Pub Date : 2025-02-17DOI: 10.1016/j.irfa.2025.104007
Kaixin Zheng
This paper investigates how FinTech platforms alter the relation between investment returns and consumption behaviors, using anonymized user data from Alipay, provided by Ant Financial, for 50,000 randomly selected users from August 2017 to December 2018. We introduce a novel metric, platform dependency (PlatDep), which measures the frequency of user visits to Alipay's “Fortune” page, as a proxy for individual engagement with the platform. Our findings show that users with higher PlatDep are more sensitive in their consumption expenditures to short-term investment returns. Further analysis suggests that FinTech platforms facilitate return–consumption transformation, reduce users' risk aversion, and enhance peer influence, increasing consumption sensitivity to investment returns, particularly in discretionary spending. The effect is particularly pronounced among young users and in cities with limited traditional banking infrastructure, highlighting FinTech's complementary role.
{"title":"Do FinTech platforms amplify the wealth effect?","authors":"Kaixin Zheng","doi":"10.1016/j.irfa.2025.104007","DOIUrl":"10.1016/j.irfa.2025.104007","url":null,"abstract":"<div><div>This paper investigates how FinTech platforms alter the relation between investment returns and consumption behaviors, using anonymized user data from Alipay, provided by Ant Financial, for 50,000 randomly selected users from August 2017 to December 2018. We introduce a novel metric, platform dependency (<em>PlatDep</em>), which measures the frequency of user visits to Alipay's “Fortune” page, as a proxy for individual engagement with the platform. Our findings show that users with higher <em>PlatDep</em> are more sensitive in their consumption expenditures to short-term investment returns. Further analysis suggests that FinTech platforms facilitate return–consumption transformation, reduce users' risk aversion, and enhance peer influence, increasing consumption sensitivity to investment returns, particularly in discretionary spending. The effect is particularly pronounced among young users and in cities with limited traditional banking infrastructure, highlighting FinTech's complementary role.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 104007"},"PeriodicalIF":7.5,"publicationDate":"2025-02-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143454991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-15DOI: 10.1016/j.irfa.2025.103980
John W. Goodell , Cal B. Muckley , Parvati Neelakantan , Darragh Ryan , Pei-Shan Yu
Using extensive transaction and money laundering detection data, at a globally important financial institution, we investigate the efficacy of including facets of national culture in formulating anti-money laundering predictions. For corporate and individual accounts, Hofstede individualism scores of the country in which a customer is resident, or from which a wire is sent/received, are of first-order importance in the detection of money laundering. When combined with account and transaction data; as well as even a proprietary institutional algorithm, individualism scores continue to determine the models’ predictive performances. The efficacy of cultural profiling in money laundering detection underscores the need for stringent and enforced data protection to prohibit its use. This will safeguard the civil right of individuals to privacy and promote financial inclusion.
{"title":"AI culture ‘profiling’ and anti-money laundering: Efficacy vs ethics","authors":"John W. Goodell , Cal B. Muckley , Parvati Neelakantan , Darragh Ryan , Pei-Shan Yu","doi":"10.1016/j.irfa.2025.103980","DOIUrl":"10.1016/j.irfa.2025.103980","url":null,"abstract":"<div><div>Using extensive transaction and money laundering detection data, at a globally important financial institution, we investigate the efficacy of including facets of national culture in formulating anti-money laundering predictions. For corporate and individual accounts, Hofstede individualism scores of the country in which a customer is resident, or from which a wire is sent/received, are of first-order importance in the detection of money laundering. When combined with account and transaction data; as well as even a proprietary institutional algorithm, individualism scores continue to determine the models’ predictive performances. The efficacy of cultural profiling in money laundering detection underscores the need for stringent and enforced data protection to prohibit its use. This will safeguard the civil right of individuals to privacy and promote financial inclusion.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 103980"},"PeriodicalIF":7.5,"publicationDate":"2025-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143446059","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-15DOI: 10.1016/j.irfa.2025.104003
Xiaoqian Liu , You Jia , Conghao Zhu , Chang’an Wang , Jian Yao
Renewable energy technology innovation (RETI) serves as the technological foundation for renewable energy development and has emerged as a pivotal component of the global energy transition strategy to combat climate change. While considerable research has investigated the macro influence of renewable energy policies, evidence on the micro-level performance of these policies remains limited. By manually constructing firm-level RETI and employing difference-in-differences approach, this study examines the impact of renewable energy development initiative (REDI) on enterprises' RETI. The finding indicates that REDI remarkably fosters corporate RETI. Mechanism results show that REDI spurs corporate RETI via three mechanisms: government incentives, corporate R&D investment, and corporate governance. Heterogeneity results reveal that REDI effect is prominent for SOEs and private enterprises. Furthermore, enterprises in high marketization regions are more influenced by REDI than those in low marketization ones. REDI dramatically enhances technological innovation in hydropower, wind power, solar power, and geothermal energy. This research offers pathways for other economies to advance enterprises' renewable energy development, providing valuable insights for global energy policy formulation and facilitating the acceleration of green transformation.
