Pub Date : 2024-11-16DOI: 10.1016/j.gfj.2024.101056
Romain Ducret, Dušan Isakov
This study examines how business group heterogeneity affects firm outcomes using data from Korean chaebols (2007–2019). We employ a three-level empirical strategy considering: 1) market-level average effects, 2) effects across categories of business groups, and 3) group-specific effects capturing unobservable attributes. Our analysis reveals substantial variations in affiliation effects between business groups, often diverging from average market-level effects. We find that group resources significantly impact affiliate performance - investors assign higher valuations to firms affiliated with large, financially sound, and well-performing business groups. While performance effects are primarily market-driven, we document considerable heterogeneity in financial and investment policies across groups, likely influenced by unobservable characteristics such as controlling shareholders' preferences. Our findings highlight the importance of considering business group heterogeneity when analyzing affiliate performance
{"title":"Business group heterogeneity and firm outcomes: Evidence from Korean chaebols","authors":"Romain Ducret, Dušan Isakov","doi":"10.1016/j.gfj.2024.101056","DOIUrl":"10.1016/j.gfj.2024.101056","url":null,"abstract":"<div><div>This study examines how business group heterogeneity affects firm outcomes using data from Korean chaebols (2007–2019). We employ a three-level empirical strategy considering: 1) market-level average effects, 2) effects across categories of business groups, and 3) group-specific effects capturing unobservable attributes. Our analysis reveals substantial variations in affiliation effects between business groups, often diverging from average market-level effects. We find that group resources significantly impact affiliate performance - investors assign higher valuations to firms affiliated with large, financially sound, and well-performing business groups. While performance effects are primarily market-driven, we document considerable heterogeneity in financial and investment policies across groups, likely influenced by unobservable characteristics such as controlling shareholders' preferences. Our findings highlight the importance of considering business group heterogeneity when analyzing affiliate performance</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101056"},"PeriodicalIF":5.5,"publicationDate":"2024-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142704054","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 : 2024-11-08DOI: 10.1016/j.gfj.2024.101054
Priyantha Mudalige , Petko S. Kalev
We examine the impact of the release time of earnings and takeover announcements on trade initiation motives on the ASX — a market with continuous disclosure. This investigation uses intraday high-frequency data of the constituent stocks of the S&P/ASX50 index and measures market sidedness around the announcements to infer trade initiation motives. We find that during a continuous trading session: (i) in a two-sided market, investors initiate both buy and sell trades just before announcements are released during trading sessions, and (ii) in a one-sided market, investors execute either buy or sell trades just after the announcements. Our results suggest that differential information is the likely motive for trade initiation just before the release of announcements. Finally, our results suggest that announcements released during continuous trading sessions are more effective in controlling information leakage.
{"title":"Under the microscope: Trade initiation activities around earnings and takeover announcements in a market with continuous disclosure","authors":"Priyantha Mudalige , Petko S. Kalev","doi":"10.1016/j.gfj.2024.101054","DOIUrl":"10.1016/j.gfj.2024.101054","url":null,"abstract":"<div><div>We examine the impact of the release time of earnings and takeover announcements on trade initiation motives on the ASX — a market with continuous disclosure. This investigation uses intraday high-frequency data of the constituent stocks of the S&P/ASX50 index and measures market sidedness around the announcements to infer trade initiation motives. We find that during a continuous trading session: (i) in a two-sided market, investors initiate both buy and sell trades just before announcements are released during trading sessions, and (ii) in a one-sided market, investors execute either buy or sell trades just after the announcements. Our results suggest that differential information is the likely motive for trade initiation just before the release of announcements. Finally, our results suggest that announcements released during continuous trading sessions are more effective in controlling information leakage.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101054"},"PeriodicalIF":5.5,"publicationDate":"2024-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142651916","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 : 2024-11-02DOI: 10.1016/j.gfj.2024.101053
Jorge A. Muñoz Mendoza , Carmen L. Veloso Ramos , Carlos L. Delgado Fuentealba , Edinson E. Cornejo Saavedra , Sandra M. Sepúlveda Yelpo
We analyze connectedness for a system composed of 111 financial markets from January 3, 2011, to December 29, 2023. Stock, foreign exchange, and commodity markets are included in the sample. Using a two-stage approach based on Principal Component Analysis to remove common global factors affecting financial market returns, we employ a LASSO-VAR model to estimate the global network of financial markets. Our results reveal that financial markets are closely linked. Common global factors intensify spillovers between financial markets. After being removed, financial markets transmit significant idiosyncratic shocks that are not explained by systemic variations. Our results also allow us to accurately identify the markets that are idiosyncratically less vulnerable to liquidity shocks, and those that are most relevant transmitting this kind of disturbances. These findings are relevant for investment decisions, risk management, and financial regulators.
