Pub Date : 2026-01-25DOI: 10.1016/j.frl.2026.109578
Qinyue Song , Mingyi Yan , Zhengxin Shi , Zhenfu Han
This study examines how digital financial inclusion (DFI) influences farmers’ income by facilitating industrial structure upgrading using panel data from 279 Chinese cities spanning 2011–2022. Employing fixed effects, instrumental variable, and threshold models, DFI significantly boosts rural income. Industrial upgrading is a crucial mechanism, and heterogeneity and threshold analyses reveal stronger effects in central and western regions, among lower-income populations, and at early and advanced DFI development stages. These findings emphasize the relevance of digital finance in promoting inclusive, sustainable, and finance-enabled rural development.
{"title":"Exploring the financial mechanisms of digital inclusion in promoting farmers’ income","authors":"Qinyue Song , Mingyi Yan , Zhengxin Shi , Zhenfu Han","doi":"10.1016/j.frl.2026.109578","DOIUrl":"10.1016/j.frl.2026.109578","url":null,"abstract":"<div><div>This study examines how digital financial inclusion (DFI) influences farmers’ income by facilitating industrial structure upgrading using panel data from 279 Chinese cities spanning 2011–2022. Employing fixed effects, instrumental variable, and threshold models, DFI significantly boosts rural income. Industrial upgrading is a crucial mechanism, and heterogeneity and threshold analyses reveal stronger effects in central and western regions, among lower-income populations, and at early and advanced DFI development stages. These findings emphasize the relevance of digital finance in promoting inclusive, sustainable, and finance-enabled rural development.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109578"},"PeriodicalIF":6.9,"publicationDate":"2026-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146185490","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 : 2026-01-25DOI: 10.1016/j.frl.2026.109577
Songyang Yu
Using data on Chinese A-share listed family firms from 2007 to 2024, this study examines the impact of intergenerational succession on corporate innovation bubbles. We construct an innovation bubble indicator based on patent structural imbalance to capture firms’ tendency toward “quantity over quality” in innovation. The results show that intergenerational succession significantly reduces innovation bubbles. Mechanism analysis indicates that this effect operates through lower agency costs: the continuity of family control alleviates owner–manager conflicts and restrains short-term, strategic, and low-quality innovation, thereby guiding resources toward higher-quality R&D. Heterogeneity analysis further demonstrates that the effect is stronger in the eastern and western regions and in nonhigh-tech industries. This study provides new evidence on the governance role of family succession in mitigating innovation bubbles in China.
{"title":"The impact of family firm intergenerational succession on innovation Bubbles","authors":"Songyang Yu","doi":"10.1016/j.frl.2026.109577","DOIUrl":"10.1016/j.frl.2026.109577","url":null,"abstract":"<div><div>Using data on Chinese A-share listed family firms from 2007 to 2024, this study examines the impact of intergenerational succession on corporate innovation bubbles. We construct an innovation bubble indicator based on patent structural imbalance to capture firms’ tendency toward “quantity over quality” in innovation. The results show that intergenerational succession significantly reduces innovation bubbles. Mechanism analysis indicates that this effect operates through lower agency costs: the continuity of family control alleviates owner–manager conflicts and restrains short-term, strategic, and low-quality innovation, thereby guiding resources toward higher-quality R&D. Heterogeneity analysis further demonstrates that the effect is stronger in the eastern and western regions and in nonhigh-tech industries. This study provides new evidence on the governance role of family succession in mitigating innovation bubbles in China.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109577"},"PeriodicalIF":6.9,"publicationDate":"2026-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075753","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 : 2026-01-24DOI: 10.1016/j.frl.2026.109574
Peng Liu , Jianfei Shen , Hualong Li
Existing research lacks empirical evidence on whether the construction of the social credit system (SCS) curbs corporate rent‑seeking. This study uses Chinese A‑share firms (2010–2023), treating the phased rollout of “SCS Construction Model Cities” (Credit model cities) as a quasi‑natural experiment and applying a multi‑period difference‑in‑differences (DID) design. Results show SCS construction significantly reduces corporate rent‑seeking, robust to various checks. Mechanism tests indicate SCS acts by improving the information environment and enhancing market competition. Corporate digital transformation positively moderates this effect. Heterogeneity analysis finds stronger effects in regions with weak institutions (low fiscal transparency, low innovation capacity). The study provides a theoretical perspective on how formal institutions curb corporate rent‑seeking in the digital era.
