Pub Date : 2026-03-01Epub Date: 2026-01-31DOI: 10.1016/j.mulfin.2026.100947
Woraphon Wattanatorn
This study explores the effect of climate change and environmental, social and governance (ESG) performance on the forward-looking probability of default using a textual analysis. Using a default predictability model, it investigates the connection between climate risk and firms’ ESG performance and financial distress across different horizons. The sample consists of 56 economies covering the period 2003–2023. The results indicate that companies with greater exposure to climate change have higher default probabilities, especially in the long term, pointing to increasing financial vulnerability with environmental risk. Additional analysis indicates that law and regulation matter, suggesting that a strong legal system complements the effectiveness of ESG policies in mitigating financial stress. Several robustness checks are performed to validate the results. A two-stage least squares regression and propensity score matching are employed to tackle endogeneity-biased issues while weighted least squares is employed to address the over-representation issue.
{"title":"The role of climate exposure and ESG in forward-looking default risk: A global perspective","authors":"Woraphon Wattanatorn","doi":"10.1016/j.mulfin.2026.100947","DOIUrl":"10.1016/j.mulfin.2026.100947","url":null,"abstract":"<div><div>This study explores the effect of climate change and environmental, social and governance (ESG) performance on the forward-looking probability of default using a textual analysis. Using a default predictability model, it investigates the connection between climate risk and firms’ ESG performance and financial distress across different horizons. The sample consists of 56 economies covering the period 2003–2023. The results indicate that companies with greater exposure to climate change have higher default probabilities, especially in the long term, pointing to increasing financial vulnerability with environmental risk. Additional analysis indicates that law and regulation matter, suggesting that a strong legal system complements the effectiveness of ESG policies in mitigating financial stress. Several robustness checks are performed to validate the results. A two-stage least squares regression and propensity score matching are employed to tackle endogeneity-biased issues while weighted least squares is employed to address the over-representation issue.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100947"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146188868","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2025-12-12DOI: 10.1016/j.mulfin.2025.100944
Sandra Ferreruela , Daniel Martín
This study investigates the relationship between short-horizon volatility and two distinct sources of microstructural information: executed order flow, measured by VPIN, and the latent order book structure, proxied by its SLOPE. While VPIN captures the realized trade imbalances, SLOPE acts as a proxy for aggregated "belief consensus." The objective is to systematically compare the relative importance of these mechanisms—realized flow versus latent consensus—as drivers and predictors of market volatility. Using tick-by-tick data and the full limit order book for 32 IBEX-35 constituents during the 2019–2020 period, we employ a multifaceted econometric approach in event-time (volume clock), combining stock-level regressions with random-effects meta-analysis, robust fixed-effects panels (Driscoll–Kraay), conditional-probability tables (CPTs), and stock-level VARs with Granger tests and meta-IRFs. Three main results emerge. First, we find that informed trading has a dual role: it helps build belief consensus in the book (H1a) while simultaneously consuming internal liquidity (depth) (H1b). Second, and most critically, belief consensus is a markedly superior predictor of subsequent volatility than VPIN; Conditional Probability Tables confirm that a high degree of consensus sharply increases the probability of the lowest-volatility state (H2). Third, VAR analysis reveals a unanimous, bidirectional, yet asymmetric loop: belief consensus robustly reduces volatility, while volatility, in turn, erodes consensus (H3). The causal links for VPIN, in contrast, are sporadic and size-dependent. Our results establish a new informational channel, demonstrating that the market's latent belief structure is a more potent and reliable determinant of short-term risk than the realized toxicity of order flow.
