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Syndicated Lending, Competition, and Relative Performance Evaluation Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-09 Thomas Schneider, Philip E Strahan, Jun Yang
Relative performance evaluation (RPE) intensifies competitive pressure by tying executive compensation to the profits of rivals. We show that these contracts make loan syndication harder by reducing banks’ willingness to participate in loans underwritten by banks named in their RPE contracts. Lead arranger banks, which are more frequently named in RPE, hold larger shares of the loans they syndicate
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The Technical Default Spread Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-09 Emilio Bisetti, Kai Li, Jun Yu
We study the quantitative impact of lender control rights on corporate investment, asset prices, and the aggregate economy. We build a general equilibrium model in which the breaching of a loan covenant (technical default) entails a switch in investment control rights from borrowers to lenders. Lenders optimally choose low-risk projects, thus mitigating borrowers’ risk-taking incentives and lowering
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Student Loans, Access to Credit, and Consumer Credit Demand Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-09 Alvaro Mezza, Daniel Ringo, Kamila Sommer
This paper provides novel evidence that increased student loan debts, caused by rising tuitions, increase borrowers’ demand for additional consumer debt, while simultaneously restricting their ability to access it. The net effect of student loan debt on consumer borrowing varies by market, depending on whether the supply or demand channel dominates. In loosely underwritten credit markets, increased
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Specialization and performance in private equity: Evidence from the hotel industry J. Financ. Econ. (IF 10.4) Pub Date : 2024-09-07 Christophe Spaenjers, Eva Steiner
Using granular data on U.S. hotel investments over the past two decades, we show that industry-specialist PE firms achieve higher net income from operations and higher capital gains from sale than generalist PE firms for comparable properties. Those results are driven by specialists implementing more and larger cost savings without compromising revenues. Fundamentally, specialists utilize their hotel-specific
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Proxy Advisory Firms and Corporate Shareholder Engagement Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-05 Aiyesha Dey, Austin Starkweather, Joshua T White
We study how Institutional Shareholder Services (ISS) affect firms’ engagement with shareholders. Our analyses exploit a quasi-natural experiment using say-on-pay voting outcomes near a threshold that triggers ISS to review engagement activities. Firms receiving ISS treatment exhibit swift and substantive increases in extensive and intensive margins of engagement, especially when their boards have
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A Comprehensive 2022 Look at the Empirical Performance of Equity Premium Prediction Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-05 Amit Goyal, Ivo Welch, Athanasse Zafirov
Our paper reexamines whether 29 variables from 26 papers published after Goyal and Welch 2008a, as well as the original 17 variables, were useful in predicting the equity premium in-sample and out-of-sample as of the end of 2021. Our samples include the original periods in which these variables were identified, but end later. More than one-third of these new variables no longer have empirical significance
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Machine Learning for Continuous-Time Finance Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-05 Victor Duarte, Diogo Duarte, Dejanir H Silva
We develop an algorithm for solving a large class of nonlinear high-dimensional continuous-time models in finance. We approximate value and policy functions using deep learning and show that a combination of automatic differentiation and Ito’s lemma allows for the computation of exact expectations, resulting in a negligible computational cost that is independent of the number of state variables. We
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Horizon-Dependent Risk Aversion and the Timing and Pricing of Uncertainty Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-04 Marianne Andries, Thomas M Eisenbach, Martin C Schmalz
Inspired by experimental evidence, we amend the recursive utility model to let risk aversion decrease with the temporal horizon. Our pseudo-recursive preferences remain tractable and retain appealing features of the long-run risk framework, notably its success at explaining asset pricing moments. In addition, our model addresses two challenges to the standard model. Calibrating the agents’ preferences
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Sexism, Culture, and Firm Value: Evidence from the Harvey Weinstein Scandal and the #MeToo Movement Journal of Accounting Research (IF 4.9) Pub Date : 2024-09-04 KARL V. LINS, LUKAS ROTH, HENRI SERVAES, ANE TAMAYO
During the revelation of the Harvey Weinstein scandal and the reemergence of the #MeToo movement, firms with a nonsexist corporate culture, proxied by having women among the five highest‐paid executives, earn excess returns of 1.3% relative to firms without female top executives. These returns are driven by changes in investor preferences toward firms with a nonsexist culture. Institutional ownership
