Pub Date : 2025-11-13DOI: 10.1016/j.ribaf.2025.103213
Yugang Chen , Shan Lu , Yasir Shahab , Yuxuan Zhu
This study examines how analyst recommendations influence takeover probability using a sample of Chinese listed companies during 2012–2023, investigating whether “loud voices” (coverage breadth) or “reliable voices” (analytical accuracy) matter more for acquirer decisions in selecting targets. Our key findings are threefold. First, analyst recommendation consensus ratings are positively associated with takeover probability. Second, information complexity in analyst reports significantly attenuates this positive relationship, indicating that transmission barriers affect analyst voice effectiveness. Third, analytical reliability exhibits stronger amplification effects than coverage breadth in enhancing recommendation influence on takeover decisions. These results reveal a “reliability over loudness” information processing pattern in M&A target selection, supporting signal quality over bounded rationality explanations and providing novel theoretical insights into the role of information intermediaries in emerging markets.
{"title":"Loud voices or reliable voices? Analyst influence on takeover decisions in China","authors":"Yugang Chen , Shan Lu , Yasir Shahab , Yuxuan Zhu","doi":"10.1016/j.ribaf.2025.103213","DOIUrl":"10.1016/j.ribaf.2025.103213","url":null,"abstract":"<div><div>This study examines how analyst recommendations influence takeover probability using a sample of Chinese listed companies during 2012–2023, investigating whether “loud voices” (coverage breadth) or “reliable voices” (analytical accuracy) matter more for acquirer decisions in selecting targets. Our key findings are threefold. First, analyst recommendation consensus ratings are positively associated with takeover probability. Second, information complexity in analyst reports significantly attenuates this positive relationship, indicating that transmission barriers affect analyst voice effectiveness. Third, analytical reliability exhibits stronger amplification effects than coverage breadth in enhancing recommendation influence on takeover decisions. These results reveal a “reliability over loudness” information processing pattern in M&A target selection, supporting signal quality over bounded rationality explanations and providing novel theoretical insights into the role of information intermediaries in emerging markets.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103213"},"PeriodicalIF":6.9,"publicationDate":"2025-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145571823","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}
We employ Natural Language Processing (NLP) to analyze how climate change is discussed in the annual sustainability reports of the 35 largest EU banks (2015–2021), assessing alignment with four societal expectations: decarbonizing financial products and services, addressing climate-related risks, reducing operational emissions, and enhancing transparency. These expectations stem from governments, regulators, and civil society. Analyzing over 1.5 million statements, we find that about 7% of content pertains to climate change. Banks increasingly focus on decarbonizing consumer products and their own operations, but devote less attention to financed emissions, transition risks, and concrete commitments. Our study contributes to the application of NLP in climate finance by qualitatively interpreting how banks, in their own words, engage with societal expectations around the climate transition. This complements quantitative studies by contextualizing disclosure patterns and highlighting reporting gaps and under-emphasized but material issues, offering insights that can inform policymakers in designing disclosure requirements.