{"title":"Informed trading, investor beliefs consensus and volatility: Evidence from the Limit Order Book dynamics during COVID-19 and short-selling ban","authors":"Sandra Ferreruela , Daniel Martín","doi":"10.1016/j.mulfin.2025.100944","DOIUrl":"10.1016/j.mulfin.2025.100944","url":null,"abstract":"<div><div>This study investigates the relationship between short-horizon volatility and two distinct sources of microstructural information: executed order flow, measured by VPIN, and the latent order book structure, proxied by its SLOPE. While VPIN captures the realized trade imbalances, SLOPE acts as a proxy for aggregated \"belief consensus.\" The objective is to systematically compare the relative importance of these mechanisms—realized flow versus latent consensus—as drivers and predictors of market volatility. Using tick-by-tick data and the full limit order book for 32 IBEX-35 constituents during the 2019–2020 period, we employ a multifaceted econometric approach in event-time (volume clock), combining stock-level regressions with random-effects meta-analysis, robust fixed-effects panels (Driscoll–Kraay), conditional-probability tables (CPTs), and stock-level VARs with Granger tests and meta-IRFs. Three main results emerge. First, we find that informed trading has a dual role: it helps build belief consensus in the book (H1a) while simultaneously consuming internal liquidity (depth) (H1b). Second, and most critically, belief consensus is a markedly superior predictor of subsequent volatility than VPIN; Conditional Probability Tables confirm that a high degree of consensus sharply increases the probability of the lowest-volatility state (H2). Third, VAR analysis reveals a unanimous, bidirectional, yet asymmetric loop: belief consensus robustly reduces volatility, while volatility, in turn, erodes consensus (H3). The causal links for VPIN, in contrast, are sporadic and size-dependent. Our results establish a new informational channel, demonstrating that the market's latent belief structure is a more potent and reliable determinant of short-term risk than the realized toxicity of order flow.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100944"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145798343","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-17DOI: 10.1016/j.mulfin.2026.100946
Yuanyuan Yan , Xin Zhong, Kai Sun
Exchange rate volatility is intensifying international turbulence where emerging-market firms expand globally via outward foreign direct investment (OFDI). Utilising Chinese case, this paper investigates how exchange rate volatility shapes emerging-market OFDI and identifies the underlying coping strategies. Empirical results indicate that exchange rate volatility significantly hinders Chinese OFDI. Specially, a 1 % rise in volatility reduces flows by 10.8 %. The adverse impact is stronger in host countries with flexible exchange rate regimes and in high-sunk-cost, non-resource industries, whereas host countries with fixed exchange rate regime and the resource and financial sectors are less affected. Moreover, exporting can supplant OFDI as exchange rate volatility rises, and larger renminbi swap lines under bilateral currency swap agreements can markedly attenuate the adverse impact of exchange rate volatility on OFDI. These findings advance the extant literature by clarifying firms’ dynamic adjustments and the institutional function of currency swap. They also urge firms to adopt rigorous risk-management and policymakers to widen swap lines so as to safeguard investment stability.
{"title":"Navigating turbulence: How exchange rate volatility shapes emerging-market outward foreign direct investment?","authors":"Yuanyuan Yan , Xin Zhong, Kai Sun","doi":"10.1016/j.mulfin.2026.100946","DOIUrl":"10.1016/j.mulfin.2026.100946","url":null,"abstract":"<div><div>Exchange rate volatility is intensifying international turbulence where emerging-market firms expand globally via outward foreign direct investment (OFDI). Utilising Chinese case, this paper investigates how exchange rate volatility shapes emerging-market OFDI and identifies the underlying coping strategies. Empirical results indicate that exchange rate volatility significantly hinders Chinese OFDI. Specially, a 1 % rise in volatility reduces flows by 10.8 %. The adverse impact is stronger in host countries with flexible exchange rate regimes and in high-sunk-cost, non-resource industries, whereas host countries with fixed exchange rate regime and the resource and financial sectors are less affected. Moreover, exporting can supplant OFDI as exchange rate volatility rises, and larger renminbi swap lines under bilateral currency swap agreements can markedly attenuate the adverse impact of exchange rate volatility on OFDI. These findings advance the extant literature by clarifying firms’ dynamic adjustments and the institutional function of currency swap. They also urge firms to adopt rigorous risk-management and policymakers to widen swap lines so as to safeguard investment stability.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100946"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146037914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2025-11-30DOI: 10.1016/j.mulfin.2025.100936
Keehwan Park , Long Kim Luong , Zhongzheng Fang
We present the first integrated VARX model for analyzing the flight-to-quality behaviour of stock, bond and currency in crises. Exogenous shocks to the system are stock market volatility and sovereign risk. We find that the impacts of two risk variables on stock and currency returns are negative and significant, due to an international flight-to-quality effect. The effects on the bond return are neutral due to the offsetting flight-to-quality within and between countries. In advanced economies, bond is a safe asset in stressed stock markets (e.g., Connolly et al., 2005). In emerging markets, a bond is not necessarily a safe asset. The effects of sovereign risk on currency are accelerated through its interaction with the stock risk. The currency market is more closely linked to the stock market than to the bond market in an emerging economy like Korea. Our integrated approach complements the prior dichotomised (single-equation) flight-to-quality literature (e.g., Connolly et al., 2005; Baur and Lucey, 2009; Corte et al., 2021).
