Pub Date : 2026-02-02DOI: 10.1016/j.iref.2026.104984
Sarah Elkelani, Feras M. Salama, Abed Al-Nasser Abdallah, Kimberly Gleason, Eid M. Alotaibi
Segment reporting provides valuable information for investors but is subject to substantial managerial discretion, making its quality uncertain. Although audit quality is generally expected to constrain misreporting, it is not obvious whether auditors meaningfully affect segment disclosures, given the discretion afforded by ASC 280 and auditors' limited authority over segment definitions. This study investigates whether auditor characteristics such as firm size, industry specialization, and tenure, influence segment disclosure quality. Our results reveal that disclosure quality improves with auditor size and specialization. Tenure shows evidence consistent with nonlinearity: disclosure quality is higher in shorter engagements (less than five years) and is weaker in longer engagements in some specifications. Additional analyses show that auditor-driven improvements mitigate earnings management linked to diversification and increase the excess value of diversification. These findings suggest that the auditor's role in segment reporting is neither mechanical nor guaranteed, but instead contingent on expertise and independence, offering new insights into how audit quality constrains discretion in one of the most opaque areas of financial reporting.
{"title":"The effect of auditor characteristics on the quality of segment disclosures of diversified firms","authors":"Sarah Elkelani, Feras M. Salama, Abed Al-Nasser Abdallah, Kimberly Gleason, Eid M. Alotaibi","doi":"10.1016/j.iref.2026.104984","DOIUrl":"10.1016/j.iref.2026.104984","url":null,"abstract":"<div><div>Segment reporting provides valuable information for investors but is subject to substantial managerial discretion, making its quality uncertain. Although audit quality is generally expected to constrain misreporting, it is not obvious whether auditors meaningfully affect segment disclosures, given the discretion afforded by ASC 280 and auditors' limited authority over segment definitions. This study investigates whether auditor characteristics such as firm size, industry specialization, and tenure, influence segment disclosure quality. Our results reveal that disclosure quality improves with auditor size and specialization. Tenure shows evidence consistent with nonlinearity: disclosure quality is higher in shorter engagements (less than five years) and is weaker in longer engagements in some specifications. Additional analyses show that auditor-driven improvements mitigate earnings management linked to diversification and increase the excess value of diversification. These findings suggest that the auditor's role in segment reporting is neither mechanical nor guaranteed, but instead contingent on expertise and independence, offering new insights into how audit quality constrains discretion in one of the most opaque areas of financial reporting.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104984"},"PeriodicalIF":5.6,"publicationDate":"2026-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189342","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 : 2026-02-02DOI: 10.1016/j.iref.2026.104982
Shahzad Ijaz , Syeda Mahlaqa Hina , Asma Rehman Ullah , Saeed Akbar
The integration of artificial intelligence with green finance is rapidly increasing. It gains more importance against the backdrop of achieving a low-carbon future in the fast-changing global economy. In this context, this paper exploits daily prices between January 2018 and August 2024 to assess the opportunities associated with AI-augmented assets and green finance, and how AI assets can change the portfolio diversification and risk-management strategies. Through a market spillover framework, during crisis episodes, the findings indicate that AI and green-energy indices are transmitters of return spillovers. Green bonds and dirty energy indices, on the other hand, are net absorbers of the shock, which indicates their passive behavior. Besides, portfolio analysis shows that AI-based and clean-energy investments are beneficial to manage portfolios and provide significant hedging performance. Other assets like green bonds and equity securities demonstrate negative hedging effectiveness, which indicates a high exposure to risk. These findings highlight the invaluable nature of AI and clean-energy assets in driving market connections and providing robust risk management. The conclusions made in this study provide policymakers and investors with a key insight that is vital to adjust their investments amid fast-changing landscape of AI and green finance.