{"title":"Unpacking banks’ response to societal expectations: An NLP analysis of European banks’ discussion of climate change","authors":"Åsa Löfgren , Jasmine Elliott , Yinan Yu , Samuel Scheidegger","doi":"10.1016/j.ribaf.2025.103207","DOIUrl":"10.1016/j.ribaf.2025.103207","url":null,"abstract":"<div><div>We employ Natural Language Processing (NLP) to analyze how climate change is discussed in the annual sustainability reports of the 35 largest EU banks (2015–2021), assessing alignment with four societal expectations: decarbonizing financial products and services, addressing climate-related risks, reducing operational emissions, and enhancing transparency. These expectations stem from governments, regulators, and civil society. Analyzing over 1.5 million statements, we find that about 7% of content pertains to climate change. Banks increasingly focus on decarbonizing consumer products and their own operations, but devote less attention to financed emissions, transition risks, and concrete commitments. Our study contributes to the application of NLP in climate finance by qualitatively interpreting how banks, in their own words, engage with societal expectations around the climate transition. This complements quantitative studies by contextualizing disclosure patterns and highlighting reporting gaps and under-emphasized but material issues, offering insights that can inform policymakers in designing disclosure requirements.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"82 ","pages":"Article 103207"},"PeriodicalIF":6.9,"publicationDate":"2025-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145618673","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-13DOI: 10.1016/j.ribaf.2025.103211
Yunning Ma , Xuhui Huang , Hyoungsuk Lee , Yongrok Choi , Fu-Sheng Tsai
South Korea launched its national carbon emissions trading scheme (ETS) in 2015, yet its effectiveness in promoting low-carbon transformation and emissions reduction within the electric utility sector remains contentious. Electric utilities dominate energy consumption and carbon emissions, making their policy responses critically important. Specifically, this study utilizes financial, energy consumption, emissions, and R&D data from electric utilities between 2013 and 2022. Employing a difference-in-differences strategy, utilities are divided into treatment and control groups based on pre-policy emission intensity. The analysis focuses on three key indicators: Carbon Total Factor Productivity (CTFP), Morishima Elasticity of Substitution (MES), and Marginal Abatement Cost (MAC). Results indicate that ETS significantly enhanced utilities’ CTFP, primarily through efficiency gains rather than technological frontier expansion. It also increased MAC, signaling rising emission reduction costs, while showing no significant impact on MES, suggesting no fundamental shift in the structural relationship between output and emissions. Given the electric utility sector’s central role in national emission reduction strategies, these findings hold significant implications for understanding ETS’ policy effectiveness and future refinement pathways.
{"title":"Can the financial scheme of emission trading affect technology development and sustainability?","authors":"Yunning Ma , Xuhui Huang , Hyoungsuk Lee , Yongrok Choi , Fu-Sheng Tsai","doi":"10.1016/j.ribaf.2025.103211","DOIUrl":"10.1016/j.ribaf.2025.103211","url":null,"abstract":"<div><div>South Korea launched its national carbon emissions trading scheme (ETS) in 2015, yet its effectiveness in promoting low-carbon transformation and emissions reduction within the electric utility sector remains contentious. Electric utilities dominate energy consumption and carbon emissions, making their policy responses critically important. Specifically, this study utilizes financial, energy consumption, emissions, and R&D data from electric utilities between 2013 and 2022. Employing a difference-in-differences strategy, utilities are divided into treatment and control groups based on pre-policy emission intensity. The analysis focuses on three key indicators: Carbon Total Factor Productivity (CTFP), Morishima Elasticity of Substitution (MES), and Marginal Abatement Cost (MAC). Results indicate that ETS significantly enhanced utilities’ CTFP, primarily through efficiency gains rather than technological frontier expansion. It also increased MAC, signaling rising emission reduction costs, while showing no significant impact on MES, suggesting no fundamental shift in the structural relationship between output and emissions. Given the electric utility sector’s central role in national emission reduction strategies, these findings hold significant implications for understanding ETS’ policy effectiveness and future refinement pathways.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103211"},"PeriodicalIF":6.9,"publicationDate":"2025-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145571270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-11DOI: 10.1016/j.ribaf.2025.103209
Manuel Cano-Rodríguez, Alonso Moreno
Previous research shows that religiosity is associated with more ethical business decisions, as well as with more conservative and less risk-prone decisions. Along this line, some research documents a positive relationship between religiosity and higher-quality accounting information, measured using different quantitative characteristics of financial information. Different from previous research, this paper focuses on the narrative sections of financial statements. Specifically, we analyze whether religiosity has any influence on the readability of annual reports. Our results show that firms located in highly religious areas provide annual reports with higher readability, consistent with the positive relationship between religiosity and financial information quality. Additionally, our results reveal that religiosity has both a direct influence on readability, which we attribute to more ethical behavior, and an indirect influence, in terms of higher risk aversion. The direct influence (ethical behavior) is stronger than the indirect one (risk aversion).