{"title":"Stock, foreign exchange and commodity markets linkages: Implications for risk diversification and portfolio management","authors":"Jorge A. Muñoz Mendoza , Carmen L. Veloso Ramos , Carlos L. Delgado Fuentealba , Edinson E. Cornejo Saavedra , Sandra M. Sepúlveda Yelpo","doi":"10.1016/j.gfj.2024.101053","DOIUrl":"10.1016/j.gfj.2024.101053","url":null,"abstract":"<div><div>We analyze connectedness for a system composed of 111 financial markets from January 3, 2011, to December 29, 2023. Stock, foreign exchange, and commodity markets are included in the sample. Using a two-stage approach based on Principal Component Analysis to remove common global factors affecting financial market returns, we employ a LASSO-VAR model to estimate the global network of financial markets. Our results reveal that financial markets are closely linked. Common global factors intensify spillovers between financial markets. After being removed, financial markets transmit significant idiosyncratic shocks that are not explained by systemic variations. Our results also allow us to accurately identify the markets that are idiosyncratically less vulnerable to liquidity shocks, and those that are most relevant transmitting this kind of disturbances. These findings are relevant for investment decisions, risk management, and financial regulators.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101053"},"PeriodicalIF":5.5,"publicationDate":"2024-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142593403","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 : 2024-10-28DOI: 10.1016/j.gfj.2024.101052
Mohammad R. Allahdadi, Torun Fretheim, Kjetil Vindedal
There is a growing consensus that climate change poses a financial material risk to investors. In the face of escalating climate change risks, investors are seeking strategies to safeguard their portfolios. Building on a growing literature that combines textual analysis and dynamic hedging approach, we propose a method to construct portfolios of publicly traded assets that dynamically hedge climate change risk in the Norwegian stock market.
As climate risk is not directly observable, we apply Latent Dirichlet Allocation to extract news on climate change from more than 400,000 articles published in the Norwegian newspaper Dagens Næringsliv between January 2013 and February 2022. Using these data, we develop the DN Climate Change News Index and use innovations in this index as a hedge target. The hedge portfolios are constructed using third-party environmental scores from MSCI and Sustainalytics, along with firm-level data of equities listed on the Oslo Stock Exchange.
The DN Climate Change News Index show high correlations with international counterparts, indicating its ability to capture major global climate events and assessing the intensity of climate change–related news coverage. However, despite a positive out-of-sample correlation, the mimicking portfolio approach fails to construct efficient hedge portfolios against innovations in the index. Hedge portfolios based on Sustainalytics E-scores show a 0.21 out-of-sample correlation with innovations in the DN Climate Change News Index, indicating that the index may provide a relevant signal for investors.