{"title":"Dynamic connectedness between AI, green finance, and energy assets: Risk transmission and portfolio implications during net-zero transition period","authors":"Shahzad Ijaz , Syeda Mahlaqa Hina , Asma Rehman Ullah , Saeed Akbar","doi":"10.1016/j.iref.2026.104982","DOIUrl":"10.1016/j.iref.2026.104982","url":null,"abstract":"<div><div>The integration of artificial intelligence with green finance is rapidly increasing. It gains more importance against the backdrop of achieving a low-carbon future in the fast-changing global economy. In this context, this paper exploits daily prices between January 2018 and August 2024 to assess the opportunities associated with AI-augmented assets and green finance, and how AI assets can change the portfolio diversification and risk-management strategies. Through a market spillover framework, during crisis episodes, the findings indicate that AI and green-energy indices are transmitters of return spillovers. Green bonds and dirty energy indices, on the other hand, are net absorbers of the shock, which indicates their passive behavior. Besides, portfolio analysis shows that AI-based and clean-energy investments are beneficial to manage portfolios and provide significant hedging performance. Other assets like green bonds and equity securities demonstrate negative hedging effectiveness, which indicates a high exposure to risk. These findings highlight the invaluable nature of AI and clean-energy assets in driving market connections and providing robust risk management. The conclusions made in this study provide policymakers and investors with a key insight that is vital to adjust their investments amid fast-changing landscape of AI and green finance.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104982"},"PeriodicalIF":5.6,"publicationDate":"2026-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189336","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 : 2026-02-02DOI: 10.1016/j.iref.2026.104978
Biswa Swarup Misra, Biresh K. Sahoo
This study investigates the determinants of profitability among Indian commercial banks from 2005 to 2024, with a specific focus on the novel role of dynamic growth efficiency (), a concept capturing a bank's ability to transform input growth into output growth, alongside conventional static efficiency measures such as level efficiency () and cost-to-income ratio (). As the first to operationalize in the Indian context, the study employs data envelopment analysis () on a panel dataset of 50 commercial banks (12 public, 17 private, and 21 foreign). Results from a system GMM estimator reveal to be a consistently significant driver of profitability, outperforming both and across various market power indicators and model specifications. A key methodological advance supporting this analysis is the inclusion of technology expenditures (which account for 29% of operating and 13% of total expenses in 2024) as a fundamental input, correcting a major misspecification in prior literature. We demonstrate that omitting this crucial input artificially inflates market power and deflates efficiency estimates. The positive impact of is more pronounced for public-sector and new private banks, underscoring divergent strategic drivers across ownership structures and highlighting the paramount importance of fostering dynamic capabilities for sustaining profitability in a rapidly evolving banking landscape.
{"title":"What drives the profitability of Indian banks: Level or growth efficiency?","authors":"Biswa Swarup Misra, Biresh K. Sahoo","doi":"10.1016/j.iref.2026.104978","DOIUrl":"10.1016/j.iref.2026.104978","url":null,"abstract":"<div><div>This study investigates the determinants of profitability among Indian commercial banks from 2005 to 2024, with a specific focus on the novel role of dynamic growth efficiency (<span><math><mrow><mi>G</mi><mi>E</mi></mrow></math></span>), a concept capturing a bank's ability to transform input growth into output growth, alongside conventional static efficiency measures such as level efficiency (<span><math><mrow><mi>L</mi><mi>E</mi></mrow></math></span>) and cost-to-income ratio (<span><math><mrow><mi>C</mi><mi>I</mi><mi>R</mi></mrow></math></span>). As the first to operationalize <span><math><mrow><mi>G</mi><mi>E</mi></mrow></math></span> in the Indian context, the study employs data envelopment analysis (<span><math><mrow><mi>D</mi><mi>E</mi><mi>A</mi></mrow></math></span>) on a panel dataset of 50 commercial banks (12 public, 17 private, and 21 foreign). Results from a system GMM estimator reveal <span><math><mrow><mi>G</mi><mi>E</mi></mrow></math></span> to be a consistently significant driver of profitability, outperforming both <span><math><mrow><mi>L</mi><mi>E</mi></mrow></math></span> and <span><math><mrow><mi>C</mi><mi>I</mi><mi>R</mi></mrow></math></span> across various market power indicators and model specifications. A key methodological advance supporting this analysis is the inclusion of technology expenditures (which account for 29% of operating and 13% of total expenses in 2024) as a fundamental input, correcting a major misspecification in prior literature. We demonstrate that omitting this crucial input artificially inflates market power and deflates efficiency estimates. The positive impact of <span><math><mrow><mi>G</mi><mi>E</mi></mrow></math></span> is more pronounced for public-sector and new private banks, underscoring divergent strategic drivers across ownership structures and highlighting the paramount importance of fostering dynamic capabilities for sustaining profitability in a rapidly evolving banking landscape.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104978"},"PeriodicalIF":5.6,"publicationDate":"2026-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189415","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 : 2026-02-01DOI: 10.1016/j.iref.2026.104983
