International Review of Finance最新文献

Nearly one-third of asset sale announcements are preceded by a public statement of the intent to sell. These voluntary disclosures generate significant average returns of 1.1%. Pre-announcements bias returns around the actual asset sales toward zero. Due to opportunistic managerial behavior, pre-announcements occur after poor stock performance and CEO turnover. Managers also opportunistically exercise options around the pre-announcements and receive potential benefits from the uptick in stock prices. Although we find no effect of pre-announcements on long-term operational performance, we do observe a negative effect on stock returns using three and four-factor models.

Using a sample of Chinese listed firms during 2007–2020, we find that non-controlling blockholders (NCBs) with common ownership can exert effective monitoring on dominant owners' self-dealing behaviors captured by financial misconducts related to controlling shareholders. This effect is concentrated among state-owned enterprises (SOEs), especially for the common NCBs holding only SOEs. Finally, the monitoring effect is particularly evident when firms have more peer firms, when common NCBs hold more firms within the same industry, when common NCBs exert stronger exit threats, or when common NCBs hold long investment horizons, indicating that common ownership enhances NCBs' incentives and abilities to identify and curb controlling shareholders' misbehaviors.

We examine the association between firm size and the likelihood of emergence from bankruptcy filed under Chapter 11. Using 715 firm-year observations from 1979 to 2019, we find that large firms are less likely to emerge. We use performance, financial constraints, and information environment as potential channels to examine the mechanism by which firm size affects the likelihood of firm emergence from bankruptcy. Further analysis shows that the likelihood of bankruptcy emergence is lower for large firms before the global financial crisis of 2007.

This study investigates how the introduction of China's Environmental Protection Tax Law impacts firms' trade credit taking Chinese A-share listed companies from 2013 to 2020 as the research sample. Since introducing the Environmental Protection Tax Law, the trade credit of pollution-intensive firms has increased significantly. Following the mechanism test, the environmental fee-to-tax reform forces firms to improve their green innovation level and reduce their risk of environmental violations, which protects the suppliers' interests and increases the willingness of suppliers to provide trade credit for these firms. Further analysis shows that when the firm's market power is relatively higher, the regional judicial environment is better, the regional intensity of tax collection is higher and the effect of environmental fee-to-tax reform on the firm's trade credit is strong. Our results contribute to the literature regarding the impact of environmental regulations on firms from the perspective of trade credit, and we provide a new perspective and empirical evidence to support Porter's win-win hypothesis further.

We examine the informativeness of analyst stock recommendations in the presence of aggregate uncertainty. Our results suggest that a one standard deviation increase in aggregate uncertainty decreases the likelihood of influential recommendation revisions by 5.26%. Increased aggregate uncertainty leads to a small stock price impact for upgrade and downgrade recommendations. Our findings reveal consistent search for information by investors, which, support a post-recommendation price drift amidst high aggregate uncertainty. We further find that investors of firms with fewer distracted shareholders, less readable financial statements, and more informed trading seek more information when aggregate uncertainty is high. Our study highlights that investors become more cautious while responding to analysts' stock recommendations during high aggregate uncertainty.

Motivated by the rapidly emerging literature on climate change and finance, we explore the effect of corporate tax avoidance on shareholder value around the adoption of the Paris Climate Agreement. Companies engaging in greater tax avoidance experience significantly more favorable stock market reactions. Companies that achieve greater savings through tax avoidance have a larger surplus of resources that can be directed toward climate-related actions in alignment with the Paris Agreement, resulting in enhanced shareholder value. Furthermore, the advantageous impact of tax avoidance on shareholder wealth is significantly less pronounced for companies that pay out larger dividends.

This study examines the effect of the early tax-free release of the superannuation (ERS), which was introduced as a financial stimulus to counter the economic havoc created by the COVID-19 pandemic, on Australians' superannuation retirement balances. By considering 2800 scenarios based on individuals' working industries, age, withdrawal amounts, and asset allocation strategies, we find that individuals with non-aggressive asset allocation strategies may struggle to reach the minimum required superannuation balance for a comfortable lifestyle in retirement if they opt-in for the ERS. This impact is more evident for individuals employed in certain industries such as accommodation and food, and retail trade.

We examine the impact of foreign institutional ownership on firms' labor investment efficiency. Using a comprehensive global sample of firms across 37 non-U.S. countries, we find that greater ownership by foreign institutional investors is significantly associated with lower deviations of labor investment from the level justified by economic fundamentals, that is, higher labor investment efficiency. Independent, U.S.-based and common-law foreign institutional investors increase labor investment efficiency to a greater extent than their gray, non-U.S.-based and civil-law peers. We further find evidence supporting the value creation of foreign institutions through the improvement in labor investment efficiency. Overall, our results suggest that foreign institutional investors promote good corporate governance practices around the world.

In this paper, we examine the relationship between Hofstede national cultures and de jure central bank independence. We propose theoretical hypotheses to explain how cultural dimensions determine central bank independence and test these hypotheses using an international dataset. We find that two cultural dimensions, namely, individualism and uncertainty avoidance, are significantly related to central bank independence. Central bank independence is higher in collectivistic and uncertainty avoidance countries. We further reveal that these cultural dimensions affect central bank independence in different ways. Individualism and uncertainty avoidance are related to independence in policy formulation and limitations on lending to governments. Although power distance and masculinity are insignificantly related to total central bank independence, they affect independence in objectives, policy formulation and limitation on lending to governments. Our results are robust through a series of checks.

We investigate the predictive role of global economic uncertainty exposure at the firm level in the top-five developed stock markets outside the US. Applying portfolio-level sorting strategies, we find that exposure to global idiosyncratic uncertainty exhibits stronger predictive power than either total or common uncertainty. Further, the idiosyncratic uncertainty betas are negatively related to future stock returns over multiple trading horizons in the UK, Europe, and Canada, and this relationship cannot be explained by common risk factors, including market, size, value, investment, profitability, and momentum. Our findings are robust to the use of firm-level Fama–MacBeth regressions and additional trading horizons.