Finance Research Letters最新文献

The increase in natural disasters due to climate change has prompted the adoption of measures to mitigate it, like the use of renewable energy sources. This study suggests that the transition risk associated with these policies will rise the demand for critical metals, increasing the systematic risk for companies that produce them. Using Bayesian structural time series, we find evidence suggesting that, following the Paris and Dubai Agreements, the systematic risk for copper and lithium-producing companies increased. At the same time, the changes for cobalt and nickel varied. So, future consideration should be given to hedging these assets.

Corporate ESG performance is increasingly recognized as crucial for sustainable development, yet the impact of CEO behavior on this metric remains understudied. This paper investigates how CEO hedging affects corporate ESG performance, addressing a significant gap in the literature. Using data from U.S. listed companies from 2013 to 2021, we employ regression analysis and propensity score matching to examine this relationship. Our findings reveal that CEO hedging significantly reduces corporate ESG performance. Further analysis shows that the CEO's shareholding ratio and corporate risk enhance this negative correlation, while external supervision mitigates it. Heterogeneity analysis indicates a stronger correlation in low-polluting enterprises. These results underscore the ethical implications of CEO option trading for personal risk hedging and highlight the importance of avoiding behaviors that can adversely affect a firm's ESG performance. Our study contributes to the understanding of corporate governance and sustainable development, offering valuable insights for policymakers and corporate leaders in designing effective strategies to enhance ESG performance.

This article analyzes the effect of ESG ratings on fostering common prosperity within companies in China's capital market, focusing on non-financial and insurance sectors. The study finds that higher corporate ESG ratings significantly enhance common prosperity within firms, primarily by easing corporate debt financing constraints. Furthermore, the positive impact of ESG ratings on common prosperity is stronger in non-state-owned and larger enterprises. This research broadens the understanding of corporate ESG's role from a micro perspective and offers evidence on advancing common prosperity in the modern era.

Through empirical analyses, this paper confirms the beneficial influence of digital governance on the information disclosure quality of listed companies. Additionally, it uncovers the intermediary roles played by managerial transaction costs and human capital structure. Furthermore, the study investigates the varying impacts of corporate geographical location and property rights characteristics on the efficacy of digital governance. The findings indicate that digital governance noticeably enhances information disclosure quality, diminishes managerial transaction costs, and refines human capital structure. Moreover, listed companies in the eastern regions and those that are state-owned have experienced more substantial advancements in disclosure quality due to digital governance.

This study explores the interconnection among major sporting events, corporate social responsibility (CSR), and the valuations of sports-listed companies. Sporting events now serve as global engagement platforms beyond mere competition. Through a mixed-methods approach including literature reviews, quantitative financial analyses, and qualitative CSR strategy explorations, this research examines how companies' involvement in such events and their CSR initiatives influence their overall values. The study aims to uncover the relationships between sporting events, CSR practices, and market performances of sports-related firms, offering valuable insights for businesses, policymakers, and investors navigating the complexities of sports, CSR, and corporate valuations.

Using a sample of Chinese listed companies from 2010 to 2022, we examine how investor‒firm online interactions influence informational efficiency of stock prices. The empirical results indicate that investor–firm online interactions significantly enhance informational efficiency. After conducting a series of robustness checks, the conclusions remain valid. Mechanistic analysis demonstrates that investor–firm online interactions enhance informational efficiency primarily by reducing information asymmetry and correcting stock mispricing. We emphasize the critical importance of retail investor–firm online interactions within social media platforms in promoting informational efficiency of stock prices.

The effectiveness of promoting sustainable development depends on the efficiency of formulating and implementing applicable policies. Based on a sample of Chinese listed companies from 2011 to 2022, this study reveals a significant enhancement of the environmental protection taxes in corporate ESG performance. The finding indicates that implementing environmental protection taxes can effectively enhance ESG performance omnidirectionally. This impact operates mainly through reducing audit fees. These findings enhance and broaden the current body of literature and contribute to a more comprehensive understanding of the impact of macro policies on individual agents.

This paper examines how intergenerational educational mobility affects family economic vulnerability using China Household Finance Survey (CHFS) data. The results show that higher educational mobility significantly reduces family economic vulnerability, confirmed by robustness tests. The effect is stronger in regions with higher marketization and among lower-income families. These findings offer valuable insights for policymakers to enhance economic stability by improving educational resources and supporting reforms, addressing educational development, and economic vulnerability issues.

This paper examines the relationship between cryptocurrency returns and price sensitivity to unexpected changes in market uncertainty, as measured by U.S. stock market volatility, from June 2018 to February 2023. Cryptocurrencies with intermediate uncertainty risk earn a risk-adjusted weekly return of 5.73% higher than those with low and high uncertainty risk, after controlling for market, size, reversal, and liquidity factors, demonstrating the non-linearity between cryptocurrency returns and VIX betas. Overpaying for lottery-like cryptocurrencies lowers expected returns, further explaining this nonlinear relationship. The relationship remains robust using (1) two-pass cross-sectional regression, (2) various quantile portfolios, and (3) alternative risk factors.

This paper investigates the impact of carbon trading prices on Chinese commercial banks. We propose a stress test model to calculate the decline of firms’ liabilities and the climate-driven loss of commercial banks to different industries. The results indicate that State-Owned Banks suffer the highest climate-driven loss among all types of banks. City commercial banks suffer the highest climate-driven loss ratio since they maintain a relatively low level of Tier 1 core capital. Beijing, Shanghai, Jiangsu, and Zhejiang maintain the highest levels of climate-driven loss ratio. Furthermore, the allocation of loans portfolio across different industries also influences climate-driven loss of banks. The climate-driven loss to the electric power, heat, gas, and water production and supply sector is the largest in all industries. It is necessary for banks to incorporate climate factors into the risk assessment framework.