Pub Date : 2024-11-22DOI: 10.1016/j.pacfin.2024.102598
Zailin Xu , Xiaoyijing Chen , Mei Yu
This paper analyzes the effects of China's fiscal tax policy changes. By exploring the immediate market responses and subsequent volatility, the study highlights the unanticipated nature of the tax hike and its significant impact on market dynamics. Using high-frequency trading data, the analysis demonstrates increased market volatility and reduced trading volumes following the tax adjustment. Comparative analysis with later adjustments in 2008 and 2023 further explains the differential impacts of such fiscal measures on various types of stocks. The findings emphasize the necessity for policymakers to consider market expectations and the specific characteristics of securities when implementing transaction taxes, suggesting approaches to reducing adverse market reactions and enhancing market stability.
{"title":"Market responses to the China's transaction cost changes: An analysis of volatility dynamics","authors":"Zailin Xu , Xiaoyijing Chen , Mei Yu","doi":"10.1016/j.pacfin.2024.102598","DOIUrl":"10.1016/j.pacfin.2024.102598","url":null,"abstract":"<div><div>This paper analyzes the effects of China's fiscal tax policy changes. By exploring the immediate market responses and subsequent volatility, the study highlights the unanticipated nature of the tax hike and its significant impact on market dynamics. Using high-frequency trading data, the analysis demonstrates increased market volatility and reduced trading volumes following the tax adjustment. Comparative analysis with later adjustments in 2008 and 2023 further explains the differential impacts of such fiscal measures on various types of stocks. The findings emphasize the necessity for policymakers to consider market expectations and the specific characteristics of securities when implementing transaction taxes, suggesting approaches to reducing adverse market reactions and enhancing market stability.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102598"},"PeriodicalIF":4.8,"publicationDate":"2024-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142724005","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 : 2024-11-22DOI: 10.1016/j.pacfin.2024.102597
Qiankun Gu , Conggang Li , Yanyin Li , Rong Xu , Yize Xu
As a pivotal element in the evolution of government regulation, the economic consequences of inquiry letters have received significant attention from policymakers and academics. This study examines the impact of inquiry letters issued by stock exchanges on the demand for corporate directors' and officers' liability insurance (D&O insurance). Our findings indicate a significant positive relationship between inquiry letters and future D&O insurance demand, with main conclusions remaining robust across various robustness tests such as difference-in-differences estimation, propensity score matching, and instrumental variables. In addition, both regulatory inquiry pressure and corporate attention significantly increase D&O insurance demand, with notable variations across inquiry types. Channel tests show that inquiry letters function as effective risk warning signals, alerting companies to litigation, governance, and reputation risks. Further analysis reveals that corporate governance mechanisms and political connections dampen the facilitating effect of inquiry letters on firms' D&O insurance demand. Our study provides valuable practical insights for policymakers and corporate managers in emerging markets based on a non-punitive regulation perspective.
{"title":"Does non-punitive regulation increase the demand for D&O insurance?","authors":"Qiankun Gu , Conggang Li , Yanyin Li , Rong Xu , Yize Xu","doi":"10.1016/j.pacfin.2024.102597","DOIUrl":"10.1016/j.pacfin.2024.102597","url":null,"abstract":"<div><div>As a pivotal element in the evolution of government regulation, the economic consequences of inquiry letters have received significant attention from policymakers and academics. This study examines the impact of inquiry letters issued by stock exchanges on the demand for corporate directors' and officers' liability insurance (D&O insurance). Our findings indicate a significant positive relationship between inquiry letters and future D&O insurance demand, with main conclusions remaining robust across various robustness tests such as difference-in-differences estimation, propensity score matching, and instrumental variables. In addition, both regulatory inquiry pressure and corporate attention significantly increase D&O insurance demand, with notable variations across inquiry types. Channel tests show that inquiry letters function as effective risk warning signals, alerting companies to litigation, governance, and reputation risks. Further analysis reveals that corporate governance mechanisms and political connections dampen the facilitating effect of inquiry letters on firms' D&O insurance demand. Our study provides valuable practical insights for policymakers and corporate managers in emerging markets based on a non-punitive regulation perspective.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102597"},"PeriodicalIF":4.8,"publicationDate":"2024-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142746379","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 : 2024-11-20DOI: 10.1016/j.pacfin.2024.102595
Yiyun Chu , Lili Shao , Li Yang
Empirical studies show mixed and inconclusive findings on the relationship between derivatives uses and firm value, with reasons remaining unclear. This paper addresses this issue by applying the enterprise discounted cash flow (DCF) model. Based on commodity futures uses in China's non-financial publicly listed companies, this paper shows that the use of commodity futures, either for the purpose of hedging or speculation, diminishes the firm value. Specifically, the hedging ones damage the operational portion of firm value through a modest decline in free cash flow—primarily attributable to a substantial increase in capital expenditure—and a relatively stable cost of capital. Conversely, the speculation ones harm the non-operating portion of firm value via a steep rise in the cost of capital and the investment gains. Our findings show that hedging and speculation derivatives impact different aspects of firm value through cash flow and cost of capital channels. These findings help to explain the diverse empirical findings on the relationship between derivatives and firm value.