{"title":"Value of climate change news: A textual analysis","authors":"Mohammad R. Allahdadi, Torun Fretheim, Kjetil Vindedal","doi":"10.1016/j.gfj.2024.101052","DOIUrl":"10.1016/j.gfj.2024.101052","url":null,"abstract":"<div><div>There is a growing consensus that climate change poses a financial material risk to investors. In the face of escalating climate change risks, investors are seeking strategies to safeguard their portfolios. Building on a growing literature that combines textual analysis and dynamic hedging approach, we propose a method to construct portfolios of publicly traded assets that dynamically hedge climate change risk in the Norwegian stock market.</div><div>As climate risk is not directly observable, we apply Latent Dirichlet Allocation to extract news on climate change from more than 400,000 articles published in the Norwegian newspaper <em>Dagens Næringsliv</em> between January 2013 and February 2022. Using these data, we develop the DN Climate Change News Index and use innovations in this index as a hedge target. The hedge portfolios are constructed using third-party environmental scores from MSCI and Sustainalytics, along with firm-level data of equities listed on the Oslo Stock Exchange.</div><div>The DN Climate Change News Index show high correlations with international counterparts, indicating its ability to capture major global climate events and assessing the intensity of climate change–related news coverage. However, despite a positive out-of-sample correlation, the mimicking portfolio approach fails to construct efficient hedge portfolios against innovations in the index. Hedge portfolios based on Sustainalytics <em>E</em>-scores show a 0.21 out-of-sample correlation with innovations in the DN Climate Change News Index, indicating that the index may provide a relevant signal for investors.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101052"},"PeriodicalIF":5.5,"publicationDate":"2024-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142651915","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 : 2024-10-18DOI: 10.1016/j.gfj.2024.101051
Rudresh Pandey , Xian He , Dengjun Zhang
This study evaluates gender gaps in the collateral requirements of bank loans using a sample of firms in Latin America. We measure firm-level gender composition through ownership and workforce, both of which are directly related to women's economic empowerment. Additionally, we evaluate the differences in the impacts of firms' gender composition on collateral borrowing between banks that adopt sustainable finance codes of conduct and those that do not. Our empirical findings indicate that female-dominant firms are less likely to be required to provide collateral for their bank loans, and when collateral is required, its value is relatively lower. However, banks adopting sustainable finance codes are not less likely to grant collateral loans to female-dominant firms; in fact, these banks even require greater collateral values from these firms. The implications derived from our empirical findings concern gender inequality in accessing financial credit in developing countries and underscore the need for designing sustainable finance codes that specifically consider and rectify the challenges faced by female-owned firms, especially by firms with a majority female workforce.
{"title":"Firms' gender composition, loan collateral, and sustainable finance","authors":"Rudresh Pandey , Xian He , Dengjun Zhang","doi":"10.1016/j.gfj.2024.101051","DOIUrl":"10.1016/j.gfj.2024.101051","url":null,"abstract":"<div><div>This study evaluates gender gaps in the collateral requirements of bank loans using a sample of firms in Latin America. We measure firm-level gender composition through ownership and workforce, both of which are directly related to women's economic empowerment. Additionally, we evaluate the differences in the impacts of firms' gender composition on collateral borrowing between banks that adopt sustainable finance codes of conduct and those that do not. Our empirical findings indicate that female-dominant firms are less likely to be required to provide collateral for their bank loans, and when collateral is required, its value is relatively lower. However, banks adopting sustainable finance codes are not less likely to grant collateral loans to female-dominant firms; in fact, these banks even require greater collateral values from these firms. The implications derived from our empirical findings concern gender inequality in accessing financial credit in developing countries and underscore the need for designing sustainable finance codes that specifically consider and rectify the challenges faced by female-owned firms, especially by firms with a majority female workforce.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101051"},"PeriodicalIF":5.5,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142525983","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}
This study evaluates the determinants of digital insurance adoption among persons with disabilities (PWDs) using the cognitive, affective, and normative (CAN) model. The study considers (i) cognitive factors such as perceived credibility, perceived knowledge, perceived usefulness, perceived complexity, and facilitating conditions; (ii) affective factors including technology anxiety and technology pleasure; and (iii) normative factors encompassing social influence. Moreover, it explores the relationship between perceived complexity and behavioral intention (BI) to adopt digital insurance among PWDs, as mediated by perceived knowledge. This study employs a two-stage hybrid structural equation modeling–artificial neural network (SEM-ANN) approach to test the hypothesis, and data from 323 physically challenged participants were collected. Empirical results show that all factors, except for perceived complexity and technological anxiety, significantly predict BI adoption of digital insurance among PWDs, whereas perceived usefulness was found to have the highest impact on BI. Although perceived complexity affects perceived knowledge, it does not significantly mediate the relationship between complexity and BI. This study expands on the CAN model and provides practical insights for PWDs in adopting digital insurance.