{"title":"Religion and the readability of textual financial disclosures","authors":"Manuel Cano-Rodríguez, Alonso Moreno","doi":"10.1016/j.ribaf.2025.103209","DOIUrl":"10.1016/j.ribaf.2025.103209","url":null,"abstract":"<div><div>Previous research shows that religiosity is associated with more ethical business decisions, as well as with more conservative and less risk-prone decisions. Along this line, some research documents a positive relationship between religiosity and higher-quality accounting information, measured using different quantitative characteristics of financial information. Different from previous research, this paper focuses on the narrative sections of financial statements. Specifically, we analyze whether religiosity has any influence on the readability of annual reports. Our results show that firms located in highly religious areas provide annual reports with higher readability, consistent with the positive relationship between religiosity and financial information quality. Additionally, our results reveal that religiosity has both a direct influence on readability, which we attribute to more ethical behavior, and an indirect influence, in terms of higher risk aversion. The direct influence (ethical behavior) is stronger than the indirect one (risk aversion).</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103209"},"PeriodicalIF":6.9,"publicationDate":"2025-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145571276","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-11DOI: 10.1016/j.ribaf.2025.103208
Dung Thi Ngoc Pham
This study examines the nonlinear relationship between fintech development and financial stability, highlighting the moderating roles of institutional quality and financial efficiency. Using data from 15 Asia-Pacific and Middle Eastern countries over 2010–2021, we document a robust cubic (S-shaped) fintech-stability nexus. At low levels of fintech, stability declines due to heightened competition, operational risks, and limited adaptive capacity. Once fintech surpasses the first threshold, stability improves through efficiency gains, diversification, and enhanced risk management. Beyond the second threshold, however, fintech again undermines stability as excessive intensity generates complexity, cyber risks, and regulatory gaps. Institutional quality and financial efficiency amplify both stabilizing and destabilizing phases, acting not only as buffers but also as multipliers of systemic sensitivity. Heterogeneity tests show that the cubic pattern is stronger in developing, low-growth, and less open economies, particularly where financial inclusion is low but financial depth is high. At the bank level, smaller, less diversified, and high-net interest margin banks exhibit sharper nonlinear responses. These findings underscore the need for stage-specific regulation that balances innovation and resilience, especially in emerging markets, and for aligning fintech growth with institutional and financial system strength to sustain stability.
{"title":"The nonlinear fintech-financial stability nexus in Asia-Pacific and the Middle East: When institutional quality and financial efficiency matter","authors":"Dung Thi Ngoc Pham","doi":"10.1016/j.ribaf.2025.103208","DOIUrl":"10.1016/j.ribaf.2025.103208","url":null,"abstract":"<div><div>This study examines the nonlinear relationship between fintech development and financial stability, highlighting the moderating roles of institutional quality and financial efficiency. Using data from 15 Asia-Pacific and Middle Eastern countries over 2010–2021, we document a robust cubic (S-shaped) fintech-stability nexus. At low levels of fintech, stability declines due to heightened competition, operational risks, and limited adaptive capacity. Once fintech surpasses the first threshold, stability improves through efficiency gains, diversification, and enhanced risk management. Beyond the second threshold, however, fintech again undermines stability as excessive intensity generates complexity, cyber risks, and regulatory gaps. Institutional quality and financial efficiency amplify both stabilizing and destabilizing phases, acting not only as buffers but also as multipliers of systemic sensitivity. Heterogeneity tests show that the cubic pattern is stronger in developing, low-growth, and less open economies, particularly where financial inclusion is low but financial depth is high. At the bank level, smaller, less diversified, and high-net interest margin banks exhibit sharper nonlinear responses. These findings underscore the need for stage-specific regulation that balances innovation and resilience, especially in emerging markets, and for aligning fintech growth with institutional and financial system strength to sustain stability.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103208"},"PeriodicalIF":6.9,"publicationDate":"2025-11-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-09DOI: 10.1016/j.ribaf.2025.103205
Tianquan Jin , Jinhai Wang , Yingying Wu
Leveraging information asymmetry theory, this study investigates whether rhetorical nationalism in corporate disclosures diminishes firm-specific price informativeness. Analyzing Chinese A-share data from 2010 to 2022, we develop a text-based index of rhetorical nationalism and find that firms employing stronger rhetoric exhibit greater stock price synchronicity. Forward-looking evidence supports an information environment channel: heightened rhetoric is associated with reduced linguistic specificity, increased analyst earnings forecast bias, and fewer negative media reports in the subsequent year, suggesting greater opacity and weaker firm-specific signals. This effect is amplified under stronger political intervention, higher tax incentives, and vaguer disclosure language. Economic consequence tests reveal that rhetorical nationalism undermines long-term firm value by distorting capital market information efficiency. Overall, our findings provide novel insights into the economic implications of political narratives in stock markets, offering a theoretical basis for regulators to refine guidelines for institutional investors and mitigate noise-driven trading in emerging markets.
