Pub Date : 2025-01-19DOI: 10.1016/j.iref.2025.103894
Lifei Gao , Dongni Wang , Guojun Wang , Hao Shi
China is a major insurance country, but the insurance density and insurance depth have long been lower than the world average. It has been found in literature that the rapid development of online payments in China promotes individuals' consumption. This research aims to explore whether online payment can promote individuals' purchase of commercial insurance. Using data from the Chinese General Social Survey 2017–2018 and China Household Finance Survey 2017, we apply the probit model, propensity score matching, instrumental variable (IV), placebo test, and other methods to examine impact of online payment on individuals' commercial insurance purchases. We find that online payment can significantly increase the probability of individuals' purchasing commercial medical and endowment insurance, partially by increasing individuals' browsing of Internet information, Internet social interaction and financial literacy. Thus, online payment system development may improve individuals’ risk protection levels.
{"title":"Does online payment promote the purchase of commercial insurance? Evidence from China","authors":"Lifei Gao , Dongni Wang , Guojun Wang , Hao Shi","doi":"10.1016/j.iref.2025.103894","DOIUrl":"10.1016/j.iref.2025.103894","url":null,"abstract":"<div><div>China is a major insurance country, but the insurance density and insurance depth have long been lower than the world average. It has been found in literature that the rapid development of online payments in China promotes individuals' consumption. This research aims to explore whether online payment can promote individuals' purchase of commercial insurance. Using data from the Chinese General Social Survey 2017–2018 and China Household Finance Survey 2017, we apply the probit model, propensity score matching, instrumental variable (IV), placebo test, and other methods to examine impact of online payment on individuals' commercial insurance purchases. We find that online payment can significantly increase the probability of individuals' purchasing commercial medical and endowment insurance, partially by increasing individuals' browsing of Internet information, Internet social interaction and financial literacy. Thus, online payment system development may improve individuals’ risk protection levels.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103894"},"PeriodicalIF":4.8,"publicationDate":"2025-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151882","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 : 2025-01-19DOI: 10.1016/j.iref.2025.103896
Joye Khoo , Adrian (Wai Kong) Cheung
We examine confidence, an important type of cognitive bias, at the subordinate executive level and provide new insights to the literature on labor investment efficiency. Using a sample of US firms from 1999 to 2020, we find that firms having highly confident subordinate executives exacerbates inefficient labor investment, which is consistent with the view that highly confident subordinate executives influencing risk-taking decisions to their advantage(s), which distorts labor investment efficiency. This detrimental impact on labor investment efficiency mainly manifests in firms with weaker external governance. Our findings are robust to alternative explanations, alternative proxies for both subordinate executives’ traits and labor investment efficiency, additional control variables (including CEO traits and bias), and various approaches to addressing endogeneity issues. This study contributes to the literature by shedding light on how personal traits in the top management team matter in labor investment decisions.
{"title":"Subordinate executives’ confidence and labor investment efficiency","authors":"Joye Khoo , Adrian (Wai Kong) Cheung","doi":"10.1016/j.iref.2025.103896","DOIUrl":"10.1016/j.iref.2025.103896","url":null,"abstract":"<div><div>We examine confidence, an important type of cognitive bias, at the subordinate executive level and provide new insights to the literature on labor investment efficiency. Using a sample of US firms from 1999 to 2020, we find that firms having highly confident subordinate executives exacerbates inefficient labor investment, which is consistent with the view that highly confident subordinate executives influencing risk-taking decisions to their advantage(s), which distorts labor investment efficiency. This detrimental impact on labor investment efficiency mainly manifests in firms with weaker external governance. Our findings are robust to alternative explanations, alternative proxies for both subordinate executives’ traits and labor investment efficiency, additional control variables (including CEO traits and bias), and various approaches to addressing endogeneity issues. This study contributes to the literature by shedding light on how personal traits in the top management team matter in labor investment decisions.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103896"},"PeriodicalIF":4.8,"publicationDate":"2025-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151749","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 : 2025-01-19DOI: 10.1016/j.iref.2025.103898
Xinhui Tang , Shujun Du , Wenwen Deng
While digital startups may demonstrate greater success compared to traditional startups, they also face more intricate and dynamic challenges. Lean startup approaches (LSAs) have garnered significant attention due to their effectiveness in fostering business model innovation within the realm of digital entrepreneurship. However, there is limited understanding regarding the application of LSAs by digital startups for effective business model innovation. Through a longitudinal exploratory case study of a Chinese AI startup, our research establishes a framework for the process of business model innovation in digital startups. We elucidate the underlying factors contributing to the limited efficacy of business model innovation in digital start-ups, unveil the internal influence mechanism of LSAs on business model innovation, emphasize its pivotal role in addressing challenges associated with business model innovation and promoting its advancement, and propose relevant propositions.
