Pub Date : 2025-02-08DOI: 10.1016/j.frl.2025.106900
Xubo Zhang , Xinyu Zhang , Yanbin Tu
This paper examines the relationship between government-guided fund (GGF) investment and corporate ESG (Environmental, Social, and Governance) performance using China's A-share companies that received GGFs from 2013 to 2022. Our analysis indicates a significant negative correlation between GGFs holdings and ESG performance, with one period lagged effect. This negative correlation is pronounced for non-state-owned enterprises but insignificant for state-owned enterprises. For state-owned enterprises, robust regional economic development and stringent environmental regulations mitigate the negative GGF correlation. This study provides new insights into the relation of GGFs with corporate sustainability.
{"title":"The paradox of government-guided funds: A negative impact on corporate ESG performance?!","authors":"Xubo Zhang , Xinyu Zhang , Yanbin Tu","doi":"10.1016/j.frl.2025.106900","DOIUrl":"10.1016/j.frl.2025.106900","url":null,"abstract":"<div><div>This paper examines the relationship between government-guided fund (GGF) investment and corporate ESG (Environmental, Social, and Governance) performance using China's A-share companies that received GGFs from 2013 to 2022. Our analysis indicates a significant negative correlation between GGFs holdings and ESG performance, with one period lagged effect. This negative correlation is pronounced for non-state-owned enterprises but insignificant for state-owned enterprises. For state-owned enterprises, robust regional economic development and stringent environmental regulations mitigate the negative GGF correlation. This study provides new insights into the relation of GGFs with corporate sustainability.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106900"},"PeriodicalIF":7.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143378511","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 : 2025-02-08DOI: 10.1016/j.frl.2025.106876
Li Wang , Jingran Zhu , Wenjun Ji
Identifying and suppressing corporate greenwashing is crucial for sustainable development. We investigate the effect of common ownership on corporate greenwashing using listed firms in China from 2010 to 2023. Our findings indicate that common ownership significantly reduces greenwashing, and this effect is primarily driven by common state ownership. Overall, our findings reveal the important role of ownership heterogeneity in understanding the impact of common ownership on corporate behavior in transitional economies.
{"title":"The long arm of the Leviathan: Common ownership and corporate greenwashing","authors":"Li Wang , Jingran Zhu , Wenjun Ji","doi":"10.1016/j.frl.2025.106876","DOIUrl":"10.1016/j.frl.2025.106876","url":null,"abstract":"<div><div>Identifying and suppressing corporate greenwashing is crucial for sustainable development. We investigate the effect of common ownership on corporate greenwashing using listed firms in China from 2010 to 2023. Our findings indicate that common ownership significantly reduces greenwashing, and this effect is primarily driven by common state ownership. Overall, our findings reveal the important role of ownership heterogeneity in understanding the impact of common ownership on corporate behavior in transitional economies.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106876"},"PeriodicalIF":7.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143403216","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 : 2025-02-08DOI: 10.1016/j.frl.2025.106896
Kaili Sun , Haohan Wang , Shengchao Ye
Digital transformation presents a crucial opportunity to strengthen industrial chain resilience in the shifting global economic and political landscape. This paper constructs a micro evaluation index system for industrial chain resilience, takes China's A-share manufacturing listed companies from 2015 to 2022 as research samples, and empirically analyzes the impact and mechanism of digital transformation on industrial chain resilience. The key findings are as follows: digital transformation significantly enhances industrial chain resilience. Digital transformation fosters diversification in upstream cooperation and drives substantive innovation, thereby strengthening industrial chain resilience. The effects are more pronounced in technology-intensive industries and state-owned enterprises. The insights from this paper provide valuable references for seizing digital opportunities and enhancing economic security.
