Pub Date : 2025-10-10DOI: 10.1016/j.jcorpfin.2025.102905
Siti Farida , Jana P. Fidrmuc , Chendi Zhang
We show that acquisitions of private targets increase the quantity, quality, and value of the acquiring firms’ patents more than acquisitions of public targets. Private-target acquisitions also foster significantly greater innovation synergies, increase the total number of inventors, and promote new collaborations among inventors. These outcomes are associated with the acquirers’ expertise in identifying innovative private targets, are more pronounced in industries with breakthrough technologies, and are not driven by targets with existing patent portfolios. We also find that the patenting increases explain away the higher announcement returns for private versus public-target acquisitions. Overall, our results underscore the role of complementary innovation capabilities in driving value creation through the integration of private targets with publicly listed acquirers.
{"title":"M&As and innovation: Evidence from acquiring private firms","authors":"Siti Farida , Jana P. Fidrmuc , Chendi Zhang","doi":"10.1016/j.jcorpfin.2025.102905","DOIUrl":"10.1016/j.jcorpfin.2025.102905","url":null,"abstract":"<div><div>We show that acquisitions of private targets increase the quantity, quality, and value of the acquiring firms’ patents more than acquisitions of public targets. Private-target acquisitions also foster significantly greater innovation synergies, increase the total number of inventors, and promote new collaborations among inventors. These outcomes are associated with the acquirers’ expertise in identifying innovative private targets, are more pronounced in industries with breakthrough technologies, and are not driven by targets with existing patent portfolios. We also find that the patenting increases explain away the higher announcement returns for private versus public-target acquisitions. Overall, our results underscore the role of complementary innovation capabilities in driving value creation through the integration of private targets with publicly listed acquirers.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102905"},"PeriodicalIF":5.9,"publicationDate":"2025-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145269776","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-10DOI: 10.1016/j.jcorpfin.2025.102906
Dongmin Kong , Chenhao Liu , Wenxu Ye
We examine the impact of environmental regulations in export destinations on firms’ pollution emissions. Leveraging the passage of Permanent Normal Trade Relations (PNTR) by the United States – which eliminated tariff policy uncertainty for Chinese exports – we provide evidence that 1% increase of exports to highly regulated markets reduces smoke, SO, and waste gas emissions by 0.267%, 0.239%, and 0.026%, and water and coal usage by 0.185% and 0.242%, respectively. Our mechanism analysis reveals that firms adapt their environmental practices to comply with foreign regulations due to compliance costs, reputational concerns, and future growth opportunities.
{"title":"Greening through trade","authors":"Dongmin Kong , Chenhao Liu , Wenxu Ye","doi":"10.1016/j.jcorpfin.2025.102906","DOIUrl":"10.1016/j.jcorpfin.2025.102906","url":null,"abstract":"<div><div>We examine the impact of environmental regulations in export destinations on firms’ pollution emissions. Leveraging the passage of Permanent Normal Trade Relations (PNTR) by the United States – which eliminated tariff policy uncertainty for Chinese exports – we provide evidence that 1% increase of exports to highly regulated markets reduces smoke, SO<span><math><msub><mrow></mrow><mrow><mn>2</mn></mrow></msub></math></span>, and waste gas emissions by 0.267%, 0.239%, and 0.026%, and water and coal usage by 0.185% and 0.242%, respectively. Our mechanism analysis reveals that firms adapt their environmental practices to comply with foreign regulations due to compliance costs, reputational concerns, and future growth opportunities.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102906"},"PeriodicalIF":5.9,"publicationDate":"2025-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145325953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-09DOI: 10.1016/j.jcorpfin.2025.102904
Rodney J. Garratt , Maarten R.C. van Oordt
This paper develops the concept of a “crypto multiplier,” which measures the equilibrium response of a cryptocurrency’s market capitalization to aggregate inflows and outflows of investors’ funds. The crypto multiplier takes high values when a large share of a cryptocurrency’s coins is held as an investment rather than being used as a means of payment. Blockchain data show that the share of coins held for the purpose of making payments is rather small for major cryptocurrencies suggesting large crypto multipliers. Our results highlight the need for market participants to be vigilant when accepting block holdings of a cryptocurrency as collateral or as compensation for seed funding. The crypto multiplier indicates that the liquidation value of block holdings of cryptocurrencies can be substantially below their prevailing market values.