{"title":"Business innovation in digital startups: A case study of an AI startup","authors":"Xinhui Tang , Shujun Du , Wenwen Deng","doi":"10.1016/j.iref.2025.103898","DOIUrl":"10.1016/j.iref.2025.103898","url":null,"abstract":"<div><div>While digital startups may demonstrate greater success compared to traditional startups, they also face more intricate and dynamic challenges. Lean startup approaches (LSAs) have garnered significant attention due to their effectiveness in fostering business model innovation within the realm of digital entrepreneurship. However, there is limited understanding regarding the application of LSAs by digital startups for effective business model innovation. Through a longitudinal exploratory case study of a Chinese AI startup, our research establishes a framework for the process of business model innovation in digital startups. We elucidate the underlying factors contributing to the limited efficacy of business model innovation in digital start-ups, unveil the internal influence mechanism of LSAs on business model innovation, emphasize its pivotal role in addressing challenges associated with business model innovation and promoting its advancement, and propose relevant propositions.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103898"},"PeriodicalIF":4.8,"publicationDate":"2025-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151746","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 : 2025-01-18DOI: 10.1016/j.iref.2025.103892
Zhaobin Fan , Rui Long , Sajid Anwar , Jinrui Wang
This paper investigates how a country's centrality within an ego-centred trade agreements network impacts its economic complexity, emphasizing the conditioning effects of network structure. We propose that enhancing a country's centrality yields both a “breadth effect” and a “depth effect” on its production capabilities by facilitating the transnational diffusion of knowledge. This diffusion positively impacts the country's economic complexity. Furthermore, we contend that a country's centrality within a “non-natural” trade agreements network—comprising countries with diverse production capabilities—has a stronger influence on its economic complexity. Additionally, we argue that developed countries predominantly serve as major sources for transnational knowledge diffusion, thereby enhancing the impact of a country's centrality within the “developed” trade agreements network on its economic complexity. Our empirical analysis, based on panel data for 78 countries over the 2000–2019 period, supports these hypotheses. The findings are validated through robustness tests, including an examination of potential endogeneity issues. This paper contributes to the literature on policy-related determinants of economic complexity by highlighting the pivotal role of strategic positioning within the trade agreements network.
{"title":"Does centrality within trade agreements network matter to economic complexity? The conditioning effects of network structure","authors":"Zhaobin Fan , Rui Long , Sajid Anwar , Jinrui Wang","doi":"10.1016/j.iref.2025.103892","DOIUrl":"10.1016/j.iref.2025.103892","url":null,"abstract":"<div><div>This paper investigates how a country's centrality within an ego-centred trade agreements network impacts its economic complexity, emphasizing the conditioning effects of network structure. We propose that enhancing a country's centrality yields both a “breadth effect” and a “depth effect” on its production capabilities by facilitating the transnational diffusion of knowledge. This diffusion positively impacts the country's economic complexity. Furthermore, we contend that a country's centrality within a “non-natural” trade agreements network—comprising countries with diverse production capabilities—has a stronger influence on its economic complexity. Additionally, we argue that developed countries predominantly serve as major sources for transnational knowledge diffusion, thereby enhancing the impact of a country's centrality within the “developed” trade agreements network on its economic complexity. Our empirical analysis, based on panel data for 78 countries over the 2000–2019 period, supports these hypotheses. The findings are validated through robustness tests, including an examination of potential endogeneity issues. This paper contributes to the literature on policy-related determinants of economic complexity by highlighting the pivotal role of strategic positioning within the trade agreements network.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103892"},"PeriodicalIF":4.8,"publicationDate":"2025-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151748","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 : 2025-01-18DOI: 10.1016/j.iref.2025.103874
Juan Carlos Matallín-Sáez, Diego Víctor de Mingo-López
This study examines active management due to interim trading in mutual funds. We propose a novel and standardized measure to estimate active management within a quarter. This measure is based on the fund tracking error in relation to the behaviour of a synthetic portfolio emulating its initial weight structure. In implementing a factor pricing model, this measure is decomposed into two components related to fund intra-quarterly changes in systematic and idiosyncratic risks. Results show that funds experience low levels of active management within a quarter, mainly arising from the differences in fund and synthetic portfolio residuals. In addition, interim trading erodes fund performance in the short term. Nonetheless, a positive effect on traditional alphas arises in the mid-term, linked to strategic asset allocation decisions. The suggested measure and the reported evidence are of interest to help stakeholders to understand and evaluate the impact of unobservable managerial decisions.