{"title":"Explaining the diversity in findings on derivatives uses and firm value: Insights from firms' commodity futures use","authors":"Yiyun Chu , Lili Shao , Li Yang","doi":"10.1016/j.pacfin.2024.102595","DOIUrl":"10.1016/j.pacfin.2024.102595","url":null,"abstract":"<div><div>Empirical studies show mixed and inconclusive findings on the relationship between derivatives uses and firm value, with reasons remaining unclear. This paper addresses this issue by applying the enterprise discounted cash flow (DCF) model. Based on commodity futures uses in China's non-financial publicly listed companies, this paper shows that the use of commodity futures, either for the purpose of hedging or speculation, diminishes the firm value. Specifically, the hedging ones damage the operational portion of firm value through a modest decline in free cash flow—primarily attributable to a substantial increase in capital expenditure—and a relatively stable cost of capital. Conversely, the speculation ones harm the non-operating portion of firm value via a steep rise in the cost of capital and the investment gains. Our findings show that hedging and speculation derivatives impact different aspects of firm value through cash flow and cost of capital channels. These findings help to explain the diverse empirical findings on the relationship between derivatives and firm value.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102595"},"PeriodicalIF":4.8,"publicationDate":"2024-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142724003","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 : 2024-11-19DOI: 10.1016/j.pacfin.2024.102592
Yunqing Tao , Qiaochu Wang , Jinqiang Yang , Yongwei Ye
This paper investigates whether strengthened creditor protection affects corporate R&D. Our identification strategy treats China's Internet judicial auction (IJA) as an exogenous shock to creditor protection and then adopts a staggered difference-in-differences (DID) estimation. The results show that IJA significantly increase corporate R&D. Mechanism analysis indicates that IJA increase loan availability of firms by lowering loan costs and improving loan scale, finally leading to an enhancement in R&D investment. In addition, this promotion effect is more pronounced among non-state-owned firms, firms in capital-intensive industries, and firms in highly competitive industries. Further analysis suggests that IJA can improve firms' patent output, productivity, and operational efficiency. Overall, our findings show that strengthening creditor protection through IJA can enhance corporate R&D investment.
{"title":"How creditor protection stimulates corporate R&D: Insights from internet judicial auctions in China","authors":"Yunqing Tao , Qiaochu Wang , Jinqiang Yang , Yongwei Ye","doi":"10.1016/j.pacfin.2024.102592","DOIUrl":"10.1016/j.pacfin.2024.102592","url":null,"abstract":"<div><div>This paper investigates whether strengthened creditor protection affects corporate R&D. Our identification strategy treats China's Internet judicial auction (<em>IJA</em>) as an exogenous shock to creditor protection and then adopts a staggered difference-in-differences (DID) estimation. The results show that <em>IJA</em> significantly increase corporate R&D. Mechanism analysis indicates that <em>IJA</em> increase loan availability of firms by lowering loan costs and improving loan scale, finally leading to an enhancement in R&D investment. In addition, this promotion effect is more pronounced among non-state-owned firms, firms in capital-intensive industries, and firms in highly competitive industries. Further analysis suggests that <em>IJA</em> can improve firms' patent output, productivity, and operational efficiency. Overall, our findings show that strengthening creditor protection through <em>IJA</em> can enhance corporate R&D investment.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102592"},"PeriodicalIF":4.8,"publicationDate":"2024-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142724002","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 : 2024-11-19DOI: 10.1016/j.pacfin.2024.102583
Kai Xing , Fang Yang , Ping Liu , Jue Wang , Junchuan Wu
This study uses data from Chinese A-share listed companies in heavily polluting industries from 2012 to 2021 to investigate the influence of environmental violations on the risk of financial distress. Empirical results show that if a company is involved in environmental violations, the probability of experiencing financial distress increases. This finding is validated through a series of robustness tests. Mechanism analysis reveals that environmental violations exacerbate financial distress through two channels: increased financing constraints and decreased internal control quality. Heterogeneity analysis indicates that the aggravating effect of environmental violations on financial distress is stronger in firms with high levels of information asymmetry and low female representation on the board of directors. Further analysis finds that the new Environmental Protection Law has a negative moderating effect on the relationship between environmental violations and financial distress. These findings provide important insights into how corporate governance and legislation can protect the environment and achieve sustainable development.
