Pub Date : 2025-02-13DOI: 10.1016/j.frl.2025.106968
Robert D. Evans Jr. , Leiza Nochebuena-Evans
Corporate social activism (CSA) has become a mainstay for U.S.-based firms seeking to curry favor with consumers and investors. Despite studies showing improvements to a wide range of firm metrics as a result of the adoption and implementation of these programs, recent changes in the U.S. social and political environments have moved some firms to adopt a corporate social anti-activist (CSAA) stance, rejecting or eliminating firm participation in such programs. Our study empirically investigates the impact of the adoption of a CSAA stance, through the elimination of participation in DEI programs, on firm stock price. Findings suggest that firm adoption of CSAA leads to short-term improvements in shareholder wealth.
{"title":"Corporate social anti-activism and firm stock price: Evidence from DEI program elimination","authors":"Robert D. Evans Jr. , Leiza Nochebuena-Evans","doi":"10.1016/j.frl.2025.106968","DOIUrl":"10.1016/j.frl.2025.106968","url":null,"abstract":"<div><div>Corporate social activism (CSA) has become a mainstay for U.S.-based firms seeking to curry favor with consumers and investors. Despite studies showing improvements to a wide range of firm metrics as a result of the adoption and implementation of these programs, recent changes in the U.S. social and political environments have moved some firms to adopt a corporate social anti-activist (CSAA) stance, rejecting or eliminating firm participation in such programs. Our study empirically investigates the impact of the adoption of a CSAA stance, through the elimination of participation in DEI programs, on firm stock price. Findings suggest that firm adoption of CSAA leads to short-term improvements in shareholder wealth.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106968"},"PeriodicalIF":7.4,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429335","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 : 2025-02-13DOI: 10.1016/j.frl.2025.106957
Jun Huang , Feifei Han , Yun Li
This paper uses textual analysis to investigate whether and how institutional investors’ ESG concerns influence firms’ ESG disclosure by identifying ESG-related questions during site visits. The findings show that institutional investors’ ESG concerns raised during site visits inspire firms to improve ESG disclosure. We further find that this positive relationship is enhanced by the shareholding of long-term institutional investors, the board secretary's ability, and analyst attention. These findings suggest that institutional investors communicate directly with management to convey their ESG information demands and motivate firms to enhance their ESG disclosures.
{"title":"The impact of institutional investors’ ESG concerns on corporate ESG disclosure: Evidence from site visits","authors":"Jun Huang , Feifei Han , Yun Li","doi":"10.1016/j.frl.2025.106957","DOIUrl":"10.1016/j.frl.2025.106957","url":null,"abstract":"<div><div>This paper uses textual analysis to investigate whether and how institutional investors’ ESG concerns influence firms’ ESG disclosure by identifying ESG-related questions during site visits. The findings show that institutional investors’ ESG concerns raised during site visits inspire firms to improve ESG disclosure. We further find that this positive relationship is enhanced by the shareholding of long-term institutional investors, the board secretary's ability, and analyst attention. These findings suggest that institutional investors communicate directly with management to convey their ESG information demands and motivate firms to enhance their ESG disclosures.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106957"},"PeriodicalIF":7.4,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429351","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 : 2025-02-12DOI: 10.1016/j.frl.2025.106915
Rufei Ma , Xinxin Fu , Qiang Ji , Pengxiang Zhai
We explore the impact of managerial climate attention on leverage deviation (i.e., the distance between actual leverage and the target leverage). The results show that greater managerial attention to climate issues is associated with smaller deviations from target leverage in the future, indicating that managers concerning climate issues tend to achieve a more optimized capital structure. This effect is robust to potential leverage measure bias, confounding effect of external crisis, and sample selection bias. Moreover, this effect is more pronounced in firms with concentrated ownership, significant institutional holdings, and government ownership, emphasizing the critical role that ownership structure plays in this relationship.
