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Uncovering the Hidden Effort Problem J. Financ. (IF 7.6) Pub Date : 2025-02-17 AZI BEN-REPHAEL, BRUCE I. CARLIN, ZHI DA, RYAN D. ISRAELSEN
We analyze minute-by-minute Bloomberg online status and study how the effort provision of executives in public corporations affects firm value. While executives spend most of their time doing other activities, patterns of Bloomberg usage allow us to characterize their work habits as measures of effort provision. We document a positive effect of effort on unexpected earnings and cumulative abnormal
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The Impact of the Opioid Crisis on Firm Value and Investment Rev. Financ. Stud. (IF 6.8) Pub Date : 2025-02-14 Paige Ouimet, Elena Simintzi, Kailei Ye
We show a negative effect of opioid prescriptions on subsequent individual employment among employers in our sample using doctor-opioid-prescribing propensity as our instrument. This finding has implications for firms that must now contend with lower local labor supply. We find a negative relationship between opioid prescriptions and subsequent establishment growth. However, firms respond to labor
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The Impact of Minority Representation at Mortgage Lenders J. Financ. (IF 7.6) Pub Date : 2025-02-12 W. SCOTT FRAME, RUIDI HUANG, ERICA XUEWEI JIANG, YEONJOON LEE, WILL SHUO LIU, ERIK J. MAYER, ADI SUNDERAM
We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority
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How to Dominate the Historical Average Rev. Financ. Stud. (IF 6.8) Pub Date : 2025-02-12 Kai Li, Yingying Li, Changlei Lyu, Jialin Yu
We present a novel methodology for the out-of-sample forecast of the equity premium. Our predictive slope coefficient is a conservative constant that has a lower bias than the zero slope employed by the historical average, but has the same variance. We demonstrate that, theoretically and empirically, our method dominates the historical average in forecast performance. Our methodology establishes a
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Repo over the Financial Crisis J. Financ. (IF 7.6) Pub Date : 2025-02-11 ADAM COPELAND, ANTOINE MARTIN
This paper uses new data to provide a comprehensive view of repo activity during the 2007 global financial crisis. We show that activity declined much more in the bilateral segment of the market than in the tri‐party segment. Surprisingly, a large share of the decline in activity is driven by repos backed by Treasury securities. Further, a disproportionate share of the decline in repo activity is connected
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Does equity crowdfunding enhance the survival of sustainability ventures? Finance Research Letters (IF 7.4) Pub Date : 2025-02-09 Belinda Laura Del Gaudio, Aristogenis Lazos, Daniele Previtali
This study investigates the impact of equity crowdfunding on the survival rates of sustainability ventures. Utilizing data from UK-based companies that have successfully issued equity via crowdfunding platforms, the analysis differentiates the outcomes for environmentally sustainable ventures compared to others. The findings suggest that equity crowdfunding appears to confer long-term benefits on these
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The real and financial effects of internal liquidity: Evidence from the Tax Cuts and Jobs Act J. Financ. Econ. (IF 10.4) Pub Date : 2025-02-08 James F. Albertus, Brent Glover, Oliver Levine
The Tax Cuts and Jobs Act unlocked as much as $1.7 trillion of U.S. multinationals’ foreign cash. We examine the real and financial response to this liquidity shock and find that firms did not increase capital expenditures, employment, R&D, or M&A, regardless of financial constraints. On the financial side, firms paid out only about one-third of the new liquidity to shareholders and retained half as
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The nexus between carbon, energy and agrifood—A contemporaneous and lagged spillover analysis Finance Research Letters (IF 7.4) Pub Date : 2025-02-08 Benjamin M. Tabak, Ives Cezar Fulber, Matheus B. Froner
Global concern about energy, food security and climate change is on the rise. We investigate the spillover effects amidst carbon, energy and agrifood markets. Applying the novel R2 decomposed connectedness approach we find that the impact of the contemporaneous spillover in the total connectedness is significant, while the lagged effects contribute substantially when looking at the net spillover. Corn
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Beyond the hype: Unauthorized immigrants and the myth of rising house price Finance Research Letters (IF 7.4) Pub Date : 2025-02-08 Steven Shu-Hsiu Chen, Xinhui Huang, Wei Li
A recent social and economic issue has addressed public attention: whether unauthorized immigrants drive up local housing prices. This study focuses on this issue and finds no significant relationship between unauthorized immigrants and general house price growth for each state in the U.S. We prove the robustness of this insignificance by addressing the endogeneity issue and applying alternative variables