本研究利用 2012 年至 2021 年中国 A 股重污染行业上市公司的数据，研究环境违法行为对财务困境风险的影响。实证结果表明，如果一家公司涉及环境违法行为，其遭遇财务困境的概率就会增加。这一结论通过一系列稳健性检验得到了验证。机制分析表明，环境违法行为通过两个渠道加剧财务困境：融资约束增加和内部控制质量下降。异质性分析表明，在信息不对称程度高、董事会中女性代表比例低的企业中，环境违规对财务困境的加剧效应更强。进一步分析发现，新《环境保护法》对环境违法行为与财务困境之间的关系具有负向调节作用。这些发现为公司治理和立法如何保护环境和实现可持续发展提供了重要启示。
{"title":"Environmental violations and financial distress risk: Evidence from Chinese listed heavily polluting companies","authors":"Kai Xing , Fang Yang , Ping Liu , Jue Wang , Junchuan Wu","doi":"10.1016/j.pacfin.2024.102583","DOIUrl":"10.1016/j.pacfin.2024.102583","url":null,"abstract":"<div><div>This study uses data from Chinese A-share listed companies in heavily polluting industries from 2012 to 2021 to investigate the influence of environmental violations on the risk of financial distress. Empirical results show that if a company is involved in environmental violations, the probability of experiencing financial distress increases. This finding is validated through a series of robustness tests. Mechanism analysis reveals that environmental violations exacerbate financial distress through two channels: increased financing constraints and decreased internal control quality. Heterogeneity analysis indicates that the aggravating effect of environmental violations on financial distress is stronger in firms with high levels of information asymmetry and low female representation on the board of directors. Further analysis finds that the new Environmental Protection Law has a negative moderating effect on the relationship between environmental violations and financial distress. These findings provide important insights into how corporate governance and legislation can protect the environment and achieve sustainable development.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102583"},"PeriodicalIF":4.8,"publicationDate":"2024-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703286","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 : 2024-11-19DOI: 10.1016/j.pacfin.2024.102593
Xiaomeng Lu , Zehui He , Yaling Li , Ronghua Luo
We investigate the impact of Post-compulsory Education (PCE) on household asset allocation in this paper. As an investment in children's development, families face a trade-off between PCE and other assets. Based on the data from six representative rounds of the China Household Finance Survey (CHFS), we conduct extensive empirical analyses and find that households with children in the PCE stage, such as senior high schools or universities, exhibit lower proportions of illiquid assets and high-risk assets. We further show that liquidity constraints and expectations of future income are two basic mechanisms through which PCE affects household asset allocation, and the former is relatively stronger. In the heterogeneity analyses, we find that the impact of PCE on family asset allocation is more pronounced in families where parents have educational attainment below the university degree, in families with male children, in rural households, and in families that value education.
{"title":"Post-compulsory education of children and household asset allocation","authors":"Xiaomeng Lu , Zehui He , Yaling Li , Ronghua Luo","doi":"10.1016/j.pacfin.2024.102593","DOIUrl":"10.1016/j.pacfin.2024.102593","url":null,"abstract":"<div><div>We investigate the impact of Post-compulsory Education (PCE) on household asset allocation in this paper. As an investment in children's development, families face a trade-off between PCE and other assets. Based on the data from six representative rounds of the China Household Finance Survey (CHFS), we conduct extensive empirical analyses and find that households with children in the PCE stage, such as senior high schools or universities, exhibit lower proportions of illiquid assets and high-risk assets. We further show that liquidity constraints and expectations of future income are two basic mechanisms through which PCE affects household asset allocation, and the former is relatively stronger. In the heterogeneity analyses, we find that the impact of PCE on family asset allocation is more pronounced in families where parents have educational attainment below the university degree, in families with male children, in rural households, and in families that value education.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102593"},"PeriodicalIF":4.8,"publicationDate":"2024-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703284","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 : 2024-11-19DOI: 10.1016/j.pacfin.2024.102591
Jiangze Bian , Qilin Qin , Wenjing Song , Jun Wang , Ge Zhang
We use granular account-level data from margin trading during the 2015 stock market crash in China to compute each stock's exposure to fire sale risks during the market turmoil. When we form the treatment group of stocks with low exposures and the control group of stocks with high exposures, we find that the diff-in-diff regression using this setting generates results qualitatively similar to the regression based on treatment/control groups setting according to whether the stock was in the STOCK-CONNECT list after 2015. When we re-run the regressions to examine the effects of the introduction of STOCK-CONNECT program in a subsample of stocks with similar exposures to fire sale risks, the difference between impact of stock market liberalization on stocks tradable by foreign investors and on stocks not tradable by foreign investors become insignificant. Our empirical results provide evidence supporting the conjecture that the effects of two salient events (the introduction of the STOCK-CONNECT and the stock bubble formation and burst) mix together.