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Credit Cycles, Expectations, and Corporate Investment Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-09-03 Huseyin Gulen, Mihai Ion, Candace E Jens, Stefano Rossi
We provide a systematic empirical assessment of the Minsky hypothesis that business fluctuations stem from irrational swings in expectations. Using predictable firm-level forecast errors, we build an aggregate index of irrational expectations and use it to provide three sets of results. First, we show that our index predicts aggregate credit cycles. Next, we show that these predictable credit cycles
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On the EPA's Radar: The Role of Financial Reports in Environmental Regulatory Oversight Journal of Accounting Research (IF 4.9) Pub Date : 2024-09-03 BIN LI, ANNIKA YU WANG
This paper investigates the role of corporate financial reports in the Environmental Protection Agency's (EPA) regulatory activities. By tracking the EPA's direct retrieval of SEC filings, we identify three key findings. First, the EPA retrieves a large volume of financial reports, especially from firms in high‐pollution industries. Second, the EPA is more likely to access financial reports during
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Financial Transparency of Private Firms: Evidence from a Randomized Field Experiment Journal of Accounting Research (IF 4.9) Pub Date : 2024-09-03 JOACHIM GASSEN, MAXIMILIAN MUHN
This paper examines why private firms choose to be financially transparent or opaque by conducting a field experiment with more than 25,000 firms in Germany. We inform a randomly chosen set of firms about a disclosure option that allows eligible firms to restrict access to their otherwise publicly available financial statements. We also vary the messaging in subtle ways to induce experimental variation
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A study on the impact of digital governance on disclosure quality of listed companies Finance Research Letters (IF 7.4) Pub Date : 2024-09-02 Cuiping Hu, Xianzi Yang
Through empirical analyses, this paper confirms the beneficial influence of digital governance on the information disclosure quality of listed companies. Additionally, it uncovers the intermediary roles played by managerial transaction costs and human capital structure. Furthermore, the study investigates the varying impacts of corporate geographical location and property rights characteristics on
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Major sporting events, corporate social responsibility, and the value of sports-listed companies Finance Research Letters (IF 7.4) Pub Date : 2024-09-02 Zhengqiang Chen, Hua Ying, Qiaoyan Chen
This study explores the interconnection among major sporting events, corporate social responsibility (CSR), and the valuations of sports-listed companies. Sporting events now serve as global engagement platforms beyond mere competition. Through a mixed-methods approach including literature reviews, quantitative financial analyses, and qualitative CSR strategy explorations, this research examines how
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Systemic bank runs without aggregate risk: How a misallocation of liquidity may trigger a solvency crisis J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-31 Lukas Altermatt, Hugo van Buggenum, Lukas Voellmy
We develop a general equilibrium model of self-fulfilling bank runs. The key novelty is the way in which the banking system’s assets and liabilities are connected. Banks issue loans to entrepreneurs who sell goods to households, which in turn pay for the goods by redeeming bank deposits. The return on bank assets is thus contingent on households being able to withdraw their deposits. In a run, not
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Exploring fiscal incentives, financial constraints, and firm innovation performance: A multidimensional correlation analysis and mechanism exploration International Review of Financial Analysis (IF 7.5) Pub Date : 2024-08-31 Xinqi Zhang, Yu Deng, Xueping Wu
The article study selects the panel data of 3407 A-share listed companies between 2010 and 2022, aiming at exploring the impact of fiscal incentives on firms' innovation performance and revealing the mediating role of financing constraints. The empirical results show that fiscal incentives have a significant positive impact on both corporate innovation performance and financing constraints; meanwhile
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Nonlinear relationship between cryptocurrency returns and price sensitivity to market uncertainty Finance Research Letters (IF 7.4) Pub Date : 2024-08-31 SeungOh Han
This paper examines the relationship between cryptocurrency returns and price sensitivity to unexpected changes in market uncertainty, as measured by U.S. stock market volatility, from June 2018 to February 2023. Cryptocurrencies with intermediate uncertainty risk earn a risk-adjusted weekly return of 5.73% higher than those with low and high uncertainty risk, after controlling for market, size, reversal
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The risk and return of equity and credit index options J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-30 Hitesh Doshi, Jan Ericsson, Mathieu Fournier, Sang Byung Seo
We develop a structural credit risk model, which allows us to price equity/credit indices and their options through the asset dynamics of index constituents. We estimate the model via MLE and find that equity and credit index option prices are well explained out-of-sample. Contrary to recent empirical findings, the two option markets are not inconsistently priced through the lens of our model. Returns