{"title":"Does firms’ rhetorical nationalism obscure stock price informativeness? Evidence from Chinese listed firms","authors":"Tianquan Jin , Jinhai Wang , Yingying Wu","doi":"10.1016/j.ribaf.2025.103205","DOIUrl":"10.1016/j.ribaf.2025.103205","url":null,"abstract":"<div><div>Leveraging information asymmetry theory, this study investigates whether rhetorical nationalism in corporate disclosures diminishes firm-specific price informativeness. Analyzing Chinese A-share data from 2010 to 2022, we develop a text-based index of rhetorical nationalism and find that firms employing stronger rhetoric exhibit greater stock price synchronicity. Forward-looking evidence supports an information environment channel: heightened rhetoric is associated with reduced linguistic specificity, increased analyst earnings forecast bias, and fewer negative media reports in the subsequent year, suggesting greater opacity and weaker firm-specific signals. This effect is amplified under stronger political intervention, higher tax incentives, and vaguer disclosure language. Economic consequence tests reveal that rhetorical nationalism undermines long-term firm value by distorting capital market information efficiency. Overall, our findings provide novel insights into the economic implications of political narratives in stock markets, offering a theoretical basis for regulators to refine guidelines for institutional investors and mitigate noise-driven trading in emerging markets.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103205"},"PeriodicalIF":6.9,"publicationDate":"2025-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520563","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-08DOI: 10.1016/j.ribaf.2025.103201
Karolina Puławska , Artur Sikora , Małgorzata Snarska , Wojciech Strzelczyk
The growing intersection of climate, geopolitical, and cyber risks poses challenges for financial markets, particularly the insurance sector, which must balance security imperatives with sustainability goals. While prior research has examined these risks individually, comparative evidence across regions and insurance segments remains limited. This study examines insurers’ stock price sensitivity to extreme macro risks using event study methodology, AR-GARCH models, and impulse response analysis. By analyzing over 2327 daily stock prices from insurers in the European Union, the United Kingdom, and the United States from June 2015 to May 2024, we find that climate risk drives the strongest stock price reactions and is systematically priced into equity risk premia. Geopolitical and cyber risks exhibit weaker direct effects but remain embedded in risk premia. Moreover, insurance stock returns adjust rapidly to extreme events, without lasting market distortions. These results highlight regional and sectoral differences in risk pricing, providing valuable insights for investors and regulators seeking to strike a balance between financial stability, sustainability and security considerations.
