Journal of Multinational Financial Management最新文献

We examine the impact of economic policy uncertainty and geopolitical risk on various industries, highlighting their asymmetric effects on sectoral volatility. Furthermore, we investigate the differential effects of economic policy uncertainty and geopolitical risk on sectoral volatility, distinguishing between good and bad volatility responses. We find an asymmetric relationship between economic policy uncertainty and geopolitical risk in these industries, with economic policy uncertainty generally exerting a stronger impact on sector-specific volatility compared to geopolitical risk. During normal circumstances since the 2010s, the influence of geopolitical risk on sector-specific volatility has been relatively insignificant. However, both economic policy uncertainty and geopolitical risk have played significant roles in affecting multiple sectors during certain crisis periods, with geopolitical risk demonstrating short-term effects. These findings have important implications for both investors and policymakers. Investors can time positions using insights on policy uncertainty and geopolitical risk, while policymakers can identify vulnerable sectors.

We examine the impact of cultural differences on nominal share prices across 63 countries from 2002 to 2018. Using institutional and catering theories, we assess how cultural dimensions—including World Governance Indicators (WGI), legal systems, religious influences, and GLOBE dimensions—affect the spatial heterogeneity of share price levels. Our findings indicate that share prices are higher in countries with common law systems and comprehensive information reporting, as these environments tend to attract institutional investors. Conversely, cultural traits emphasizing altruistic values correspond with lower share prices, reflecting the preferences of individual investors.

Utilizing survey data for firms from 40 countries, we explore the impact of extreme weather exposure on corporate carbon emissions management. Our findings indicate that firms manage their carbon emissions better if they have suffered losses due to extreme weather events. These results persist after considering endogeneity concerns, including placebo tests, the Heckman two-stage method, propensity score matching, the instrumental variables approach, and other robustness tests. Cross-sectional analyses reveal that this impact is more pronounced for firms located in developed countries and in countries with superior climate protection and lower levels of carbon emissions. Furthermore, the effect of extreme weather exposure is more significant for firms with foreign ownership and political connections and those subject to an energy tax. Finally, improved management of carbon emissions accompanied by extreme weather exposure can lead to increased corporate capacity utilization and reduced production costs.

Since the start of the previous decade, regionalization of trade and investment flows has led to complex coupling in local (country-level) and global risks. To-date, little is known about how global uncertainty interacts with local uncertainty across the financial systems. Our study investigates the nexus between global and country-specific Geopolitical Risks (GPRs) and financial stress index (FSI) in five highly-open, large developed economies. We employ the cross-quantilogram and cross-spectral quantile coherency approaches on weekly data over 2000–2022 to show heterogeneous dependency of local and global geopolitical uncertainty on the financial stress conditions. Specifically, our results show that in the U.S. and the UK dependency of local and global geopolitical uncertainty on the financial stress conditions is influenced by the varying market conditions. In contrast, Canadian FSI is intensified by both global and country-level geopolitical risks, whereas German and French financial systems exhibit significant resilience to the global and local geopolitical shocks. Hence, the latter markets show hedging properties vis-a-vis global geopolitical risks.

Employing an international sample of 10,012 firms across 62 economies spanning 2005–2017, we show that climate risk is negatively associated with corporate innovation activities. This finding is consistent with increased managerial risk aversion when managers perceive higher climate risk, leading to lower innovativeness. Through risk-buffering mechanisms, the negative association is weaker when firms are not subject to financial constraints, when corporate governance is stronger, and when the economy is more developed. Through risk-sharing mechanisms, better equity market development, greater trade openness, and greater insurance coverage can help mitigate the negative impact of climate risk on corporate innovation. Further analyses suggest that firms respond to climate change by inventing more green patents. Our study has implications for how to motivate corporate innovation in high-climate-risk economies.

In this study, we investigate whether foreign equity participation enhances the level of transparency in Korean listed firms’ accounting information. Using panel data on the Korean listed firms during the 1999–2019 period, we find that foreign ownership has a positive effect on the accounting transparency of firms. This suggests that foreign investors effectively monitor the earnings management activities of a firm and contribute to increasing the quality of accounting information. In addition, this positive impact of foreign equity ownership is more pronounced in non-chaebol firms than in chaebols. We further show that foreign investors reinforce the effect of changes in accounting systems on the transparency of Korean firms. Finally, firms with enhanced transparency by foreign investors perform better in the future. Overall, our study highlights the importance of foreign investors for enhancing accounting transparency in the Korean stock market. (JEL F21, F65, G15, G30, M40)

The study investigates the interconnectedness of GCC real estate markets using wavelet coherence analysis of daily data from 2013 to 2023 and analyzes the impact of various external shocks (political, economic, regulatory, and pandemic) and oil dependence on these dynamics. Despite shared cultural ties and energy intensity, findings reveal primarily weak to moderate linkages, with increased coherence observed during significant events. These linkages exhibit temporal variability, characterized by short-term spikes, loose medium-term correlations, and evolving long-term relationships. Isolating the effect of oil prices yielded limited impact, suggesting the influence of country-specific factors. This research offers valuable insights for policymakers, investors, and stakeholders, aiding informed decision-making during sensitive periods and fostering a deeper understanding of international finance and investments.

This paper explores the nuanced extreme market responses exhibited by segmented domestic and foreign investors in reaction to state media coverage of the COVID-19 pandemic in China’s A-share and H-share markets. Our findings indicate that an extreme increase (or decrease) in this unexpected attention is likely to lead to an extreme increase (or decrease) in stock prices. Domestic investors show increased sensitivity to an abnormal decrease in state media attention, whereas foreign investors are more responsive to an increase in this attention. An extreme unexpected decline in state media coverage of the pandemic significantly influences extreme fluctuations in the A-share market’s trading volume. In contrast, an abnormal increase in state media coverage of the pandemic tends to extremely decrease the H-share market’s trading volume. In the early panic phase, domestic (foreign) investors tend to reach a consensus more on abnormal declines (increases) in state media reports on the pandemic.

Outbound investment refers to the act of investing by enterprises or individuals in regions or countries outside their home country. We explore the impact of CEO financial work experience on the outbound investments of Chinese A-share listed firms. The results demonstrate a significant, positive correlation between CEO financial work experience and the scale of outbound investments, particularly for nonbank financial work experience. We also reveal that the intermediary mechanism of CEO financial work experience is due to an increase in the proportion of financial assets and the easing of financing constraints, thereby promoting outbound investments. Moreover, the research shows that the effect of CEO financial work experience varies by ownership type and scale, with state-owned and large-scale firms receiving greater benefits.

This study examines the nonlinear effects of financial openness on financial development in the representative ASEAN member states: Indonesia, Malaysia, the Philippines, Singapore, and Thailand. It reveals that with a low (high) level of financial openness, the assets and liabilities of foreign direct investment increase (decrease) equity market capitalization and the financial development, institution, and market indices. We identify a threshold of financial openness where its positive impact begins to diminish; beyond this point, excessive financial openness may become detrimental to financial development. By reassessing the risks associated with financial openness after the Asian financial crisis, we can understand that the potential toxicity amplified by financial openness may pose threats to financial development.