Pub Date : 2024-09-21DOI: 10.1016/j.irfa.2024.103595
Digital mergers and acquisitions (M&As) have gained global momentum. However, whether digital M&As can effectively stimulate corporate innovation awaits further research. This paper evaluates the causal effect of digital M&As on corporate innovation using data from digital M&As and patents of Chinese A-share listed companies. Our findings indicate that digital M&As significantly promote the quantity and quality of acquirers' innovation, which still holds after various robustness tests and exhibits heterogeneity in different dimensions such as transactions, acquirers, and targets. Mechanism tests further reveal that knowledge synergy, financial synergy, and human capital structure upgrading are critical channels through which digital M&As promote the acquirers' innovation.
{"title":"The innovation effect of digital M&As: Evidence from China","authors":"","doi":"10.1016/j.irfa.2024.103595","DOIUrl":"10.1016/j.irfa.2024.103595","url":null,"abstract":"<div><div>Digital mergers and acquisitions (M&As) have gained global momentum. However, whether digital M&As can effectively stimulate corporate innovation awaits further research. This paper evaluates the causal effect of digital M&As on corporate innovation using data from digital M&As and patents of Chinese A-share listed companies. Our findings indicate that digital M&As significantly promote the quantity and quality of acquirers' innovation, which still holds after various robustness tests and exhibits heterogeneity in different dimensions such as transactions, acquirers, and targets. Mechanism tests further reveal that knowledge synergy, financial synergy, and human capital structure upgrading are critical channels through which digital M&As promote the acquirers' innovation.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142318745","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 : 2024-09-21DOI: 10.1016/j.irfa.2024.103590
This paper revisits the determinants of the loan generating process as it is revealed through the idiosyncratic role of banks, in the case of the United States. Specifically, if banks are primarily mainstream “financial intermediaries”, then their financial role is expressed through a credit growth process emanating from the reserves of banks, in the period before Basel requirements, and from banks' equity during the era of Basel I, II & III restrictions. On the other hand, if banks are primarily “credit and money creators”, as an heterodox point of view would have it, then every proxy of the aggregate demand (AD) needs, is expected to play a leading role in the credit creation process. The innovative liquidity risk ratios, like LCR & NFSR, brought new instruments in this debate thus, extending the alternatives between the two extremes. Hence, the combination of a predominant role for AD needs along with acknowledgment of liquidity restrictions as drivers of credit growth, characterises an eclectic approach. According to our empirical results, credit to both US firms and households, is primarily driven by aggregate demand (AD) factors. Solvency and liquidity risk ratios do play a role, during the examined period but the overall results are closer to the eclectic approach, concerning the role of US banks, which seems to be more encompassing and realistic.
本文以美国为例，重新探讨了通过银行的特殊作用揭示的贷款产生过程的决定因素。具体而言，如果银行主要是主流的 "金融中介"，那么在巴塞尔协议要求之前的时期，其金融作用就会通过银行的储备金以及巴塞尔协议 I、II & 和 III 限制时期的银行股本所产生的信贷增长过程来体现。另一方面，如果银行主要是 "信贷和货币创造者"，正如异端观点所认为的那样，那么总需求（AD）的每一个代理变量都将在信贷创造过程中发挥主导作用。创新的流动性风险比率，如 LCR & NFSR，为这场辩论带来了新的工具，从而扩大了两个极端之间的选择范围。因此，既承认 AD 需求的主导作用，又承认流动性限制是信贷增长的驱动力，这两者的结合是一种折衷方法的特点。根据我们的实证结果，美国企业和家庭的信贷主要由总需求因素驱动。在研究期间，偿付能力和流动性风险比率确实发挥了一定作用，但总体结果更接近折衷方法，即美国银行的作用，这似乎更全面、更现实。
{"title":"Testing how banks generate credit in the USA under the Basel III framework","authors":"","doi":"10.1016/j.irfa.2024.103590","DOIUrl":"10.1016/j.irfa.2024.103590","url":null,"abstract":"<div><div>This paper revisits the determinants of the loan generating process as it is revealed through the idiosyncratic role of banks, in the case of the United States. Specifically, if banks are primarily mainstream “financial intermediaries”, then their financial role is expressed through a credit growth process emanating from the reserves of banks, in the period before Basel requirements, and from banks' equity during the era of Basel I, II & III restrictions. On the other hand, if banks are primarily “credit and money creators”, as an heterodox point of view would have it, then every proxy of the aggregate