Journal of International Financial Markets Institutions & Money最新文献

Fintech has experienced rapid advances in recent years. This study examines the impact of Fintech on financial stability for a group of 25 countries during 2013–2020. We adopt the novel Fintech-enabled financing volume to directly measure Fintech development. We utilise both the aggregate and disaggregated level of Fintech financing; the latter includes crowdfunding, business lending and consumer lending, each has a different funding process and default rates. We account for spatial dependence in financial stability across countries by employing various spatial models. Our findings first reveal that there is positive spatial dependence of financial stability across countries. It implies that financial stability has a positive spillover to neighbouring countries and validates the necessity of spatial analysis. Second, based on the Spatial Durbin Model which best describes our data, Fintech financing makes a positive local and cross-border contribution towards financial stability, irrespective of alternative weight matrices and sample sizes. Such positive impact is more profound in countries with smaller sizes of Fintech financing volume, and the cross-border effect is stronger with closer geographic proximity. Finally, crowdfunding enhances financial stability, whilst consumer lending has a contrasting destabilising effect.

Recent research has started to acknowledge the vital role of soft information in shaping credit rating outcomes. We extend this literature by investigating the effect of corporate integrity culture on the credit rating process and document a significant positive relationship between a culture of integrity and corporate credit ratings. We further show that this relationship is from both an indirect effect of integrity on a reduced financial risk, and a direct effect of integrity in signalling the creditworthiness of the underlying firm. When an alternative signalling device, such as firm reputation, earnings management activity, and Carbon Disclosure Project involvement, contradicts with integrity culture, integrity is no longer a significant predictor of credit ratings. Our results suggest that corporate culture plays an important role in the credit rating assessment process.

This study shows a significantly positive relationship between natural disasters and firm-level stock price crash risk using a sample of listed firms from emerging markets.The channel tests suggest that natural disasters affect crash risk by increasing corporate risk-taking, dampening firm fundamentals, and aggravating bad news hoarding. The research further identifies that the effect of natural disasters on crash risk is moderated by country-level and firm-level characteristics. Overall, our findings contribute to a broader understanding of the economic outcomes of natural disasters in emerging markets.

This paper examines the impact of exchange rate movements on firm outward direct investment (ODI), by taking into account the heterogeneous effects between distribution and production ODI. Overall, homecurrency depreciation tends to increase ODI due, in large part, to the growing emergence of distribution ODI as predicted by a theoretical model. Using rich Chinese firm-level ODI decision data over the period between 2000 and 2008, the intensive empirical search shows strong supports to the model prediction on the complementary relationship between distribution ODI and export. In response to home depreciation, Chinese firms set up more distribution trade affiliates to promote exports. Such results are robust to different econometric methodologies, empirical specifications, and time spans.

Using data from forty-six developed and emerging markets, we show that a world-based environmental, social, and governance index (ESGI) provides useful information about future economic activity in- and out-of-sample. A relatively high increase in ESGI predicts a decrease (increase) in future economic activity in the short (long) term. We document that the environmental, social, and governance components of ESGI contribute to the predictability of economic activity. Our results have significant implications for policymakers to advise firms to adopt better ESG practices.

Governments and stock exchanges worldwide are increasingly mandating firms to disclose their environmental, social, and governance (ESG) performance. This study examines whether firms adjust their dividend policies following the implementation of mandated ESG reporting. Leveraging the staggered adoption of mandatory ESG reporting using a large international dataset spanning from 1996 to 2019, we find a substantial and negative impact on corporate dividends. Specifically, we observe that firms subject to mandatory ESG reporting, on average, reduce their dividend payout ratios by approximately 25% immediately after its implementation. Further analysis reveals that this response is more pronounced for firms facing higher agency conflicts and operating in environments with greater information asymmetry, as these firms are more difficult to monitor. Additionally, we find that the impact is stronger for firms located in countries with less developed stock markets and higher financial constraints. Exploiting cross-country variations in the regulatory framework of ESG reporting, we find a heightened response in jurisdictions with stricter disclosure requirements.

We examine the stock price reactions to the mass inclusion of China A-shares in the Morgan Stanley Capital International (MSCI) global indices and find that stocks that would be included in the MSCI global indices earned significantly positive abnormal returns when the inclusion plan was first announced. These unusual stock price changes are proportional to firm-specific conditional market risk, but not to firm-level changes in expected future cash flows or the domestic shareholder base. We also show that better firm transparency and stock liquidity strengthen the positive relationship between conditional market risk and stock price revaluation. Moreover, there is a positive externality effect on the stock prices and risk exposures of stocks that would not be included in the MSCI global indices. Our results demonstrate that MSCI inclusion not only directly integrates index-included stocks with the global market but also indirectly integrates non-index-included stocks with the global market. Since the successful inclusion of A-shares in MSCI global indices implies the reduction in implicit market barriers to international investors, our results provide empirical evidence for the proposition that the reduction in implicit market barriers contributes to market integration from the perspective of stock price revaluation.

We examine the reaction of different investor categories to the COVID-19 pandemic in the Indian market throughout 2020. Using quarterly ownership data, we find significant differences across various investor categories during the crisis and post-crisis periods. We find that domestic institutional investors (DIIs) exhibit 'flight-to-quality' behavior, foreign institutional investors (FIIs) exhibit 'fire-sale' behavior, and retail investors (RIs) act as informed investors who provide liquidity during the crisis period. We observe conservative behavior from DIIs and FIIs throughout 2020, during which RIs initially increase their holdings in high-risk stocks but move to high-quality stocks in the final quarter of 2020. FIIs contribute the most to lower stock returns and higher volatility during the crisis period. Using daily FII trade-level data, we find that long-term FIIs start buying high-quality stocks before other categories in the post-crisis period, with short-term FIIs driving returns and volatility during the crisis period.

In this study, we examine whether and how the worldwide integration of corporate social responsibility (CSR) criteria into executive compensation contracts (hereafter, CSR contracting or CSR-based executive compensation) affects a firm’s stock price crash risk. Using a comprehensive sample of 42,049 firm-year observations from 53 countries from 2003 to 2019, we find that CSR contracting firms have greater stock price crash risk. This positive association can be attributed to exacerbated managerial bad news hoarding behavior and overinvestment. We further demonstrate that the positive relationship between CSR contracting and crash risk is more pronounced for firms with powerful CEOs, as well as in countries with inferior investor protection and disclosure transparency. Overall, our findings are consistent with the agency cost and managerial power perspective, suggesting that CSR contracting may be exploited by powerful and opportunistic managers as a means of diverting shareholders’ attention and concealing bad financial news. Our findings have implications for both researchers and business practitioners.

This study examines the influence of trade openness on economic growth in the Association of Southeast Asian Nations. Trade openness is associated with low levels of trade barriers and high levels of trade volumes. Lower trade barriers may negatively affect GDP in developing economies, implying that excessive trade openness could impede economic growth. Conversely, increased trade volumes positively affect GDP, highlighting the potential advantages of trade openness for economic growth. We identify the moderating role of trade barriers, noting that in countries with high trade barriers, increased trade volumes are associated with stronger economic growth.