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An asymmetric volatility analysis of the negative oil price during the first COVID-19 wave International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-07 Carolin Birnstengel, Bernd Süssmuth
For the first time ever, oil futures were negatively priced on April 20, 2020. We modify an investment model to fit the financial markets context of information processing and arrival. It is able to explain a negative price dip. Its joint interpretation with estimates from GARCH models captures some central institutional setups of the market. We show not only storage uncertainty, in particular, due
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Does credit growth predict lower returns for large banks? Finance Research Letters (IF 7.4) Pub Date : 2025-02-07 Arpit Kumar Parija
Prior research finds that bank credit growth predicts lower bank equity returns in subsequent years. Stocks of banks with high credit growth are initially overvalued. Eventually, these banks underperform. Shareholders realize their mistakes and lower share price, thus generating lower returns. We argue that such correction of mispricing happens to a lesser extent for large banks and show that for large
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(In)Frequently traded corporate bonds and pricing implications of liquidity dry-ups Finance Research Letters (IF 7.4) Pub Date : 2025-02-07 Alexey Ivashchenko
I study the link between corporate bond trading activity and expected bond return. I show that many individual corporate bonds experience booms and busts of trading activity. Such (in)frequently traded bonds have higher expected returns following periods of active trading, alongside greater return volatility. Of two actively traded bonds, one with a history of trading activity dry-ups carries the expected
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Upward Influencers in Teams Journal of Accounting Research (IF 4.9) Pub Date : 2025-02-07 Wei Cai, Yaxuan Chen, Jee‐Eun Shin
Upward influencers, employees who are more favorably perceived by their supervisors than their peers and subordinates, are predicted by economic and accounting theories and are found to be ubiquitous in many organizations. Despite their prevalence, the role of upward influencers in teams remains underexplored. This paper fills this void by using proprietary data from a service‐providing organization
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Auditors’ decision-making aid for going concern audit opinions through machine learning analysis Int. J. Account. Inf. Syst. (IF 4.1) Pub Date : 2025-02-07 E.Jin Lee, Dave Tahmoush
Prior going concern studies often use regression techniques. Such techniques do not often examine the complex intertwined relationships between factors and therefore have limited value as a decision process aid. However, this study overcomes these limitations by employing a hierarchical machine learning method, a decision tree model, to discover potential interactions to create an understandable decision
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Environmental, social and governance controversies and systematic risk: A machine learning approach Finance Research Letters (IF 7.4) Pub Date : 2025-02-06 Mohammad Hassan Shakil, Arne Johan Pollestad, Khine Kyaw
We examine the relationship between environmental, social and governance (ESG) controversies and systematic risk among non-financial firms in the STOXX Europe 600 index from 2016 to 2022. We apply random forest regression to predict firm-level systematic risk and employ explainable AI techniques to assess the role of ESG controversies. The results show a negative relationship between ESG controversies
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Can switching between predictive models and the historical average improve bond return predictability? Finance Research Letters (IF 7.4) Pub Date : 2025-02-06 Runqing Wan, Bingxin Ann Xing
We propose a novel and simple “switching” approach to improve out-of-sample evidence of return predictability: when the return forecast from a predictive model is negative, we switch to use the return’s historical average as our forecast. When applied to predict Treasury bond returns, this approach can produce stronger evidence of statistical predictability and higher real-time economic gains than
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Assessing Firm ESG Performance Through Corporate Survival: The Moderating Role of Firm Size International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-05 Massimo Postiglione, Cristian Carini, Alberto Falini
This study explores the relationship between Corporate Survival (CS), measured through both an accounting-based model (Altman Z-Score) and a market-based model (Merton Distance to Default), and ESG performance, measured through Refinitiv ESG ratings. Based on an IQR-normalized sample of data from non-financial companies listed on the STOXX 600 European index, the study conducted a fixed-effects regression