{"title":"The crypto multiplier","authors":"Rodney J. Garratt , Maarten R.C. van Oordt","doi":"10.1016/j.jcorpfin.2025.102904","DOIUrl":"10.1016/j.jcorpfin.2025.102904","url":null,"abstract":"<div><div>This paper develops the concept of a “crypto multiplier,” which measures the equilibrium response of a cryptocurrency’s market capitalization to aggregate inflows and outflows of investors’ funds. The crypto multiplier takes high values when a large share of a cryptocurrency’s coins is held as an investment rather than being used as a means of payment. Blockchain data show that the share of coins held for the purpose of making payments is rather small for major cryptocurrencies suggesting large crypto multipliers. Our results highlight the need for market participants to be vigilant when accepting block holdings of a cryptocurrency as collateral or as compensation for seed funding. The crypto multiplier indicates that the liquidation value of block holdings of cryptocurrencies can be substantially below their prevailing market values.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102904"},"PeriodicalIF":5.9,"publicationDate":"2025-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145325954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-03DOI: 10.1016/j.jcorpfin.2025.102892
Masumi Sai , Yasutomo Tsukioka , Kazuo Yamada
This study examines the impact of monitoring activities of beneficial investors toward asset managers. We use data from Japan, where the stewardship code requires beneficial investors, such as pension funds, to monitor the engagement of asset managers. We provide evidence that firms with asset managers who have endorsed the code are less likely to have anti-takeover provisions, especially after the code revision. Additional analyses clarify the causality by including ownership of non-signatory investors, a matching procedure, and an alternative definition of the ownership variable. We also confirm that the engagement also changes other corporate governance measurements of Japanese listed companies. Finally, we demonstrate that removing such provisions can improve operational and stock performance.
{"title":"Beneficiary investor monitoring and asset manager engagement","authors":"Masumi Sai , Yasutomo Tsukioka , Kazuo Yamada","doi":"10.1016/j.jcorpfin.2025.102892","DOIUrl":"10.1016/j.jcorpfin.2025.102892","url":null,"abstract":"<div><div>This study examines the impact of monitoring activities of beneficial investors toward asset managers. We use data from Japan, where the stewardship code requires beneficial investors, such as pension funds, to monitor the engagement of asset managers. We provide evidence that firms with asset managers who have endorsed the code are less likely to have anti-takeover provisions, especially after the code revision. Additional analyses clarify the causality by including ownership of non-signatory investors, a matching procedure, and an alternative definition of the ownership variable. We also confirm that the engagement also changes other corporate governance measurements of Japanese listed companies. Finally, we demonstrate that removing such provisions can improve operational and stock performance.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102892"},"PeriodicalIF":5.9,"publicationDate":"2025-10-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145269778","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-26DOI: 10.1016/j.jcorpfin.2025.102895
Naser Al-Ayyoub, Hieu V. Phan
We examine how firm-level climate risk affects the choice between bank loans and public debt. Using a large sample of U.S. public firms from 2002 to 2021, we find that climate-exposed firms rely more on bank loans relative to public debt. This effect intensifies after the Paris Agreement and a tax policy change that eases debt renegotiation, highlighting banks' value in flexibility and monitoring. The relationship is weaker among firms with lower default risk and stronger governance. Our findings underscore debt structure as an important channel through which firms adapt to climate-related uncertainty.