{"title":"Policy-driven innovation: Does the renewable energy development initiative foster corporate innovation in renewable energy technologies?","authors":"Xiaoqian Liu , You Jia , Conghao Zhu , Chang’an Wang , Jian Yao","doi":"10.1016/j.irfa.2025.104003","DOIUrl":"10.1016/j.irfa.2025.104003","url":null,"abstract":"<div><div>Renewable energy technology innovation (RETI) serves as the technological foundation for renewable energy development and has emerged as a pivotal component of the global energy transition strategy to combat climate change. While considerable research has investigated the macro influence of renewable energy policies, evidence on the micro-level performance of these policies remains limited. By manually constructing firm-level RETI and employing difference-in-differences approach, this study examines the impact of renewable energy development initiative (REDI) on enterprises' RETI. The finding indicates that REDI remarkably fosters corporate RETI. Mechanism results show that REDI spurs corporate RETI via three mechanisms: government incentives, corporate R&D investment, and corporate governance. Heterogeneity results reveal that REDI effect is prominent for SOEs and private enterprises. Furthermore, enterprises in high marketization regions are more influenced by REDI than those in low marketization ones. REDI dramatically enhances technological innovation in hydropower, wind power, solar power, and geothermal energy. This research offers pathways for other economies to advance enterprises' renewable energy development, providing valuable insights for global energy policy formulation and facilitating the acceleration of green transformation.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104003"},"PeriodicalIF":7.5,"publicationDate":"2025-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143534663","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-13DOI: 10.1016/j.irfa.2025.104002
Wenlong Miao, Yuxian Ma, Haoran Xu
Capital regulation is a core measure of modern financial regulation, but banks' regulatory avoidance behavior may affect the control effect of capital regulation on systemic risk. This study evaluates the control effect of capital regulation on bank systemic risk from the perspective of regulatory avoidance. We employ sample data from 42 Chinese listed banks from 2013 to 2023. The results reveal that as capital regulatory standards are improved, the impact of capital regulation on bank systemic risk changes from a suppressive effect to an exacerbating effect, and there is a ‘U-shaped’ relationship between the two. This impact is related to regulatory evasion behavior. The higher the capital regulatory standards, the greater the degree of bank regulatory evasion, and the weaker the control effect of capital regulation on bank systemic risk. Furthermore, this study investigates the mechanism by which capital regulation affects bank systemic risk. The results reveal that the cost compensation effect, risk correlation effect, and loss aggravation effect will all positively regulate the impact of capital supervision on bank systemic risk.