Zengjie Kuang , Jiawei Yu , Qi Gao , Lixing Guo
The rapid development of global digital trade rules is reshaping the international division of labor and the structural evolution of global trade. Based on panel data covering Japan's trade with 77 partner countries from 2005 to 2023, this study empirically investigates the impact of digital trade rule deepening on Japan's export structure. The results indicate that within the “American template” framework dominated by developed economies, the deepening of digital trade rules significantly constrains the upgrading of Japan's export structure in high-tech manufacturing, particularly in digital services. Mechanism analysis reveals a dual effect: while digital technologies lower traditional trade costs through simplified customs procedures, binding provisions on data governance and privacy protection increase compliance and technological adaptation costs, thereby inhibiting structural optimization. Furthermore, institutional distance amplifies this inhibitory effect. When Japan's institutional gap with its trading partners is larger, the adverse effects of privacy and cooperation clauses become more pronounced. The study suggests that Japan should promote regional rule innovation, advance digital provisions better aligned with regional realities under frameworks such as the CPTPP and RCEP, and strengthen the optimization of trade structure and long-term competitiveness.
{"title":"The mystery of the sluggish upgrade of Japan's trade structure: An explanatory perspective on the deepening of digital trade rules","authors":"Zengjie Kuang , Jiawei Yu , Qi Gao , Lixing Guo","doi":"10.1016/j.iref.2026.104983","DOIUrl":"10.1016/j.iref.2026.104983","url":null,"abstract":"<div><div>The rapid development of global digital trade rules is reshaping the international division of labor and the structural evolution of global trade. Based on panel data covering Japan's trade with 77 partner countries from 2005 to 2023, this study empirically investigates the impact of digital trade rule deepening on Japan's export structure. The results indicate that within the “American template” framework dominated by developed economies, the deepening of digital trade rules significantly constrains the upgrading of Japan's export structure in high-tech manufacturing, particularly in digital services. Mechanism analysis reveals a dual effect: while digital technologies lower traditional trade costs through simplified customs procedures, binding provisions on data governance and privacy protection increase compliance and technological adaptation costs, thereby inhibiting structural optimization. Furthermore, institutional distance amplifies this inhibitory effect. When Japan's institutional gap with its trading partners is larger, the adverse effects of privacy and cooperation clauses become more pronounced. The study suggests that Japan should promote regional rule innovation, advance digital provisions better aligned with regional realities under frameworks such as the CPTPP and RCEP, and strengthen the optimization of trade structure and long-term competitiveness.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104983"},"PeriodicalIF":5.6,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189337","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 : 2026-01-31DOI: 10.1016/j.iref.2026.104981
Ying Ke , Jiajun Luo
In the context of the rapid advancement of artificial intelligence (AI), the internal mechanisms through which AI applications affect green productivity within firms remain inadequately understood. This study empirically investigates the relationship between AI application levels and green total factor productivity (GTFP) among Chinese listed firms from 2007 to 2023, yielding the following conclusions. (1) A significant inverted U-shaped relationship exists between the level of AI application and firms' GTFP, which remains robust after a series of stringent tests. (2) Mediation analysis reveals that AI applications exert an inverted U-shaped influence on GTFP by initially enhancing, then subsequently suppressing the degree of green transformation of strategy management and the efficiency of green technology R&D. (3) Regarding moderation effects, both the regional higher education level and a firm's corporate governance quality attenuate the inverted U-shaped relationship, leading to a flattening of the curve. (4) Heterogeneity analysis indicates that the inverted U-shaped relationship is more pronounced in firms facing low environmental regulation, low emissions, and high financing constraints. The flattening effect of corporate governance is more substantial in firms with low environmental regulation, low emissions, and low financing constraints. In contrast, regional higher education exerts a more significant moderating role in firms subject to high environmental regulation, with low emissions and low financing constraints. This paper contributes to understanding how the intra-firm application of AI influences the development of green productivity through strategic change and technological innovation, and provides a novel perspective for reconciling their divergent macro-level impact mechanisms.