{"title":"Stock and sovereign risks, and stock, bond and currency returns in crises in an emerging market: An integrated VARX model","authors":"Keehwan Park , Long Kim Luong , Zhongzheng Fang","doi":"10.1016/j.mulfin.2025.100936","DOIUrl":"10.1016/j.mulfin.2025.100936","url":null,"abstract":"<div><div>We present the first integrated VARX model for analyzing the flight-to-quality behaviour of stock, bond and currency in crises. Exogenous shocks to the system are stock market volatility and sovereign risk. We find that the impacts of two risk variables on stock and currency returns are negative and significant, due to an international flight-to-quality effect. The effects on the bond return are neutral due to the offsetting flight-to-quality within and between countries. In advanced economies, bond is a safe asset in stressed stock markets (e.g., Connolly et al., 2005). In emerging markets, a bond is not necessarily a safe asset. The effects of sovereign risk on currency are accelerated through its interaction with the stock risk. The currency market is more closely linked to the stock market than to the bond market in an emerging economy like Korea. Our integrated approach complements the prior dichotomised (single-equation) flight-to-quality literature (e.g., Connolly et al., 2005; Baur and Lucey, 2009; Corte et al., 2021).</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100936"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145705728","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-09DOI: 10.1016/j.mulfin.2026.100948
Elroi Hadad , Sun-Yong Choi
We examine volatility spillovers in global real estate investment trust (REIT) markets using the Garman–Klass estimator to capture risk transmission dynamics. We identify key risk factors—such as risk aversion and bond yields—that are statistically associated with higher volatility spillovers, particularly during periods of market stress. Our findings reveal significant market integration, with Japan and Australia acting as major risk transmitters during crises, while Hong Kong serves as a net transmitter under normal conditions. Unlike previous studies that have emphasized sentiment and uncertainty shocks in return spillovers, we find their impact on volatility transmission to be limited. These results underscore the dominant role of risk aversion and bond yields in driving systemic risk across REIT markets. Our findings offer insights for investors, asset managers, and policymakers, emphasizing the importance of monitoring market dynamics and long-term risk factors influencing global REIT stability.
{"title":"Volatility spillovers and risk transmission in global real estate investment trust markets: Role of uncertainty and macroeconomic shocks","authors":"Elroi Hadad , Sun-Yong Choi","doi":"10.1016/j.mulfin.2026.100948","DOIUrl":"10.1016/j.mulfin.2026.100948","url":null,"abstract":"<div><div>We examine volatility spillovers in global real estate investment trust (REIT) markets using the Garman–Klass estimator to capture risk transmission dynamics. We identify key risk factors—such as risk aversion and bond yields—that are statistically associated with higher volatility spillovers, particularly during periods of market stress. Our findings reveal significant market integration, with Japan and Australia acting as major risk transmitters during crises, while Hong Kong serves as a net transmitter under normal conditions. Unlike previous studies that have emphasized sentiment and uncertainty shocks in return spillovers, we find their impact on volatility transmission to be limited. These results underscore the dominant role of risk aversion and bond yields in driving systemic risk across REIT markets. Our findings offer insights for investors, asset managers, and policymakers, emphasizing the importance of monitoring market dynamics and long-term risk factors influencing global REIT stability.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100948"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146188869","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-02-24DOI: 10.1016/j.mulfin.2026.100949
Haijian Zeng , Zhengge Song , Jingjing Tang , Ling Lin
This paper examines whether and how capital market liberalization affects bond market liquidity in China. Using a quasi-natural experiment provided by the 2017 launch of Bond Connect and bond-level data from China’s interbank and exchange markets, we find that foreign investor entry significantly improves liquidity, as reflected in a pronounced decline in effective bid-ask spreads. Mechanism analyses indicate that these liquidity gains operate through lower inventory costs, reduced adverse selection costs, and diminished order-processing costs. The main results are robust to alternative liquidity measures and additional controls for return and price volatility. Our findings contribute to a better understanding of the economic consequences of China’s bond market internationalization and offer policy implications for other emerging markets.