{"title":"Riskier climate, closer ties? How climate risk drives firms towards bank debt financing","authors":"Naser Al-Ayyoub, Hieu V. Phan","doi":"10.1016/j.jcorpfin.2025.102895","DOIUrl":"10.1016/j.jcorpfin.2025.102895","url":null,"abstract":"<div><div>We examine how firm-level climate risk affects the choice between bank loans and public debt. Using a large sample of U.S. public firms from 2002 to 2021, we find that climate-exposed firms rely more on bank loans relative to public debt. This effect intensifies after the Paris Agreement and a tax policy change that eases debt renegotiation, highlighting banks' value in flexibility and monitoring. The relationship is weaker among firms with lower default risk and stronger governance. Our findings underscore debt structure as an important channel through which firms adapt to climate-related uncertainty.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102895"},"PeriodicalIF":5.9,"publicationDate":"2025-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145269777","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-13DOI: 10.1016/j.jcorpfin.2025.102894
Xingxing Hu , Bingxuan Lin , Huilong Liu , Xiaowei Xu
The influence of external institutional environments on the internal functioning of business groups remains a critical yet underexplored area of research. In this paper, we focus on China's pro-market judicial reforms and examine how these reforms affect internal product and service transactions within business groups, finding that such reforms significantly reduce intra-group transactions. We further demonstrate that this decline reflects a strategic substitution toward external market transactions rather than an overall contraction in firm operations, and that the effect is not driven by managerial self-dealing but aligns with institutional voids theory. The effect is particularly pronounced in regions with underdeveloped product markets and weaker informal institutions, and in firms with lower reputations and stronger political connections. Moreover, our results hold consistently across various transaction types, whether seller- or buyer-initiated, service- or goods-related, and remain robust across alternative regression models, explanations, and regardless of the geographic proximity of group firms. These findings contribute to understanding the role of internal transactions within business groups in addressing institutional voids and add to the broader literature on how business groups emerge and adapt in response to gaps in institutional frameworks.
{"title":"Institutional voids and business group dynamics: Evidence from judicial reform in China1","authors":"Xingxing Hu , Bingxuan Lin , Huilong Liu , Xiaowei Xu","doi":"10.1016/j.jcorpfin.2025.102894","DOIUrl":"10.1016/j.jcorpfin.2025.102894","url":null,"abstract":"<div><div>The influence of external institutional environments on the internal functioning of business groups remains a critical yet underexplored area of research. In this paper, we focus on China's pro-market judicial reforms and examine how these reforms affect internal product and service transactions within business groups, finding that such reforms significantly reduce intra-group transactions. We further demonstrate that this decline reflects a strategic substitution toward external market transactions rather than an overall contraction in firm operations, and that the effect is not driven by managerial self-dealing but aligns with institutional voids theory. The effect is particularly pronounced in regions with underdeveloped product markets and weaker informal institutions, and in firms with lower reputations and stronger political connections. Moreover, our results hold consistently across various transaction types, whether seller- or buyer-initiated, service- or goods-related, and remain robust across alternative regression models, explanations, and regardless of the geographic proximity of group firms. These findings contribute to understanding the role of internal transactions within business groups in addressing institutional voids and add to the broader literature on how business groups emerge and adapt in response to gaps in institutional frameworks.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"95 ","pages":"Article 102894"},"PeriodicalIF":5.9,"publicationDate":"2025-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145095902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-11DOI: 10.1016/j.jcorpfin.2025.102884
Yu Liu , Jian Xu , Yifan Zhou
This study examines the long-term impact of the African slave trade on present-day corporate corruption in Africa. Analyzing data from over 30,000 firms across 41 African countries between 2006 and 2021, we find a robust positive relationship between historical slave export and modern firm-level corruption. The results suggest that ethnic fractionalization, diminished trust, and weak institutions are potential channels linking the slave trade to current corruption. In countries with a history of extensive slave export, firms are more likely to engage in tax avoidance, circumvent government interactions, and operate informally due to prevalent corruption.
