Pub Date : 2025-06-26DOI: 10.1016/j.ememar.2025.101317
Humoud Alsabah , Khaled Alsabah
This study examines seasonal anomalies in Kuwait’s stock exchange market from 2012 to 2023, following the establishment of the Capital Markets Authority. Our findings reveal significant shifts in established patterns. Notably, we observe higher returns on the third and fourth trading days of the week and a substantial increase in January returns. This research contributes to understanding market behavior, emphasizing the impact of regulatory changes and market evolution on trading patterns. Additionally, our findings provide actionable insights for fund managers and investors, suggesting that aligning investment strategies with these new patterns could lead to optimized returns.
{"title":"Kuwait Stock Exchange: A re-examination of seasonal anomalies","authors":"Humoud Alsabah , Khaled Alsabah","doi":"10.1016/j.ememar.2025.101317","DOIUrl":"10.1016/j.ememar.2025.101317","url":null,"abstract":"<div><div>This study examines seasonal anomalies in Kuwait’s stock exchange market from 2012 to 2023, following the establishment of the Capital Markets Authority. Our findings reveal significant shifts in established patterns. Notably, we observe higher returns on the third and fourth trading days of the week and a substantial increase in January returns. This research contributes to understanding market behavior, emphasizing the impact of regulatory changes and market evolution on trading patterns. Additionally, our findings provide actionable insights for fund managers and investors, suggesting that aligning investment strategies with these new patterns could lead to optimized returns.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101317"},"PeriodicalIF":5.6,"publicationDate":"2025-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144517006","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-24DOI: 10.1016/j.ememar.2025.101331
Neeru Chaudhry, Priya Dhawan
Inconclusive evidence on how CSR affects idiosyncratic volatility (IVOL) is potentially because of different approaches used to measure firms' CSR performance. We use the actual amount spent on CSR activities to measure firms' CSR performance. For a sample of 20,410 firm-year observations and 2000–2021 period, we show that as firms' CSR spending increases, IVOL decreases. This relationship becomes stronger as social-and-community and employee-welfare spending increases but is insensitive to spending on environmental-protection. Cash flow volatility and financial-constraints decreases, and firm valuation improves with employee-welfare spending. It is important to integrate CSR with risk-management-strategies at the firm-level and policy-formulation at the economy-level.
{"title":"Does firms' commitment towards CSR influence idiosyncratic volatility? Evidence from India","authors":"Neeru Chaudhry, Priya Dhawan","doi":"10.1016/j.ememar.2025.101331","DOIUrl":"10.1016/j.ememar.2025.101331","url":null,"abstract":"<div><div>Inconclusive evidence on how CSR affects idiosyncratic volatility (<em>IVOL</em>) is potentially because of different approaches used to measure firms' CSR performance. We use the actual amount spent on CSR activities to measure firms' CSR performance. For a sample of 20,410 firm-year observations and 2000–2021 period, we show that as firms' CSR spending increases, <em>IVOL</em> decreases. This relationship becomes stronger as social-and-community and employee-welfare spending increases but is insensitive to spending on environmental-protection. Cash flow volatility and financial-constraints decreases, and firm valuation improves with employee-welfare spending. It is important to integrate CSR with risk-management-strategies at the firm-level and policy-formulation at the economy-level.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101331"},"PeriodicalIF":5.6,"publicationDate":"2025-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144570252","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-18DOI: 10.1016/j.ememar.2025.101311
Chuhong Wang , Xingfei Liu , Massimiliano Tani , Yan Zhao
We examine how reducing ‘background risk’ – the unobserved uncertainty in investment settings – affects household portfolios when individuals unexpectedly gain a comprehensive safety net encompassing health insurance, pension, and other benefits. Leveraging a natural experiment from China's property rights reform and RUMiC data, we find that the reform increases household savings rates and investments in risky assets, indicating that lower background risk enables households to allocate more resources to higher-return, more productive investments. Our results underscore institutional safety nets as effective policy tools to promote risk-taking and capital accumulation in emerging economies.
{"title":"Safety nets and investment choices","authors":"Chuhong Wang , Xingfei Liu , Massimiliano Tani , Yan Zhao","doi":"10.1016/j.ememar.2025.101311","DOIUrl":"10.1016/j.ememar.2025.101311","url":null,"abstract":"<div><div>We examine how reducing ‘background risk’ – the unobserved uncertainty in investment settings – affects household portfolios when individuals unexpectedly gain a comprehensive safety net encompassing health insurance, pension, and other benefits. Leveraging a natural experiment from China's property rights reform and RUMiC data, we find that the reform increases household savings rates and investments in risky assets, indicating that lower background risk enables households to allocate more resources to higher-return, more productive investments. Our results underscore institutional safety nets as effective policy tools to promote risk-taking and capital accumulation in emerging economies.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101311"},"PeriodicalIF":5.6,"publicationDate":"2025-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144510658","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-16DOI: 10.1016/j.ememar.2025.101327
Luis Gonzalo Llosa , Fernando J. Pérez-Forero , Vicente Tuesta
We study the connection between financial conditions and economic uncertainty across five major Latin American countries: Brazil, Chile, Colombia, Mexico, and Peru. Using a Bayesian Threshold Vector Autoregression (BVAR) model with stochastic volatility, our findings reveal that sudden jumps in uncertainty tighten financial conditions, increasing the likelihood of financial distress when the country credit spread exceeds a threshold value. Additionally, we find that uncertainty shocks are recessionary, leading to lower domestic short-term interest rates and a depreciation of domestic currencies against the US dollar. Notably, these effects are more pronounced and persistent during periods of financial distress. Another important finding is the heterogeneity in countries' responses to uncertainty, which reflects significant cross-country differences in economic fundamentals and policy frameworks. Finally, our results suggest that, while uncertainty contributes modestly to overall business cycle volatility, it has a substantial impact on financial variables—a dynamic that becomes significantly amplified during episodes of financial distress.
