025-01-04DOI: 10.1016/j.frl.2025.106757
Qishu Wang
We explore the time-lag effects of Environmental, Social, and Governance (ESG) practices’ integration within firms from the NASDAQ 100 index, analyzing how this information is reflected over time through Generative AI. By employing ChatGPT-4 to assess ESG progress from 2011 to 2022 in their annual 10-K reports, we identify significant time-lagged effects between the AI-generated evaluations and the ESG ratings, particularly pronounced in the Environmental and Social pillars among firms with mid-range ESG ratings. Our evidence suggests that such information delay in ESG ratings is plausibly driven by reputational herding among firms in their ESG practices, along with potential greenwashing.
{"title":"Generative AI-assisted evaluation of ESG practices and information delays in ESG ratings","authors":"Qishu Wang","doi":"10.1016/j.frl.2025.106757","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106757","url":null,"abstract":"We explore the time-lag effects of Environmental, Social, and Governance (ESG) practices’ integration within firms from the NASDAQ 100 index, analyzing how this information is reflected over time through Generative AI. By employing ChatGPT-4 to assess ESG progress from 2011 to 2022 in their annual 10-K reports, we identify significant time-lagged effects between the AI-generated evaluations and the ESG ratings, particularly pronounced in the Environmental and Social pillars among firms with mid-range ESG ratings. Our evidence suggests that such information delay in ESG ratings is plausibly driven by reputational herding among firms in their ESG practices, along with potential greenwashing.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"30 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142986114","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 exploratory research investigates the success factors of food waste-related products and services in crowdfunding campaigns by focusing on two key aspects: the type of solution suggested in terms of waste management hierarchy classification (prevention versus reuse/recycle) and the target market (niche versus mass market). Specifically, 122 food waste-related campaigns launched on Kickstarter from 2009 to 2019 have been analyzed. Results show that 1) campaigns offering food waste prevention solutions are more successful than those offering other solutions and 2) campaigns offering mass market products/services are more successful than those targeting niche markets. Based on these findings, this paper contributes to the current crowdfunding literature, especially the stream focused on the sustainability, by addressing a neglected topic, namely the food waste, and offering valuable insights for projects’ proponents and other stakeholders (e.g. platform managers and authorities). Additionally, this research provides contributions to theory, in particular on the key role of the wisdom of crowd in crowdfunding campaigns’ contexts.
{"title":"Crowdfunding food waste related campaigns: The role of waste hierarchy classification and target market","authors":"Ciro Troise, Stefania Testa, Enrico Battisti, Silvano Cincotti","doi":"10.1016/j.frl.2025.106745","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106745","url":null,"abstract":"This exploratory research investigates the success factors of food waste-related products and services in crowdfunding campaigns by focusing on two key aspects: the type of solution suggested in terms of waste management hierarchy classification (prevention versus reuse/recycle) and the target market (niche versus mass market). Specifically, 122 food waste-related campaigns launched on Kickstarter from 2009 to 2019 have been analyzed. Results show that 1) campaigns offering food waste prevention solutions are more successful than those offering other solutions and 2) campaigns offering mass market products/services are more successful than those targeting niche markets. Based on these findings, this paper contributes to the current crowdfunding literature, especially the stream focused on the sustainability, by addressing a neglected topic, namely the food waste, and offering valuable insights for projects’ proponents and other stakeholders (e.g. platform managers and authorities). Additionally, this research provides contributions to theory, in particular on the key role of the wisdom of crowd in crowdfunding campaigns’ contexts.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"56 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936150","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 : 2025-01-04DOI: 10.1016/j.frl.2025.106746
Nicola Del Sarto, Cristiano Bellavitis
This study examines how lead investors’ human capital influences equity crowdfunding (ECF) outcomes, focusing on campaign success and post-campaign performance, with a specific emphasis on Sustainable Oriented Ventures (SOVs). Using a two-step Heckman model on 508 Italian campaigns (2016–2020), we find that general human capital enhances campaign success universally, signaling credibility to investors. However, for SOVs, specialized human capital becomes critical post-campaign to navigate ESG complexities. In contrast, non-SOVs benefit consistently from general human capital across both stages. These results underscore the dual role of human capital in ECF, offering actionable insights for ventures with diverse orientations.
