FINANCIAL REVIEW最新文献

We explore the impact of political risk on firms' corporate social responsibility (CSR) and find a negative effect, especially on CSR strengths. Firms facing higher political risk tend to prioritize compliance-driven CSR concerns over proactive CSR initiatives. This effect is more pronounced in firms with limited financial and operational flexibility, suggesting that CSR decisions align with overall investment strategies and are influenced by financial resources. We also show that political risk negatively affects CSR activities more during financial crises and gubernatorial elections. Overall, our study highlights the role of political risk and financial flexibility in shaping firms' CSR strategies.

This paper explores the effects of bank lines of credit on corporate investment efficiency. Credit lines impact capital investment efficiency by influencing fundamental growth opportunities and non-fundamental stock valuations in Tobin's Q. Furthermore, firms with credit lines reduce under-investment, contributing to an overall improvement in investment efficiency. Although credit lines enhance capital investment efficiency, their positive impact diminishes during economic downturns, low market sentiment, and stringent lending standards. Firms characterized by specific traits, such as high financial constraints, high leverage, and short operating cycles, tend to derive greater benefits in capital investment efficiency through access to credit lines.

We study the effect of employee mobility on firm innovation. Using an occupation-based measure of employee mobility, we find that firms with more mobile workforces are associated with greater patent quantity and quality and higher innovation efficiency. This effect is more pronounced for firms with higher labor intensity, greater business diversification, and lower unionization rates. Both the private market value of innovation and the effectiveness of innovation to generate revenues increase with higher employee mobility. Consistent results are found using a quasi-experimental shock, which helps address endogeneity concerns. Our findings suggest that employee mobility has a profound impact on innovation.

This study investigates group common factors within six anomaly groups using a factor model with time-varying coefficients and stochastic volatility. We explore the time-varying relative contributions of group common factors in explaining the variation of each anomaly's return. We demonstrate that the relative importance is heterogeneous across the anomaly groups. The relative importance of the value group common factor decreased during the global financial crisis (GFC) and the COVID-19 pandemic in 2020 because the GFC and the pandemic were associated with cash flow and earnings. Moreover, we reveal that business cycles have heterogeneous impacts on the group common factors.

This study examines the spillover of Bitcoin's jumps and diffusive variations to traditional assets using high-frequency data. For our cross-asset analysis, we detect positive spillovers from Bitcoin to risk assets and negative spillovers to defensive assets. We also find evidence of positive jump and diffusion spillovers from Bitcoin to U.S. equity sectors, particularly the financials, technology, consumer discretionary, and communication services sectors. By examining the source of these risk transmissions, we show that these spillovers are exacerbated by increased economic exposures to blockchain and cryptocurrency technologies by U.S. companies. The empirical findings reveal that the price fluctuations of an unregulated asset such as Bitcoin can materially affect the price dynamics of regulated assets.

This paper explores strategies for generating and evaluating novel research ideas. Researchers can identify promising ideas by systematically exposing themselves to new, practitioner-relevant information and by contrasting emerging facts with existing theories. Additionally, by identifying the necessary conditions that are required for an idea to become a viable research project, researchers can quickly discard low-prospect ideas, freeing up mental space and time to evaluate new research opportunities.

This research investigates how block orders affect trade premium and order execution quality across trader types in Taiwan's order-driven call market. Foreign investors place buy-side block orders at a smaller premium compared to individuals, while submitting sell-side block orders at a smaller discount than individuals. Block orders tend to have longer order duration but lower fill rates. Domestic institutions themselves complete their orders faster than individuals do. Foreign investors have better market-timing capabilities either for buying or selling block orders and thus obtain shorter order duration but higher fill rate.

We investigate how the personal political preferences of top managers shape the investor base of firms. Based on the risk-aversion attitude of firm decisions that rely on conservative political ideologies, we find that Republican managers tend to maintain a lower leverage level; invest less in tangible assets and R&D to pursue near-term profitability; and maintain a high quality of information disclosure to increase stock liquidity. We demonstrate that firms led by Republican managers can attract more transient institutions. This relationship becomes stronger during financially stressful periods and is robust after considering the moderating role of managerial discretion and potential endogeneity.

This study finds that mandatory rotation of engagement partners results in more positive earnings response coefficient (ERC) in the years immediately following rotation than in the years that are not. Further analysis reveals that the positive association is driven by firms that announce bad earnings news and for bonds with longer maturity terms. Furthermore, such positive association is stronger when the incoming engagement partner has more industry expertise than the leaving partner, when the audit firm is a non–Big 6 auditor, and when the client firm is small. Finally, the relationship does not exist for voluntary partner rotation.

We study the effects of carbon transition risk on equity prices in the United States and Europe using disclosed carbon intensity data and find a negative effect on the cross section of returns and a negative carbon premium for the period 2009–2019. Examining fund flows, we find that institutional investors had an aversion to carbon-intensive stocks, which could help explain the outperformance of green stocks. We find that after the Paris Agreement this negative carbon premium disappears, and expect a positive premium in the future. We apply an asset-pricing approach to quantify the carbon risk exposure of any given asset.