demand (AD) needs, is expected to play a leading role in the credit creation process. The innovative liquidity risk ratios, like LCR & NFSR, brought new instruments in this debate thus, extending the alternatives between the two extremes. Hence, the combination of a predominant role for AD needs along with acknowledgment of liquidity restrictions as drivers of credit growth, characterises an eclectic approach. According to our empirical results, credit to both US firms and households, is primarily driven by aggregate demand (AD) factors. Solvency and liquidity risk ratios do play a role, during the examined period but the overall results are closer to the eclectic approach, concerning the role of US banks, which seems to be more encompassing and realistic.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142357213","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 : 2024-09-21DOI: 10.1016/j.irfa.2024.103589
This paper examines the association between non-arm's-length transactions, the existence of offshore financial centres, the existence of a transfer pricing agreement and corporate cash holdings for a large sample of U.S. multinational corporations over the 2006–2020 period. This study provides evidence that the existence of non-arm's-length transactions and of offshore financial centres increased the level of corporate cash holdings. In contrast, the existence of a transfer pricing agreement reduces the level of firm cash holdings. Overall, these results suggest that development of transfer pricing agreements with taxing authorities reduces multinational corporations' incentives and capacity to shift profits from higher- to lower-tax countries. These results remain robust to alternative specifications of cash holdings and endogeneity tests.
{"title":"Non-arm's-length transactions, offshore financial centres, transfer pricing agreements and corporate cash holdings: Evidence from U.S. multinational corporations","authors":"","doi":"10.1016/j.irfa.2024.103589","DOIUrl":"10.1016/j.irfa.2024.103589","url":null,"abstract":"<div><div>This paper examines the association between non-arm's-length transactions, the existence of offshore financial centres, the existence of a transfer pricing agreement and corporate cash holdings for a large sample of U.S. multinational corporations over the 2006–2020 period. This study provides evidence that the existence of non-arm's-length transactions and of offshore financial centres increased the level of corporate cash holdings. In contrast, the existence of a transfer pricing agreement reduces the level of firm cash holdings. Overall, these results suggest that development of transfer pricing agreements with taxing authorities reduces multinational corporations' incentives and capacity to shift profits from higher- to lower-tax countries. These results remain robust to alternative specifications of cash holdings and endogeneity tests.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142318743","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}
Pub Date : 2024-09-21DOI: 10.1016/j.irfa.2024.103596
Digital technology for financial inclusion tends to bring more benefits to people at the bottom of the economic pyramid across the Asia-Pacific region; therefore, financial inclusion is crucial for sustainable development and economic growth in this region. Digital financial services, based on technology-driven innovation, contribute to enhanced financial inclusion at affordable prices, which potentially reaches many new people who are unbanked or underbanked. This paper examines the impact of digital financial inclusion (DFI) on economic growth in 30 Asia-Pacific countries based on panel data for 2014, 2017, and 2021. A three-stage principal component analysis is used to develop the DFI index for the Asia-Pacific region, capturing both the digital and traditional aspects. We use fixed effect regression to examine the linear effect of DFI on economic growth, and results show a significant positive impact, contributing to the Theory of Finance and Growth, System Theory, and Diffusion Theory of Innovation. Given the different roles of DFI in different countries and the wide digital divide across the region, this paper employs a panel threshold regression model to identify any non-monotonic influence of DFI on economic growth. The results show a significant threshold effect of DFI, indicating the non-linear effect of financial inclusion on economic growth. The paper brings evidence-based policy implications to boost DFI to achieve inclusive growth.