{"title":"Capital regulation, regulatory avoidance, and bank systemic risk","authors":"Wenlong Miao, Yuxian Ma, Haoran Xu","doi":"10.1016/j.irfa.2025.104002","DOIUrl":"10.1016/j.irfa.2025.104002","url":null,"abstract":"<div><div>Capital regulation is a core measure of modern financial regulation, but banks' regulatory avoidance behavior may affect the control effect of capital regulation on systemic risk. This study evaluates the control effect of capital regulation on bank systemic risk from the perspective of regulatory avoidance. We employ sample data from 42 Chinese listed banks from 2013 to 2023. The results reveal that as capital regulatory standards are improved, the impact of capital regulation on bank systemic risk changes from a suppressive effect to an exacerbating effect, and there is a ‘U-shaped’ relationship between the two. This impact is related to regulatory evasion behavior. The higher the capital regulatory standards, the greater the degree of bank regulatory evasion, and the weaker the control effect of capital regulation on bank systemic risk. Furthermore, this study investigates the mechanism by which capital regulation affects bank systemic risk. The results reveal that the cost compensation effect, risk correlation effect, and loss aggravation effect will all positively regulate the impact of capital supervision on bank systemic risk.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"100 ","pages":"Article 104002"},"PeriodicalIF":7.5,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-12DOI: 10.1016/j.irfa.2025.103995
Houyin Long , Guansen Lai , Jiaoliang Jiang , Ruonan Liu
This paper investigates the impact of top-down amplification of economic growth targets on corporate social responsibility (CSR) performance. We find a significant negative relationship between the amplification and CSR performance. We further explore the underlying mechanisms for such an effect and find that top-down amplification of economic growth targets aggravates firms' operating risk and increases their financial constraints, thereby leading to a decline in CSR performance. Further analysis shows that the effect is more pronounced among firms with less economically important, inefficient external and internal monitoring, in non-state-owned enterprises (non-SOEs), and those with lower facilitation payments. Additionally, we also find that firms with lower CSR performance are more affected by the top-down amplification of economic growth targets in terms of worse operating performance and lower total factor productivity. Overall, our findings provide new insights into the consequences of the top-down amplification of economic growth targets in emerging markets, thus expanding and complementing the existing literature.
{"title":"The impact of top-down amplification of economic growth targets on CSR performance-evidence from China","authors":"Houyin Long , Guansen Lai , Jiaoliang Jiang , Ruonan Liu","doi":"10.1016/j.irfa.2025.103995","DOIUrl":"10.1016/j.irfa.2025.103995","url":null,"abstract":"<div><div>This paper investigates the impact of top-down amplification of economic growth targets on corporate social responsibility (CSR) performance. We find a significant negative relationship between the amplification and CSR performance. We further explore the underlying mechanisms for such an effect and find that top-down amplification of economic growth targets aggravates firms' operating risk and increases their financial constraints, thereby leading to a decline in CSR performance. Further analysis shows that the effect is more pronounced among firms with less economically important, inefficient external and internal monitoring, in non-state-owned enterprises (non-SOEs), and those with lower facilitation payments. Additionally, we also find that firms with lower CSR performance are more affected by the top-down amplification of economic growth targets in terms of worse operating performance and lower total factor productivity. Overall, our findings provide new insights into the consequences of the top-down amplification of economic growth targets in emerging markets, thus expanding and complementing the existing literature.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 103995"},"PeriodicalIF":7.5,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143437648","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-12DOI: 10.1016/j.irfa.2025.103998
Peng Zhang
Using annual data from Chinese A-share listed companies from 2010 to 2022, this study empirically examines the impact of establishing the comprehensive pilot zones for cross-border e-commerce (CPZCEs) on corporate supply chain resilience by constructing a multiperiod difference-in-differences (DID) model. Furthermore, it investigates the moderating role of foreign ownership. Findings reveal that establishing CPZCEs significantly improves supply chain resilience, as evidenced by increased supply chain redundancy, decreased supply chain concentration, and improved quality of supply chain innovation. Further analysis demonstrates that foreign ownership significantly moderates the impact of CPZCEs on supply chain resilience, with higher foreign ownership percentages further amplifying this positive effect. Mechanism tests reveal that the establishment of CPZCEs improves supply chain resilience by lowering periodic expenses and tax burdens for firms. In summary, establishing CPZCEs positively influences corporate supply chain resilience, with foreign ownership playing a crucial moderating role. These findings offer empirical support for the policy's effectiveness and valuable insights into promoting cross-border e-commerce development.
