Global Finance Journal最新文献

The undeniable significance of small and medium-sized enterprises (SMEs) and startups in fostering economic development and prosperity serves as the backdrop for this study. The primary goal of this research is to determine how various factors influence the digitalization of financial accounting within SMEs and startups. An analysis is carried out using data from a cohort of 200 Chinese SMEs, all listed and sourced from the China Stock Market & Accounting Research database's financing reports from 2010 to 2020. The findings suggest that environmental, social, and governance investment and loans obtained by these SMEs positively promote digitalization. Meanwhile, financial fraud acts as a barrier to the expansion of digitalization within their financial structures. Notably, total income and transaction costs exhibit a mixed pattern of effects, acting as long-term enablers of digitalization. Moreover, the Chinese government's establishment of an electronic financial accounting standard framework and provision of incentive packages can expedite the digitalization of financial accounting in Chinese SMEs.

This paper investigates the impact of asset-based uncertainty on the asymmetric return connectedness and hedging effectiveness of regional environmental, social and governance (ESG) equity markets from January 2017 to December 2022. The results of the asymmetric time-varying parameter vector autoregressive connectedness approach show strong dynamic connectedness within regional ESG markets, with the dominance of negative returns intensifying during COVID-19. Quantile regressions reveal that uncertainty in crude oil and bond markets negatively affects asymmetric return connectedness across bearish, normal and bullish market periods, whereas uncertainty in stock, gold and exchange rate markets has a positive impact. Overall, asset-based uncertainty influences negative return connectedness more than positive return connectedness, and a varied influence of asset-based uncertainty is noted during COVID-19 and the Russia–Ukraine war. A portfolio analysis shows that all ESG markets significantly contribute to higher hedging effectiveness, with a portfolio constructed based on the minimum connectedness approach outperforming the other portfolios. The findings provide policy implications for portfolio and risk management strategies.

We investigate the use of home equity to address the retirement saving crisis and funding shortfall. Using survey data from consumers and financial planners, we examine Canadian consumers' views on equity release and gauge financial planners' knowledge, attitudes, and perspectives towards recommending equity release products to their clients. Our findings indicate that a primary barrier for consumers is their lack of understanding about home equity release schemes. However, when these schemes are more cost-effective and endorsed by financial planners, they become more attractive. Behavioral biases and emotional attachment to one's home did not affect consumers' willingness when considering these options. Among financial planners, there's a general comfort in advising on home equity release. Their preferred recommendation is the “sell and downsize” strategy, followed by HELOC. Interestingly, older planners and those with personal biases tend to be more hesitant in giving advice on this subject. The results of this study suggest there may be a willingness to access home equity by future retirees, and that there is less desire to bequeath assets to the next generation.

This paper analyzes the effects of strong public sector labor unions on the municipal bond issuances and yields of U.S. states. The findings indicate that states with strong labor unions issue more municipal debt following fiscal deficit shocks and have higher bond yields. A one standard deviation increase in the unionization rate is associated with an approximate 17% increase in municipal debt issuance following a deficit shock, and a 233 basis points higher bond yield for the state's municipal debt. Strong unions are associated with a significant reduction in the responsiveness of labor costs and capital investments to fiscal shocks. Overall, the evidence suggests that states with strong unions have lower financial flexibility and are more likely to issue new municipal debt following adverse fiscal shocks and have higher bond yields.

This paper investigates the reaction of real stock returns and their volatility in the three main euro area economies (France, Germany and Italy), the U.K. and the U.S. to oil price changes caused by different shocks in the supply-side and demand-side of the global crude oil market, including the shock on the demand for oil inventories. Our findings suggest that the impact of oil supply and aggregate demand shocks on real stock returns and volatility are not altered when oil inventories are explicitly considered in the modeling of global crude oil market. However, the effects of oil-specific demand shocks on real stock returns are modified by the inclusion of oil inventories in the model, stressing the importance of the uncertainty channel in the link between the oil and stock markets. Finally, oil inventory shocks have a negative impact at medium time horizons on real stock returns, as the surge in the price of oil causes depletion of inventories.