{"title":"How does digital transformation enhance industrial chain resilience? Evidence from China","authors":"Kaili Sun , Haohan Wang , Shengchao Ye","doi":"10.1016/j.frl.2025.106896","DOIUrl":"10.1016/j.frl.2025.106896","url":null,"abstract":"<div><div>Digital transformation presents a crucial opportunity to strengthen industrial chain resilience in the shifting global economic and political landscape. This paper constructs a micro evaluation index system for industrial chain resilience, takes China's A-share manufacturing listed companies from 2015 to 2022 as research samples, and empirically analyzes the impact and mechanism of digital transformation on industrial chain resilience. The key findings are as follows: digital transformation significantly enhances industrial chain resilience. Digital transformation fosters diversification in upstream cooperation and drives substantive innovation, thereby strengthening industrial chain resilience. The effects are more pronounced in technology-intensive industries and state-owned enterprises. The insights from this paper provide valuable references for seizing digital opportunities and enhancing economic security.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106896"},"PeriodicalIF":7.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143350782","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 : 2025-02-08DOI: 10.1016/j.frl.2025.106890
Benjamin M. Tabak, Ives Cezar Fulber, Matheus B. Froner
Global concern about energy, food security and climate change is on the rise. We investigate the spillover effects amidst carbon, energy and agrifood markets. Applying the novel decomposed connectedness approach we find that the impact of the contemporaneous spillover in the total connectedness is significant, while the lagged effects contribute substantially when looking at the net spillover. Corn appears as the main net transmitter and carbon is mostly a net receiver. The Russian–Ukraine war affected the markets, given Ukraine’s role in food production and the impact of the conflict on Europe’s access to natural gas, increasing coal use.
{"title":"The nexus between carbon, energy and agrifood—A contemporaneous and lagged spillover analysis","authors":"Benjamin M. Tabak, Ives Cezar Fulber, Matheus B. Froner","doi":"10.1016/j.frl.2025.106890","DOIUrl":"10.1016/j.frl.2025.106890","url":null,"abstract":"<div><div>Global concern about energy, food security and climate change is on the rise. We investigate the spillover effects amidst carbon, energy and agrifood markets. Applying the novel <span><math><msup><mrow><mi>R</mi></mrow><mrow><mn>2</mn></mrow></msup></math></span> decomposed connectedness approach we find that the impact of the contemporaneous spillover in the total connectedness is significant, while the lagged effects contribute substantially when looking at the net spillover. Corn appears as the main net transmitter and carbon is mostly a net receiver. The Russian–Ukraine war affected the markets, given Ukraine’s role in food production and the impact of the conflict on Europe’s access to natural gas, increasing coal use.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106890"},"PeriodicalIF":7.4,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143394434","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 : 2025-02-07DOI: 10.1016/j.frl.2025.106910
Weijian Du, Mengjie Li
In the “what to say–how to say it–what to do” context, this study uses the sample data of Chinese listed companies to investigate the relationship between digital attitude and digital technology innovation. This study shows that the importance given to digitalization and the optimism listed companies toward digitalization increase digital patent applications through the R&D investment, financing constraints and scale expansion. Additionally, digital word frequency promotes the digital innovation of other firms, whereas digital tone promotes only the digital technology innovation of other firms in the same industry. This study helps open the “black box” of companies’ digital actions.
{"title":"Corporations’ digital attitude and digital technology innovation: Are the heart and mouth in agreement or not?","authors":"Weijian Du, Mengjie Li","doi":"10.1016/j.frl.2025.106910","DOIUrl":"10.1016/j.frl.2025.106910","url":null,"abstract":"<div><div>In the “what to say–how to say it–what to do” context, this study uses the sample data of Chinese listed companies to investigate the relationship between digital attitude and digital technology innovation. This study shows that the importance given to digitalization and the optimism listed companies toward digitalization increase digital patent applications through the R&D investment, financing constraints and scale expansion. Additionally, digital word frequency promotes the digital innovation of other firms, whereas digital tone promotes only the digital technology innovation of other firms in the same industry. This study helps open the “black box” of companies’ digital actions.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106910"},"PeriodicalIF":7.4,"publicationDate":"2025-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143373032","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 : 2025-02-07DOI: 10.1016/j.frl.2025.106880
Alexey Ivashchenko
I study the link between corporate bond trading activity and expected bond return. I show that many individual corporate bonds experience booms and busts of trading activity. Such (in)frequently traded bonds have higher expected returns following periods of active trading, alongside greater return volatility. Of two actively traded bonds, one with a history of trading activity dry-ups carries the expected return premium of 10-20 bps per month, controlling for bond credit risk and illiquidity characteristics. Therefore, it is not just the current state of illiquidity that impacts expected return but also the bond’s recent history of illiquidity fluctuations. I connect liquidity dry-ups with changes in bond institutional ownership, implying that the expected return and risk also depend on who owns the bonds.