{"title":"Climate awareness in management and deviation from target leverage: Evidence from China","authors":"Rufei Ma , Xinxin Fu , Qiang Ji , Pengxiang Zhai","doi":"10.1016/j.frl.2025.106915","DOIUrl":"10.1016/j.frl.2025.106915","url":null,"abstract":"<div><div>We explore the impact of managerial climate attention on leverage deviation (i.e., the distance between actual leverage and the target leverage). The results show that greater managerial attention to climate issues is associated with smaller deviations from target leverage in the future, indicating that managers concerning climate issues tend to achieve a more optimized capital structure. This effect is robust to potential leverage measure bias, confounding effect of external crisis, and sample selection bias. Moreover, this effect is more pronounced in firms with concentrated ownership, significant institutional holdings, and government ownership, emphasizing the critical role that ownership structure plays in this relationship.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106915"},"PeriodicalIF":7.4,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429350","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 : 2025-02-12DOI: 10.1016/j.frl.2025.106899
Zhibo Xu , Siyu Yan , Zhongxin Gan
Using data from Chinese listed firms over 2007–2023, we identify a new economic benefit of common institutional ownership: reduced abnormal trading halts. Results remain robust across various checks. Mechanism analysis reveals that the information advantage and the internalization of governance externalities by common institutional ownership are key drivers of this effect. We also provide evidence that common institutional ownership can impose ex-ante restrictions and employ ex-post “exit threats” to discipline insiders, thereby reducing abnormal trading halts. Overall, our results indicate that common institutional ownership curbs abnormal trading halts, offering an alternative perspective in the policy debate on its anti-competitive effects.
{"title":"Common institutional ownership and abnormal stock trading halts","authors":"Zhibo Xu , Siyu Yan , Zhongxin Gan","doi":"10.1016/j.frl.2025.106899","DOIUrl":"10.1016/j.frl.2025.106899","url":null,"abstract":"<div><div>Using data from Chinese listed firms over 2007–2023, we identify a new economic benefit of common institutional ownership: reduced abnormal trading halts. Results remain robust across various checks. Mechanism analysis reveals that the information advantage and the internalization of governance externalities by common institutional ownership are key drivers of this effect. We also provide evidence that common institutional ownership can impose ex-ante restrictions and employ ex-post “exit threats” to discipline insiders, thereby reducing abnormal trading halts. Overall, our results indicate that common institutional ownership curbs abnormal trading halts, offering an alternative perspective in the policy debate on its anti-competitive effects.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106899"},"PeriodicalIF":7.4,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143438311","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 : 2025-02-12DOI: 10.1016/j.frl.2025.106906
Selahattin Tolga Er , Jaroslaw Kantorowicz
While extensive research has examined the impact of populist parties’ electoral victories on financial markets, less is known about the effects of their exit from government. This study addresses this gap by analyzing market response to the democratic transition away from populism in Poland. Leveraging the close competition in Poland’s 2023 general elections as a quasi-experimental framework, we use the event study and synthetic control methods to explore the market reaction to the end of the right-wing populist government. In the short term, we demonstrate a market premium associated with the democratic transition from the right-wing populist bloc to the pro-democratic bloc. Our findings from the synthetic control method corroborate these results, further suggesting enduring positive effects on investor welfare in the longer term.
{"title":"Financial market reaction to the end of the right-wing populist government: The case of Poland","authors":"Selahattin Tolga Er , Jaroslaw Kantorowicz","doi":"10.1016/j.frl.2025.106906","DOIUrl":"10.1016/j.frl.2025.106906","url":null,"abstract":"<div><div>While extensive research has examined the impact of populist parties’ electoral victories on financial markets, less is known about the effects of their exit from government. This study addresses this gap by analyzing market response to the democratic transition away from populism in Poland. Leveraging the close competition in Poland’s 2023 general elections as a quasi-experimental framework, we use the event study and synthetic control methods to explore the market reaction to the end of the right-wing populist government. In the short term, we demonstrate a market premium associated with the democratic transition from the right-wing populist bloc to the pro-democratic bloc. Our findings from the synthetic control method corroborate these results, further suggesting enduring positive effects on investor welfare in the longer term.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106906"},"PeriodicalIF":7.4,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"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 : 2025-02-11DOI: 10.1016/j.frl.2025.106934
Yafei Xing , Junwei Wang , Zheng Liu , Daibo Xiao
This study utilizes data from publicly listed companies between 2009 and 2022 as a sample set to investigate how corporate financialization affects corporate ESG performance. The empirical findings suggest that corporate financialization positively contributes to enhancing ESG performance. Executive compensation structures emerge as a moderating variable in the interplay between corporate financialization and ESG performance, with this moderation exhibiting differential impacts on state-owned versus non-state-owned enterprises. Furthermore, the degree of corporate financialization influences ESG performance, revealing a threshold effect as the company's debt-to-asset ratio rises.