{"title":"Financial inclusion through digitalization and economic growth in Asia-Pacific countries","authors":"","doi":"10.1016/j.irfa.2024.103596","DOIUrl":"10.1016/j.irfa.2024.103596","url":null,"abstract":"<div><div>Digital technology for financial inclusion tends to bring more benefits to people at the bottom of the economic pyramid across the Asia-Pacific region; therefore, financial inclusion is crucial for sustainable development and economic growth in this region. Digital financial services, based on technology-driven innovation, contribute to enhanced financial inclusion at affordable prices, which potentially reaches many new people who are unbanked or underbanked. This paper examines the impact of digital financial inclusion (DFI) on economic growth in 30 Asia-Pacific countries based on panel data for 2014, 2017, and 2021. A three-stage principal component analysis is used to develop the DFI index for the Asia-Pacific region, capturing both the digital and traditional aspects. We use fixed effect regression to examine the linear effect of DFI on economic growth, and results show a significant positive impact, contributing to the <em>Theory of Finance and Growth, System Theory,</em> and <em>Diffusion Theory of Innovation</em>. Given the different roles of DFI in different countries and the wide digital divide across the region, this paper employs a panel threshold regression model to identify any non-monotonic influence of DFI on economic growth. The results show a significant threshold effect of DFI, indicating the non-linear effect of financial inclusion on economic growth. The paper brings evidence-based policy implications to boost DFI to achieve inclusive growth.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142318750","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}
Pub Date : 2024-09-21DOI: 10.1016/j.irfa.2024.103600
This study delves into the intricate relationship between house prices and the economy, using a combined dataset of 287 Chinese cities and incorporating urban investment bonds, local government financing platforms, and land resources statistics. Key findings indicate that rising house prices boosted per capita gross domestic product before the financial crisis, but this effect diminished after the crisis. Although rising prices increased total output, they also heightened local debt risks, resulting in a double-edged impact. The study also found that government policies that caused a rapid increase in house prices disrupted resource allocation, jeopardizing urban sustainability. Research emphasizes the importance of carefully designed policies to ensure the balanced development of the real estate market, which is conducive to long-term economic health.
{"title":"House prices, financing mode and economic growth","authors":"","doi":"10.1016/j.irfa.2024.103600","DOIUrl":"10.1016/j.irfa.2024.103600","url":null,"abstract":"<div><div>This study delves into the intricate relationship between house prices and the economy, using a combined dataset of 287 Chinese cities and incorporating urban investment bonds, local government financing platforms, and land resources statistics. Key findings indicate that rising house prices boosted per capita gross domestic product before the financial crisis, but this effect diminished after the crisis. Although rising prices increased total output, they also heightened local debt risks, resulting in a double-edged impact. The study also found that government policies that caused a rapid increase in house prices disrupted resource allocation, jeopardizing urban sustainability. Research emphasizes the importance of carefully designed policies to ensure the balanced development of the real estate market, which is conducive to long-term economic health.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142327235","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 : 2024-09-21DOI: 10.1016/j.irfa.2024.103586
In this paper, we use a semi-supervised machine learning technique, the word2vec word embedding model, to measure litigation risk for fixed-income issuers that use bond financing in primary market for mergers and acquisitions (M&As) in 28 countries. We investigate the relationship between the litigation risk and the offering yield of these securities, demonstrating that increased litigation risk increases financing costs. We analyze several ways to mitigate adverse effects, including the employment of more M&A advisors and assessing the legal environment in the issuing country. Our results are robust to an instrumental variable approach and alternative measures.