{"title":"How does artificial intelligence affect firms' green total factor productivity: Evidence from Chinese listed companies","authors":"Ying Ke , Jiajun Luo","doi":"10.1016/j.iref.2026.104981","DOIUrl":"10.1016/j.iref.2026.104981","url":null,"abstract":"<div><div>In the context of the rapid advancement of artificial intelligence (AI), the internal mechanisms through which AI applications affect green productivity within firms remain inadequately understood. This study empirically investigates the relationship between AI application levels and green total factor productivity (GTFP) among Chinese listed firms from 2007 to 2023, yielding the following conclusions. (1) A significant inverted U-shaped relationship exists between the level of AI application and firms' GTFP, which remains robust after a series of stringent tests. (2) Mediation analysis reveals that AI applications exert an inverted U-shaped influence on GTFP by initially enhancing, then subsequently suppressing the degree of green transformation of strategy management and the efficiency of green technology R&D. (3) Regarding moderation effects, both the regional higher education level and a firm's corporate governance quality attenuate the inverted U-shaped relationship, leading to a flattening of the curve. (4) Heterogeneity analysis indicates that the inverted U-shaped relationship is more pronounced in firms facing low environmental regulation, low emissions, and high financing constraints. The flattening effect of corporate governance is more substantial in firms with low environmental regulation, low emissions, and low financing constraints. In contrast, regional higher education exerts a more significant moderating role in firms subject to high environmental regulation, with low emissions and low financing constraints. This paper contributes to understanding how the intra-firm application of AI influences the development of green productivity through strategic change and technological innovation, and provides a novel perspective for reconciling their divergent macro-level impact mechanisms.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104981"},"PeriodicalIF":5.6,"publicationDate":"2026-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189338","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 : 2026-01-31DOI: 10.1016/j.iref.2026.104949
Hasibul Chowdhury , Ihtisham Malik , Hui Sun , Searat Ali
We investigate how exposure to natural disaster intensity impacts a firm's default risk. Analyzing data from 3753 disaster affected U.S. companies between 1994 and 2017, we find that firms located in areas with higher disaster intensity face increased default risk. This link holds across various tests and alternative measures of disaster intensity and default risk. We also show that limited financial access, reduced debt capacity, and higher operational risk worsen this effect. Additionally, financial institutions charge higher spreads and impose stricter credit terms on these firms. These findings highlight the need for stronger disaster support as current assistance may be inadequate for firms in disaster-prone areas, increasing their financial distress and default risk.
{"title":"Natural disasters and corporate default risk","authors":"Hasibul Chowdhury , Ihtisham Malik , Hui Sun , Searat Ali","doi":"10.1016/j.iref.2026.104949","DOIUrl":"10.1016/j.iref.2026.104949","url":null,"abstract":"<div><div>We investigate how exposure to natural disaster intensity impacts a firm's default risk. Analyzing data from 3753 disaster affected U.S. companies between 1994 and 2017, we find that firms located in areas with higher disaster intensity face increased default risk. This link holds across various tests and alternative measures of disaster intensity and default risk. We also show that limited financial access, reduced debt capacity, and higher operational risk worsen this effect. Additionally, financial institutions charge higher spreads and impose stricter credit terms on these firms. These findings highlight the need for stronger disaster support as current assistance may be inadequate for firms in disaster-prone areas, increasing their financial distress and default risk.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104949"},"PeriodicalIF":5.6,"publicationDate":"2026-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189288","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 : 2026-01-31DOI: 10.1016/j.iref.2026.104959
Jing Yu , Chin-Tsai Lin
With the intensification of climate change and the tightening of environmental regulations, green bonds have emerged as a key sustainable financing instrument, valued for their cost efficiency and issuance convenience. While existing research has largely focused on their environmental benefits, this study investigates their unintended consequences for bank liquidity creation. Analyzing data from 380 Chinese banks from 2014 to 2022 using two-way fixed effects and difference-in-differences models, this paper finds that green bond issuance significantly reduces bank liquidity creation. Specifically, approximately 11.22% of the raised funds remain held within banks rather than flowing into the real economy. The mechanism analysis reveals that green bonds influence liquidity creation through three distinct channels: the earmarking effect, the signaling effect, and the stabilizer effect. The earmarking effect creates asset rigidity due to legally binding commitments, which prevent funds from being diverted to other uses and subject them to rigorous monitoring. The signaling effect attracts specialized ESG-oriented investors and intensifies external market scrutiny, thereby imposing greater discipline on banks' liquidity management. Simultaneously, the stabilizer effect, reflected in improved financial indicators such as lower funding costs and higher profitability, encourages more conservative liquidity management. Furthermore, these impacts are moderated by regulatory intensity and bank stability, where stricter regulation and greater stability amplify the reduction in liquidity creation. These findings suggest several policy implications: implementing a differentiated regulatory framework based on banks’ stability profiles, establishing targeted liquidity support mechanisms for green assets, and developing coordinated incentive policies.