{"title":"Macro risks and their impact on insurer stock prices: Analyzing climate, geopolitical, and cybersecurity risks","authors":"Karolina Puławska , Artur Sikora , Małgorzata Snarska , Wojciech Strzelczyk","doi":"10.1016/j.ribaf.2025.103201","DOIUrl":"10.1016/j.ribaf.2025.103201","url":null,"abstract":"<div><div>The growing intersection of climate, geopolitical, and cyber risks poses challenges for financial markets, particularly the insurance sector, which must balance security imperatives with sustainability goals. While prior research has examined these risks individually, comparative evidence across regions and insurance segments remains limited. This study examines insurers’ stock price sensitivity to extreme macro risks using event study methodology, AR-GARCH models, and impulse response analysis. By analyzing over 2327 daily stock prices from insurers in the European Union, the United Kingdom, and the United States from June 2015 to May 2024, we find that climate risk drives the strongest stock price reactions and is systematically priced into equity risk premia. Geopolitical and cyber risks exhibit weaker direct effects but remain embedded in risk premia. Moreover, insurance stock returns adjust rapidly to extreme events, without lasting market distortions. These results highlight regional and sectoral differences in risk pricing, providing valuable insights for investors and regulators seeking to strike a balance between financial stability, sustainability and security considerations.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103201"},"PeriodicalIF":6.9,"publicationDate":"2025-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-08DOI: 10.1016/j.ribaf.2025.103203
Ruiqian Li , Tong Huang , Ramakrishnan Ramanathan
Mitigating corporate environmental, social and governance (ESG) controversies is a topic of profound theoretical and practical relevance. In this study, we use a dataset of Chinese A-share listed firms from 2018 to 2022 as our research sample. We introduce a novel approach to measure the degree of firm-level ESG risk perception and investigate its impact on ESG controversies using the technique of textual analysis. We further examine how stable institutional ownership and financial constraints moderate the relationship between ESG risk perception and ESG controversies. The results show that ESG risk perception has an inhibitory effect on ESG controversies. Moreover, stable institutional ownership can strengthen this inhibitory effect, whereas financial constraints can weaken it. Heterogeneity analyses show that the inhibitory effect of ESG risk perception on ESG controversies is more pronounced for firms located in regions with heightened government environmental attention, firms subject to higher media attention, firms audited by the Big 4 accounting firms, and firms facing higher retail investor attention. Our findings have important implications for reducing ESG controversial behaviors through the actions of both institutional investors and firms themselves.
{"title":"Turning perception into impact: ESG risk perception and ESG controversies","authors":"Ruiqian Li , Tong Huang , Ramakrishnan Ramanathan","doi":"10.1016/j.ribaf.2025.103203","DOIUrl":"10.1016/j.ribaf.2025.103203","url":null,"abstract":"<div><div>Mitigating corporate environmental, social and governance (ESG) controversies is a topic of profound theoretical and practical relevance. In this study, we use a dataset of Chinese A-share listed firms from 2018 to 2022 as our research sample. We introduce a novel approach to measure the degree of firm-level ESG risk perception and investigate its impact on ESG controversies using the technique of textual analysis. We further examine how stable institutional ownership and financial constraints moderate the relationship between ESG risk perception and ESG controversies. The results show that ESG risk perception has an inhibitory effect on ESG controversies. Moreover, stable institutional ownership can strengthen this inhibitory effect, whereas financial constraints can weaken it. Heterogeneity analyses show that the inhibitory effect of ESG risk perception on ESG controversies is more pronounced for firms located in regions with heightened government environmental attention, firms subject to higher media attention, firms audited by the Big 4 accounting firms, and firms facing higher retail investor attention. Our findings have important implications for reducing ESG controversial behaviors through the actions of both institutional investors and firms themselves.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103203"},"PeriodicalIF":6.9,"publicationDate":"2025-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520561","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-08DOI: 10.1016/j.ribaf.2025.103202
Yuxi Wang , Fangjia Hu , Yunyun Wang
This study introduces a novel quantitative framework to measure selective investment greenwashing, leveraging a dynamic Pearson correlation coefficient applied on a rolling basis. Using empirical data from the Chinese capital market, we explore how climate policy uncertainty impacts corporate greenwashing behavior. Our findings indicate that heightened CPU exacerbates greenwashing, particularly through selective disclosure and selective investment practices. By examining the underlying mechanisms, we observe that CPU leads to stricter environmental regulations and a reduced presence of green investors, both of which heighten firms’ incentives to engage in greenwashing.