{"title":"Litigation risk and the cost of debt financing in M&As","authors":"","doi":"10.1016/j.irfa.2024.103586","DOIUrl":"10.1016/j.irfa.2024.103586","url":null,"abstract":"<div><div>In this paper, we use a semi-supervised machine learning technique, the <em>word2vec</em> word embedding model, to measure litigation risk for fixed-income issuers that use bond financing in primary market for mergers and acquisitions (M&As) in 28 countries. We investigate the relationship between the litigation risk and the offering yield of these securities, demonstrating that increased litigation risk increases financing costs. We analyze several ways to mitigate adverse effects, including the employment of more M&A advisors and assessing the legal environment in the issuing country. Our results are robust to an instrumental variable approach and alternative measures.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142329840","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}
Pub Date : 2024-09-21DOI: 10.1016/j.irfa.2024.103603
With the emergence of the digital economy era, enhancing financial efficiency through the complementary effect of digital and traditional finance has increasingly become a focal point in the financial industry. This paper focuses on 19 urban agglomerations in China to investigate whether digital finance and traditional finance have complementary effect on improving financial efficiency. It explores the mechanisms behind this complementary effect, examines whether financial efficiency can continue to improve once digital finance reaches a critical scale, and investigates whether economic development moderates the impact of digital finance on financial efficiency. The findings reveal that digital finance contributes positively to enhancing financial efficiency, and that there exists a complementary effect between digital finance and traditional finance in this regard. These conclusions remain robust even after conducting various stability tests and addressing endogeneity issues. Mechanism testing demonstrated that this complementary effect arises from improvements of transactional efficiency and marketization level. Further analysis reveals that, while digital finance significantly enhances financial efficiency up to a critical scale, this effect diminishes beyond that threshold. Moreover, in areas with high-level financial development, economic development has a positive moderating effect on the impact of digital finance on financial efficiency, whereas in areas with low-level financial development, such a moderating effect is not robust.
{"title":"Traditional finance, digital finance, and financial efficiency: An empirical analysis based on 19 urban agglomerations in China","authors":"","doi":"10.1016/j.irfa.2024.103603","DOIUrl":"10.1016/j.irfa.2024.103603","url":null,"abstract":"<div><div>With the emergence of the digital economy era, enhancing financial efficiency through the complementary effect of digital and traditional finance has increasingly become a focal point in the financial industry. This paper focuses on 19 urban agglomerations in China to investigate whether digital finance and traditional finance have complementary effect on improving financial efficiency. It explores the mechanisms behind this complementary effect, examines whether financial efficiency can continue to improve once digital finance reaches a critical scale, and investigates whether economic development moderates the impact of digital finance on financial efficiency. The findings reveal that digital finance contributes positively to enhancing financial efficiency, and that there exists a complementary effect between digital finance and traditional finance in this regard. These conclusions remain robust even after conducting various stability tests and addressing endogeneity issues. Mechanism testing demonstrated that this complementary effect arises from improvements of transactional efficiency and marketization level. Further analysis reveals that, while digital finance significantly enhances financial efficiency up to a critical scale, this effect diminishes beyond that threshold. Moreover, in areas with high-level financial development, economic development has a positive moderating effect on the impact of digital finance on financial efficiency, whereas in areas with low-level financial development, such a moderating effect is not robust.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142357288","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}
Pub Date : 2024-09-21DOI: 10.1016/j.irfa.2024.103606
This article uses China's A-share nonfinancial listed company reports from 2017 to 2019 as the research sample and analyzes three textual features of key audit matters using machine learning to identify financial restatement behaviors. Results show that firms with a worse level of key audit matter readability, a negative tone, and a greater level of detail had a higher probability of financial restatement behaviors. From this, investors can infer whether firms have strong internal or external monitoring. These correlations reflect the importance of standardized information disclosures and appropriate regulatory programs to safeguard investors' rights and interests.
{"title":"Do firms incur financial restatements? A recognition study based on textual features of key audit matters reports","authors":"","doi":"10.1016/j.irfa.2024.103606","DOIUrl":"10.1016/j.irfa.2024.103606","url":null,"abstract":"<div><div>This article uses China's A-share nonfinancial listed company reports from 2017 to 2019 as the research sample and analyzes three textual features of key audit matters using machine learning to identify financial restatement behaviors. Results show that firms with a worse level of key audit matter readability, a negative tone, and a greater level of detail had a higher probability of financial restatement behaviors. From this, investors can infer whether firms have strong internal or external monitoring. These correlations reflect the importance of standardized information disclosures and appropriate regulatory programs to safeguard investors' rights and interests.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142327233","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 : 2024-09-21DOI: 10.1016/j.irfa.2024.103608
Following the increasing adoption of stablecoins, their robustness has become an ongoing concern for investors and regulators alike. This article studies the co-instability of a large panel of stablecoins by identifying their structural breaks and co-occurrences. Moreover, we use Dynamic Time Warping (DTW) and Dynamic Conditional Correlation DCC-GARCH models to assess spillover effects in the wake of four major black swan events in the crypto world. Similar to prior literature, we conclude that algorithmic stablecoins were the major shock receivers of the IRON TITAN and TERRA LUNA crashes, highlighting the importance of allowing for sufficient margins of safety in their design. We also observe that the FTX bankruptcy and the Silicon Valley Bank collapse had repercussions of a different nature and affected more categories of stablecoins, from algorithmic to fiat money-backed. We also highlight how, irrespective of the idiosyncratic or systemic nature of the shocks, well-known custodial stablecoins, as well as the most successful crypto-collateralized tokens, showed resilience during or in the immediate aftermath of these events.