{"title":"Uncertainty shocks and financial conditions in Latin-American countries","authors":"Luis Gonzalo Llosa , Fernando J. Pérez-Forero , Vicente Tuesta","doi":"10.1016/j.ememar.2025.101327","DOIUrl":"10.1016/j.ememar.2025.101327","url":null,"abstract":"<div><div>We study the connection between financial conditions and economic uncertainty across five major Latin American countries: Brazil, Chile, Colombia, Mexico, and Peru. Using a Bayesian Threshold Vector Autoregression (BVAR) model with stochastic volatility, our findings reveal that sudden jumps in uncertainty tighten financial conditions, increasing the likelihood of financial distress when the country credit spread exceeds a threshold value. Additionally, we find that uncertainty shocks are recessionary, leading to lower domestic short-term interest rates and a depreciation of domestic currencies against the US dollar. Notably, these effects are more pronounced and persistent during periods of financial distress. Another important finding is the heterogeneity in countries' responses to uncertainty, which reflects significant cross-country differences in economic fundamentals and policy frameworks. Finally, our results suggest that, while uncertainty contributes modestly to overall business cycle volatility, it has a substantial impact on financial variables—a dynamic that becomes significantly amplified during episodes of financial distress.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101327"},"PeriodicalIF":5.6,"publicationDate":"2025-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144517093","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses a portfolio allocation model to analyse the demand for household financial assets in the form of bank deposits, savings and term deposits for an emerging market, Sri Lanka, for the period 1981–2022. In contrast to previous research, findings reveal the presence of a non-linear relationship between household financial assets and share of asset allocation. The findings also suggest some degree of substitutability and complementarity between household bank investments. The findings of this study inform monetary policy decisions to encourage household savings in times of highly volatile political and economic conditions, such as civil wars and economic crises.
{"title":"Modelling the demand for financial assets: The case of Sri Lanka","authors":"E.A. Selvanathan , Maneka Jayasinghe , Saroja Selvanathan , Brinda Viswanathan","doi":"10.1016/j.ememar.2025.101330","DOIUrl":"10.1016/j.ememar.2025.101330","url":null,"abstract":"<div><div>This paper uses a portfolio allocation model to analyse the demand for household financial assets in the form of bank deposits, savings and term deposits for an emerging market, Sri Lanka, for the period 1981–2022. In contrast to previous research, findings reveal the presence of a non-linear relationship between household financial assets and share of asset allocation. The findings also suggest some degree of substitutability and complementarity between household bank investments. The findings of this study inform monetary policy decisions to encourage household savings in times of highly volatile political and economic conditions, such as civil wars and economic crises.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101330"},"PeriodicalIF":5.6,"publicationDate":"2025-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144297244","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-13DOI: 10.1016/j.ememar.2025.101328
Chunkai Zhao , Runtao Wang , Boou Chen , Jingrong Li
This study examines the effect of childhood left-behind experience (CLBE) on financial market participation in China. We find that the CLBE significantly reduces the likelihood of financial market participation, which is supported by several robustness checks. Mechanism tests show that this negative impact can be explained by human capital loss, earnings penalty effects, and financial accessibility. Further exploration indicates that the greater the CLBE intensity, the more pronounced the negative impact. Worse, the negative effect of CLBE is not eliminated by the subsequent return of parents, and the mitigation effects of digital development are limited.
{"title":"Hidden costs of separation: Exploring the effect of left-behind experiences on financial market participation in China","authors":"Chunkai Zhao , Runtao Wang , Boou Chen , Jingrong Li","doi":"10.1016/j.ememar.2025.101328","DOIUrl":"10.1016/j.ememar.2025.101328","url":null,"abstract":"<div><div>This study examines the effect of childhood left-behind experience (CLBE) on financial market participation in China. We find that the CLBE significantly reduces the likelihood of financial market participation, which is supported by several robustness checks. Mechanism tests show that this negative impact can be explained by human capital loss, earnings penalty effects, and financial accessibility. Further exploration indicates that the greater the CLBE intensity, the more pronounced the negative impact. Worse, the negative effect of CLBE is not eliminated by the subsequent return of parents, and the mitigation effects of digital development are limited.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101328"},"PeriodicalIF":5.6,"publicationDate":"2025-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144330457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-13DOI: 10.1016/j.ememar.2025.101329
Tam Tran , Craig Wilson , Fan Yang
Using Vietnamese data, we study how net-buyer executives (previously thought to identify overconfidence) affect corporate investment. We find that both net-buyer CEOs and net-buyer board chairs tend to increase corporate investment, which is mitigated by both domestic and state institutional ownership, and exacerbated by foreign institutional ownership. We find that net-buyer CEOs subsequently increase firm value, so they seem to have justified confidence in their ability to generate value, whereas net-buyer board chairs subsequently decrease firm value, displaying genuine overconfidence. As this distinction does not hold for dual board chair-CEOs, it could arise from information asymmetry between CEOs and chairs.
