Pub Date : 2025-07-14DOI: 10.1016/j.gfj.2025.101156
Hyun-Jung Nam , Doojin Ryu , Peter G. Szilagyi
We examine the U-shaped effect of technological progress on CO₂ emissions using digital and high-tech trade as well as R&D levels as threshold variables. By analyzing a comprehensive European Union dataset, we reveal the U-shaped effects of digital and high-tech trade and R&D investment on CO₂ emissions, suggesting that technological progress modifies the conventional Environmental Kuznets Curve. At low levels of technological progress, it reduces CO₂ emissions; however, CO₂ emissions increase again beyond a certain threshold. Institutional quality moderates this relationship, highlighting its role in shaping the environmental impact of technological progress, and mitigates the negative impact of technological progress on emissions in its advanced stages. As investors become more aware of environmental liabilities and regulations, incorporating environmental factors into financial policies and risk management becomes crucial. Our findings underscore the role of institutional quality in mitigating the adverse effects of technological progress on CO₂ emissions.
{"title":"Technological progress and carbon emissions: Evidence from the European Union","authors":"Hyun-Jung Nam , Doojin Ryu , Peter G. Szilagyi","doi":"10.1016/j.gfj.2025.101156","DOIUrl":"10.1016/j.gfj.2025.101156","url":null,"abstract":"<div><div>We examine the U-shaped effect of technological progress on CO₂ emissions using digital and high-tech trade as well as R&D levels as threshold variables. By analyzing a comprehensive European Union dataset, we reveal the U-shaped effects of digital and high-tech trade and R&D investment on CO₂ emissions, suggesting that technological progress modifies the conventional Environmental Kuznets Curve. At low levels of technological progress, it reduces CO₂ emissions; however, CO₂ emissions increase again beyond a certain threshold. Institutional quality moderates this relationship, highlighting its role in shaping the environmental impact of technological progress, and mitigates the negative impact of technological progress on emissions in its advanced stages. As investors become more aware of environmental liabilities and regulations, incorporating environmental factors into financial policies and risk management becomes crucial. Our findings underscore the role of institutional quality in mitigating the adverse effects of technological progress on CO₂ emissions.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101156"},"PeriodicalIF":5.5,"publicationDate":"2025-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144714496","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}
We investigate the impact of vertical mergers on bank loans of acquirers' and targets' rivals. Following a vertical merger, these rivals experience higher interest rate spreads on bank loans, shorter loan maturities, and more stringent contract covenants. We observe the increase in the cost of debt whether or not the merger is part of an industry merger wave, mitigating concerns that unobserved industry factors drive our findings. While vertical mergers can foreclose markets for rivals, they can also create efficiencies for the merging firms by reducing the holdup problem in relationship-specific investments. Utilizing asset specificity measures to assess the severity of the holdup problem, we find that rivals' cost of debt increases when vertical mergers are more likely motivated by foreclosure rather than efficiency motives.
{"title":"Impact of vertical mergers on rivals' cost of debt","authors":"Mohammadali Fallah , Palani-Rajan Kadapakkam , Mauro Oliveira","doi":"10.1016/j.gfj.2025.101155","DOIUrl":"10.1016/j.gfj.2025.101155","url":null,"abstract":"<div><div>We investigate the impact of vertical mergers on bank loans of acquirers' and targets' rivals. Following a vertical merger, these rivals experience higher interest rate spreads on bank loans, shorter loan maturities, and more stringent contract covenants. We observe the increase in the cost of debt whether or not the merger is part of an industry merger wave, mitigating concerns that unobserved industry factors drive our findings. While vertical mergers can foreclose markets for rivals, they can also create efficiencies for the merging firms by reducing the holdup problem in relationship-specific investments. Utilizing asset specificity measures to assess the severity of the holdup problem, we find that rivals' cost of debt increases when vertical mergers are more likely motivated by foreclosure rather than efficiency motives.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101155"},"PeriodicalIF":5.5,"publicationDate":"2025-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144656126","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}
While recent studies have explored how firms react to credit rating events, the specific impact of news disclosed in credit rating change announcements on dividend policy remains largely unexplored. We analyze a sample of dividend paying firms that consistently paid dividends from 1995 to 2019 to examine whether, and to what extent, firms adjust dividend policy in credit rating shocks. Focusing on the type of information conveyed to the capital markets, we identify three types of downgrades, namely, “bad”, “good”, and “systemic” and upgrades associated with strong financial performance. We provide evidence that firms smooth dividends more under a “good” downgrade and less under a “bad” downgrade, a “systemic” downgrade and an upgrade. In favor of this finding, we show that dividend forecast errors are positively associated with “bad” downgrades, “systemic” downgrades and upgrades, but are not associated with “good” downgrades.