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Food inflation and macroeconomic dynamics in the US: Evidence from an estimated DSGE model Finance Research Letters (IF 7.4) Pub Date : 2025-02-05 Xiaoke Zhu, Xiaohua Yu
This study aims to investigate whether and how food inflation influences U.S. macroeconomic dynamics. To this end, we develop and estimate a heterogeneous dynamic stochastic general equilibrium (DSGE) model incorporating both the food and non-food sectors. Calibration and Bayesian estimation methods are employed to derive the key parameters involved in this model. Our analysis reveals that key macroeconomic
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Exploring dimensions of governance for different types of blockchain systems The British Accounting Review (IF 5.5) Pub Date : 2025-02-05 Rina Dhillon, Prabhu Sivabalan
The rapid evolution of digital technologies has significantly reshaped governance. While much existing literature focuses on public blockchain governance, fewer investigate governance mechanisms of private and consortium blockchains, increasingly prevalent in society. We explore how blockchain systems enact governance using Beck et al.’s (2018) framework examining decision rights, accountability, and
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Uncertainty, macroeconomic activity and commodity price: A global analysis International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-04 Yifan Shen, Jia He, Xunpeng Shi, Ting Zeng
We adopt a rich global dataset to extend the conventional forecast-error-based uncertainty measure to the international context and construct a proxy of global macroeconomic uncertainty. Our proxy displays significant independent variations from popular regional or country-specific uncertainty measures, and can serve as an alternative to the global economic policy uncertainty (EPU) index among others
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Public value disclosure by Brazilian federal universities The British Accounting Review (IF 5.5) Pub Date : 2025-02-04 Evelyze Cruz Dallagnol, Henrique Portulhak
This research analysed Brazilian Federal Universities to investigate the determinants of the public value disclosure. Based on the Public Value Disclosure Index, the Management Reports of 65 Brazilian universities were subjected to a content analysis to measure the level of public value disclosure, both in general and for each perspective of the public value strategic triangle. Beta regression was
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Is faster information transmission always better? Finance Research Letters (IF 7.4) Pub Date : 2025-02-03 Yu Yan, Yan Tong, Yiming Wang
This paper establishes a continuous-time heterogeneous beliefs model to investigate the impact of information transmission speed on welfare. We calibrate the required parameters using real data from the S & P 500. Numerical simulations based on this calibration indicate that faster information transmission leads to increased volatility in risky assets, thereby reducing the level of trader welfare.
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The informational role of forex option volume International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-01 Kun Bao, Denghui Chen, Chen Gu, Erlina Papakroni, Raluca Stan, Muhan Wang
This paper investigates the effect of foreign exchange (FX) option trading volume on the underlying EUR/USD futures market. Our in-sample and out-of-sample tests show that the FX put-call volume ratio can predict future exchange rate changes. Greater put-call volume ratios predict a depreciation of the Euro relative to the US dollar. The predictability is prevalent in times of high uncertainty in the
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Optimal conversion ratio of contingent capital under issuance constraints International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-01 Sijia Zhang, Xin Xia, Liu Gan
We develop a model of banking to clarify how contingent convertible bonds (CoCos) affect banks’ financing and investment policies when they face the upper limit of CoCo issuance. We then discuss the optimal conversion ratio of CoCos. In contrast to the frictionless setting, banks with more dilutive terms optimally choose to delay investment and issue first larger and then smaller CoCos. For banks with
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Environmental tightening, labor slackening: Unveiling the inefficiencies in labor investment International Review of Financial Analysis (IF 7.5) Pub Date : 2025-02-01 Chien-Chiang Lee, Chih-Wei Wang, Weizheng Lin, Fang-Yi Lee
This paper investigates the impact of environmental policy stringency (EPS) on labor investment inefficiency using a dataset of firms from 37 countries. Our study contributes to the literature by addressing a gap in understanding how stringent environmental policies influence corporate labor decisions, particularly regarding inefficient labor investments. To deal with potential endogeneity, we employ
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Can deep reinforcement learning beat [formula omitted] Finance Research Letters (IF 7.4) Pub Date : 2025-02-01 Garvin Kruthof, Sebastian Müller
