Journal of Multinational Financial Management最新文献

We use funds of hedge funds data from more than 40 countries to analyze how investors’ performance-chasing behaviors affect subsequent fund performance. Fund performance improves when investors are sensitive to past performance. Higher flow-performance sensitivity (FPS) leads to better subsequent performance. A one-standard-deviation increase in FPS is associated with an increase of around 1% per annum in subsequent performance. The positive effect is stronger when fund flows are less affected by market uncertainty, when funds are less prone to decreasing returns to scale, and when funds have shorter share restriction periods. This positive effect varies across regions, and it is most significant in low individualistic countries, suggesting that investors in low individualistic countries can influence fund performance through their response to past performance.

We examine whether politically connected directors (PCDs) play an information role in corporate investments in periods of uncertainty about government policy (PU). Our identification strategy relies on a 2013 ruling in China which mandated eviction of PCDs from corporate boards. Using difference-in-differences estimation around the ruling, we find that PU is less disruptive to capital expenditures and acquisitions in the presence of PCDs and this benefit dissipates in their absence. Managers also pay closer attention to stock price signals after their firms get politically disconnected. Thus, we conclude that political connections provide informational benefits that facilitate corporate investments under PU.

This paper studies the cross-border transmission of exchange rate volatility through foreign-invested enterprises (FIEs)’ investments. We find that exchange rate volatility in FIEs’ home countries reduces the investments made by FIEs, which is exacerbated in industries with greater external finance dependence. We further confirm that the reduction in investment is due to a decrease in financial support from FIEs’ parent enterprises. By comparing FIEs whose parents are located in countries with different levels of financial development and in sectors with different levels of investment irreversibility, we test two potential channels of transmission, namely, the uncertainty channel and the financing channel. We also attempt to test the potential indirect impact on local firms through the production network.

This study investigates how knowledge transfers within multinational corporations affect the financing decisions of foreign affiliates using a unique dataset on Korean multinationals and their foreign affiliates’ employment structure. We document that affiliates with more expatriate managers tend to maintain lower financial leverage, suggesting that the greater number of expatriate managers facilitate knowledge transfer and increase risk of affiliates. We further show that the negative relation between expatriate managers on affiliate leverage is more pronounced when parents or affiliates own greater intangible assets and host countries have fewer knowledge assets in place. The instrumental variable estimation also confirms the negative relation.

We examine the dynamic interconnections between sovereign credit and liquidity risks in ten euro area countries at the 5-year maturity with daily CDS data from IHS Markit and high-frequency data from MTS between 2008 and 2018 using the extended TVP-VAR connectedness approach of Antonakakis et al. (2020). We find that, for most of the period, net connectedness is from credit risk to liquidity risk, but this indicator is time-dependent, detecting some episodes where it goes from liquidity risk to credit risk. We set up an event study and discover that most of the latter episodes can be related to several unconventional monetary policy measures of the ECB. Then, we examine the drivers of the connectedness indicator using a Probit model. Our results suggest that a decline in global funding liquidity, monetary policy shocks and economic policy uncertainty increase the probability of risk transmission from liquidity to credit, while tensions in financial markets and the deterioration of fiscal sustainability are factors that reduce such a probability.

This research investigates the role of industrial munificence and dynamism in foreign ownership of international joint ventures (IJVs) in emerging markets. Based on an investigation of 50,069 observations of IJVs in China, I find that foreign ownership in IJVs increases with industrial munificence and decreases with industrial dynamism in the local market. Moreover, while foreign firms with higher intangible asset intensity tend to hold higher foreign ownership in IJVs, industrial munificence positively moderates this relationship due to its role in enhancing the knowledge leakage risks. Furthermore, the roles of intangible asset intensity, munificence and dynamism on foreign ownership are more observable in industries with medium technology intensities and more liberalized FDI policies. The moderating roles of munificence and dynamism are not significant in IJVs with conventional local partners and foreign partners with Chinese cultural background.

The study employs macro data for 42 African countries to examine the interactive and threshold effects of financial development in the remittances-inclusive growth relationship. First, evidence based on the system GMM estimator shows that remittances are not statistically significant in promoting inclusive growth in Africa. Notably, across the economic growth and income inequality dimensions of inclusive growth, we find that although remittances are ineffective in boosting the former, they deepen the latter. Second, we find that Africa’s underdeveloped financial sector dampens the marginal positive effect of remittances on inclusive growth. Third, our threshold analysis indicates that for financial development to interact with complementary policies to foster inclusive growth in Africa, a minimum threshold of 14.5% is required. We conclude by informing policy on the level of investments needed for financial development to promote fairer income growth and distribution in Africa.

We examine the short-term market impact of the beginning of the military conflict between Russia and Ukraine (February 24, 2022) on the largest European listed banks. Using an event study, for the 100 largest European listed banks, we observe a negative and statistically significant stock price reaction at and around the beginning of the military conflict. These results are consistent with investor sentiment, investment portfolio rebalancing and the asset pricing perspective. Furthermore, we use a cross-sectional analysis against a set of country- and bank-specific variables. The results show a higher negative stock market reaction for Russian listed banks and for foreign banks with a high exposure to Russia. The magnitude of the stock market reaction to the military conflict is reinforced or mitigated by bank-specific determinants such as size, profitability, risk aversion, operational efficiency level, institutional ownership and exposure to Russia.

We investigate the relation between foreign institutional ownership and stock price synchronicity, and whether this relation varies across country-level institutional and information infrastructures. Using a comprehensive dataset for firms across 40 countries over the period between 2000 and 2016, we document the following notable findings. First, foreign institutional ownership is negatively associated with stock price synchronicity. Second, we find that improved information transparency is a possible channel underlying the effect of foreign institutional ownership on stock price synchronicity. In addition, the synchronicity-reducing effect of foreign institutional ownership is more pronounced for firms in countries with weaker institutional infrastructures. Finally, our results reveal different impacts of foreign institutional ownership on stock price synchronicity across various types of foreign institutional ownership, highlighting the importance of foreign investor heterogeneity in improving firm information environment.

This study examines the effects of the COVID-19 outbreak on the performance and stability of the banking sector. Our sample consists of 2073 banks in 106 countries from 2016Q1 to 2021Q2. We employ several alternative bank performance and stability measures for a comprehensive analysis and robustness. The findings show that the COVID-19 outbreak has significantly reduced bank performance and stability. These results are consistently observed across several geographical regions and countries’ income classifications. Additional analysis shows that the adverse impact of COVID-19 depends on the characteristics of the bank and market structure. While a better regulatory environment, institutional quality, and financial development have significantly increased the strength and resilience of banks. These findings provide practical implications for regulators and policymakers in the face of unprecedented uncertainty caused by the COVID-19 pandemic.