本研究采用认知、情感和规范（CAN）模型评估了残疾人（PWDs）采用数字保险的决定因素。研究考虑了（i）认知因素，如感知可信度、感知知识、感知有用性、感知复杂性和便利条件；（ii）情感因素，包括技术焦虑和技术乐趣；以及（iii）规范因素，包括社会影响。此外，本研究还探讨了感知复杂性与残疾人采用数字保险的行为意向（BI）之间的关系，以及感知知识的中介作用。本研究采用了两阶段混合结构方程建模-人工神经网络（SEM-ANN）方法来验证假设，并收集了 323 名身体残疾参与者的数据。实证结果表明，除感知复杂性和技术焦虑外，所有因素都能显著预测残疾人对数字保险的商业智能采用情况，而感知有用性对商业智能的影响最大。虽然感知复杂性会影响感知知识，但它对复杂性与 BI 之间的关系并没有明显的中介作用。本研究对 CAN 模型进行了扩展，为残疾人采用数字保险提供了实用见解。
{"title":"Cognitive, affective, and normative factors affecting digital insurance adoption among persons with disabilities: A two-stage SEM-ANN analysis","authors":"Somya Gupta , Majdi Hassen , Dharen Kumar Pandey , Ganesh P. Sahu","doi":"10.1016/j.gfj.2024.101048","DOIUrl":"10.1016/j.gfj.2024.101048","url":null,"abstract":"<div><div>This study evaluates the determinants of digital insurance adoption among persons with disabilities (PWDs) using the cognitive, affective, and normative (CAN) model. The study considers (i) cognitive factors such as perceived credibility, perceived knowledge, perceived usefulness, perceived complexity, and facilitating conditions; (ii) affective factors including technology anxiety and technology pleasure; and (iii) normative factors encompassing social influence. Moreover, it explores the relationship between perceived complexity and behavioral intention (BI) to adopt digital insurance among PWDs, as mediated by perceived knowledge. This study employs a two-stage hybrid structural equation modeling–artificial neural network (SEM-ANN) approach to test the hypothesis, and data from 323 physically challenged participants were collected. Empirical results show that all factors, except for perceived complexity and technological anxiety, significantly predict BI adoption of digital insurance among PWDs, whereas perceived usefulness was found to have the highest impact on BI. Although perceived complexity affects perceived knowledge, it does not significantly mediate the relationship between complexity and BI. This study expands on the CAN model and provides practical insights for PWDs in adopting digital insurance.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101048"},"PeriodicalIF":5.5,"publicationDate":"2024-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142525982","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 : 2024-10-15DOI: 10.1016/j.gfj.2024.101047
Jie Liu , Zhenshan Chen , Gengyan Lin , Yinglun Zhu
This study investigates the mutual fund timing of geopolitical risk and corresponding economic consequences based on open-end active stock funds data in China from January 2005 to June 2023. Mutual funds are effective at timing geopolitical risks, evidenced by their tendency to reduce market risk exposure before periods of heightened geopolitical risk. We find that geopolitical risk timing is significantly positively associated with fund performance with persistence in mutual funds' geopolitical risk timing abilities. This effect remains robust even after controlling for market, volatility, and liquidity timing of mutual funds. The results suggest that mutual funds with superior geopolitical risk timing attract greater fund inflows, highlighting their positive market value. Fund managers with experience as macro analysts and political connections are more sophisticated in timing geopolitical risk than their counterparts.