Deep reinforcement learning (DRL) has emerged as a promising tool for portfolio management. However, limited datasets in prior research hinder the generalizability of findings. We conduct a large-scale evaluation of the Soft Actor-Critic (SAC) algorithm across seven diverse equity datasets, spanning over 300 years of out-of-sample data. While SAC demonstrates market timing potential, it does not systematically
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Analyzing market efficiency: The role of business cycles, risk aversion, and Occam’s razor in the Adaptive Market Hypothesis Finance Research Letters (IF 7.4) Pub Date : 2025-02-01 Viktor Hřebačka
In this study, we analyze US stock market return predictability using autocorrelation and variance ratios. We show that relationships in Adaptive Market Hypothesis (AMH) literature can be explained by business cycles and risk aversion, without invalidating the Efficient Market Hypothesis (EMH). We argue that, following Occam’s razor, the more parsimonious EMH should be preferred over many AMH effects
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How do timing and narrative tone influence the impact of pro-environmental orientation on crowdfunding performance? Finance Research Letters (IF 7.4) Pub Date : 2025-02-01 Ruichen Ge, Sha Zhang, Hong Zhao
Pro-environmentally oriented entrepreneurial projects on crowdfunding platforms have great potential for contributing to sustainable development. Previous research on the impact of pro-environmental orientation in crowdfunding has yielded mixed results, suggesting the existence of boundary conditions. This study examines how the timing and the narrative tone moderate this effect. Analyzing entrepreneurial
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Corporate short-termism and the use of performance-sensitive debt Finance Research Letters (IF 7.4) Pub Date : 2025-02-01 Zixia Miao, Yiping Huang, Yingyi Lv
We develop a dynamic agency model to investigate the impacts of performance-sensitive debt (PSD) on managers’ long-term and short-term efforts. Compared with straight debt, PSD reduces incentive costs and, in turn, increases long-term managerial effort. Moreover, PSD mitigates the excessive pursuit of short-term efforts when long-term and short-term efforts are substitutes, thereby alleviating short-termism
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Return Predictability, Expectations, and Investment: Experimental Evidence Rev. Financ. Stud. (IF 6.8) Pub Date : 2025-02-01 Marianne Andries, Milo Bianchi, Karen K Huynh, Sébastien Pouget
In an investment experiment, we show variations in information afect beliefs and decision-making within the information-beliefs-decisions chain. Subjects observe the time series of a risky asset and a signal that, in random rounds, helps predict returns. Subjects form extrapolative forecasts following a signal they perceive as useless, and their investment decisions underreact to their beliefs. If
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Website disclosure and financial performance: Evidence from U.S. hospitals using a textual analysis approach Int. J. Account. Inf. Syst. (IF 4.1) Pub Date : 2025-02-01 Yangmei Wang, Tiankai Wang, Yuewu Li, Jiao Li
Although a website is widely available for a hospital to communicate with its stakeholders, the impact of hospital website disclosure has been under-investigated by prior studies. By employing textual analysis techniques to analyze the website content of U.S. hospitals, we explore the relationship between hospital website disclosure and financial performance. We find that a higher degree of hospital
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Financial Inclusion Across the United States J. Financ. Econ. (IF 10.4) Pub Date : 2025-01-31 Motohiro Yogo, Andrew Whitten, Natalie Cox
We study retirement and bank account participation for the universe of U.S. households with a member aged 50 to 59 in the administrative tax data. ZCTA-level average income, income inequality, and racial composition predict retirement account participation for low-income households, conditional on household income and regional price parities. Income inequality also predicts bank account participation
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Feedback Effects and Systematic Risk Exposures J. Financ. (IF 7.6) Pub Date : 2025-01-31 SNEHAL BANERJEE, BRADYN BREON‐DRISH, KEVIN SMITH
We model the “feedback effect” of a firm's stock price on investment in projects exposed to a systematic risk factor, like climate risk. The stock price reflects information about both the project's cash flows and its discount rate. A cash‐flow‐maximizing manager treats discount rate fluctuations as “noise,” but a price‐maximizing manager interprets such variation as information about the project's
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Wealth and Insurance Choices: Evidence from U.S. Households J. Financ. (IF 7.6) Pub Date : 2025-01-31 MICHAEL J. GROPPER, CAMELIA M. KUHNEN
Using administrative data for 63,000 individuals across 2,500,000 person‐month observations, we find that wealthier individuals have better life insurance coverage, controlling for the value of the asset insured, namely, the consumption needs of dependents. This positive wealth‐insurance correlation, which is surprising given the prevailing view that wealth substitutes for insurance, persists after