{"title":"(In)Frequently traded corporate bonds and pricing implications of liquidity dry-ups","authors":"Alexey Ivashchenko","doi":"10.1016/j.frl.2025.106880","DOIUrl":"10.1016/j.frl.2025.106880","url":null,"abstract":"<div><div>I study the link between corporate bond trading activity and expected bond return. I show that many individual corporate bonds experience booms and busts of trading activity. Such (in)frequently traded bonds have higher expected returns following periods of active trading, alongside greater return volatility. Of two actively traded bonds, one with a history of trading activity dry-ups carries the expected return premium of 10-20 bps per month, controlling for bond credit risk and illiquidity characteristics. Therefore, it is not just the current state of illiquidity that impacts expected return but also the bond’s recent history of illiquidity fluctuations. I connect liquidity dry-ups with changes in bond institutional ownership, implying that the expected return and risk also depend on who owns the bonds.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106880"},"PeriodicalIF":7.4,"publicationDate":"2025-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143373035","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 : 2025-02-07DOI: 10.1016/j.frl.2025.106911
Weisong Qiu
Extensive documentation indicates that holding highly concentrated portfolios can lead to significant losses in financial welfare. Using data from the 2017 to 2019 China Household Finance Survey, this study examines the impact of mobile payment adoption on household portfolio diversification. Using a two-way fixed effects model, we identify a positive correlation between mobile payment usage and the diversification of household portfolios. This relationship withstands various robustness tests, encompassing analyses for endogeneity, selection bias, and alternative proxies for key variables. Mechanism analysis indicates that mobile payments function via financial information and risk preference. Heterogeneity analysis suggests that the positive impact of mobile payments is particularly pronounced for households with lower educational attainment, those facing health risks, and residents of rural areas.
{"title":"Does mobile payment adoption increase household portfolio diversification? Evidence from China","authors":"Weisong Qiu","doi":"10.1016/j.frl.2025.106911","DOIUrl":"10.1016/j.frl.2025.106911","url":null,"abstract":"<div><div>Extensive documentation indicates that holding highly concentrated portfolios can lead to significant losses in financial welfare. Using data from the 2017 to 2019 China Household Finance Survey, this study examines the impact of mobile payment adoption on household portfolio diversification. Using a two-way fixed effects model, we identify a positive correlation between mobile payment usage and the diversification of household portfolios. This relationship withstands various robustness tests, encompassing analyses for endogeneity, selection bias, and alternative proxies for key variables. Mechanism analysis indicates that mobile payments function via financial information and risk preference. Heterogeneity analysis suggests that the positive impact of mobile payments is particularly pronounced for households with lower educational attainment, those facing health risks, and residents of rural areas.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106911"},"PeriodicalIF":7.4,"publicationDate":"2025-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143350241","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 : 2025-02-07DOI: 10.1016/j.frl.2025.106881
Arpit Kumar Parija
Prior research finds that bank credit growth predicts lower bank equity returns in subsequent years. Stocks of banks with high credit growth are initially overvalued. Eventually, these banks underperform. Shareholders realize their mistakes and lower share price, thus generating lower returns. We argue that such correction of mispricing happens to a lesser extent for large banks and show that for large banks, the decline in equity return following an increase in credit growth is minimal. This finding is consistent with government guarantees that protect shareholders of large banks, but not small banks.