{"title":"The devil is in the details: Does information in credit rating announcements affect dividend policy?","authors":"Konstantinos Kakouris , Evangelos Charalambakis , Dimitrios Psychoyios","doi":"10.1016/j.gfj.2025.101153","DOIUrl":"10.1016/j.gfj.2025.101153","url":null,"abstract":"<div><div>While recent studies have explored how firms react to credit rating events, the specific impact of news disclosed in credit rating change announcements on dividend policy remains largely unexplored. We analyze a sample of dividend paying firms that consistently paid dividends from 1995 to 2019 to examine whether, and to what extent, firms adjust dividend policy in credit rating shocks. Focusing on the type of information conveyed to the capital markets, we identify three types of downgrades, namely, “bad”, “good”, and “systemic” and upgrades associated with strong financial performance. We provide evidence that firms smooth dividends more under a “good” downgrade and less under a “bad” downgrade, a “systemic” downgrade and an upgrade. In favor of this finding, we show that dividend forecast errors are positively associated with “bad” downgrades, “systemic” downgrades and upgrades, but are not associated with “good” downgrades.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101153"},"PeriodicalIF":5.5,"publicationDate":"2025-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144633509","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 : 2025-07-05DOI: 10.1016/j.gfj.2025.101152
Karel Hrazdil , Yan Li , Thomas Scott
We investigate whether adopting a uniform set of accounting standards impacts stock price efficiency by introducing a novel empirical test imported from the finance literature. Using mandatory adoption of International Financial Reporting Standards (IFRS) as an exogenous shock to the accounting information disclosure environment and employing a difference-in-difference research design, we find that the extent to which stock prices deviate from their fundamental values decreases significantly following the adoption of IFRS. In cross-sectional tests, we further observe that the impact of IFRS adoption on stock price efficiency is more pronounced in countries with lower accounting quality prior to IFRS adoption and in those with substantial differences between their domestic Generally Accepted Accounting Principles (GAAP) and IFRS. Overall, our study contributes to the literature by empirically examining a fundamental aspect of the IFRS mission statement—whether IFRS adoption enhances financial market efficiency.
{"title":"Accounting disclosures and stock price efficiency: Evidence from mandatory IFRS adoption","authors":"Karel Hrazdil , Yan Li , Thomas Scott","doi":"10.1016/j.gfj.2025.101152","DOIUrl":"10.1016/j.gfj.2025.101152","url":null,"abstract":"<div><div>We investigate whether adopting a uniform set of accounting standards impacts stock price efficiency by introducing a novel empirical test imported from the finance literature. Using mandatory adoption of International Financial Reporting Standards (IFRS) as an exogenous shock to the accounting information disclosure environment and employing a difference-in-difference research design, we find that the extent to which stock prices deviate from their fundamental values decreases significantly following the adoption of IFRS. In cross-sectional tests, we further observe that the impact of IFRS adoption on stock price efficiency is more pronounced in countries with lower accounting quality prior to IFRS adoption and in those with substantial differences between their domestic Generally Accepted Accounting Principles (GAAP) and IFRS. Overall, our study contributes to the literature by empirically examining a fundamental aspect of the IFRS mission statement—whether IFRS adoption enhances financial market efficiency.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101152"},"PeriodicalIF":5.5,"publicationDate":"2025-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144579768","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 : 2025-07-02DOI: 10.1016/j.gfj.2025.101150
Ficawoyi Donou-Adonsou
The efficiency of financial systems in fostering economic growth remains a critical concern, particularly in Sub-Saharan Africa, where financial markets and institutions exhibit structural weaknesses. Existing literature predominantly focuses on the dichotomy between bank-based and market-based financial systems, overlooking the relative contributions of different financial institutions. Using data from 22 Sub-Saharan African countries from 2006 to 2017, we examine the role of banks, stock markets, microfinance, credit unions and credit cooperatives, other deposit takers, and non-resident banks in enhancing economic efficiency. Employing the generalized method of moments, we find that deposit-taking institutions exert the most substantial impact, while investments in stock markets are twice as effective as bank loans in driving economic performance. Additionally, our results indicate that banking activities complement both stock markets and deposit-taking institutions, but we observe no significant relationship between stock markets and deposit takers. These findings challenge the conventional wisdom that distinguishes between market-based and bank-based financial systems as primary factors for economic growth. Instead, we argue that the composition and interaction of institutions within the financial system are more critical for fostering economic efficiency. This study provides valuable implications for policymakers and financial practitioners, emphasizing the need to focus on institutional dynamics rather than merely the structural type of financial system. By enhancing our understanding of these relationships, our findings contribute to the broader debate of financial development and economic performance in emerging markets.