{"title":"Bridging markets: The impact of bond connect policy on liquidity in China’s bond market","authors":"Haijian Zeng , Zhengge Song , Jingjing Tang , Ling Lin","doi":"10.1016/j.mulfin.2026.100949","DOIUrl":"10.1016/j.mulfin.2026.100949","url":null,"abstract":"<div><div>This paper examines whether and how capital market liberalization affects bond market liquidity in China. Using a quasi-natural experiment provided by the 2017 launch of Bond Connect and bond-level data from China’s interbank and exchange markets, we find that foreign investor entry significantly improves liquidity, as reflected in a pronounced decline in effective bid-ask spreads. Mechanism analyses indicate that these liquidity gains operate through lower inventory costs, reduced adverse selection costs, and diminished order-processing costs. The main results are robust to alternative liquidity measures and additional controls for return and price volatility. Our findings contribute to a better understanding of the economic consequences of China’s bond market internationalization and offer policy implications for other emerging markets.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100949"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147396290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-03-01Epub Date: 2026-01-06DOI: 10.1016/j.mulfin.2026.100945
Tianyu Zhang, Jiachen Wang
This study investigates whether and how physical climate risk affects the investment decisions of Qualified Foreign Institutional Investors (QFIIs). Using data from Chinese A-share listed firms between 2007 and 2022, we find that QFIIs’ investment reacts negatively to climate risk. This effect is more pronounced among firms with weaker governance, less geographic diversification, and among QFIIs with longer investment horizons or from common law countries. Mechanism analyses indicate that elevated operational and financial risks partly explain this tendency. In contrast to the main effect, domestic institutional investors show little response to climate risk, and QFIIs seem to be indifferent to climate policy risk. Our findings highlight the importance of climate risk in shaping cross-border investments and provide new insights into the role of foreign institutional investors in promoting sustainability in emerging markets.
{"title":"Do Qualified Foreign Institutional Investors (QFIIs) care about physical climate risk?","authors":"Tianyu Zhang, Jiachen Wang","doi":"10.1016/j.mulfin.2026.100945","DOIUrl":"10.1016/j.mulfin.2026.100945","url":null,"abstract":"<div><div>This study investigates whether and how physical climate risk affects the investment decisions of Qualified Foreign Institutional Investors (QFIIs). Using data from Chinese A-share listed firms between 2007 and 2022, we find that QFIIs’ investment reacts negatively to climate risk. This effect is more pronounced among firms with weaker governance, less geographic diversification, and among QFIIs with longer investment horizons or from common law countries. Mechanism analyses indicate that elevated operational and financial risks partly explain this tendency. In contrast to the main effect, domestic institutional investors show little response to climate risk, and QFIIs seem to be indifferent to climate policy risk. Our findings highlight the importance of climate risk in shaping cross-border investments and provide new insights into the role of foreign institutional investors in promoting sustainability in emerging markets.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"81 ","pages":"Article 100945"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145939078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-11-16DOI: 10.1016/j.mulfin.2025.100935
Van Ha Nguyen , Thanh Hang Nguyen , Ly Ho , Tung Lam Dang
This paper examines the influence of a firm’s ESG reputation risk on its cost of equity capital around the world. Employing a comprehensive sample of firms across 45 markets, it documents strong evidence that ESG reputation risk leads to a higher cost of equity capital. This result remains unchanged in various robustness checks, including use of alternative variable measures, different model specifications, alternative subsamples, and potential endogeneity concerns. Further analyses show that firms with less severe information asymmetry and lower levels of financial risk experience a more pronounced impact of ESG reputation risk on the cost of equity capital, thereby suggesting that information asymmetry and financial risk are two mechanisms through which ESG reputation risk affects the cost of equity capital. It also finds that the positive effect of ESG reputation risk on the cost of equity capital is stronger in markets with better financial development and higher governance quality.