This study examines the association between income-shifting incentives and share repurchases using a sample of US multinational corporations (MNCs) from 2006 to 2020. We find a significant negative (positive) association between income shifting and share repurchases before (after) the enactment of the Tax Cuts and Jobs Act (TCJA) in 2018. The results show that the TCJA only had a short-term effect on the relation between income shifting and share repurchases that was largely confined to 2018 and reverted to pre-TCJA levels in subsequent years. Additionally, the overall negative relationship between income shifting and share repurchases is stronger in firms with high repatriation costs. However, firms with an advance pricing agreement with the Internal Revenue Service evidence a positive association between income shifting and share repurchases. Overall, we provide evidence for the effects of taxation system reforms on MNCs' income-shifting incentives and share repurchase decisions.

This study examines the impact of outward foreign direct investment performance (OFDI/OFIP) on digital transformation (DT) and determines how environmental, social, and governance (ESG) performance mediates this relationship. For this purpose, we employ a panel regression model, mediation effect tests (the Sobel test, a bootstrap test, and variable replacement test), and endogeneity analyses (2SLS and GMM method). We also evaluate China's accelerated depreciation of fixed assets policy (ADP) by using a difference-in-difference (DID) model, parallel trend test, propensity score matching (PSM)-DID model, quantile DID model, and bootstrap test. We use the CSMAR database for Chinese OFIP, and perform text and word frequency analysis to obtain the DT score and the Huazheng ESG ratings index for the ESG Performance during the period 2010–2020. (1) Based on the results, OFIP has a significant positive impact on firms' DT, with ESG performance strengthening this relationship. (2) Meanwhile, the ADP restrains the DT and OFIP of high-tech firms in China. These findings provide practical implications for companies aiming to improve their long-term sustainability and competitiveness and obtain a better understanding of the relationship between OFIP, DT, and ESG performance. It is hoped that the findings will be used as a reference for expanding firms' overseas investments, driving DT, and enhancing ESG performance in emerging economies.

This study evaluates the potential of gold-backed cryptocurrencies, such as Tether Gold and PAX Gold, as a hedge and safe haven against global, regional, and categorical financial stresses. Hedge and safe haven properties of gold-backed cryptocurrencies are also compared with those of gold and Bitcoin. For the analyses, dynamic conditional correlation (DCC) and quantile coherency techniques are applied to daily data from February 2020 to March 2023. The results show that Tether Gold and PAX Gold are strong safe havens against the US and equity-valuation-related financial stress but weak safe havens against global financial stress. Tether Gold is a weak safe haven against credit-related financial stress as well. Tether Gold is a strong hedge against US financial stress but a weak hedge against aggregate financial stress of developed economies and that of emerging economies. In our sample, gold-backed cryptocurrencies usually outperform gold and Bitcoin as a hedge and safe haven against financial stresses. The Quantile coherency analysis shows that Tether Gold is a hedge against low to moderate financial stress and a safe haven against extreme financial stresses. These findings have important implications for investors, risk-managers and policy makers.

This study examines the impact of political corruption on firm labor investment efficiency. We find that firms headquartered in areas with higher levels of corruption have more inefficient levels of labor investment. Firms in more corrupt environments have weaker monitoring brought about by information opacity as well as a need to shield their assets, which prompts them to adopt inefficient labor investment policies. These results are robust to considerations of omitted variable bias, selection bias, and other endogeneity concerns. The present research has broad implications for society, particularly employees, as it shows that political corruption causes firms to deviate from optimal labor investment decisions.

Using a unique data set of 6556 investment advisory clients at a large European wealth management institution we reveal how wealth trumps gender in determining the investment risk taking behaviour of women. While overall the advisory portfolios held by women contain less equity exposure and therefore have lower risk and return profiles than those held by men, this effect is attenuated when controlling for portfolio size. The portfolios of women with less than EUR200,000 invested contain higher equity allocations, i.e., more risk, and achieve greater returns, but they do not incur higher advisory fees compared to women with larger portfolios. These results confirm the moderating effect of wealth on gender. Furthermore, across both genders these smaller investors absorb more risk and have higher returning portfolios than investors with larger portfolios. Contributing to research on the role of gender in financial advice and investment decision making, our results are relevant to financial advisors and their clients.