Journal of Multinational Financial Management最新文献

We investigate the relationship between the credibility of officially reported COVID-19 infection cases and the direct effects of the public health crisis on stock market performance. Employing the law of left digits, we estimate the likelihood of misreporting in official data to evaluate government reporting credibility (RC). A higher deviation from expected Benford’s distributions implies a greater likelihood of misreporting and lower RC. Our premise is that high credibility of government reporting during crisis mitigates the negative consequences of disasters through lowering investors’ risk aversion and bolstering their confidence. Our main results are highly consistent with this hypothesis. The positive influence of RC is particularly pronounced for companies situated in economies characterized by higher uncertainty and weaker governance before the crisis, and during periods of heightened market panic. Our findings suggest that the credibility of government reporting can act as immunity-like protection for stock markets in times of crisis.

We utilize the cross-quantilogram method to assess the predictive capacity of geopolitical risk (GPR) on volatility spillovers calculated by the time-varying parameter vector autoregressive model, across international commodity, exchange, and U.S. and Chinese stock markets. The findings yield three notable observations: First, we establish the directional predictive influence of GPR on net and net pairwise volatility spillovers, indicating discernible shifts in the risk roles of specific markets and transmission pathways. Second, these shifts, anticipated by GPR, manifest swiftly within a single day and subside within a quarter, albeit with varying durations contingent on market categories and transmission pathways. Third, disparities are evident in the predictive effectiveness of geopolitical acts and geopolitical threats. These findings remain robust even when considering factors such as economic policy uncertainty, alternative proxies, and other spillover models.

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

This article studies the international linkages of market risk perception, which embeds a statistical measure of risk as well as the subjective beliefs and preferences of the representative investor. We find high commonality between the risk perception of different countries/economic areas, with a first principal component explaining more than 80% of the total variability. The level of integration is dynamic, peaking during crises. A connectedness analysis shows that the transmission of shocks goes from Western to Asia-Pacific economies. We also disentangle whether risk perception spillovers are due to shocks in the aggregate risk aversion or a resolution of uncertainty. A local projection analysis documents a short-term impact of risk aversion in the perception of risk. Uncertainty is also statistically significant, and although their effects are milder they span for longer periods.

This study represents the first comprehensive analysis of the role of national religiosity in corporate innovation. Using a PCA method, we divide religiosity into five dimensions: ideological, ritualistic, experiential, intellectual, and consequential. For 1506 firms in 27 countries, we find that the ideological and ritualistic dimensions promote corporate innovation, whereas the experiential, intellectual, and consequential dimensions hinder corporate innovation. Furthermore, religiosity overall has a positive impact on corporate innovation. Finally, we show that the positive effect of religiosity is more pronounced for firms in Judeo-Christian countries. Overall, we provide the first guideline to understand the diverse and comprehensive effects of religion on corporate innovation. (JEL G3, O3, Z12)

This study investigates the effect of banking competition on the transformation of Chinese firms' export trade mode. We use matched data from the Chinese Industrial Enterprise Database and the Chinese Customs Trade Statistics between 2007 and 2013 to measure export firm trade-mode, and apply the number of commercial bank branches at the prefecture level to gauge bank competitiveness. With a large firm-level dataset, we find that bank competition affects a company's transition from processing mode to ordinary trade. The validity of our findings is confirmed through several robustness tests. Furthermore, we examine the underlying processes through which bank competition influences trade-mode transformation by means of firms' financial constraints, the regional marketization process and banking structural characteristics. Finally, we investigate the heterogeneity conditions and find that firms with distinct ownership structures and in different geographical locations demonstrate diverse performances in the aforementioned connection. The empirical findings provide crucial evidence to enhance the understanding of the relationship between banking institutions and company exports in emerging economies.

The paper studies the association between climate risk and bank stability. Using an international sample of 6433 commercial banks in 109 countries between 2005 and 2019, we illustrate that increased climate risk leads to decreased bank stability. These findings are robust to alternative bank stability measures and after controlling for endogeneity by an instrumental variable and system GMM approach. Further analysis shows that the negative impact of climate risk on bank stability is more pronounced in small banks and banks that have low capital. In addition, we also find better institutional governance, bank supervision, and regulations can eliminate the adverse impact of climate risk. Our results are neither determined by the effect of the financial crisis nor by the heterogeneity of different regions. Overall, our findings add a novel determinant of bank stability globally.

The purpose of the study is to examine the effect of national culture on corporate payout mix policy (dividends and share repurchases). Using an extensive data set covering 55 countries during 1980–2018, we find that the national cultural dimension significantly affects the payout policy mix, choice, and levels. Firms in countries with high uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint are inclined to pay out through share repurchases. In contrast, firms in countries with low uncertainty avoidance, masculinity, long-term orientation, and indulgence vs. restraint tend to pay out through dividends. Our findings are robust to control for firm and country characteristics, alternative payout ratios, different culture proxies, sub-period samples, and subsamples.

The aim of this paper is to assess an alternative method of estimating the amount of profit shifting and corporate income tax revenue losses. We propose a nonstandard methodology to refine the measurement of profit shifting beyond the traditional semi-elasticity procedure. A four-stage Data Envelopment Analysis (DEA) is used to estimate the relative technical efficiency of profits before taxation reported by foreign-owned companies in Czechia. The efficiency gap resulting from the difference between the first-stage and third-stage technical efficiency scores represents the level of profit shifting. Using the statutory and average effective corporate income tax rates, we calculate the amount of corporate income tax revenue losses attributable to profit shifting. The estimated mean level of profit shifting by foreign subsidiaries involved in the manufacturing and service sectors between 2009 and 2016 is over 570 million EUR, and the mean amount of tax losses exceeds 100 million EUR. In relative terms, profit shifting leads to a decrease in total corporate income tax revenues of 2% in Czechia. Foreign-owned companies involved in the manufacturing sector are less efficient than foreign-owned companies from services industries in terms of relative technical efficiency scores, while companies involved in the service sector have a considerably high efficiency gap with respect to companies involved in the manufacturing sector.

Broadening access to finance is among the top priorities for governments and international development organizations worldwide. This study examines the impact of natural resource rents on access to finance in financial institutions and financial markets across 109 countries from 1996 to 2020. The results of dynamic two-step system generalized method of moments estimation demonstrate that total natural resource rents hinder access to finance in financial institutions and markets, confirming the natural resource curse hypothesis. Specifically, rents from oil, coal, minerals, and forests negatively affect access to finance in financial institutions and markets, while gas rent has surprisingly a positive effect on both. Furthermore, institutional quality significantly promotes access to finance in financial institutions and markets. All aspects of institutional quality (control of corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability) positively affect access to finance except regulatory quality, which has an insignificant effect on access to finance in financial institutions. Moreover, our findings show that institutional quality significantly moderates the effect of natural resource rents on access to finance, specifically, it varies depending on whether the institutions are strong or weak, being positive in the former case and negative in the latter. The study conducts several robustness tests using additional controls, alternative measures of financial access, and sample sensitivity analysis, all of which confirm the findings. Finally, we suggest policy implications for relevant stakeholders.