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Regulatory Fragmentation J. Financ. (IF 7.6) Pub Date : 2025-01-31 JOSEPH KALMENOVITZ, MICHELLE LOWRY, EKATERINA VOLKOVA
Regulatory fragmentation occurs when multiple federal agencies oversee a single issue. Using the full text of the Federal Register, the government's official daily publication, we provide the first systematic evidence on the extent and costs of regulatory fragmentation. Fragmentation increases the firm's costs while lowering its productivity, profitability, and growth. Moreover, it deters entry into
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Crisis Interventions in Corporate Insolvency J. Financ. (IF 7.6) Pub Date : 2025-01-31 SAMUEL ANTILL, CHRISTOPHER CLAYTON
We model the optimal resolution of insolvent firms in general equilibrium. Collateral‐constrained banks lend to (i) solvent firms to finance investments and (ii) distressed firms to avoid liquidation. Liquidations create negative fire‐sale externalities. Liquidations also relieve bank balance–sheet congestion, enabling new firm loans that generate positive collateral externalities by lowering bank
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Conditional currency momentum portfolios International Review of Financial Analysis (IF 7.5) Pub Date : 2025-01-31 Yasuhiro Iwanaga, Ryuta Sakemoto
Currency momentum portfolios have not generated positive returns after the global financial crisis. We propose conditional currency momentum strategies that incorporate information about the average forward discount, the currency market volatility, and the return dispersion of currency portfolios. Our strategy goes long in the momentum portfolio only when the average forward discount is positive, the
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Does corporate ESG news impact firm productivity? Finance Research Letters (IF 7.4) Pub Date : 2025-01-31 Joseph Arthur, Francis Bilson Darku, Abena Fosua Owusu
This paper examines the relationship between ESG and firm productivity, addressing how ESG news impacts productivity across operational and financial dimensions. Using Truvalue Lab's AI-generated ESG score data, we analyze how near- and long-term ESG news scores influence key productivity indicators such as sales generation, operating costs (SG&A), and labor costs. We find that non-financial firms
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How do financial markets price political uncertainty? Evidence from the 2024 United States presidential election Finance Research Letters (IF 7.4) Pub Date : 2025-01-31 Matthew Flynn, Augustine Tarkom
This study examines the relationship between perceived election outcomes and financial markets by analyzing the unique case of a United States presidential candidate with direct corporate interests. Focusing on Donald Trump's media company (DJT) and his 2024 presidential election odds from betting markets, we document robust evidence of market interdependence across multiple empirical specifications
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ESG transition incentives with loan guarantees Finance Research Letters (IF 7.4) Pub Date : 2025-01-31 Wenyang Xu, Zhaojun Yang, Nanhui Zhu
This paper develops a model of ESG transition in a loan–guarantee framework. By incorporating tax subsidies with loan guarantees, the financial stress due to the transition is alleviated. We find that the ESG ongoing input makes the transition postponed such that ESG transition investment threshold first increases and then decreases with the tax subsidy rate. At a sufficiently low transition cost,
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Strategic arbitrage in segmented markets J. Financ. Econ. (IF 10.4) Pub Date : 2025-01-30 Svetlana Bryzgalova, Anna Pavlova, Taisiya Sikorskaya
We propose a model in which arbitrageurs act strategically in markets with entry costs. In a repeated game, arbitrageurs choose to specialize in some markets, which leads to the highest combined profits. We present evidence consistent with our theory from the options market, in which suboptimally unexercised options create arbitrage opportunities for intermediaries. We use transaction-level data to
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Central Bank–Driven Mispricing J. Financ. Econ. (IF 10.4) Pub Date : 2025-01-30 Loriana Pelizzon, Marti G. Subrahmanyam, Davide Tomio
We explore whether Quantitative Easing (QE) negatively affected the functioning of the treasury market. Focusing on the arbitrage between European sovereign bonds and their futures contracts, we show that the scarcity of treasuries created by QE led to a disconnect between the prices of identical assets. We identify three channels: reduced bond market liquidity, increased funding costs in the repo
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The enhanced gain effects of ESG's non-linearity on portfolios: An asset pricing tree model perspective International Review of Financial Analysis (IF 7.5) Pub Date : 2025-01-30 Puliang Du, Runsheng Gu, Ling Luo, Fei Xie, Chenyang Zhang