{"title":"The components of tracking error, interim trading and mutual fund performance","authors":"Juan Carlos Matallín-Sáez, Diego Víctor de Mingo-López","doi":"10.1016/j.iref.2025.103874","DOIUrl":"10.1016/j.iref.2025.103874","url":null,"abstract":"<div><div>This study examines active management due to interim trading in mutual funds. We propose a novel and standardized measure to estimate active management within a quarter. This measure is based on the fund tracking error in relation to the behaviour of a synthetic portfolio emulating its initial weight structure. In implementing a factor pricing model, this measure is decomposed into two components related to fund intra-quarterly changes in systematic and idiosyncratic risks. Results show that funds experience low levels of active management within a quarter, mainly arising from the differences in fund and synthetic portfolio residuals. In addition, interim trading erodes fund performance in the short term. Nonetheless, a positive effect on traditional alphas arises in the mid-term, linked to strategic asset allocation decisions. The suggested measure and the reported evidence are of interest to help stakeholders to understand and evaluate the impact of unobservable managerial decisions.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103874"},"PeriodicalIF":4.8,"publicationDate":"2025-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151887","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 : 2025-01-17DOI: 10.1016/j.iref.2025.103878
Eric B. Yiadom , Paapa N. Indome , John K.M. Mawutor , George Domfe
This study examines the interplay between financial access, innovation, entrepreneurship, and carbon emissions using a dataset of 149 countries over 24 years (2000–2023). Employing two-stage least squares (2SLS) techniques to address endogeneity, the findings reveal that financial access significantly boosts innovation and entrepreneurship, which are key drivers of economic growth. However, financial access may also increase carbon emissions if not aligned with sustainable practices. Innovation reduces emissions by fostering environmentally friendly technologies, while entrepreneurship initially contributes to emissions but can mitigate this effect when supported by sustainable financial practices. The study highlights the importance of financial policies that promote green innovation and sustainable entrepreneurship, offering actionable insights for policymakers to achieve economic growth while addressing global carbon emissions.
{"title":"Balancing finance and sustainability: The impact of financial access on carbon emissions through innovation and entrepreneurship in a global study","authors":"Eric B. Yiadom , Paapa N. Indome , John K.M. Mawutor , George Domfe","doi":"10.1016/j.iref.2025.103878","DOIUrl":"10.1016/j.iref.2025.103878","url":null,"abstract":"<div><div>This study examines the interplay between financial access, innovation, entrepreneurship, and carbon emissions using a dataset of 149 countries over 24 years (2000–2023). Employing two-stage least squares (2SLS) techniques to address endogeneity, the findings reveal that financial access significantly boosts innovation and entrepreneurship, which are key drivers of economic growth. However, financial access may also increase carbon emissions if not aligned with sustainable practices. Innovation reduces emissions by fostering environmentally friendly technologies, while entrepreneurship initially contributes to emissions but can mitigate this effect when supported by sustainable financial practices. The study highlights the importance of financial policies that promote green innovation and sustainable entrepreneurship, offering actionable insights for policymakers to achieve economic growth while addressing global carbon emissions.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103878"},"PeriodicalIF":4.8,"publicationDate":"2025-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151754","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 : 2025-01-17DOI: 10.1016/j.iref.2025.103877
Chao-Qun Ma , Xukang Liu , Tony Klein , Yi-Shuai Ren
Considering the substantial influence of technological advancements on the growth of asset investments, it is imperative to examine the relationships among financial technology (fintech), artificial intelligence (AI) stocks, and sustainable finance. This analysis is vital for achieving technology-driven investments in sustainable development. This study employs the Time-Varying Parameter VAR Model with Stochastic Volatility (TVP-SV-VAR) methodology to analyze the correlation between changes in fintech and AI indices and the markets for clean energy, green bonds, and environmental pricing indices, utilizing daily data from January 1, 2018, to October 26, 2023. The results indicate that the spillover effect of sustainable finance on fintech is more pronounced than that of the AI industry. In addition, AI has the lowest level of shock response on the clean energy index, and the short-term effects of the green bond market on the market remain consistently negative. The fintech, AI, and sustainable finance markets experience varied levels of influence at different times, which in turn impacts the connections across markets and the mechanism risks are transferred. These findings aid policymakers, investors, and financial institutions in formulating more efficient policy measures and market strategies.