{"title":"Financial structure and economic efficiency in Sub-Saharan Africa","authors":"Ficawoyi Donou-Adonsou","doi":"10.1016/j.gfj.2025.101150","DOIUrl":"10.1016/j.gfj.2025.101150","url":null,"abstract":"<div><div>The efficiency of financial systems in fostering economic growth remains a critical concern, particularly in Sub-Saharan Africa, where financial markets and institutions exhibit structural weaknesses. Existing literature predominantly focuses on the dichotomy between bank-based and market-based financial systems, overlooking the relative contributions of different financial institutions. Using data from 22 Sub-Saharan African countries from 2006 to 2017, we examine the role of banks, stock markets, microfinance, credit unions and credit cooperatives, other deposit takers, and non-resident banks in enhancing economic efficiency. Employing the generalized method of moments, we find that deposit-taking institutions exert the most substantial impact, while investments in stock markets are twice as effective as bank loans in driving economic performance. Additionally, our results indicate that banking activities complement both stock markets and deposit-taking institutions, but we observe no significant relationship between stock markets and deposit takers. These findings challenge the conventional wisdom that distinguishes between market-based and bank-based financial systems as primary factors for economic growth. Instead, we argue that the composition and interaction of institutions within the financial system are more critical for fostering economic efficiency. This study provides valuable implications for policymakers and financial practitioners, emphasizing the need to focus on institutional dynamics rather than merely the structural type of financial system. By enhancing our understanding of these relationships, our findings contribute to the broader debate of financial development and economic performance in emerging markets.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101150"},"PeriodicalIF":5.5,"publicationDate":"2025-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144588588","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}
In light of the rising macro-financial, geopolitical, and environmental risks, alternative assets such as cryptocurrencies, green bonds, and sukuk have received increasing attention for their potential in risk hedging and diversification. This study examines the dynamic return spillovers and risk-sharing interconnections among conventional and gold-backed Islamic cryptocurrencies, green bonds, and sukuk using daily data from 2018 to 2023. Employing a novel combination of frequency-based quantile connectedness and quantile cross-spectral techniques, we investigate time- and frequency-dependent interconnections under varying market conditions. Our results are threefold: First, Islamic gold-backed cryptocurrencies, green bonds, and sukuk exhibit intense co-movement and risk-sharing, in contrast to conventional cryptocurrencies, which display differential patterns. Second, return spillovers and connectedness intensify significantly during market stress periods such as the COVID-19 pandemic and the Russia–Ukraine war, with Islamic gold-backed cryptocurrencies showing stronger resilience and hedging potential than conventional cryptocurrencies. Third, return spillovers are more pronounced in the short term compared to the long term, potentially driven by liquidity flows, investor behavior, and high-frequency trading. Our findings suggest important implications for investors, fund managers, regulators, and policymakers.