This study investigates the incremental benefits of ESG criteria on investment portfolio performance, with a particular focus on the non-linear attributes of ESG factors. Employing linear regression models, the research establishes that ESG factors contribute supplementary information to investment portfolios, thereby augmenting the models' explanatory power regarding returns. The integration of ESG
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Institutional ownership and investment by private companies The British Accounting Review (IF 5.5) Pub Date : 2025-01-30 Seth Armitage, Ronan Gallagher, Jiaman Xu
We examine the impact of institutional shareholders on the investment activity and external financing of established private companies. Our sample includes both VC and non-VC institutions, and both controlling and minority ownership stakes. Institutions give rise to higher levels of investment in intangible assets—but not in tangible assets—and higher funding via external equity. These results apply
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Does financial openness mitigate carbon emissions? Evidence from a cross-country study Finance Research Letters (IF 7.4) Pub Date : 2025-01-29 Xiaobo Fang, Dahai Fu, Yushi Xian, Ying Zhang
This study empirically investigates the impact of financial openness on carbon emission intensities at the country-level. Utilizing a fixed effects model and a comprehensive dataset across more than 100 countries from 1971 to 2019, we find that financial openness significantly reduces carbon emission intensities. The results are robust to various sensitivity analyses and control for potential endogeneity
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Crypto Crashes: An examination of the Binance and FTX scandals and associated accounting challenges The British Accounting Review (IF 5.5) Pub Date : 2025-01-29 Milind Tiwari, You Zhou, Jamie Ferrill, Marcus Smith
This article offers a comprehensive analysis of the treatment of cryptocurrencies and cryptocurrency exchanges in accounting, emphasizing the challenges they present to traditional accounting and auditing practices within current regulatory frameworks. The cryptocurrency sector has experienced multiple disruptions in recent years. By analysing two case studies representing such disruptions – Binance
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Artificial intelligence auditability and auditor readiness for auditing artificial intelligence systems Int. J. Account. Inf. Syst. (IF 4.1) Pub Date : 2025-01-29 Yueqi Li, Sanjay Goel
As the business community races to implement artificial intelligence (AI), there are several challenges that need to be addressed such as fairness and biases, transparency, denial of individual rights, and dilution of privacy. AI audits are expected to ensure that AI systems function lawfully, robustly, and follow ethical standards (e.g., fairness). While the auditability for financial audits and information
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Adaptive structural audit processes as shaped by emerging technologies Int. J. Account. Inf. Syst. (IF 4.1) Pub Date : 2025-01-29 Navitha Singh Sewpersadh
This study investigates how audit firms integrate emerging technologies to transform traditional audit methodologies and enhance audit quality. Using a qualitative research approach, the findings highlight that centralized audit platforms streamline documentation, promote knowledge sharing, and facilitate more effective internal reviews. Advanced Data Analytics (ADAs) such as the General Ledger (GL)
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Optimal policy for behavioral financial crises J. Financ. Econ. (IF 10.4) Pub Date : 2025-01-28 Paul Fontanier
Should policymakers adapt their macroprudential and monetary policies when the financial sector is vulnerable to belief-driven boom-bust cycles? I develop a model in which financial intermediaries are subject to collateral constraints, and that features a general class of deviations from rational expectations. I show that distinguishing between the drivers of behavioral biases matters for the precise
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Risk spillovers between the BRICS and the U.S. staple grain futures markets Finance Research Letters (IF 7.4) Pub Date : 2025-01-28 Ying-Hui Shao, Yan-Hong Yang, Wei-Xing Zhou
This study examines spillover effects in the BRICS staple grain futures markets and their linkages with the U.S. markets. Results show that contemporaneous spillovers dominate, while net spillovers are driven by lagged connectedness. Systemic risk is lower in intra-BRICS markets than in those including the U.S., highlighting the U.S. grain market’s significant influence. Brazilian and U.S. grains,
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Application of consumer search volume in auditing Int. J. Account. Inf. Syst. (IF 4.1) Pub Date : 2025-01-28 Pei Li
The application of nonfinancial information in auditing has allowed external auditors to effectively analyze corporate financial performance and assess fraud risk. This study examines whether the consumer search volume can be employed as a source of nonfinancial information in external audits to improve the accuracy of accounting estimates and help detect fraud in the financial statements. The consumer