{"title":"Cross-border e-commerce, foreign shareholding, and supply chain resilience","authors":"Peng Zhang","doi":"10.1016/j.irfa.2025.103998","DOIUrl":"10.1016/j.irfa.2025.103998","url":null,"abstract":"<div><div>Using annual data from Chinese A-share listed companies from 2010 to 2022, this study empirically examines the impact of establishing the comprehensive pilot zones for cross-border e-commerce (CPZCEs) on corporate supply chain resilience by constructing a multiperiod difference-in-differences (DID) model. Furthermore, it investigates the moderating role of foreign ownership. Findings reveal that establishing CPZCEs significantly improves supply chain resilience, as evidenced by increased supply chain redundancy, decreased supply chain concentration, and improved quality of supply chain innovation. Further analysis demonstrates that foreign ownership significantly moderates the impact of CPZCEs on supply chain resilience, with higher foreign ownership percentages further amplifying this positive effect. Mechanism tests reveal that the establishment of CPZCEs improves supply chain resilience by lowering periodic expenses and tax burdens for firms. In summary, establishing CPZCEs positively influences corporate supply chain resilience, with foreign ownership playing a crucial moderating role. These findings offer empirical support for the policy's effectiveness and valuable insights into promoting cross-border e-commerce development.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 103998"},"PeriodicalIF":7.5,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143511874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-11DOI: 10.1016/j.irfa.2025.103997
Qiuhan Zhao , Liangxian Fan , Honglin Chen , Yixing Yang , Zifu Wang
Addressing global climate challenges requires innovative solutions to reduce greenhouse gas emissions; however, research exploring how regional differences and spatial interactions impact the effectiveness of environmental innovation remains limited. Past research has examined green innovation and emission reduction separately, overlooking their complex geographic interdependency. This study used transaction cost theory to examine the impact of green innovation on carbon emission reduction across Chinese provinces. The findings indicate significant regional patterns in innovation effectiveness by applying spatial Durbin and dynamic threshold models based on data from China's A-share listed companies from 2015 to 2022. The findings show that green innovation significantly reduced carbon emissions while positively affecting neighboring regions. This impact varied notably across areas, with eastern provinces exhibiting the most significant effects, followed by the western and central areas. This relationship was nonlinear, influenced by government intervention, economic development, and foreign direct investment. These findings inform environmental policy by illustrating how regional factors shape innovation outcomes while proposing targeted strategies to enhance emission reductions across varying economic contexts.
{"title":"Green innovation and carbon emission reduction: Empirical insights from spatial durbin and dynamic threshold models","authors":"Qiuhan Zhao , Liangxian Fan , Honglin Chen , Yixing Yang , Zifu Wang","doi":"10.1016/j.irfa.2025.103997","DOIUrl":"10.1016/j.irfa.2025.103997","url":null,"abstract":"<div><div>Addressing global climate challenges requires innovative solutions to reduce greenhouse gas emissions; however, research exploring how regional differences and spatial interactions impact the effectiveness of environmental innovation remains limited. Past research has examined green innovation and emission reduction separately, overlooking their complex geographic interdependency. This study used transaction cost theory to examine the impact of green innovation on carbon emission reduction across Chinese provinces. The findings indicate significant regional patterns in innovation effectiveness by applying spatial Durbin and dynamic threshold models based on data from China's A-share listed companies from 2015 to 2022. The findings show that green innovation significantly reduced carbon emissions while positively affecting neighboring regions. This impact varied notably across areas, with eastern provinces exhibiting the most significant effects, followed by the western and central areas. This relationship was nonlinear, influenced by government intervention, economic development, and foreign direct investment. These findings inform environmental policy by illustrating how regional factors shape innovation outcomes while proposing targeted strategies to enhance emission reductions across varying economic contexts.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 103997"},"PeriodicalIF":7.5,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143488946","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-11DOI: 10.1016/j.irfa.2025.103969
Giuseppe Orlando
This work provides a comprehensive overview of Exchange-Traded Products (ETPs), focusing on their emergence as a preferred investment option for investors prioritizing asset allocation over stock picking. It discusses market practices, performance standards like GIPS, and the transformative impact of ETPs since their introduction in Canada in 1990. Regulatory shifts have disintermediated commercial banks, while the rise of passive investment vehicles like ETFs has contributed to what some call the ”zombification” of markets, marked by increased risk from excessive leverage and concentrated exposure to specific assets and strategies. The study also explores risks, mitigation strategies, transparency, liquidity, and systemic risk implications, highlighting the need for effective regulations to safeguard investors and maintain financial stability, fueled by growth concerns.