{"title":"Quantifying the legacy of trauma: The long-term impact of the African slave trade on contemporary firm corruption","authors":"Yu Liu , Jian Xu , Yifan Zhou","doi":"10.1016/j.jcorpfin.2025.102884","DOIUrl":"10.1016/j.jcorpfin.2025.102884","url":null,"abstract":"<div><div>This study examines the long-term impact of the African slave trade on present-day corporate corruption in Africa. Analyzing data from over 30,000 firms across 41 African countries between 2006 and 2021, we find a robust positive relationship between historical slave export and modern firm-level corruption. The results suggest that ethnic fractionalization, diminished trust, and weak institutions are potential channels linking the slave trade to current corruption. In countries with a history of extensive slave export, firms are more likely to engage in tax avoidance, circumvent government interactions, and operate informally due to prevalent corruption.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102884"},"PeriodicalIF":5.9,"publicationDate":"2025-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145110214","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-11DOI: 10.1016/j.jcorpfin.2025.102893
Hao Wei, Yuan Liu
Using global corporate investment data from 2007 to 2022, this study employs a multi-period difference-in-differences methodology to investigate the impact of opening new international passenger flight routes on FDI. The empirical results are as follows: The launch of new international passenger air routes has significantly promotes multinational corporations'(MNCs') investment in China by shortening cross-border travel time. Results from heterogeneity analysis suggest that investment scale expansion in China is primarily concentrated among large-scale MNCs and capital-intensive MNCs. Mechanism analysis reveals that, alleviating information friction, enhancing financing capability, and reducing cultural barriers are crucial channels. Further analysis indicates that the launch of new international passenger flight routes substantially enhances China's market appeal to MNCs and raises MNCs' investment returns. Our research findings not only enrich the theoretical literature on the economic implications of “home bias” effect in international investment, but also offer empirical support for achieving the United Nations World Tourism Organization's sustainable development goal of “Tourism for Economic Growth”.
{"title":"New international flight routes and MNCs' investment","authors":"Hao Wei, Yuan Liu","doi":"10.1016/j.jcorpfin.2025.102893","DOIUrl":"10.1016/j.jcorpfin.2025.102893","url":null,"abstract":"<div><div>Using global corporate investment data from 2007 to 2022, this study employs a multi-period difference-in-differences methodology to investigate the impact of opening new international passenger flight routes on FDI. The empirical results are as follows: The launch of new international passenger air routes has significantly promotes multinational corporations'(MNCs') investment in China by shortening cross-border travel time. Results from heterogeneity analysis suggest that investment scale expansion in China is primarily concentrated among large-scale MNCs and capital-intensive MNCs. Mechanism analysis reveals that, alleviating information friction, enhancing financing capability, and reducing cultural barriers are crucial channels. Further analysis indicates that the launch of new international passenger flight routes substantially enhances China's market appeal to MNCs and raises MNCs' investment returns. Our research findings not only enrich the theoretical literature on the economic implications of “home bias” effect in international investment, but also offer empirical support for achieving the United Nations World Tourism Organization's sustainable development goal of “Tourism for Economic Growth”.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"96 ","pages":"Article 102893"},"PeriodicalIF":5.9,"publicationDate":"2025-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145120168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-10DOI: 10.1016/j.jcorpfin.2025.102891
Oliver Zhen Li , Yupeng Lin , Jinping Zhang , Zilong Zhang
We find that a borrower default causes an increase in investors' EDGAR searches for non-defaulting borrowers that share the same relationship bank. This effect is more pronounced when the lending relationship between the defaulting borrower and the defaulted-upon bank is stronger and when the reliance of non-defaulting borrowers on the defaulted-upon bank is greater. The co-movement of information acquisition for non-defaulting borrowers increases after the peer default, which leads to a co-movement in the issuance of management forecasts and a co-movement in stock returns. In sum, our research supports a network effect of peer defaults on information acquisition.
{"title":"Peer default and EDGAR searches","authors":"Oliver Zhen Li , Yupeng Lin , Jinping Zhang , Zilong Zhang","doi":"10.1016/j.jcorpfin.2025.102891","DOIUrl":"10.1016/j.jcorpfin.2025.102891","url":null,"abstract":"<div><div>We find that a borrower default causes an increase in investors' EDGAR searches for non-defaulting borrowers that share the same relationship bank. This effect is more pronounced when the lending relationship between the defaulting borrower and the defaulted-upon bank is stronger and when the reliance of non-defaulting borrowers on the defaulted-upon bank is greater. The co-movement of information acquisition for non-defaulting borrowers increases after the peer default, which leads to a co-movement in the issuance of management forecasts and a co-movement in stock returns. In sum, our research supports a network effect of peer defaults on information acquisition.</div></div>","PeriodicalId":15525,"journal":{"name":"Journal of Corporate Finance","volume":"95 ","pages":"Article 102891"},"PeriodicalIF":5.9,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145095901","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"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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