{"title":"Social credit system construction and corporate rent-seeking: Evidence from China","authors":"Peng Liu , Jianfei Shen , Hualong Li","doi":"10.1016/j.frl.2026.109574","DOIUrl":"10.1016/j.frl.2026.109574","url":null,"abstract":"<div><div>Existing research lacks empirical evidence on whether the construction of the social credit system (SCS) curbs corporate rent‑seeking. This study uses Chinese A‑share firms (2010–2023), treating the phased rollout of “SCS Construction Model Cities” (Credit model cities) as a quasi‑natural experiment and applying a multi‑period difference‑in‑differences (DID) design. Results show SCS construction significantly reduces corporate rent‑seeking, robust to various checks. Mechanism tests indicate SCS acts by improving the information environment and enhancing market competition. Corporate digital transformation positively moderates this effect. Heterogeneity analysis finds stronger effects in regions with weak institutions (low fiscal transparency, low innovation capacity). The study provides a theoretical perspective on how formal institutions curb corporate rent‑seeking in the digital era.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109574"},"PeriodicalIF":6.9,"publicationDate":"2026-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146185537","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 : 2026-01-24DOI: 10.1016/j.frl.2026.109571
Ruochen Li , Shuyu Xue , Quansheng Xuan , Xue Cui
This study explores the role of environmental, social, and governance (ESG) investment in mitigating fund risk and enhancing portfolio resilience, using Chinese mutual fund data from 2009 to 2022. We find that ESG investment in funds significantly decreases fund risk. The risk-reduction benefits are more pronounced for funds that are signatories to the Principles for Responsible Investment (PRI). Moreover, ESG-integrated funds exhibit lower risk and greater resilience during periods of adverse markets and heightened ESG-related attention. We further show that ESG investment is associated with lower tail risk, lower ambiguity, and higher net returns. These findings highlight the significance of ESG investing as a strategic tool for strengthening portfolio resilience and promoting financial stability.
{"title":"The risk-reducing effect of ESG investment: Evidence from mutual funds","authors":"Ruochen Li , Shuyu Xue , Quansheng Xuan , Xue Cui","doi":"10.1016/j.frl.2026.109571","DOIUrl":"10.1016/j.frl.2026.109571","url":null,"abstract":"<div><div>This study explores the role of environmental, social, and governance (ESG) investment in mitigating fund risk and enhancing portfolio resilience, using Chinese mutual fund data from 2009 to 2022. We find that ESG investment in funds significantly decreases fund risk. The risk-reduction benefits are more pronounced for funds that are signatories to the Principles for Responsible Investment (PRI). Moreover, ESG-integrated funds exhibit lower risk and greater resilience during periods of adverse markets and heightened ESG-related attention. We further show that ESG investment is associated with lower tail risk, lower ambiguity, and higher net returns. These findings highlight the significance of ESG investing as a strategic tool for strengthening portfolio resilience and promoting financial stability.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109571"},"PeriodicalIF":6.9,"publicationDate":"2026-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075699","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 : 2026-01-24DOI: 10.1016/j.frl.2026.109575
Lili Wei, Lingjun Li, Fengjuan Kou
Urban ecological resilience reflects the capacity of a city's natural and social systems to absorb disturbances, sustain fundamental structure and functions in the face of external shocks and pressures, and evolve into a more sustainable state through adaptation and learning. Enhancing urban ecological resilience is crucial for green development and sustainable economic growth, and it relies on the targeted implementation and robust support of green financial policies. This study employs the TOPSIS entropy method combined with a DID model to examine the impact of the green credit interest subsidy policy (GCISP) on urban ecological resilience (UER) from 2003 to 2023. Theoretical analysis and empirical findings indicate that GCISPs predominantly improves UER, which is mediated by reduction in regional energy intensity and decrease in industrial agglomeration. The impact of GCISPs on UER is significant in eastern, western, and northeastern China but insignificant in the central region. Moreover, the policy has a notable effect on UER in nonresource-based cities but not in resource-based cities. Notably, local governments should promote targeted green finance policies based on regional endowments, focus on traditional industries’ energy-efficient upgrades development of new energy sources to reduce energy intensity, and ensure strategic funding support for key aspects of green industrial transformation.