{"title":"Equity crowdfunding for sustainable oriented ventures: Lead investor impact on campaign success and post-campaign performance","authors":"Nicola Del Sarto, Cristiano Bellavitis","doi":"10.1016/j.frl.2025.106746","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106746","url":null,"abstract":"This study examines how lead investors’ human capital influences equity crowdfunding (ECF) outcomes, focusing on campaign success and post-campaign performance, with a specific emphasis on Sustainable Oriented Ventures (SOVs). Using a two-step Heckman model on 508 Italian campaigns (2016–2020), we find that general human capital enhances campaign success universally, signaling credibility to investors. However, for SOVs, specialized human capital becomes critical post-campaign to navigate ESG complexities. In contrast, non-SOVs benefit consistently from general human capital across both stages. These results underscore the dual role of human capital in ECF, offering actionable insights for ventures with diverse orientations.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"26 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936149","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 : 2025-01-04DOI: 10.1016/j.frl.2024.106713
Katherine Wood, Chaehyun Pyun, Hieu Pham
This paper investigates whether mutual funds that adopt ESG-related names follow through on the implied increase in ESG commitments. Utilizing Large Language Models (LLMs) to analyze mutual fund prospectuses, we find that, following a name change, funds increase their discussion of ESG and improve their holdings-based ESG scores. While we observe a positive correlation between a fund’s ESG content and its scores, the marginal benefit of additional ESG content diminishes post-name change. Our findings suggest that investors evaluating these funds can use LLMs to gauge a fund’s ESG commitment, especially when traditional ESG metrics are unavailable.
{"title":"Beyond Green Labels: Assessing Mutual Funds’ ESG Commitments through Large Language Models","authors":"Katherine Wood, Chaehyun Pyun, Hieu Pham","doi":"10.1016/j.frl.2024.106713","DOIUrl":"https://doi.org/10.1016/j.frl.2024.106713","url":null,"abstract":"This paper investigates whether mutual funds that adopt ESG-related names follow through on the implied increase in ESG commitments. Utilizing Large Language Models (LLMs) to analyze mutual fund prospectuses, we find that, following a name change, funds increase their discussion of ESG and improve their holdings-based ESG scores. While we observe a positive correlation between a fund’s ESG content and its scores, the marginal benefit of additional ESG content diminishes post-name change. Our findings suggest that investors evaluating these funds can use LLMs to gauge a fund’s ESG commitment, especially when traditional ESG metrics are unavailable.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"99 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936151","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 : 2025-01-04DOI: 10.1016/j.frl.2025.106744
Claudio Bonvino, Andrea Odille Bosio, Giancarlo Giudici
Despite the advent of equity crowdfunding increased democratization and access to capital resources and contributed to the financing of sustainable projects, there is puzzling evidence that women are less likely to invest in equity offers on the Internet. In this work, we point out the determinants that favor (or curb) women's participation in equity crowdfunding campaigns. Through different alternative models, we find that female investors are more likely to finance projects proposed by female entrepreneurs. They pay attention to focuses on sustainability but only on the decision related to invest or not, and this has no impact on the total funding. Few women contribute to finance the project when the minimum investment chip is larger and they are relatively less represented in follow-on campaigns. Our work reinforces the evidence of the important gap in women's investments in equity crowdfunding and identifies the determinants associated with a larger participation.
{"title":"Gender disparity in the participation to equity crowdfunding campaigns","authors":"Claudio Bonvino, Andrea Odille Bosio, Giancarlo Giudici","doi":"10.1016/j.frl.2025.106744","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106744","url":null,"abstract":"Despite the advent of equity crowdfunding increased democratization and access to capital resources and contributed to the financing of sustainable projects, there is puzzling evidence that women are less likely to invest in equity offers on the Internet. In this work, we point out the determinants that favor (or curb) women's participation in equity crowdfunding campaigns. Through different alternative models, we find that female investors are more likely to finance projects proposed by female entrepreneurs. They pay attention to focuses on sustainability but only on the decision related to invest or not, and this has no impact on the total funding. Few women contribute to finance the project when the minimum investment chip is larger and they are relatively less represented in follow-on campaigns. Our work reinforces the evidence of the important gap in women's investments in equity crowdfunding and identifies the determinants associated with a larger participation.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"53 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142986113","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 : 2025-01-03DOI: 10.1016/j.frl.2025.106739
Rajat Sharma, Sonia Chawla, Vishal Dagar, Leila Dagher
This study explores the impact of corporate SDG adoption on share price synchronicity in India's emerging market, focusing on the dissemination of firm-specific information. Using data from Indian firms, the analysis demonstrates that SDG adoption reduces share price synchronicity by enhancing stock market liquidity and attracting greater analyst coverage. The effect is stronger in non-state-owned firms and those with high institutional ownership. Further analysis reveals that subcategory PEOPLE SDGs has the most pronounced impact on share price synchronicity. The findings offer significant implications for policymakers, firms, and investors, suggesting the need to incentivize corporate SDG adoption to promote market transparency and informed investment decisions. More specifically, firms can leverage incentive-compatible contracts to increase SDG adoption, aligning corporate interests with sustainability goals, which further reduces information asymmetry and share price synchronicity.