{"title":"When reputation hurts: ESG risk and the cost of equity capital around the world","authors":"Van Ha Nguyen , Thanh Hang Nguyen , Ly Ho , Tung Lam Dang","doi":"10.1016/j.mulfin.2025.100935","DOIUrl":"10.1016/j.mulfin.2025.100935","url":null,"abstract":"<div><div>This paper examines the influence of a firm’s ESG reputation risk on its cost of equity capital around the world. Employing a comprehensive sample of firms across 45 markets, it documents strong evidence that ESG reputation risk leads to a higher cost of equity capital. This result remains unchanged in various robustness checks, including use of alternative variable measures, different model specifications, alternative subsamples, and potential endogeneity concerns. Further analyses show that firms with less severe information asymmetry and lower levels of financial risk experience a more pronounced impact of ESG reputation risk on the cost of equity capital, thereby suggesting that information asymmetry and financial risk are two mechanisms through which ESG reputation risk affects the cost of equity capital. It also finds that the positive effect of ESG reputation risk on the cost of equity capital is stronger in markets with better financial development and higher governance quality.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"80 ","pages":"Article 100935"},"PeriodicalIF":4.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145578761","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-08-28DOI: 10.1016/j.mulfin.2025.100922
Dong-Hyeon Kim , Shu-Chin Lin , Peiyao Liu , Jiaqi Liu
Since the global financial crisis, the redistributive consequences of inflation have gained substantial attention. While income inequality has long dominated public discourse, wealth inequality, which is critical for shaping economic opportunities and political power, has been comparatively overlooked. This paper empirically examines how inflation affects wealth inequality, emphasizing the role of financial development. We focus on top wealth shares, as the recent surge in wealth inequality is largely driven by increasing concentration among a small elite. Using cross-country panel data, we find that inflation exacerbates wealth inequality by increasing top wealth shares while reducing those at the lower end of the distribution. These effects are mitigated by banking development but intensified by stock market development. Pathway analyses suggest that these impacts operate through entrepreneurship and asset prices. Financial reform policies that promote banking development and broaden access to stock markets may help mitigate inflation’s adverse effects on wealth inequality.
{"title":"Financial development and the nexus between inflation and wealth inequality","authors":"Dong-Hyeon Kim , Shu-Chin Lin , Peiyao Liu , Jiaqi Liu","doi":"10.1016/j.mulfin.2025.100922","DOIUrl":"10.1016/j.mulfin.2025.100922","url":null,"abstract":"<div><div>Since the global financial crisis, the redistributive consequences of inflation have gained substantial attention. While income inequality has long dominated public discourse, wealth inequality, which is critical for shaping economic opportunities and political power, has been comparatively overlooked. This paper empirically examines how inflation affects wealth inequality, emphasizing the role of financial development. We focus on top wealth shares, as the recent surge in wealth inequality is largely driven by increasing concentration among a small elite. Using cross-country panel data, we find that inflation exacerbates wealth inequality by increasing top wealth shares while reducing those at the lower end of the distribution. These effects are mitigated by banking development but intensified by stock market development. Pathway analyses suggest that these impacts operate through entrepreneurship and asset prices. Financial reform policies that promote banking development and broaden access to stock markets may help mitigate inflation’s adverse effects on wealth inequality.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"80 ","pages":"Article 100922"},"PeriodicalIF":4.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144926675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01Epub Date: 2025-11-04DOI: 10.1016/j.mulfin.2025.100931
Xiaoyi Ren
This study investigates the impact of the China Securities Investor Services Center (CSISC)—a non-profit minority shareholder organization innovatively established by Chinese regulatory authorities—on corporate external guarantees, assessing its effectiveness in protecting minority shareholders. The results show that CSISC shareholding significantly reduces guarantees to non-subsidiaries, while its effect on guarantees to subsidiaries is not significant. The reduction is stronger in firms with higher leverage and lower profitability and is concentrated in related-party guarantees, indicating that CSISC shareholding mitigates riskier external guarantee practices. Channel tests reveal that this effect operates through both governance effect and a demonstration-guided effect. Further analysis indicates that the impact is more pronounced in firms audited by top-ten accounting firms and in regions with stronger legal standards.
{"title":"Non-profit minority institutional shareholder and corporate external guarantee","authors":"Xiaoyi Ren","doi":"10.1016/j.mulfin.2025.100931","DOIUrl":"10.1016/j.mulfin.2025.100931","url":null,"abstract":"<div><div>This study investigates the impact of the China Securities Investor Services Center (CSISC)—a non-profit minority shareholder organization innovatively established by Chinese regulatory authorities—on corporate external guarantees, assessing its effectiveness in protecting minority shareholders. The results show that CSISC shareholding significantly reduces guarantees to non-subsidiaries, while its effect on guarantees to subsidiaries is not significant. The reduction is stronger in firms with higher leverage and lower profitability and is concentrated in related-party guarantees, indicating that CSISC shareholding mitigates riskier external guarantee practices. Channel tests reveal that this effect operates through both governance effect and a demonstration-guided effect. Further analysis indicates that the impact is more pronounced in firms audited by top-ten accounting firms and in regions with stronger legal standards.</div></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"80 ","pages":"Article 100931"},"PeriodicalIF":4.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465492","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"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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