{"title":"How does green finance policy improve urban ecological resilience? Evidence from a quasi-natural experiment on green credit interest subsidies","authors":"Lili Wei, Lingjun Li, Fengjuan Kou","doi":"10.1016/j.frl.2026.109575","DOIUrl":"10.1016/j.frl.2026.109575","url":null,"abstract":"<div><div>Urban ecological resilience reflects the capacity of a city's natural and social systems to absorb disturbances, sustain fundamental structure and functions in the face of external shocks and pressures, and evolve into a more sustainable state through adaptation and learning. Enhancing urban ecological resilience is crucial for green development and sustainable economic growth, and it relies on the targeted implementation and robust support of green financial policies. This study employs the TOPSIS entropy method combined with a DID model to examine the impact of the green credit interest subsidy policy (GCISP) on urban ecological resilience (UER) from 2003 to 2023. Theoretical analysis and empirical findings indicate that GCISPs predominantly improves UER, which is mediated by reduction in regional energy intensity and decrease in industrial agglomeration. The impact of GCISPs on UER is significant in eastern, western, and northeastern China but insignificant in the central region. Moreover, the policy has a notable effect on UER in nonresource-based cities but not in resource-based cities. Notably, local governments should promote targeted green finance policies based on regional endowments, focus on traditional industries’ energy-efficient upgrades development of new energy sources to reduce energy intensity, and ensure strategic funding support for key aspects of green industrial transformation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109575"},"PeriodicalIF":6.9,"publicationDate":"2026-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075658","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 : 2026-01-23DOI: 10.1016/j.frl.2026.109570
Xiaowei Zhang , Jiayin Liu , Fan Wang
Using green patent data from Chinese A-share listed companies spanning 2010–2024, this study takes China’s initial 2017 climate-resilient city pilot policy implementation as a quasinatural experiment to examine the impact of the pilot policy on enterprises’ green technological innovation (GTI) and its underlying mechanism using a difference-in-differences model. Notably, the policy significantly promotes enterprises’ GTI, mainly by strengthening regional environmental regulation and alleviating enterprises’ financing constraints,with a long-term driving effect. Heterogeneity analysis demonstrates that the policy’s effect on enterprises’ GTI is primarily reflected in green invention patents. In addition, large-scale, state-owned, and high-market development enterprises and those in high-pollution industries are more affected. Our conclusions provide empirical evidence and valuable insights for China to refine the climate-resilient city pilot policy to strike a balance between adaptation and mitigation, as well as other countries to implement or improve similar policies.
{"title":"Impact of China’s climate-resilient city pilot policy on enterprises’ green technological innovation","authors":"Xiaowei Zhang , Jiayin Liu , Fan Wang","doi":"10.1016/j.frl.2026.109570","DOIUrl":"10.1016/j.frl.2026.109570","url":null,"abstract":"<div><div>Using green patent data from Chinese A-share listed companies spanning 2010–2024, this study takes China’s initial 2017 climate-resilient city pilot policy implementation as a quasinatural experiment to examine the impact of the pilot policy on enterprises’ green technological innovation (GTI) and its underlying mechanism using a difference-in-differences model. Notably, the policy significantly promotes enterprises’ GTI, mainly by strengthening regional environmental regulation and alleviating enterprises’ financing constraints,with a long-term driving effect. Heterogeneity analysis demonstrates that the policy’s effect on enterprises’ GTI is primarily reflected in green invention patents. In addition, large-scale, state-owned, and high-market development enterprises and those in high-pollution industries are more affected. Our conclusions provide empirical evidence and valuable insights for China to refine the climate-resilient city pilot policy to strike a balance between adaptation and mitigation, as well as other countries to implement or improve similar policies.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109570"},"PeriodicalIF":6.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146075700","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 : 2026-01-23DOI: 10.1016/j.frl.2026.109566
Xingyu Chen , Zhengyifan Chen , Yingqi Li , Steven Xiaofan Zheng
In this paper we examine whether and how country-level religiosity affects corporate cash holdings. Using 356,435 firm-year observations from 43 countries over the period 1996–2020, we construct three proxies that capture distinct dimensions of religiosity: Religious Person (knowing), Religious Importance (feeling), and Religious Service (doing). We find that Religious Person is robustly and negatively associated with corporate cash holdings, and that this effect is stronger for firms facing higher information asymmetry. The evidence suggests that firms located in less religious countries experience greater financial frictions and therefore maintain larger precautionary cash buffers.