{"title":"Bank green bond issuance and liquidity creation: Evidence from Chinese banks","authors":"Jing Yu , Chin-Tsai Lin","doi":"10.1016/j.iref.2026.104959","DOIUrl":"10.1016/j.iref.2026.104959","url":null,"abstract":"<div><div>With the intensification of climate change and the tightening of environmental regulations, green bonds have emerged as a key sustainable financing instrument, valued for their cost efficiency and issuance convenience. While existing research has largely focused on their environmental benefits, this study investigates their unintended consequences for bank liquidity creation. Analyzing data from 380 Chinese banks from 2014 to 2022 using two-way fixed effects and difference-in-differences models, this paper finds that green bond issuance significantly reduces bank liquidity creation. Specifically, approximately 11.22% of the raised funds remain held within banks rather than flowing into the real economy. The mechanism analysis reveals that green bonds influence liquidity creation through three distinct channels: the earmarking effect, the signaling effect, and the stabilizer effect. The earmarking effect creates asset rigidity due to legally binding commitments, which prevent funds from being diverted to other uses and subject them to rigorous monitoring. The signaling effect attracts specialized ESG-oriented investors and intensifies external market scrutiny, thereby imposing greater discipline on banks' liquidity management. Simultaneously, the stabilizer effect, reflected in improved financial indicators such as lower funding costs and higher profitability, encourages more conservative liquidity management. Furthermore, these impacts are moderated by regulatory intensity and bank stability, where stricter regulation and greater stability amplify the reduction in liquidity creation. These findings suggest several policy implications: implementing a differentiated regulatory framework based on banks’ stability profiles, establishing targeted liquidity support mechanisms for green assets, and developing coordinated incentive policies.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104959"},"PeriodicalIF":5.6,"publicationDate":"2026-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189340","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 : 2026-01-31DOI: 10.1016/j.iref.2026.104979
Nihed Fezai , Ramzi Ben Slama
This study examines the causal impact of corporate climate commitment, proxied by three indexes, on financial performance using 3645 US firms for the period 2016–2021. We adopt both return on equity (accounting-based) and Tobin's Q (market-based) measures of firms' financial performance. Using a multivalued treatment effect approach, our results show a significant positive causal effect on Tobin's Q, but not on return on equity. Doubly robust estimation results suggest that stronger corporate climate commitment improves stakeholders' returns. However, we find no significant effect on performance based on shareholder equity. We therefore conduct a control function-generalized method of moments estimations to address endogeneity concerns, with further evidence that enhances the baseline results. Based on our findings, we provide recommendations to encourage corporate sustainability actions for managers and policymakers.