{"title":"Corporate SDG adoption, share price synchronicity, and the role of incentive-compatible contracts in India","authors":"Rajat Sharma, Sonia Chawla, Vishal Dagar, Leila Dagher","doi":"10.1016/j.frl.2025.106739","DOIUrl":"https://doi.org/10.1016/j.frl.2025.106739","url":null,"abstract":"This study explores the impact of corporate SDG adoption on share price synchronicity in India's emerging market, focusing on the dissemination of firm-specific information. Using data from Indian firms, the analysis demonstrates that SDG adoption reduces share price synchronicity by enhancing stock market liquidity and attracting greater analyst coverage. The effect is stronger in non-state-owned firms and those with high institutional ownership. Further analysis reveals that subcategory PEOPLE SDGs has the most pronounced impact on share price synchronicity. The findings offer significant implications for policymakers, firms, and investors, suggesting the need to incentivize corporate SDG adoption to promote market transparency and informed investment decisions. More specifically, firms can leverage incentive-compatible contracts to increase SDG adoption, aligning corporate interests with sustainability goals, which further reduces information asymmetry and share price synchronicity.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142986115","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 examines the impact of domestic environmental policy stringency (EPS) on cross-border bank inflows across 33 countries from 2000 to 2020. Using panel data estimation models, the results reveal that higher levels of EPS are associated with increased cross-border bank inflows. Furthermore, non-market-based EPS shows a stronger effect in attracting these inflows compared to market-based policies. Additionally, green industries in host countries partially mediate the relationship between EPS and cross-border bank inflows, suggesting that stringent EPS fosters a favorable investment climate through the promotion of green sectors. These findings highlight the crucial role of environmental regulations in shaping financial flows and resource distribution in the banking sector, offering valuable insights for policymakers aiming to attract sustainable investment.
{"title":"Environmental policies stringency and cross-border banking: The mediating role of green industries","authors":"Subroto Rapih, Jorge Tavares Borges, Susantiningrum","doi":"10.1016/j.frl.2024.106734","DOIUrl":"https://doi.org/10.1016/j.frl.2024.106734","url":null,"abstract":"This study examines the impact of domestic environmental policy stringency (EPS) on cross-border bank inflows across 33 countries from 2000 to 2020. Using panel data estimation models, the results reveal that higher levels of EPS are associated with increased cross-border bank inflows. Furthermore, non-market-based EPS shows a stronger effect in attracting these inflows compared to market-based policies. Additionally, green industries in host countries partially mediate the relationship between EPS and cross-border bank inflows, suggesting that stringent EPS fosters a favorable investment climate through the promotion of green sectors. These findings highlight the crucial role of environmental regulations in shaping financial flows and resource distribution in the banking sector, offering valuable insights for policymakers aiming to attract sustainable investment.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"28 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936153","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 : 2025-01-01DOI: 10.1016/j.frl.2024.106689
Zhehao Huang, Yaya Su, Yuanqi Zhao
This study examined the effect of carbon emissions reduction on corporate profitability. We theoretically prove that carbon emissions reduction would crowd out corporate profitability in the short run, shifting into a feeding-back effect in the long run. The findings provide reliable evidence for the synergy between environmental regulation and economic development.
{"title":"Carbon emissions reduction: Crowding out or feeding back on corporate profitability?","authors":"Zhehao Huang, Yaya Su, Yuanqi Zhao","doi":"10.1016/j.frl.2024.106689","DOIUrl":"https://doi.org/10.1016/j.frl.2024.106689","url":null,"abstract":"This study examined the effect of carbon emissions reduction on corporate profitability. We theoretically prove that carbon emissions reduction would crowd out corporate profitability in the short run, shifting into a feeding-back effect in the long run. The findings provide reliable evidence for the synergy between environmental regulation and economic development.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"35 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142936152","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 : 2025-01-01DOI: 10.1016/j.frl.2024.106728
Navruz Khotamov, Naoto Jinji
Decisions under risk are often multidimensional, where the preferences of the investor depend on several factors. Investment theory implies that in the presence of different shocks, the correlation between these shocks is important. This study analyzes the relationship between the correlation of two shocks and foreign direct investment (FDI). The sources of shocks, in this study, are related to demand and exchange rate in the destination market. Constructing large panel data on industry-level FDI, we analyze FDI under correlation risk. We show that in the presence of two shocks, industry-level FDI flows exhibit correlation aversion and that the correlation of two distinct shocks explains significant variation in geographic allocation of FDI at the industry-level.
{"title":"Correlation aversion in foreign direct investment","authors":"Navruz Khotamov, Naoto Jinji","doi":"10.1016/j.frl.2024.106728","DOIUrl":"https://doi.org/10.1016/j.frl.2024.106728","url":null,"abstract":"Decisions under risk are often <ce:italic>multidimensional</ce:italic>, where the preferences of the investor depend on several factors. Investment theory implies that in the presence of different shocks, the correlation between these shocks is important. This study analyzes the relationship between the correlation of two shocks and foreign direct investment (FDI). The sources of shocks, in this study, are related to demand and exchange rate in the destination market. Constructing large panel data on industry-level FDI, we analyze FDI under correlation risk. We show that in the presence of two shocks, industry-level FDI flows exhibit <ce:italic>correlation aversion</ce:italic> and that the correlation of two distinct shocks explains significant variation in geographic allocation of FDI at the industry-level.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"43 1","pages":""},"PeriodicalIF":10.4,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142986119","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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