Journal of Multinational Financial Management最新文献

In this paper, we empirically study the linkages between financial openness and financial development using a sample of 164 countries during 1960–2020. Based on the results of the estimation of systems of equations, we find that the relationship between relative financial openness and relative banking sector development is positive and bidirectional. Likewise, the relationship between relative financial openness and relative stock market development is positive and bidirectional. However, the relationship between relative financial openness and relative bond market development is negative and bidirectional.

Economic policy uncertainty is an evolving area of research that may affect environmental issues such as the carbon footprint. However, from a global perspective, it is not known whether economic policy uncertainty is significantly related to it. Motivated by this gap in the literature, we investigate the impact of economic policy uncertainty on carbon footprint. Using a sample of 2782 firms from 60 countries, our cross-sectional regression analysis finds that economic policy uncertainty is positively associated with the carbon footprint. This applies to the total, direct, and indirect carbon emissions measurements. However, we find that countries with better institutional governance alleviate the significant association between economic policy uncertainty and carbon footprint.

Motivated by existing research on the informational and monitoring role of social trust, we examine how social trust affects firms’ choice between bank debt and public debt. Using firm-level data from 33 countries, we document that higher social trust is associated positively (negatively) with the long-term public (bank) debt ratio. The findings are robust when we control for other important country-level and firm-level factors. There are two possible channels of this association. We find that social trust affects debt structure through monitoring and borrowers’ incentive channels. To address potential endogeneity, we use instrumental variables, propensity score and entropy balancing matching, and large change analyses and document that our findings are robust. Examining the effect of debt structure on firm performance, we find that Tobin's Q associates positively with long-term public debt ratios in high-trust countries.

This paper examines the financial structure and bank relationships of multinational firms in Italy, a large European country strongly reliant on bank debt. We show that multinationals are, on average, more leveraged than non-internationalized companies. Moreover, multinationals have larger shares of both financial debt and bank debt as a percentage of total debt, benefit from lower interest rates, maintain more bank relationships, and are less dependent on the primary bank for the firm. Overall, these findings suggest that globally diversified firms have better access to credit markets than domestic companies. These results are robust to estimation methods that address the potential endogeneity of the choice to go international, such as matching and instrumental variable estimation.

This study examines the effect of foreign institutional investors (FIIs) on executive compensation incentives. Using the quasi-natural experiment of Shanghai (Shenzhen)–Hong Kong Stock Connect, we show that the presence of FIIs has a positive effect on pay-for-performance sensitivity (PPS) and helps to decrease excessive compensation. We also demonstrate that good corporate governance and high accounting information quality would be two possible underlying channels. Our results are more pronounced for firms with fewer state-owned shareholders and powerful managers. Overall, our results indicate that compared with domestic counterparts, FIIs are more effective at improving firms’ executive compensation incentives.

We examine how climate change risk impacts corporate social responsibility using an international firm-level sample. Exploiting a new firm-level measure of climate change risk, we find that firms significantly adjust their CSR standards upwards in response to climate change risk shocks. Using the difference in difference (DiD) approach and natural disaster shocks as plausibly exogenous shocks to climate change risk, we document an increase in CSR performance for affected firms relative to their unaffected peers after severe natural disasters. Additionally, we observe that the sensitivity of CSR performance to climate change risk jumps after the release of the Stern Review and the Paris Agreement. Furthermore, we find that this impact is more pronounced for firms in climate-sensitive sectors, firms with more growth options, firms with higher governance standards, and firms in highly competitive industries. Overall, our findings reveal that climate change uncertainty can trigger firms to invest more in CSR activities to hedge against regulatory and physical risks.

We investigate whether a home country’s culture determines lending behavior of foreign bank subsidiaries in host countries during both prosperous and difficult economic periods. We employ a dataset of foreign-owned banks originating from 46 home countries and operating in 47 host countries during 1996–2018. The results show that, in general, only certain cultural dimensions of the home country influence the foreign bank subsidiaries’ lending. However, this impact strengthens significantly during crises.

This study examines the impact of the ownership structure of oil revenues on financial markets and institutions, and the intermediating role of political institutions. Using the fixed-effects model and GMM for robustness, we analyse data from 82 oil-producing countries. We find several key results. Firstly, government ownership of oil revenues undermines the efficiency of financial institutions when the quality of political institutions is weak, but enhances their efficiency when political institutions are strong. Secondly, the impact of private ownership of oil revenues is negative on the depth of and access to financial institutions when the quality of political institutions is weak, but positive when political institutions are strong. We observe similar threshold effects for the depth of and access to financial markets in the subsample of developing countries. We conclude that oil-producing countries need solid political institutions to benefit from oil wealth and to boost financial development.

This paper empirically investigates the effects of exchange demutualization on listed firms around the world. In particular, it examines how stock exchange demutualization affects stock liquidity and how the effect varies by exchange operating performance and country development level. We find that stock liquidity improves following exchange demutualization. Specifically, the effect is more evident among exchanges with stronger operating performance which tend to diversify their revenue, and which belong to developed countries. Furthermore, we identify an increase in the market share of exchanges in developed markets in response to exchange ownership conversion, which is mostly driven by domestic order flow. Overall, this paper highlights the importance of the exchange ownership structure strategy in enhancing financial market quality in international markets.

This study examines the impact of geopolitical risk (GPR) on corporate innovation in China. Using the GPR Index constructed by Caldara and Iacoviello (2018), we find that, first, GPR has a significantly positive effect on corporate innovation. Second, the effect is more pronounced for state-owned firms and firms with more government subsidies, overseas businesses, and product market competition. Third, GPR motivates firms to innovate mainly through the degree of threat. Finally, heterogeneous exposure to GPR is positively correlated with corporate innovation. This study enriches the empirical research on the impact of GPR on corporate decision-making.