随着稳定币被越来越多地采用，其稳健性已成为投资者和监管机构持续关注的问题。本文通过识别稳定币的结构断裂和共现，研究了大量稳定币的共不稳定性。此外，我们还使用动态时间扭曲（DTW）和动态条件相关性 DCC-GARCH 模型来评估加密世界四大黑天鹅事件后的溢出效应。与之前的文献类似，我们得出的结论是，算法稳定币是 IRON TITAN 和 TERRA LUNA 崩溃的主要冲击接收器，这凸显了在其设计中留出足够的安全边际的重要性。我们还注意到，FTX 破产和硅谷银行倒闭产生了不同性质的反响，影响了更多类别的稳定币，从算法币到法币支持币。我们还强调，无论冲击的特异性或系统性如何，知名的托管型稳定币以及最成功的加密担保代币在这些事件期间或之后都表现出了韧性。
{"title":"Break a peg! A study of stablecoin co-instability","authors":"","doi":"10.1016/j.irfa.2024.103608","DOIUrl":"10.1016/j.irfa.2024.103608","url":null,"abstract":"<div><div>Following the increasing adoption of stablecoins, their robustness has become an ongoing concern for investors and regulators alike. This article studies the co-instability of a large panel of stablecoins by identifying their structural breaks and co-occurrences. Moreover, we use Dynamic Time Warping (DTW) and Dynamic Conditional Correlation DCC-GARCH models to assess spillover effects in the wake of four major black swan events in the crypto world. Similar to prior literature, we conclude that algorithmic stablecoins were the major shock receivers of the IRON TITAN and TERRA LUNA crashes, highlighting the importance of allowing for sufficient margins of safety in their design. We also observe that the FTX bankruptcy and the Silicon Valley Bank collapse had repercussions of a different nature and affected more categories of stablecoins, from algorithmic to fiat money-backed. We also highlight how, irrespective of the idiosyncratic or systemic nature of the shocks, well-known custodial stablecoins, as well as the most successful crypto-collateralized tokens, showed resilience during or in the immediate aftermath of these events.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142329839","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 : 2024-09-21DOI: 10.1016/j.irfa.2024.103587
This study examines how employee approval ratings of CEOs improve the predictability of turnover. Using the crowd-sourced reviews from Glassdoor, we find that CEOs with high employee approval are less likely to be removed, even after a poor performance. The decrease in turnover–performance sensitivity is particularly strong when the relative importance of employees is greater in industries of higher intangible asset intensity and in states with strong employee protection. Firms with higher CEO approval subsequently show improved performance and lowered firm-specific risk. We highlight the role of employees as a key stakeholder in predicting CEO turnover, consistent with the value creation view of stakeholder capitalism.
{"title":"Crowd-sourced CEO approval and turnover","authors":"","doi":"10.1016/j.irfa.2024.103587","DOIUrl":"10.1016/j.irfa.2024.103587","url":null,"abstract":"<div><div>This study examines how employee approval ratings of CEOs improve the predictability of turnover. Using the crowd-sourced reviews from Glassdoor, we find that CEOs with high employee approval are less likely to be removed, even after a poor performance. The decrease in turnover–performance sensitivity is particularly strong when the relative importance of employees is greater in industries of higher intangible asset intensity and in states with strong employee protection. Firms with higher CEO approval subsequently show improved performance and lowered firm-specific risk. We highlight the role of employees as a key stakeholder in predicting CEO turnover, consistent with the value creation view of stakeholder capitalism.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":null,"pages":null},"PeriodicalIF":7.5,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142357214","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}
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