{"title":"The impact of corporate financialization on ESG performance: A perspective based on executive incentives","authors":"Yafei Xing , Junwei Wang , Zheng Liu , Daibo Xiao","doi":"10.1016/j.frl.2025.106934","DOIUrl":"10.1016/j.frl.2025.106934","url":null,"abstract":"<div><div>This study utilizes data from publicly listed companies between 2009 and 2022 as a sample set to investigate how corporate financialization affects corporate ESG performance. The empirical findings suggest that corporate financialization positively contributes to enhancing ESG performance. Executive compensation structures emerge as a moderating variable in the interplay between corporate financialization and ESG performance, with this moderation exhibiting differential impacts on state-owned versus non-state-owned enterprises. Furthermore, the degree of corporate financialization influences ESG performance, revealing a threshold effect as the company's debt-to-asset ratio rises.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106934"},"PeriodicalIF":7.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143444145","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 : 2025-02-11DOI: 10.1016/j.frl.2025.106932
Luxin Zhang
The relationship between cultural heritage protection and economic development remains incompletely understood, especially regarding the mechanisms through which heritage resources contribute to sustainable growth. This study investigates how cultural heritage protection drives high-quality economic development in China, using provincial data from 2010–2021. Through econometric analyses, the research reveals that heritage protection enhances economic development both directly and indirectly, with tourism mediating 23% of the total effect. Human capital strengthens this relationship, as regions with higher education levels show greater heritage-driven development. Central-western provinces benefit more from cultural heritage than eastern ones, while areas outside the Yangtze River Economic Belt show stronger positive effects than those within. The findings support integrated policies combining cultural preservation with human capital investment.
{"title":"Influence of cultural heritage protection on high-quality economic development","authors":"Luxin Zhang","doi":"10.1016/j.frl.2025.106932","DOIUrl":"10.1016/j.frl.2025.106932","url":null,"abstract":"<div><div>The relationship between cultural heritage protection and economic development remains incompletely understood, especially regarding the mechanisms through which heritage resources contribute to sustainable growth. This study investigates how cultural heritage protection drives high-quality economic development in China, using provincial data from 2010–2021. Through econometric analyses, the research reveals that heritage protection enhances economic development both directly and indirectly, with tourism mediating 23% of the total effect. Human capital strengthens this relationship, as regions with higher education levels show greater heritage-driven development. Central-western provinces benefit more from cultural heritage than eastern ones, while areas outside the Yangtze River Economic Belt show stronger positive effects than those within. The findings support integrated policies combining cultural preservation with human capital investment.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106932"},"PeriodicalIF":7.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429443","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 : 2025-02-11DOI: 10.1016/j.frl.2025.106937
Tian Li , Feng Qi
This quasi-natural experimental study examines how China's local government debt management reform affects corporate green innovation. The findings show that the reform significantly promotes green innovation by reducing financial constraints and efficient resource allocation. Mechanism analysis reveals that while higher default risk strengthens the effects of the reform, firms with higher total factor productivity (TFP) benefit more from resource optimization and policy incentives. Heterogeneity analysis shows stronger impacts in regions with less developed markets and firms with high capital density. These findings are confirmed through robustness tests. This study underscores the importance of macroeconomic policies in driving sustainable development and corporate innovation.