{"title":"Cryptocurrencies and alternative bonds: Novel evidence on co-movement and risk sharing","authors":"Osamah AlKhazali , Destan Kirimhan , Mustafa Raza Rabbani , Syed Mabruk Billah , Muneer Shaik","doi":"10.1016/j.gfj.2025.101149","DOIUrl":"10.1016/j.gfj.2025.101149","url":null,"abstract":"<div><div>In light of the rising macro-financial, geopolitical, and environmental risks, alternative assets such as cryptocurrencies, green bonds, and sukuk have received increasing attention for their potential in risk hedging and diversification. This study examines the dynamic return spillovers and risk-sharing interconnections among conventional and gold-backed Islamic cryptocurrencies, green bonds, and sukuk using daily data from 2018 to 2023. Employing a novel combination of frequency-based quantile connectedness and quantile cross-spectral techniques, we investigate time- and frequency-dependent interconnections under varying market conditions. Our results are threefold: First, Islamic gold-backed cryptocurrencies, green bonds, and sukuk exhibit intense co-movement and risk-sharing, in contrast to conventional cryptocurrencies, which display differential patterns. Second, return spillovers and connectedness intensify significantly during market stress periods such as the COVID-19 pandemic and the Russia–Ukraine war, with Islamic gold-backed cryptocurrencies showing stronger resilience and hedging potential than conventional cryptocurrencies. Third, return spillovers are more pronounced in the short term compared to the long term, potentially driven by liquidity flows, investor behavior, and high-frequency trading. Our findings suggest important implications for investors, fund managers, regulators, and policymakers.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101149"},"PeriodicalIF":5.5,"publicationDate":"2025-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144511064","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 : 2025-06-18DOI: 10.1016/j.gfj.2025.101148
Jang-Chul Kim , Sharif Mazumder , Ali Nejadmalayeri , Qing Su
Motivated by the pioneering work of Porter (1990) and a vast supporting literature, we posit that global competitiveness improves a nation's ability to benefit from globalization and financial liberalization. To prove the veracity of this supposition, we study the relationship between the competitiveness of countries worldwide, as measured by the Global Competitiveness Index as well as its sub-indices, and the market liquidity of cross-listed stocks from 43 countries on the NYSE between 2006 and 2019. Our findings suggest that a country's greater global competitiveness extends beyond its borders, thereby significantly enhancing the liquidity of its foreign-listed stocks. This extenuating impact of global competitiveness on cross-listed stocks is partially but significantly due to reduced information asymmetry in global markets. Competitiveness associated with efficiency and innovation are particularly crucial in improving market liquidity and ameliorating the adverse effects of information asymmetry on market liquidity.
{"title":"Global competitiveness and market liquidity","authors":"Jang-Chul Kim , Sharif Mazumder , Ali Nejadmalayeri , Qing Su","doi":"10.1016/j.gfj.2025.101148","DOIUrl":"10.1016/j.gfj.2025.101148","url":null,"abstract":"<div><div>Motivated by the pioneering work of Porter (1990) and a vast supporting literature, we posit that global competitiveness improves a nation's ability to benefit from globalization and financial liberalization. To prove the veracity of this supposition, we study the relationship between the competitiveness of countries worldwide, as measured by the Global Competitiveness Index as well as its sub-indices, and the market liquidity of cross-listed stocks from 43 countries on the NYSE between 2006 and 2019. Our findings suggest that a country's greater global competitiveness extends beyond its borders, thereby significantly enhancing the liquidity of its foreign-listed stocks. This extenuating impact of global competitiveness on cross-listed stocks is partially but significantly due to reduced information asymmetry in global markets. Competitiveness associated with efficiency and innovation are particularly crucial in improving market liquidity and ameliorating the adverse effects of information asymmetry on market liquidity.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101148"},"PeriodicalIF":5.5,"publicationDate":"2025-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144366798","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 : 2025-06-16DOI: 10.1016/j.gfj.2025.101132
Joy D. Xiuyao Yang
This paper studies a theoretical question: Why is cryptocurrency so volatile? To investigate this, I apply a New Monetary model that incorporates an adaptive learning assumption. Specifically, building on the baseline framework of Choi and Rocheteau (2021), I relax their perfect foresight assumption by replacing it with adaptive learning. I show how high volatility can emerge under this revised assumption. With a simple learning rate algorithm, I find that adaptive learning can alter the stability of steady states. For instance, with a high learning rate, the system can experience a period of doubling bifurcation, potentially leading to chaotic regimes or explosive paths. These price dynamics help explain the extreme volatility observed in cryptocurrency markets.