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Predicting U.S. bank failures and stress testing with machine learning algorithms Finance Research Letters (IF 7.4) Pub Date : 2025-01-27 Wendi Hu, Chujian Shao, Wenyu Zhang
This study applies multiple machine learning models to forecast the bankruptcy of U.S. financial institutions from the year 2001 to 2023 using data from the Federal Deposit Insurance Corporation. To incorporate time dynamics, this paper employs exponentially weighted moving averages, enhancing the models’ predictive accuracy. The results show that the Random Forest model achieves the highest overall
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The Financial Consequences of Pretrial Detention Rev. Financ. Stud. (IF 6.8) Pub Date : 2025-01-27 Pablo Slutzky, Sheng-Jun Xu
In the United States, a significant number of criminal defendants are held in pretrial detention and face substantial financial burdens. Matching individual-level criminal case records to household-level financial data, we exploit the quasi-random assignment of court commissioners to study how pretrial detention affects household solvency. We find that pretrial detention results in higher rates of
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The benefits of small business FinTech lending: Evidence from entrepreneurs’ consumption structure The British Accounting Review (IF 5.5) Pub Date : 2025-01-27 Yan Luo, Shu Tian, Ningyu Zhou
Utilizing data on 160,000 individually-owned micro and small enterprises (MSEs) and the consumption of their entrepreneurs from the Ant Group, the FinTech giant, we show that MSEs' usage of FinTech credit is followed by a significant reduction in their entrepreneurs' food consumption as a percentage of total consumption, which is driven by an increase in their non-food consumption. It confirms FinTech
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Examining blockchain's role in supply chain finance structure and governance International Review of Financial Analysis (IF 7.5) Pub Date : 2025-01-26 Sang Hoo Bae, Sara Saberi, Mahtab Kouhizadeh, Joseph Sarkis
Can innovative technologies address the challenge of information asymmetry that has long plagued the financial services industry? This study investigates a three-tier supply chain model, consisting of a core buyer firm, suppliers, and sub-suppliers. It explores the impact of blockchain-enabled financing (BF) on the supply chain finance's structure and governance. Utilizing a circular city model, this
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National risk preference, insurance development and exports-a study based on the world values survey International Review of Financial Analysis (IF 7.5) Pub Date : 2025-01-26 Xiaohui Zeng, Danna Xing, Qilin Zhan, Xiuzhen Mu
Based on the data from the World Values Survey and the World Integrated Trade Solution for 23 exporting countries (regions) from 1993 to 2021, this paper studies the impact of national risk preference on exports, and investigates the moderating effect of insurance development level on this impact. The results show that national risk preference has a significant positive effect on the exports of exporting
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Dynamic tail risk connectedness among green REITs, sustainability products, and fossil energy assets under external shocks Finance Research Letters (IF 7.4) Pub Date : 2025-01-26 Liya Hau, Yao Ge, Yongmin Zhang, Weineng Zhu
This study employed a hybrid AS-CAViaR-TVP-VAR connectedness model to analyse the tail risk interconnectedness among green REITs, sustainability products, and fossil energy assets. Using daily data on twelve assets from January 1, 2015, to January 12, 2024, we found that the tail risk connectedness between green REITs and other markets intensifies under external shocks. Notably, green REITs in the
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Designing Stress Scenarios J. Financ. (IF 7.6) Pub Date : 2025-01-25 CECILIA PARLATORE, THOMAS PHILIPPON
We study the optimal design of stress scenarios. A principal manages the unknown risk exposures of agents by asking them to report losses under hypothetical scenarios before taking remedial actions. We apply a Kalman filter to solve the learning problem, and we relate the optimal design to the risk environment, the principal's preferences, and available interventions. In a banking context, optimal
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Pension levels, social activities, and household consumption Finance Research Letters (IF 7.4) Pub Date : 2025-01-25 Bowen Qu
Using CHARLS2020 data, this paper conducts a comprehensive exploration of the deep-seated connections between pension levels, social engagement, and household spending. The findings indicate that elevated pension levels notably boost household consumption, with social activities serving as a crucial intermediary in this dynamic. Furthermore, the research uncovers diverse influences of gender, income