{"title":"Riding the geopolitical storm or dodging bullets: Geopolitical risk timing of mutual funds","authors":"Jie Liu , Zhenshan Chen , Gengyan Lin , Yinglun Zhu","doi":"10.1016/j.gfj.2024.101047","DOIUrl":"10.1016/j.gfj.2024.101047","url":null,"abstract":"<div><div>This study investigates the mutual fund timing of geopolitical risk and corresponding economic consequences based on open-end active stock funds data in China from January 2005 to June 2023. Mutual funds are effective at timing geopolitical risks, evidenced by their tendency to reduce market risk exposure before periods of heightened geopolitical risk. We find that geopolitical risk timing is significantly positively associated with fund performance with persistence in mutual funds' geopolitical risk timing abilities. This effect remains robust even after controlling for market, volatility, and liquidity timing of mutual funds. The results suggest that mutual funds with superior geopolitical risk timing attract greater fund inflows, highlighting their positive market value. Fund managers with experience as macro analysts and political connections are more sophisticated in timing geopolitical risk than their counterparts.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101047"},"PeriodicalIF":5.5,"publicationDate":"2024-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142525985","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 : 2024-10-11DOI: 10.1016/j.gfj.2024.101050
Asror Nigmonov , Syed Shams , Povilas Urbonas
The unprecedented growth of the financial sector's digital transformation opens wide areas to the scaling up of finance in innovative and knowledge-based projects. Improving risk management takes centre stage in the acceleration of this process. This study uses loan-book data from the peer-to-peer (P2P) lending market to empirically investigate the determinants of default risk. Using the loan-book database covering the period from 2014 to 2020, we examine multiple factors related to the default risk of loans issued by P2P lending platforms. The results indicate that a higher interest rate and higher stock market returns increase the probability of default in the P2P lending market. Results are robust to additional tests based on endogeneity correction, the LASSO method and sampling bias. The severity of the impact of market returns and interest rates is found to be significantly different based on the levels of financial technology (FinTech) adoption and banking sector distress. Increases in the market interest rate are found to boost the sensitivity of P2P loan defaults to stock market volatility. This study contributes to existing literature on risk management models with its consideration of country-specific factors, paving the way to future best practices in the market.
{"title":"Estimating probability of default via delinquencies? Evidence from European P2P lending market","authors":"Asror Nigmonov , Syed Shams , Povilas Urbonas","doi":"10.1016/j.gfj.2024.101050","DOIUrl":"10.1016/j.gfj.2024.101050","url":null,"abstract":"<div><div>The unprecedented growth of the financial sector's digital transformation opens wide areas to the scaling up of finance in innovative and knowledge-based projects. Improving risk management takes centre stage in the acceleration of this process. This study uses loan-book data from the peer-to-peer (P2P) lending market to empirically investigate the determinants of default risk. Using the loan-book database covering the period from 2014 to 2020, we examine multiple factors related to the default risk of loans issued by P2P lending platforms. The results indicate that a higher interest rate and higher stock market returns increase the probability of default in the P2P lending market. Results are robust to additional tests based on endogeneity correction, the LASSO method and sampling bias. The severity of the impact of market returns and interest rates is found to be significantly different based on the levels of financial technology (FinTech) adoption and banking sector distress. Increases in the market interest rate are found to boost the sensitivity of P2P loan defaults to stock market volatility. This study contributes to existing literature on risk management models with its consideration of country-specific factors, paving the way to future best practices in the market.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101050"},"PeriodicalIF":5.5,"publicationDate":"2024-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142441386","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}
Using the deregulation of market entry barriers in China as a quasi-natural experiment, this study examines how increased entry threats affect incumbent firms' risk disclosure. We find that firms respond by increasing their market-related risk disclosures. This effect is stronger among firms facing higher economic uncertainty, lower financial constraints, greater product market competition, and higher information transparency. Mechanism analysis shows that increased risk disclosure weakens the link between deregulation of market entry barriers and new firm entry, suggesting that such disclosures can effectively deter potential competitors. Moreover, while market reactions to market risk disclosures are neutral, they are negative for operational and financial risk disclosures. Our findings suggest that firms strategically disclose market risks to mitigate entry threats, thus enhancing their resilience and adaptability in dynamic markets.