{"title":"Religiosity and corporate cash holdings: International evidence","authors":"Xingyu Chen , Zhengyifan Chen , Yingqi Li , Steven Xiaofan Zheng","doi":"10.1016/j.frl.2026.109566","DOIUrl":"10.1016/j.frl.2026.109566","url":null,"abstract":"<div><div>In this paper we examine whether and how country-level religiosity affects corporate cash holdings. Using 356,435 firm-year observations from 43 countries over the period 1996–2020, we construct three proxies that capture distinct dimensions of religiosity: Religious Person (knowing), Religious Importance (feeling), and Religious Service (doing). We find that Religious Person is robustly and negatively associated with corporate cash holdings, and that this effect is stronger for firms facing higher information asymmetry. The evidence suggests that firms located in less religious countries experience greater financial frictions and therefore maintain larger precautionary cash buffers.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109566"},"PeriodicalIF":6.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146032762","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 : 2026-01-23DOI: 10.1016/j.frl.2026.109569
Qiaoyan Sheng , Yan Lv
The green credit subsidies policy, as an important combination of fiscal and financial instruments, is exerting a profound impact on corporate green innovation activities. This study treats the policy as a quasi-natural experiment to examine its effects on corporate green innovation bubbles and the underlying mechanisms. The findings indicate that implementing the green credit subsidies policy can significantly curb corporate green innovation bubbles. Mechanism analysis shows that improving environmental information disclosure quality and financing availability are the key channels through which the policy suppresses green innovation bubbles, and artificial intelligence investment plays a significant moderating role in these channels. Further moderation analysis reveals that the higher the level of artificial intelligence investment, the stronger the inhibitory effect of the green credit subsidies policy on green innovation bubbles. Heterogeneity analysis finds that the policy’s suppressive effect is more pronounced in non-state-owned enterprises, non-heavy-pollution industries, and regions with lower government environmental attention.
{"title":"Green credit subsidies policy, artificial intelligence investment, and corporate green innovation bubbles","authors":"Qiaoyan Sheng , Yan Lv","doi":"10.1016/j.frl.2026.109569","DOIUrl":"10.1016/j.frl.2026.109569","url":null,"abstract":"<div><div>The green credit subsidies policy, as an important combination of fiscal and financial instruments, is exerting a profound impact on corporate green innovation activities. This study treats the policy as a quasi-natural experiment to examine its effects on corporate green innovation bubbles and the underlying mechanisms. The findings indicate that implementing the green credit subsidies policy can significantly curb corporate green innovation bubbles. Mechanism analysis shows that improving environmental information disclosure quality and financing availability are the key channels through which the policy suppresses green innovation bubbles, and artificial intelligence investment plays a significant moderating role in these channels. Further moderation analysis reveals that the higher the level of artificial intelligence investment, the stronger the inhibitory effect of the green credit subsidies policy on green innovation bubbles. Heterogeneity analysis finds that the policy’s suppressive effect is more pronounced in non-state-owned enterprises, non-heavy-pollution industries, and regions with lower government environmental attention.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109569"},"PeriodicalIF":6.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146033959","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 : 2026-01-23DOI: 10.1016/j.frl.2026.109572
Mei Yang, Haolun Sun
Drawing on 2011 2023 panel data from multiple Chinese provinces, this study empirically tests the impact of digital inclusive finance (DIF) on the urban-rural income gap (URIG) through the lens of agricultural productive services (APS). The findings indicate that DIF well reduces URIG, though such effect varies across regions and DIF dimensions. Further analysis reveals that DIF narrows income gaps primarily by expanding rural credit access and improving agricultural productivity. Moreover, DIF exhibits notable spatial spillover effects, reducing income inequality within local areas alongside promoting positive externalities in neighboring regions. Consequently, it is essential to boost the localized implementation of high-quality DIF initiatives, leverage spatial spillover effects to foster coordinated regional development, actively bridge the urban-rural digital divide, and further integrate DIF into rural economic revitalization strategies.