{"title":"Decoding the nexus: How fintech and AI stocks drive the future of sustainable finance","authors":"Chao-Qun Ma , Xukang Liu , Tony Klein , Yi-Shuai Ren","doi":"10.1016/j.iref.2025.103877","DOIUrl":"10.1016/j.iref.2025.103877","url":null,"abstract":"<div><div>Considering the substantial influence of technological advancements on the growth of asset investments, it is imperative to examine the relationships among financial technology (fintech), artificial intelligence (AI) stocks, and sustainable finance. This analysis is vital for achieving technology-driven investments in sustainable development. This study employs the Time-Varying Parameter VAR Model with Stochastic Volatility (TVP-SV-VAR) methodology to analyze the correlation between changes in fintech and AI indices and the markets for clean energy, green bonds, and environmental pricing indices, utilizing daily data from January 1, 2018, to October 26, 2023. The results indicate that the spillover effect of sustainable finance on fintech is more pronounced than that of the AI industry. In addition, AI has the lowest level of shock response on the clean energy index, and the short-term effects of the green bond market on the market remain consistently negative. The fintech, AI, and sustainable finance markets experience varied levels of influence at different times, which in turn impacts the connections across markets and the mechanism risks are transferred. These findings aid policymakers, investors, and financial institutions in formulating more efficient policy measures and market strategies.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103877"},"PeriodicalIF":4.8,"publicationDate":"2025-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151876","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 : 2025-01-17DOI: 10.1016/j.iref.2025.103852
Jionghao Huang , Hongqiao Li , Baifan Chen , Mengai Liu , Chaofan An , Xiaohua Xia
In this study, we incorporate the novel decomposed connectedness and event-driven statistical analysis to empirically investigate the dynamic return and volatility connectedness of six leading currencies and various commodity markets, and further provide formal statistical evidence of how global shocks can trigger significant increases in the currency-commodity connectedness. With effective differentiation between contemporaneous correlations and lagged spillovers, the empirical results show that, while the overall connectedness is mainly driven by contemporaneous components during tranquil periods, the lagged volatility spillovers play a more prominent role especially during extreme market turmoil. Moreover, both return and volatility transmission present significant time-varying characteristics and even-dependent patterns, with prominent spikes during periods of extreme events such as the 2007–2009 global financial crisis and 2020 COVID-19 pandemic, which is further supported with formal statistical evidence utilizing the event-driven probabilistic analysis. Lastly, we further spot that the commodity currencies such as the Canadian dollar and Australian dollar prevailingly transmit to the connectedness network, while the agricultural commodity markets mainly serve as risk receivers, with potential net position reversal under various market conditions. Overall, our analysis provides valuable insights into the intricacies of currency-commodity nexus which are highly conducive to a better understanding of the potential risk contagion among these markets and corresponding risk management for policy makers and investors.
{"title":"Revisiting the currency-commodity nexus: New insights into the R2 decomposed connectedness and the role of global shocks","authors":"Jionghao Huang , Hongqiao Li , Baifan Chen , Mengai Liu , Chaofan An , Xiaohua Xia","doi":"10.1016/j.iref.2025.103852","DOIUrl":"10.1016/j.iref.2025.103852","url":null,"abstract":"<div><div>In this study, we incorporate the novel <span><math><mrow><msup><mi>R</mi><mn>2</mn></msup></mrow></math></span> decomposed connectedness and event-driven statistical analysis to empirically investigate the dynamic return and volatility connectedness of six leading currencies and various commodity markets, and further provide formal statistical evidence of how global shocks can trigger significant increases in the currency-commodity connectedness. With effective differentiation between contemporaneous correlations and lagged spillovers, the empirical results show that, while the overall connectedness is mainly driven by contemporaneous components during tranquil periods, the lagged volatility spillovers play a more prominent role especially during extreme market turmoil. Moreover, both return and volatility transmission present significant time-varying characteristics and even-dependent patterns, with prominent spikes during periods of extreme events such as the 2007–2009 global financial crisis and 2020 COVID-19 pandemic, which is further supported with formal statistical evidence utilizing the event-driven probabilistic analysis. Lastly, we further spot that the commodity currencies such as the Canadian dollar and Australian dollar prevailingly transmit to the connectedness network, while the agricultural commodity markets mainly serve as risk receivers, with potential net position reversal under various market conditions. Overall, our analysis provides valuable insights into the intricacies of currency-commodity nexus which are highly conducive to a better understanding of the potential risk contagion among these markets and corresponding risk management for policy makers and investors.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103852"},"PeriodicalIF":4.8,"publicationDate":"2025-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151753","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 : 2025-01-16DOI: 10.1016/j.iref.2025.103879
Di Zheng , Guang Yang , Lei Lei , Pinghua Li
Facing the current trend of the virtualization of the real economy, this paper examines the influence of financialization on the main business performance of real enterprises. Theoretically, corporate financialization often stems from the motives of “reservoir” and “speculative arbitrage”, which in turn lead to the “feed-back effect” or the “crowding-out effect. Collecting data from China's A-share listed companies from 2012 to 2022, this study constructs a micro-level indicator of corporate financialization and empirically tests the effects and mechanisms of financialization on their main business performance. The findings reveal that, overall, financialization has a detrimental impact on their main business performance, indicating that the “crowding-out effect” outweighs the “feed-back effect”. This conclusion remains robust after a series of robustness tests. Further mechanistic tests demonstrate that financialization does not act as a “reservoir” to reserve liquidity funds; rather, it inhibits corporate innovation investments and real capital investments, thereby diminishing the main business performance of real enterprises. This research, from the micro-level perspective, proves the influence of financialization on the development of real enterprises to be negative. It also offers empirical support for government to strengthen financial regulation of real enterprises and guide capital to “return from virtual to real”.