{"title":"Does credit growth predict lower returns for large banks?","authors":"Arpit Kumar Parija","doi":"10.1016/j.frl.2025.106881","DOIUrl":"10.1016/j.frl.2025.106881","url":null,"abstract":"<div><div>Prior research finds that bank credit growth predicts lower bank equity returns in subsequent years. Stocks of banks with high credit growth are initially overvalued. Eventually, these banks underperform. Shareholders realize their mistakes and lower share price, thus generating lower returns. We argue that such correction of mispricing happens to a lesser extent for large banks and show that for large banks, the decline in equity return following an increase in credit growth is minimal. This finding is consistent with government guarantees that protect shareholders of large banks, but not small banks.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106881"},"PeriodicalIF":7.4,"publicationDate":"2025-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143386920","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 : 2025-02-06DOI: 10.1016/j.frl.2025.106874
Runqing Wan , Bingxin Ann Xing
We propose a novel and simple “switching” approach to improve out-of-sample evidence of return predictability: when the return forecast from a predictive model is negative, we switch to use the return’s historical average as our forecast. When applied to predict Treasury bond returns, this approach can produce stronger evidence of statistical predictability and higher real-time economic gains than the original forecasts. We also show that our approach outperforms the “truncation” approach which replaces negative forecasts with a zero value. Our findings lend support to the hypothesis that predictive evidence exists only in short-lived periods.
{"title":"Can switching between predictive models and the historical average improve bond return predictability?","authors":"Runqing Wan , Bingxin Ann Xing","doi":"10.1016/j.frl.2025.106874","DOIUrl":"10.1016/j.frl.2025.106874","url":null,"abstract":"<div><div>We propose a novel and simple “switching” approach to improve out-of-sample evidence of return predictability: when the return forecast from a predictive model is negative, we switch to use the return’s historical average as our forecast. When applied to predict Treasury bond returns, this approach can produce stronger evidence of statistical predictability and higher real-time economic gains than the original forecasts. We also show that our approach outperforms the “truncation” approach which replaces negative forecasts with a zero value. Our findings lend support to the hypothesis that predictive evidence exists only in short-lived periods.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106874"},"PeriodicalIF":7.4,"publicationDate":"2025-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143376832","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 : 2025-02-06DOI: 10.1016/j.frl.2025.106908
Heng Yang , Guimin Ma , Bo Tan
This paper investigates the impact of the Central and Western Higher Education Revitalization Plan on regional innovation capacity, with a particular focus on the differentiated performance of this impact across cities with varying characteristics. Through empirical analysis, this paper reveals how the enhancement of higher education quality indirectly strengthens regional innovation capacity by promoting knowledge innovation, talent cultivation, and industry-university-research collaboration. Furthermore, this paper delves into how factors such as city size and resource endowment influence the effectiveness of this policy. The research findings indicate that the Central and Western Higher Education Revitalization Plan has a significant role in boosting regional innovation capacity, and this effect is even more pronounced in small-to-medium-sized cities and resource-based cities.
{"title":"The impact of higher education revitalisation on regional innovation capability","authors":"Heng Yang , Guimin Ma , Bo Tan","doi":"10.1016/j.frl.2025.106908","DOIUrl":"10.1016/j.frl.2025.106908","url":null,"abstract":"<div><div>This paper investigates the impact of the Central and Western Higher Education Revitalization Plan on regional innovation capacity, with a particular focus on the differentiated performance of this impact across cities with varying characteristics. Through empirical analysis, this paper reveals how the enhancement of higher education quality indirectly strengthens regional innovation capacity by promoting knowledge innovation, talent cultivation, and industry-university-research collaboration. Furthermore, this paper delves into how factors such as city size and resource endowment influence the effectiveness of this policy. The research findings indicate that the Central and Western Higher Education Revitalization Plan has a significant role in boosting regional innovation capacity, and this effect is even more pronounced in small-to-medium-sized cities and resource-based cities.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"75 ","pages":"Article 106908"},"PeriodicalIF":7.4,"publicationDate":"2025-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143420458","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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