{"title":"The impact of digital inclusive finance on urban-rural income gap","authors":"Mei Yang, Haolun Sun","doi":"10.1016/j.frl.2026.109572","DOIUrl":"10.1016/j.frl.2026.109572","url":null,"abstract":"<div><div>Drawing on 2011 2023 panel data from multiple Chinese provinces, this study empirically tests the impact of digital inclusive finance (DIF) on the urban-rural income gap (URIG) through the lens of agricultural productive services (APS). The findings indicate that DIF well reduces URIG, though such effect varies across regions and DIF dimensions. Further analysis reveals that DIF narrows income gaps primarily by expanding rural credit access and improving agricultural productivity. Moreover, DIF exhibits notable spatial spillover effects, reducing income inequality within local areas alongside promoting positive externalities in neighboring regions. Consequently, it is essential to boost the localized implementation of high-quality DIF initiatives, leverage spatial spillover effects to foster coordinated regional development, actively bridge the urban-rural digital divide, and further integrate DIF into rural economic revitalization strategies.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109572"},"PeriodicalIF":6.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146032765","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 : 2026-01-23DOI: 10.1016/j.frl.2026.109529
Hakan Yilmazkuday
This paper investigates the spillover effects of country-specific geopolitical risks on the economic growth of other countries. Our primary empirical contribution is the identification and quantification of these international risk transmission pathways, distinguishing between advanced and emerging economies as both sources and destinations of shocks. We employ the local projections method at the country-pair level to estimate the cumulative impulse responses of GDP growth to geopolitical risk shocks. Using quarterly data for 23 advanced and 25 emerging economies from 1985 to 2023, our findings reveal a striking asymmetry in global risk transmission. While advanced economies consistently experience significant and persistent economic contractions following geopolitical shocks, emerging markets display a degree of short-term resilience, often registering positive growth responses likely driven by substitution effects. Robustness checks indicate that these transmission channels have intensified in the post-pandemic era. The results underscore the necessity for differentiated policy responses, emphasizing supply chain diversification for advanced economies and the maintenance of robust financial buffers for emerging markets.
{"title":"International spillover effects of geopolitical risks on economic growth","authors":"Hakan Yilmazkuday","doi":"10.1016/j.frl.2026.109529","DOIUrl":"10.1016/j.frl.2026.109529","url":null,"abstract":"<div><div>This paper investigates the spillover effects of country-specific geopolitical risks on the economic growth of other countries. Our primary empirical contribution is the identification and quantification of these international risk transmission pathways, distinguishing between advanced and emerging economies as both sources and destinations of shocks. We employ the local projections method at the country-pair level to estimate the cumulative impulse responses of GDP growth to geopolitical risk shocks. Using quarterly data for 23 advanced and 25 emerging economies from 1985 to 2023, our findings reveal a striking asymmetry in global risk transmission. While advanced economies consistently experience significant and persistent economic contractions following geopolitical shocks, emerging markets display a degree of short-term resilience, often registering positive growth responses likely driven by substitution effects. Robustness checks indicate that these transmission channels have intensified in the post-pandemic era. The results underscore the necessity for differentiated policy responses, emphasizing supply chain diversification for advanced economies and the maintenance of robust financial buffers for emerging markets.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"92 ","pages":"Article 109529"},"PeriodicalIF":6.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146032763","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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