{"title":"Corporate climate commitment effect on US firms’ financial performance: A multivalued treatment effect approach","authors":"Nihed Fezai , Ramzi Ben Slama","doi":"10.1016/j.iref.2026.104979","DOIUrl":"10.1016/j.iref.2026.104979","url":null,"abstract":"<div><div>This study examines the causal impact of corporate climate commitment, proxied by three indexes, on financial performance using 3645 US firms for the period 2016–2021. We adopt both return on equity (accounting-based) and Tobin's Q (market-based) measures of firms' financial performance. Using a multivalued treatment effect approach, our results show a significant positive causal effect on Tobin's Q, but not on return on equity. Doubly robust estimation results suggest that stronger corporate climate commitment improves stakeholders' returns. However, we find no significant effect on performance based on shareholder equity. We therefore conduct a control function-generalized method of moments estimations to address endogeneity concerns, with further evidence that enhances the baseline results. Based on our findings, we provide recommendations to encourage corporate sustainability actions for managers and policymakers.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104979"},"PeriodicalIF":5.6,"publicationDate":"2026-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189409","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 : 2026-01-30DOI: 10.1016/j.iref.2025.104822
Zhen Wu , Guoliang Si , Yudong Ai , Ran Gu , Daqian Yang
This research examines the impact of Confucian culture on corporate digital leadership within Chinese listed companies. Using a dataset of 25,333 firm-year observations from 2010 to 2023, we apply two-way fixed-effects models to isolate the specific influence of regional cultural norms. The empirical results demonstrate that firms located near Confucian heritage sites exhibit significantly stronger digital leadership, defined as the allocation of intangible assets toward digital transformation strategies. Mechanism tests indicate that Confucian culture drives this outcome through two specific channels. First, it fosters financial prudence by reducing executive risk-taking and leverage. Second, it attracts patient institutional capital by establishing an environment of trust. Further analysis reveals that this positive effect is more prominent in digital economy industries and among larger enterprises. Robustness checks, including instrumental variable approaches and propensity score matching, confirm the validity of these findings. This study links traditional values to modern technological strategy and offers actionable insights for policymakers and executives aiming to facilitate digital innovation.
{"title":"Confucian culture and corporate digital leadership","authors":"Zhen Wu , Guoliang Si , Yudong Ai , Ran Gu , Daqian Yang","doi":"10.1016/j.iref.2025.104822","DOIUrl":"10.1016/j.iref.2025.104822","url":null,"abstract":"<div><div>This research examines the impact of Confucian culture on corporate digital leadership within Chinese listed companies. Using a dataset of 25,333 firm-year observations from 2010 to 2023, we apply two-way fixed-effects models to isolate the specific influence of regional cultural norms. The empirical results demonstrate that firms located near Confucian heritage sites exhibit significantly stronger digital leadership, defined as the allocation of intangible assets toward digital transformation strategies. Mechanism tests indicate that Confucian culture drives this outcome through two specific channels. First, it fosters financial prudence by reducing executive risk-taking and leverage. Second, it attracts patient institutional capital by establishing an environment of trust. Further analysis reveals that this positive effect is more prominent in digital economy industries and among larger enterprises. Robustness checks, including instrumental variable approaches and propensity score matching, confirm the validity of these findings. This study links traditional values to modern technological strategy and offers actionable insights for policymakers and executives aiming to facilitate digital innovation.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104822"},"PeriodicalIF":5.6,"publicationDate":"2026-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189287","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}
Using a large panel dataset of Chinese manufacturing firms from 2013 to 2019, this study examines how FinTech credit affects firm-level capital expenditure growth. We find that FinTech financing enhances capital expenditure growth in China, particularly in industries that are more financially dependent. When decomposing total FinTech credit, we find that balance sheet lending and P2P lending are positively associated with capital expenditure growth, whereas crowdfunding is not. Overall, these findings suggest that specific FinTech financing models can ease financial constraints and promote long-term investment among Chinese manufacturing firms, underscoring the role of digital finance in corporate growth.
{"title":"The impact of FinTech credit on growth in capital expenditure: Evidence from Chinese manufacturing firms","authors":"Ali Mirzaei , Osamah AlKhazali , Iness Aguir , Wael Aguir","doi":"10.1016/j.iref.2026.104911","DOIUrl":"10.1016/j.iref.2026.104911","url":null,"abstract":"<div><div>Using a large panel dataset of Chinese manufacturing firms from 2013 to 2019, this study examines how FinTech credit affects firm-level capital expenditure growth. We find that FinTech financing enhances capital expenditure growth in China, particularly in industries that are more financially dependent. When decomposing total FinTech credit, we find that balance sheet lending and P2P lending are positively associated with capital expenditure growth, whereas crowdfunding is not. Overall, these findings suggest that specific FinTech financing models can ease financial constraints and promote long-term investment among Chinese manufacturing firms, underscoring the role of digital finance in corporate growth.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"106 ","pages":"Article 104911"},"PeriodicalIF":5.6,"publicationDate":"2026-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146189418","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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