{"title":"Fiscal reform and green innovation: Evidence from China's local debt management reform","authors":"Tian Li , Feng Qi","doi":"10.1016/j.frl.2025.106937","DOIUrl":"10.1016/j.frl.2025.106937","url":null,"abstract":"<div><div>This quasi-natural experimental study examines how China's local government debt management reform affects corporate green innovation. The findings show that the reform significantly promotes green innovation by reducing financial constraints and efficient resource allocation. Mechanism analysis reveals that while higher default risk strengthens the effects of the reform, firms with higher total factor productivity (TFP) benefit more from resource optimization and policy incentives. Heterogeneity analysis shows stronger impacts in regions with less developed markets and firms with high capital density. These findings are confirmed through robustness tests. This study underscores the importance of macroeconomic policies in driving sustainable development and corporate innovation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106937"},"PeriodicalIF":7.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429449","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 : 2025-02-11DOI: 10.1016/j.frl.2025.106905
Ki C Han , Sukhun Lee , David Y Suk , Hyun Mo Sung
In previous global financial crises, microfinance institutions (MFIs) provided a significant diversification benefit to global portfolios. However, since the COVID-19 pandemic significantly impaired the microfinance industry's traditional modes of operation and threatened the survival of microentrepreneurs’ businesses, the diversification benefit was not stable but rather fluctuated during the crisis period. One year before the pandemic, MFIs provided significant diversification benefit; however, during the first year of the pandemic, this benefit disappeared completely and continued to be nonexistent during the second year of the pandemic. During the last year of the pandemic, the diversification benefit became statistically significant again.
{"title":"Impact of COVID-19 pandemic on diversification: Evidence from microfinance","authors":"Ki C Han , Sukhun Lee , David Y Suk , Hyun Mo Sung","doi":"10.1016/j.frl.2025.106905","DOIUrl":"10.1016/j.frl.2025.106905","url":null,"abstract":"<div><div>In previous global financial crises, microfinance institutions (MFIs) provided a significant diversification benefit to global portfolios. However, since the COVID-19 pandemic significantly impaired the microfinance industry's traditional modes of operation and threatened the survival of microentrepreneurs’ businesses, the diversification benefit was not stable but rather fluctuated during the crisis period. One year before the pandemic, MFIs provided significant diversification benefit; however, during the first year of the pandemic, this benefit disappeared completely and continued to be nonexistent during the second year of the pandemic. During the last year of the pandemic, the diversification benefit became statistically significant again.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106905"},"PeriodicalIF":7.4,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429353","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 : 2025-02-10DOI: 10.1016/j.frl.2025.106923
Hanjun Chen , Long Qian , Haohao Gu , Qianqian Chen , Ke Zheng , Yong Zhang , Sha Dong
This study examines the impact of patent quality on technology-based enterprise profitability using panel data from companies listed on China's Science and Technology Innovation Board (STAR market) and the Growth Enterprises Market from 2013 to 2022. The findings indicate that patent quality significantly enhances the profitability of these enterprises from an economic and legal perspective. The study explores the moderating role of research and development investment in the relationship between patent quality and profitability, identifying a negative moderating effect. Heterogeneity analysis indicates that the positive impact of patent quality on profitability is more pronounced in China's eastern region.
{"title":"Patent quality, R&D investment, and the profitability of technology-based firms","authors":"Hanjun Chen , Long Qian , Haohao Gu , Qianqian Chen , Ke Zheng , Yong Zhang , Sha Dong","doi":"10.1016/j.frl.2025.106923","DOIUrl":"10.1016/j.frl.2025.106923","url":null,"abstract":"<div><div>This study examines the impact of patent quality on technology-based enterprise profitability using panel data from companies listed on China's Science and Technology Innovation Board (STAR market) and the Growth Enterprises Market from 2013 to 2022. The findings indicate that patent quality significantly enhances the profitability of these enterprises from an economic and legal perspective. The study explores the moderating role of research and development investment in the relationship between patent quality and profitability, identifying a negative moderating effect. Heterogeneity analysis indicates that the positive impact of patent quality on profitability is more pronounced in China's eastern region.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106923"},"PeriodicalIF":7.4,"publicationDate":"2025-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143429448","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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