{"title":"Cryptocurrency’s price volatility and adaptive learning","authors":"Joy D. Xiuyao Yang","doi":"10.1016/j.gfj.2025.101132","DOIUrl":"10.1016/j.gfj.2025.101132","url":null,"abstract":"<div><div>This paper studies a theoretical question: Why is cryptocurrency so volatile? To investigate this, I apply a New Monetary model that incorporates an adaptive learning assumption. Specifically, building on the baseline framework of <span><span>Choi and Rocheteau (2021)</span></span>, I relax their perfect foresight assumption by replacing it with adaptive learning. I show how high volatility can emerge under this revised assumption. With a simple learning rate algorithm, I find that adaptive learning can alter the stability of steady states. For instance, with a high learning rate, the system can experience a period of doubling bifurcation, potentially leading to chaotic regimes or explosive paths. These price dynamics help explain the extreme volatility observed in cryptocurrency markets.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101132"},"PeriodicalIF":5.5,"publicationDate":"2025-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144366703","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 : 2025-06-14DOI: 10.1016/j.gfj.2025.101146
Edward R. Lawrence , Mehul Raithatha , Iván M. Rodríguez Jr.
We analyze the impact of terrorism on cross-border mergers and acquisitions (M&As) and find that terrorist attacks in acquirer and target countries significantly influence both the initiation and completion of M&As. While the presence of terrorism deters deal initiation, it paradoxically increases the likelihood of deal completion, suggesting a complex interplay of risk assessment and strategic decision-making. Furthermore, we find that firms accelerate completion after terrorist attacks.
{"title":"Terrorism and cross-border mergers and acquisitions","authors":"Edward R. Lawrence , Mehul Raithatha , Iván M. Rodríguez Jr.","doi":"10.1016/j.gfj.2025.101146","DOIUrl":"10.1016/j.gfj.2025.101146","url":null,"abstract":"<div><div>We analyze the impact of terrorism on cross-border mergers and acquisitions (M&As) and find that terrorist attacks in acquirer and target countries significantly influence both the initiation and completion of M&As. While the presence of terrorism deters deal initiation, it paradoxically increases the likelihood of deal completion, suggesting a complex interplay of risk assessment and strategic decision-making. Furthermore, we find that firms accelerate completion after terrorist attacks.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101146"},"PeriodicalIF":5.5,"publicationDate":"2025-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144307630","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 investigates how governance characteristics, specifically gender diversity, and bank business models influence the transition from greenwashing and greenhushing to becoming green banks. A balanced panel of 150 listed banks worldwide from 2015 to 2021 is used. Latent Markov models are applied as a methodology capable of explaining the evolution of a group of banks and the characteristics that may affect their transition over time. Key findings reveal a positive correlation between having a female CEO with at least 30 % female board representation and the likelihood of a bank shifting from greenwashing to a green stance. Conversely, a higher proportion of women on the board appears to reduce the likelihood of transitioning from greenhushing to a vocal green position, suggesting a more risk-averse and conservative approach. Additionally, investment-oriented banks are more likely to evolve toward vocal green banking than retail and universal banks. The research advances the literature on greenwashing and greenhushing by highlighting the importance of governance characteristics in supporting environmentally responsible practices.
{"title":"Greenwashing, greenhushing, and the path to green banking","authors":"Gennaro De Novellis , Alessia Pedrazzoli , Daniela Pennetta , Valeria Venturelli","doi":"10.1016/j.gfj.2025.101147","DOIUrl":"10.1016/j.gfj.2025.101147","url":null,"abstract":"<div><div>This study investigates how governance characteristics, specifically gender diversity, and bank business models influence the transition from greenwashing and greenhushing to becoming green banks. A balanced panel of 150 listed banks worldwide from 2015 to 2021 is used. Latent Markov models are applied as a methodology capable of explaining the evolution of a group of banks and the characteristics that may affect their transition over time. Key findings reveal a positive correlation between having a female CEO with at least 30 % female board representation and the likelihood of a bank shifting from greenwashing to a green stance. Conversely, a higher proportion of women on the board appears to reduce the likelihood of transitioning from greenhushing to a vocal green position, suggesting a more risk-averse and conservative approach. Additionally, investment-oriented banks are more likely to evolve toward vocal green banking than retail and universal banks. The research advances the literature on greenwashing and greenhushing by highlighting the importance of governance characteristics in supporting environmentally responsible practices.</div></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"67 ","pages":"Article 101147"},"PeriodicalIF":5.5,"publicationDate":"2025-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144298908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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