{"title":"Executive overconfidence, corporate investment, and institutional ownership: Evidence from Vietnam","authors":"Tam Tran , Craig Wilson , Fan Yang","doi":"10.1016/j.ememar.2025.101329","DOIUrl":"10.1016/j.ememar.2025.101329","url":null,"abstract":"<div><div>Using Vietnamese data, we study how net-buyer executives (previously thought to identify overconfidence) affect corporate investment. We find that both net-buyer CEOs and net-buyer board chairs tend to increase corporate investment, which is mitigated by both domestic and state institutional ownership, and exacerbated by foreign institutional ownership. We find that net-buyer CEOs subsequently increase firm value, so they seem to have justified confidence in their ability to generate value, whereas net-buyer board chairs subsequently decrease firm value, displaying genuine overconfidence. As this distinction does not hold for dual board chair-CEOs, it could arise from information asymmetry between CEOs and chairs.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101329"},"PeriodicalIF":5.6,"publicationDate":"2025-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144330456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-09DOI: 10.1016/j.ememar.2025.101326
Xiangyi Zhou , Fang Zheng , Sheng Xiao
Using a large sample of over 5000 startups across various industries and 524 media outlets in China between 2000 and 2016, we examine the effects of media coverage of startups on Venture Capital (VC) investment decisions and performance. To the best of our knowledge, for the first time in finance literature, we have discovered that media coverage of startups significantly affects VC investment decisions and exit performance. Specifically, such coverage, especially positive coverage, significantly increases the probability and amount of VC investments in startups. It also significantly improves the exit performance of VC investments. The significant effects of media coverage of startups on VC investments are caused by market-oriented instead of state-controlled media. We further find that VC investments in a focal startup are significantly influenced by the average media coverage of other startups in the same industry or the same city. Our results are robust to a battery of robustness tests.
{"title":"Media coverage of startups and venture capital investments","authors":"Xiangyi Zhou , Fang Zheng , Sheng Xiao","doi":"10.1016/j.ememar.2025.101326","DOIUrl":"10.1016/j.ememar.2025.101326","url":null,"abstract":"<div><div>Using a large sample of over 5000 startups across various industries and 524 media outlets in China between 2000 and 2016, we examine the effects of media coverage of startups on Venture Capital (VC) investment decisions and performance. To the best of our knowledge, for the first time in finance literature, we have discovered that media coverage of startups significantly affects VC investment decisions and exit performance. Specifically, such coverage, especially positive coverage, significantly increases the probability and amount of VC investments in startups. It also significantly improves the exit performance of VC investments. The significant effects of media coverage of startups on VC investments are caused by market-oriented instead of state-controlled media. We further find that VC investments in a focal startup are significantly influenced by the average media coverage of other startups in the same industry or the same city. Our results are robust to a battery of robustness tests.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101326"},"PeriodicalIF":5.6,"publicationDate":"2025-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144290632","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-05-31DOI: 10.1016/j.ememar.2025.101314
Liangcheng Wang, Yizheng Chen
Artificial intelligence technology provides new solutions to management problems and plays an important role in investment decision-making. In this study, we explore the effect of artificial intelligence on corporate investment. Using a sample from China, we find that artificial intelligence improves corporate investment efficiency by enhancing internal control and ESG performance. This finding is particularly pronounced in firms with high artificial intelligence application proficiency and without state ownership. Finally, our findings demonstrate that AI could influence corporate investment decisions, encouraging firms to engage in risky investment behaviours. Our findings have implications for firms to adopt artificial intelligence to optimise investment.
{"title":"Artificial intelligence and corporate investment efficiency: Evidence from China","authors":"Liangcheng Wang, Yizheng Chen","doi":"10.1016/j.ememar.2025.101314","DOIUrl":"10.1016/j.ememar.2025.101314","url":null,"abstract":"<div><div>Artificial intelligence technology provides new solutions to management problems and plays an important role in investment decision-making. In this study, we explore the effect of artificial intelligence on corporate investment. Using a sample from China, we find that artificial intelligence improves corporate investment efficiency by enhancing internal control and ESG performance. This finding is particularly pronounced in firms with high artificial intelligence application proficiency and without state ownership. Finally, our findings demonstrate that AI could influence corporate investment decisions, encouraging firms to engage in risky investment behaviours. Our findings have implications for firms to adopt artificial intelligence to optimise investment.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"68 ","pages":"Article 101314"},"PeriodicalIF":5.6,"publicationDate":"2025-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144196107","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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