Global Finance Journal最新文献

This study examines the impact of environmental, social, and governance (ESG) rating disagreement on real earnings management in Chinese companies. Using ESG ratings from Huazheng, Wind, SynTao Green Finance, and Bloomberg, we find that increased disagreements in ESG rating lead to higher real earnings management in the current period and over the next 1 to 2 years. This effect is driven by external attention, compensation incentives, and reputational pressure. Furthermore, companies with a financial management background and younger management show a stronger correlation. Specifically, ESG rating disagreement has a significant impact on the manipulation of discretionary expenses and production costs but not on operating cash flows. Additionally, high ESG-rated companies tend to manage their earnings through discretionary expenses when rating disagreements arise. Overall, this study reveals the potential incentive mechanisms for such companies, providing theoretical support for understanding the factors influencing real earnings management. It also suggests that regulators and investors should fully consider the impact of ESG rating disagreement when assessing company performance.

Fintech has significantly influenced the traditional financial industry by introducing advanced technologies and innovative business models that have resulted in profound impacts. This study examines the effects of Fintech development on labor allocation efficiency and explores its underlying mechanisms. Using a set of Chinese A-share public firms from 2011 to 2020, we find that Fintech development plays a positive role in labor allocation efficiency, mainly by mitigating labor overinvestment. This positive effect is further reinforced by market competition. We also find that the primary pathways of this enhancement include lowering information asymmetry, mitigating agency issues, and substituting low-skilled labor. Moreover, we show that the dimensions of depth and digital integration are particularly important in improving labor allocation efficiency.

Drawing on data collected from 30 provinces in China between 2010 and 2020, we attempt to investigate how the digital economy and environmental regulation affect green total factor productivity in different regions. The findings indicate that both environmental regulation and the digital economy substantially positively affect the green total factor productivity. Additionally, environmental regulation and the digital economy have a mutually reinforcing interaction effect. This study presents significant implications for government agencies working to reform environmental regulations and promote the development of the digital economy.

This study examines the influence of bond issuer's social capital on underwriting fees. Investors rely on accurate information to evaluate bond quality, while underwriters assume inventory risk stemming from uncertain investor demand. We posit that social capital enhances the quality of information disclosed by the issuer, consequently impacting the fees underwriters charge for bearing this risk. Utilizing data on new tax-exempt municipal bonds issued from U.S. counties over the period 1990–2017, we find that underwriters charge significantly lower fees for bonds issued from counties with higher social capital. This result remains robust after controlling for issuer and bond characteristics, as well as addressing potential endogeneity concerns. Further investigations show that the observed effect persists only in situations where underwriters bear greater risk, suggesting that social capital functions as a valuable form of certification within the underwriting process.

Enhancing household financial capability is critical for mitigating severe economic challenges. In the European Union (EU), financial technology (FinTech) solutions are considered critical for managing household finance, but their role in enhancing financial capability is ambiguous. Herein, we measure financial capability in the EU and investigate the effect of FinTech using three waves of panel data from Global Findex (2014, 2017, and 2021) and Eurostat Databases. According to the analyses, EU countries vary greatly in terms of FinTech and financial capability, with countries in the Union's north scoring remarkably high. Results emphasize a considerable effect of FinTech on financial capability and highlight an increase in the latter when the Human Development Index increases. Practical guidelines for measuring financial capability are also presented to assist countries that requier additional efforts to effectively address financial capability challenges.

We investigate the degree of digitalization required to gain a competitive advantage in the supply chain by developing a firm-specific metric based on firm disclosure. Using a 2011–2020 sample of Chinese listed firms, we examine whether improving corporate digitalization can bring more trade credit financing from the supply chain. Our findings indicate that firms acquire more trade credit after increasing their level of digitalization, despite the low pressure of credit rationing. Furthermore, digitalization improves operation, research and development, and governance efficiency, giving such firms a competitive advantage. Cross-sectional analyses indicate that specific characteristics, such as a large firm size, state-owned property, traditional industry type, stable macropolicy environment, high industry status, and transparent internal information environment, can bolster this competitive advantage. In general, we highlight the role of digitalization in improving firms' competitiveness in the supply chain from the perspective of trade credit financing.

Using daily data spanning from 5 January 2004 to 22 November 2022, we quantify the spillover effects between 42 global stock markets. Specifically, combining causal structure learning and Elastic-Net-VAR methods, we innovatively construct multilayer causal networks based on volume-price relationship. Then, we analyze the network characteristics of multilayer spillover networks from system and market levels. Our findings indicate that there is heterogeneity in risk spillovers of price and volume networks, highlighting how trading volume spillover network play an important role in the risk contagion. Furthermore, multilayer interconnected networks confirm the risk spillovers between volume and price, and it exhibits significant differences compared to single-layer network. In addition, at system-level, each network layer shows unique network structures and dynamic evolution characteristics. At market-level, global stock markets play different roles in emitting or receiving shocks through various transmission channels. Our study emphasizes the importance of intra- and inter-layer risk propagation in multilayer networks based on volume and price, and has significant implications for developing investment strategies and global portfolio risk management.

This study delves into the battle of factors in Canadian capital markets, employing spanning tests to evaluate 17 factors from ten multifactor models for 1991–2022. While the value factor (HML) proves redundant, its monthly updated counterpart excels. The size factor (SMB) is not improved by discounting mispriced stocks but gains potency after controlling for profitability and investment. Q-based and mispricing factors subsume the momentum factor (UMD). No single asset-pricing model emerges dominant, except in three instances. A six-factor model including market, size, monthly updated value, ROE, expected growth, and PEAD factors proves effective for asset pricing in Canadian markets.

Given the financial markets' growing preference for examining digital platforms, this study explores the dynamic relationship of oil shocks with both conventional and digital currencies. It provides a novel approach for evaluating the relationship between aggregate oil, demand, and supply shocks using three conventional currencies (Japanese Yen, Chinese Yuan, and Euro), cryptocurrencies (Bitcoin, Ethereum, Tether), and DeFi tokens (Maker, Chainlink, and Basic Attention Token). We use wavelet analysis to test the asymmetric association among variables from June 22, 2018, to July 11, 2023. The outcomes of continuous wavelet confirm the volatile behavior of oil shocks and studied currencies. In particular, a nonlinear wavelet coherence is observed between oil shocks and DeFi tokens, cryptocurrencies, and traditional currency in the short, medium, and long term. Moreover, crypto and conventional currencies are found to respond more strongly to external events than DeFi tokens. Given the empirical findings and the rapid transformation of digitalized finance with ongoing currency restructuring, this study plays a critical role by actively influencing the adaptation of regulatory frameworks to align with dynamic changes in associations, serving as a strategic guide for regulatory bodies to navigate the complexities of emerging financial paradigms.

This study examines how various forms of capital in the years leading up to the COVID-19 pandemic affected bank profitability during the crisis in emerging economies. Using data from 819 banks in 26 countries during the 2019–2020 period, we find that banks entering the crisis with a superior capital position performed better during the pandemic. High-quality capital metrics such as Tier 1 capital and total regulatory capital ratios, not the standard leverage ratio, possess the capacity to affect bank profitability. These results are robust after controlling for Basel III liquidity requirements. We also find that the capital-profitability relationship is stronger for larger banks and for those that entered the crisis with better liquidity and credit risk position. Overall, our results imply that focusing on capital quality can help reduce the adverse effect of an external shock on bank performance.