{"title":"Stock fire sale risks and the effect of China connect","authors":"Jiangze Bian , Qilin Qin , Wenjing Song , Jun Wang , Ge Zhang","doi":"10.1016/j.pacfin.2024.102591","DOIUrl":"10.1016/j.pacfin.2024.102591","url":null,"abstract":"<div><div>We use granular account-level data from margin trading during the 2015 stock market crash in China to compute each stock's exposure to fire sale risks during the market turmoil. When we form the treatment group of stocks with low exposures and the control group of stocks with high exposures, we find that the diff-in-diff regression using this setting generates results qualitatively similar to the regression based on treatment/control groups setting according to whether the stock was in the STOCK-CONNECT list after 2015. When we re-run the regressions to examine the effects of the introduction of STOCK-CONNECT program in a subsample of stocks with similar exposures to fire sale risks, the difference between impact of stock market liberalization on stocks tradable by foreign investors and on stocks not tradable by foreign investors become insignificant. Our empirical results provide evidence supporting the conjecture that the effects of two salient events (the introduction of the STOCK-CONNECT and the stock bubble formation and burst) mix together.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102591"},"PeriodicalIF":4.8,"publicationDate":"2024-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703283","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 : 2024-11-16DOI: 10.1016/j.pacfin.2024.102578
Wei-an Li , Hanyu Du , Feng He
Investigating the potential benefits of corporate ESG disclosure for increased risk mitigation and business resilience is imperative. Using a sample of publicly listed companies in China from 2006 to 2020, this paper uses a difference-in-differences (DID) design to investigate whether corporate ESG disclosure can effectively reduce its default risk. We find that corporate ESG information disclosure significantly reduces default risk. This relationship is mediated through information communication mechanisms, internal governance mechanisms and external monitoring mechanisms. This finding is robust to a series of tests, including a parallel trend test, a PSM-DID design, a placebo test and alternative default risk calculations. ESG disclosure does not significantly affect a company's stock returns but significantly reduce its stock price volatility and enhance stock liquidity. We show that corporate engagement and disclosure of ESG information can enhance corporate governance and promote sustainable development.
{"title":"Mandatory corporate ESG disclosure and default risk – Evidence from China","authors":"Wei-an Li , Hanyu Du , Feng He","doi":"10.1016/j.pacfin.2024.102578","DOIUrl":"10.1016/j.pacfin.2024.102578","url":null,"abstract":"<div><div>Investigating the potential benefits of corporate ESG disclosure for increased risk mitigation and business resilience is imperative. Using a sample of publicly listed companies in China from 2006 to 2020, this paper uses a difference-in-differences (DID) design to investigate whether corporate ESG disclosure can effectively reduce its default risk. We find that corporate ESG information disclosure significantly reduces default risk. This relationship is mediated through information communication mechanisms, internal governance mechanisms and external monitoring mechanisms. This finding is robust to a series of tests, including a parallel trend test, a PSM-DID design, a placebo test and alternative default risk calculations. ESG disclosure does not significantly affect a company's stock returns but significantly reduce its stock price volatility and enhance stock liquidity. We show that corporate engagement and disclosure of ESG information can enhance corporate governance and promote sustainable development.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102578"},"PeriodicalIF":4.8,"publicationDate":"2024-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703287","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 : 2024-11-16DOI: 10.1016/j.pacfin.2024.102585
Xianghui Yuan , Jun Long , Xiang Li , Chencheng Zhao
This paper investigates the asymmetric spillover in the Chinese stock sectors, spanning from January 2011 to December 2022. Specifically, our work highlights the daytime and overnight return spillovers, using the DY spillover framework. The empirical results reveal that the main risk transmitters are Industrial, Materials, and Con.discret sectors, whereas the main risk receivers are Telecom and Financial sectors during the day and night. Furthermore, we find ample evidence of asymmetric spillover by the spillover asymmetric measures (SAM). Total spillover is higher at night due to stronger overnight correlations. The sectors' FROM contributions are also significantly higher at night, while TO contributions are not so. Finally, we find that Chinese and American EPUs have asymmetric influence on the daytime and overnight spillovers. These findings provide important practical implications to regulatory authorities and investors for better diversification strategies and effective market oversight.