{"title":"Feed-back effect or crowding-out effect: The influence of financialization on the main business performance of real enterprises","authors":"Di Zheng , Guang Yang , Lei Lei , Pinghua Li","doi":"10.1016/j.iref.2025.103879","DOIUrl":"10.1016/j.iref.2025.103879","url":null,"abstract":"<div><div>Facing the current trend of the virtualization of the real economy, this paper examines the influence of financialization on the main business performance of real enterprises. Theoretically, corporate financialization often stems from the motives of “reservoir” and “speculative arbitrage”, which in turn lead to the “feed-back effect” or the “crowding-out effect. Collecting data from China's A-share listed companies from 2012 to 2022, this study constructs a micro-level indicator of corporate financialization and empirically tests the effects and mechanisms of financialization on their main business performance. The findings reveal that, overall, financialization has a detrimental impact on their main business performance, indicating that the “crowding-out effect” outweighs the “feed-back effect”. This conclusion remains robust after a series of robustness tests. Further mechanistic tests demonstrate that financialization does not act as a “reservoir” to reserve liquidity funds; rather, it inhibits corporate innovation investments and real capital investments, thereby diminishing the main business performance of real enterprises. This research, from the micro-level perspective, proves the influence of financialization on the development of real enterprises to be negative. It also offers empirical support for government to strengthen financial regulation of real enterprises and guide capital to “return from virtual to real”.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103879"},"PeriodicalIF":4.8,"publicationDate":"2025-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151885","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 : 2025-01-16DOI: 10.1016/j.iref.2025.103858
Xiaoming Zhang , Weijie Luo , Di Xiang
This paper relies on the policy of strategic emerging industries in China as a quasi-natural experiment to examine the role that the industry policy plays in shaping firm innovation. Utilizing a listed firm-level panel dataset over 2006–2020 in difference-in-differences framework, we find that innovation increases after this policy implemented, and this increase is larger in firms belonging to the strategic emerging industries. Our empirical results hold across various econometric specifications employed and support the argument that the industry policy strengthens the incentives of firms to innovate. Moreover, we find evidence that the strategic emerging industries policy significantly promotes tax benefits, firm loans, industrial concentration, R&D input and innovator quality, leading to more innovative outcomes. This paper also suggests that developing countries closed to the frontier of world’s advanced technologies can adopt the industry policy to optimize the innovative outcomes structure.
{"title":"Strategic emerging industries and innovation: Evidence from China","authors":"Xiaoming Zhang , Weijie Luo , Di Xiang","doi":"10.1016/j.iref.2025.103858","DOIUrl":"10.1016/j.iref.2025.103858","url":null,"abstract":"<div><div>This paper relies on the policy of strategic emerging industries in China as a quasi-natural experiment to examine the role that the industry policy plays in shaping firm innovation. Utilizing a listed firm-level panel dataset over 2006–2020 in difference-in-differences framework, we find that innovation increases after this policy implemented, and this increase is larger in firms belonging to the strategic emerging industries. Our empirical results hold across various econometric specifications employed and support the argument that the industry policy strengthens the incentives of firms to innovate. Moreover, we find evidence that the strategic emerging industries policy significantly promotes tax benefits, firm loans, industrial concentration, R&D input and innovator quality, leading to more innovative outcomes. This paper also suggests that developing countries closed to the frontier of world’s advanced technologies can adopt the industry policy to optimize the innovative outcomes structure.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"98 ","pages":"Article 103858"},"PeriodicalIF":4.8,"publicationDate":"2025-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151282","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}
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