Journal of Multinational Financial Management最新文献

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 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 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.

This work studies the returns to technical trading rules utilising a sample of 14 currency pairs by applying five trading rules: Filter rules, Trading Range Breakout, Moving Average, and Bollinger bands over varying market conditions. The mixed results indicate that technical analysis based on the applied trading rules is appropriate for the trading strategies examined. The one per cent filter, 150-day MA rule and the Bollinger bands trading rule surpassed the other applied techniques in general performance. What is also clear is that these trading rules are rewarding over varying market conditions. Results from various subperiods, representing normal and stressful market conditions, generally confirm our main findings and show the added value of the trading range breakout rule, which delivers performance in strongly trending markets. Evidence from bootstrap analysis demonstrates the predictive ability of the Moving Average and Bollinger band trading rules.

According to real options theory, a global network built through multinational investments endows a firm with a series of options for future development. These options can enhance a firm’s operational flexibility, reducing its downside risk. This study aims to investigate the home country conditions necessary to achieve multinationality’s downside risk effect in Chinese small and medium-sized enterprises (SMEs). Using data from Chinese manufacturing SMEs from 2003 to 2021 and a Tobit regression model, this study finds that multinationality can significantly reduce the downside risk of Chinese SMEs. Moreover, the degree of home country economic openness and financial development can significantly enhance multinationality’s negative effect on downside risk. Further analysis suggests that the moderating effects of the home country environment are more prominent for state-owned firms than for privately-owned firms. Our findings emphasize the important role of a home country environment in achieving the value of multinationality’s flexibility.

This study examines the sources of economic uncertainty in Euro Area countries with a special focus on the effects of the ECB’s monetary policy on economic uncertainty, for the period between 2001 and 2020. The contribution of the research lies (a) on the employment of an uncertainty factor that combines information from different uncertainty variables, rather than just one as in many previous studies, (b) on the fact that we obtain our results with the employment of a significant number of variables that consist a large data set which offers a great amount of information and (c) the examination of the behavior of Core and Peripheral Eurozone countries, since many studies indicate that their reaction to economic shocks may be different. We examine a sample of four Core and four Peripheral Eurozone Countries and employ for each country and for panel data a Factor-Augmented Vector Autoregression framework (FAVAR) with six different factors (real activity, inflation, interest rates, monetary policy, financial market and uncertainty). The results indicate that real activity and financial markets are important contributors to economic uncertainty, especially for the Core Eurozone countries, while for the Peripheral countries the uncertainty factor itself seems to contribute to its own level; in addition, our results indicate that periods of high uncertainty tend to be followed by periods of low uncertainty.

Using daily money, stock, bond, foreign exchange, and credit markets data in the G7 and BRICS between 2006 and 2022, this paper investigates the extreme risk interconnectedness across countries and markets. Specifically, we propose a multilayer nonlinear extreme risk spillover network based on the CAViaR model and nonlinear Granger causality test to capture extreme risk spillovers across and within layers from static and dynamic perspectives, respectively. We find that the extreme risks of the G7 countries are higher than those of the BRICS countries. Simultaneously, extreme risks in the stock and foreign exchange markets are significantly higher than those in other markets. The stock market tends to be the net emitter of extreme risks, and the bond and credit markets tend to be the net recipients. During special event periods, BRICS countries (except Russia) tend to be net recipients of extreme risks. Our study provides new evidence on the interconnectedness of extreme risk across markets and countries, which has several practical implications for managing financial risks and maintaining the financial system’s stability.

We investigate the effects of foreign direct investment (FDI) on technological change in the Association of South East Asian Nations member countries. Our analysis underscores the pivotal roles that financial and governmental institutions play as mediators in the relationship between FDI and technological change. Our empirical results based on the 25 years panel dataset from 1996 to 2020 reveal that the rule of law, one of the sub-indicators of the Worldwide Governance Indicators, has a significant mediating effect in this relationship. Though financial institutions play a mediating role, FDI negatively affects financial institutions and positively affects technological change, meaning the suppression effect. To maximize FDI’s spillover effects, governments should facilitate the effective functioning of the rule of law and develop strategies to alleviate financing restrictions, which might hamper FDI.

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.