本文研究了 2011 年 1 月至 2022 年 12 月期间中国股票行业的非对称溢出效应。具体而言，我们的研究利用 DY 溢出框架，突出了日间和隔夜回报的溢出效应。实证结果显示，在白天和夜间，主要的风险传递者是工业、材料和通信行业，而主要的风险接收者是电信和金融行业。此外，通过溢出非对称度量（SAM），我们发现了大量非对称溢出的证据。由于隔夜相关性更强，夜间的总溢出率更高。各部门的 FROM 贡献在夜间也显著较高，而 TO 贡献则不然。最后，我们发现中国和美国的 EPU 对白天和夜间溢出效应的影响是不对称的。这些发现为监管机构和投资者提供了重要的实际意义，有助于他们制定更好的分散化策略和进行有效的市场监督。
{"title":"Asymmetric connectedness in the Chinese stock sectors: Overnight and daytime return spillovers","authors":"Xianghui Yuan , Jun Long , Xiang Li , Chencheng Zhao","doi":"10.1016/j.pacfin.2024.102585","DOIUrl":"10.1016/j.pacfin.2024.102585","url":null,"abstract":"<div><div>This paper investigates the asymmetric spillover in the Chinese stock sectors, spanning from January 2011 to December 2022. Specifically, our work highlights the daytime and overnight return spillovers, using the DY spillover framework. The empirical results reveal that the main risk transmitters are Industrial, Materials, and Con.discret sectors, whereas the main risk receivers are Telecom and Financial sectors during the day and night. Furthermore, we find ample evidence of asymmetric spillover by the spillover asymmetric measures (SAM). Total spillover is higher at night due to stronger overnight correlations. The sectors' FROM contributions are also significantly higher at night, while TO contributions are not so. Finally, we find that Chinese and American EPUs have asymmetric influence on the daytime and overnight spillovers. These findings provide important practical implications to regulatory authorities and investors for better diversification strategies and effective market oversight.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102585"},"PeriodicalIF":4.8,"publicationDate":"2024-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703281","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 : 2024-11-16DOI: 10.1016/j.pacfin.2024.102584
Jie Wang , Hanxiu Cheng , Ke Qiao
Executive corruption stands as a pervasive issue in the capital market, posing a substantial threat to the healthy and steady growth of companies. Using data from Chinese listed companies from 2007 to 2019, this study comprehensively investigates the correlation between individual auditor's experience and executive implicit corruption, delving deeper into the functions of both internal and external corporate governance frameworks. The results indicate that individual auditor's industry-specific and client-specific expertise play a critical role in mitigating executive implicit corruption. Further analysis suggests that as national anti-corruption efforts intensify and media scrutiny increases, the significance of auditor experience in combating executive corruption becomes even more evident. Additionally, in state-owned enterprises and companies with high transparency, the experience of individual auditors exerts a stronger influence in mitigating executive corruption, emphasizing its increased importance in a governance environment marked by transparency and standardization. This study not only guides practical corporate governance efforts but also provides substantial theoretical support for shaping relevant policies and regulatory interventions, highlighting the unique and substantial contributions of auditor individual characteristics to corporate governance and transparency.
{"title":"Does experience matter? An examination of individual Auditor's experience on executive implicit corruption","authors":"Jie Wang , Hanxiu Cheng , Ke Qiao","doi":"10.1016/j.pacfin.2024.102584","DOIUrl":"10.1016/j.pacfin.2024.102584","url":null,"abstract":"<div><div>Executive corruption stands as a pervasive issue in the capital market, posing a substantial threat to the healthy and steady growth of companies. Using data from Chinese listed companies from 2007 to 2019, this study comprehensively investigates the correlation between individual auditor's experience and executive implicit corruption, delving deeper into the functions of both internal and external corporate governance frameworks. The results indicate that individual auditor's industry-specific and client-specific expertise play a critical role in mitigating executive implicit corruption. Further analysis suggests that as national anti-corruption efforts intensify and media scrutiny increases, the significance of auditor experience in combating executive corruption becomes even more evident. Additionally, in state-owned enterprises and companies with high transparency, the experience of individual auditors exerts a stronger influence in mitigating executive corruption, emphasizing its increased importance in a governance environment marked by transparency and standardization. This study not only guides practical corporate governance efforts but also provides substantial theoretical support for shaping relevant policies and regulatory interventions, highlighting the unique and substantial contributions of auditor individual characteristics to corporate governance and transparency.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"89 ","pages":"Article 102584"},"PeriodicalIF":4.8,"publicationDate":"2024-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703280","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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