{"title":"Climate policy uncertainty and corporate greenwashing: Developing a new metric for selective investment practices","authors":"Yuxi Wang , Fangjia Hu , Yunyun Wang","doi":"10.1016/j.ribaf.2025.103202","DOIUrl":"10.1016/j.ribaf.2025.103202","url":null,"abstract":"<div><div>This study introduces a novel quantitative framework to measure selective investment greenwashing, leveraging a dynamic Pearson correlation coefficient applied on a rolling basis. Using empirical data from the Chinese capital market, we explore how climate policy uncertainty impacts corporate greenwashing behavior. Our findings indicate that heightened CPU exacerbates greenwashing, particularly through selective disclosure and selective investment practices. By examining the underlying mechanisms, we observe that CPU leads to stricter environmental regulations and a reduced presence of green investors, both of which heighten firms’ incentives to engage in greenwashing.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103202"},"PeriodicalIF":6.9,"publicationDate":"2025-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines how the evolution of geopolitical risk (GPR) influences the market dynamics of weapon (WPs) and non-weapon producers (NWPs) in the United States over the period January 2014–March 2025. Adopting a Wavelet Coherence framework, we analyze the market response of a representative sample of WP and NWP to the GRP index fluctuations, as well as to its components, GPR-Acts and GPR-Threats. The empirical analyses show that WPs’ volatility is predominantly driven by GPR-Acts, while they tend to lead market co-movements when shocks stem from threats alone. When geopolitical tensions escalate from threats into acts, on the other hand, the co-movement becomes non-directional, revealing a complex and asymmetric market behavior. Furthermore, NWPs display heterogeneous responses: sectors such as consumer discretionary and healthcare amplify exposure to GPR, whereas energy and utilities provide partial hedging. Industrials display lagged but similar reactions to WPs, while the information technology sector shows even stronger co-movement with GPR than defense firms. These findings provide novel insights into the complex propagation mechanism of geopolitical shocks across industries, contribute to the literature on controversial assets and market resilience under geopolitical uncertainty, and offer insights for investors, regulators, and policymakers.
{"title":"Geopolitical risk and stock market volatility: The case of US weapon and non-weapon firms","authors":"Milena Migliavacca , Zaheer Anwer , Paola Fandella","doi":"10.1016/j.ribaf.2025.103195","DOIUrl":"10.1016/j.ribaf.2025.103195","url":null,"abstract":"<div><div>This paper examines how the evolution of geopolitical risk (GPR) influences the market dynamics of weapon (WPs) and non-weapon producers (NWPs) in the United States over the period January 2014–March 2025. Adopting a Wavelet Coherence framework, we analyze the market response of a representative sample of WP and NWP to the GRP index fluctuations, as well as to its components, GPR-Acts and GPR-Threats. The empirical analyses show that WPs’ volatility is predominantly driven by GPR-Acts, while they tend to lead market co-movements when shocks stem from threats alone. When geopolitical tensions escalate from threats into acts, on the other hand, the co-movement becomes non-directional, revealing a complex and asymmetric market behavior. Furthermore, NWPs display heterogeneous responses: sectors such as consumer discretionary and healthcare amplify exposure to GPR, whereas energy and utilities provide partial hedging. Industrials display lagged but similar reactions to WPs, while the information technology sector shows even stronger co-movement with GPR than defense firms. These findings provide novel insights into the complex propagation mechanism of geopolitical shocks across industries, contribute to the literature on controversial assets and market resilience under geopolitical uncertainty, and offer insights for investors, regulators, and policymakers.</div></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":"81 ","pages":"Article 103195"},"PeriodicalIF":6.9,"publicationDate":"2025-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520570","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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