{"title":"Corporate risk disclosure in response to heightened entry threat: Evidence from a quasi-natural experiment in China","authors":"Jingru Wang , Zhuochen Wu , Xinwei Fang , Haoxin Xiu","doi":"10.1016/j.gfj.2024.101049","DOIUrl":"10.1016/j.gfj.2024.101049","url":null,"abstract":"<div><div>Using the deregulation of market entry barriers in China as a quasi-natural experiment, this study examines how increased entry threats affect incumbent firms' risk disclosure. We find that firms respond by increasing their market-related risk disclosures. This effect is stronger among firms facing higher economic uncertainty, lower financial constraints, greater product market competition, and higher information transparency. Mechanism analysis shows that increased risk disclosure weakens the link between deregulation of market entry barriers and new firm entry, suggesting that such disclosures can effectively deter potential competitors. Moreover, while market reactions to market risk disclosures are neutral, they are negative for operational and financial risk disclosures. Our findings suggest that firms strategically disclose market risks to mitigate entry threats, thus enhancing their resilience and adaptability in dynamic markets.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101049"},"PeriodicalIF":5.5,"publicationDate":"2024-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142525984","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 : 2024-10-05DOI: 10.1016/j.gfj.2024.101045
Vagner Naysinger Machado , Igor Bernardi Sonza , Wilson Toshiro Nakamura , Johnny Silva Mendes , Marco Aurélio dos Santos
Using a quasi-experimental approach, this study examines the effect of the mandatory disclosure of executive compensation on the performance and liquidity of firms in emerging markets with weak legal protection such as Argentina, Belgium, Brazil, Italy, and Spain. The results of the multi-level generalized linear models suggest that executive compensation disclosure positively impacts the accounting performance of firms in countries with weak legal protection. The findings also indicate that regulating such disclosure can help reduce agency problems. However, stricter executive compensation disclosure requirements do not impact market performance, as measured by the market-to-book ratio and Tobin's Q. In addition, there is a negative relationship between the regulation of executive compensation disclosure and the amount of cash retained by firms in countries with legal origins in French civil law.
{"title":"Executive compensation disclosure in emerging markets with weak shareholder enforcement: A multi-level analysis","authors":"Vagner Naysinger Machado , Igor Bernardi Sonza , Wilson Toshiro Nakamura , Johnny Silva Mendes , Marco Aurélio dos Santos","doi":"10.1016/j.gfj.2024.101045","DOIUrl":"10.1016/j.gfj.2024.101045","url":null,"abstract":"<div><div>Using a quasi-experimental approach, this study examines the effect of the mandatory disclosure of executive compensation on the performance and liquidity of firms in emerging markets with weak legal protection such as Argentina, Belgium, Brazil, Italy, and Spain. The results of the multi-level generalized linear models suggest that executive compensation disclosure positively impacts the accounting performance of firms in countries with weak legal protection. The findings also indicate that regulating such disclosure can help reduce agency problems. However, stricter executive compensation disclosure requirements do not impact market performance, as measured by the market-to-book ratio and Tobin's Q. In addition, there is a negative relationship between the regulation of executive compensation disclosure and the amount of cash retained by firms in countries with legal origins in French civil law.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"63 ","pages":"Article 101045"},"PeriodicalIF":5.5,"publicationDate":"2024-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142525981","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}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号