{"title":"Exchange traded products: Taxonomy, risk and mitigations","authors":"Giuseppe Orlando","doi":"10.1016/j.irfa.2025.103969","DOIUrl":"10.1016/j.irfa.2025.103969","url":null,"abstract":"<div><div>This work provides a comprehensive overview of Exchange-Traded Products (ETPs), focusing on their emergence as a preferred investment option for investors prioritizing asset allocation over stock picking. It discusses market practices, performance standards like GIPS, and the transformative impact of ETPs since their introduction in Canada in 1990. Regulatory shifts have disintermediated commercial banks, while the rise of passive investment vehicles like ETFs has contributed to what some call the ”zombification” of markets, marked by increased risk from excessive leverage and concentrated exposure to specific assets and strategies. The study also explores risks, mitigation strategies, transparency, liquidity, and systemic risk implications, highlighting the need for effective regulations to safeguard investors and maintain financial stability, fueled by growth concerns.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"101 ","pages":"Article 103969"},"PeriodicalIF":7.5,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143437649","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines whether and how green manufacturing enhances corporate environmental performances. We find that the green manufacturing policy significantly improves firm environmental performance. Mechanisms analysis show that green manufacturing will affect corporate environmental performances through fostering corporate green innovation, relieving financing constraints, and promoting environmental information disclosure. The impacts of green manufacturing on corporate environmental performances are more pronounced in non-state-owned firms, firms with lower environmentally regulated level, heavily polluting firms, and large-scale companies. Finally, we find that the green manufacturing policy can also improve firm overall ESG performance. This paper contributes to the growing literature on firm environmental behavior and proposes tailored policy implications for the government to address the challenges of green development.
{"title":"Greening the future: How green manufacturing shapes corporate environmental and ESG success","authors":"Yulan Zheng , Yifan Wu , Yaoli Zhang , Xiaoyu Meng , Pengdong Zhang","doi":"10.1016/j.irfa.2025.103994","DOIUrl":"10.1016/j.irfa.2025.103994","url":null,"abstract":"<div><div>This paper examines whether and how green manufacturing enhances corporate environmental performances. We find that the green manufacturing policy significantly improves firm environmental performance. Mechanisms analysis show that green manufacturing will affect corporate environmental performances through fostering corporate green innovation, relieving financing constraints, and promoting environmental information disclosure. The impacts of green manufacturing on corporate environmental performances are more pronounced in non-state-owned firms, firms with lower environmentally regulated level, heavily polluting firms, and large-scale companies. Finally, we find that the green manufacturing policy can also improve firm overall ESG performance. This paper contributes to the growing literature on firm environmental behavior and proposes tailored policy implications for the government to address the challenges of green development.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"100 ","pages":"Article 103994"},"PeriodicalIF":7.5,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The increasing interest in sustainability within economics and finance has led to the widespread adoption of Environmental, Social, and Governance (ESG) metrics, expressed as ratings or indices, to assess the sustainable performance of companies. However, inconsistencies among data providers stem not only from definitional differences but also from disagreements on how to measure ESG factors. This paper proposes a novel approach by conversely focusing on ESG factors common to data providers. Through three empirical approaches – correlation analysis, principal component analysis, and panel data regressions – we aim to understand the shared components shaping common ESG metrics, particularly in the Environmental Pillar. Our findings emphasize a limited number of indicators that act as common factors across three providers, primarily concerning managing natural resources. This commonality emerges despite the different perspectives adopted by the rating agencies — such as risk management, corporate impact management, and integration into corporate strategy. This analysis offers valuable insights for companies, financial institutions, practitioners, scholars, and policymakers, enabling more concise information for analyses and decision-making in their respective fields.
{"title":"Common factors behind companies’ Environmental ratings","authors":"Gianluca Gucciardi , Elisa Ossola , Lucia Parisio , Matteo Pelagatti","doi":"10.1016/j.irfa.2025.103961","DOIUrl":"10.1016/j.irfa.2025.103961","url":null,"abstract":"<div><div>The increasing interest in sustainability within economics and finance has led to the widespread adoption of Environmental, Social, and Governance (ESG) metrics, expressed as ratings or indices, to assess the sustainable performance of companies. However, inconsistencies among data providers stem not only from definitional differences but also from disagreements on how to measure ESG factors. This paper proposes a novel approach by conversely focusing on ESG factors common to data providers. Through three empirical approaches – correlation analysis, principal component analysis, and panel data regressions – we aim to understand the shared components shaping common ESG metrics, particularly in the Environmental Pillar. Our findings emphasize a limited number of indicators that act as common factors across three providers, primarily concerning managing natural resources. This commonality emerges despite the different perspectives adopted by the rating agencies — such as risk management, corporate impact management, and integration into corporate strategy. This analysis offers valuable insights for companies, financial institutions, practitioners, scholars, and policymakers, enabling more concise information for analyses and decision-making in their respective fields.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"100 ","pages":"Article 103961"},"PeriodicalIF":7.5,"publicationDate":"2025-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422696","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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