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The risk and return of impact investing funds J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-30 Jessica Jeffers, Tianshu Lyu, Kelly Posenau
We provide the first analysis of the risk exposure and risk-adjusted performance of impact investing funds, private market funds with dual financial and social goals. We introduce a dataset of impact fund cash flows and exploit distortions in VC performance measures to characterize risk profiles. Impact funds have a lower market than comparable private market strategies. Accounting for , impact funds
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Modeling volatility in dynamic term structure models J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-30 Hitesh Doshi, Kris Jacobs, Rui Liu
We propose no-arbitrage term structure models with volatility factors that follow GARCH processes. The models’ tractability is similar to canonical affine term structure models, but they fit yield volatility much better, especially for long-maturity yields. This improvement does not come at the expense of a deterioration in yield fit. Because of the improved volatility fit, the model performs substantially
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FinTech Credit and Entrepreneurial Growth J. Financ. (IF 7.6) Pub Date : 2024-08-30 HARALD HAU, YI HUANG, CHEN LIN, HONGZHE SHAN, ZIXIA SHENG, LAI WEI
Based on automated credit lines to vendors trading on Alibaba's online retail platform and a discontinuity in the credit decision algorithm, we document that a vendor's access to FinTech credit boosts its sales growth, transaction growth, and the level of customer satisfaction gauged by product, service, and consignment ratings. These effects are more pronounced for vendors characterized by greater
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Executive power discrepancy and corporate ESG greenwashing International Review of Financial Analysis (IF 7.5) Pub Date : 2024-08-30 Xinlu Zhao, Xiaohui Huang, Fang Liu, Lin Pan
Originating from the theory of organizational hierarchy, the concept of power discrepancy among corporate executives has garnered scholarly attention due to its roots in the unequal distribution of authority and influence within the upper echelons of management. This paper explores the realm of corporate ESG greenwashing, a deceptive practice masking genuine environmental, social, and governance responsibilities
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Approximate utility Finance Research Letters (IF 7.4) Pub Date : 2024-08-30 Philip H. Dybvig, Shu Li
Approximating arbitrage or a perfect hedge in a limit implies approximation in utility (formally, expected utilities are continuous in ), if and only if the utility function is bounded above and below by quadratics. We characterize when some special utility functions are continuous for all random consumptions with a common lower bound. Only linear, quadratic, and, in some cases, translated SAHARA utilities
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Information acquisition, market professional and discretionary liquidity trading Finance Research Letters (IF 7.4) Pub Date : 2024-08-30 Yu Ma, Hong Liu, Qingshan Yang
We analyze an insider trading strategy and market professionals’ information acquisition strategies, and explore their impact on market liquidity and price efficiency in endogenous noise trading. Our findings highlight the negative precision effect on market professionals’ information acquisition. With an increase in market professionals, two opposing effects emerge on market liquidity and price efficiency:
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Heterogeneous Real Estate Agents and the Housing Cycle Rev. Financ. Stud. (IF 6.8) Pub Date : 2024-08-30 Sonia Gilbukh, Paul Goldsmith-Pinkham
The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent. However, low barriers to entry and fixed commission rates result in large market share for inexperienced intermediaries. Using micro-level data on 8.5 million listings and a novel research design, we show that house listings by inexperienced agents have a lower probability of selling, and this effect is
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Sustainable development goals, accounting practices and public financial management: A pre and post COVID-19 assessment The British Accounting Review (IF 5.5) Pub Date : 2024-08-30 Franklin Nakpodia, Rilwan Sakariyahu, Temitope Fagbemi, Rasheed Adigun, Oluwatoyin Dosumu
Previous studies have highlighted the importance of policy interventions in achieving the Sustainable Development Goals (SDGs). However, there is limited understanding within accounting literature about strategies to enhance sustainable development initiatives and address the challenges faced in varieties of capitalism. This study investigates the influence of accounting practices and public financial
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Monetary policy and fragility in corporate bond mutual funds J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-29 John Chi-Fong Kuong, James O’Donovan, Jinyuan Zhang
We document aggregate outflows from corporate bond mutual funds days before and after the announcement of increases in the Federal Funds Target rate (FFTar). To rationalize this phenomenon, we build a model in which funds’ net-asset-values (NAVs) are stale and investors strategically redeem to profit from the mispricing when they learn about the increases of FFTar. Consistent with the model’s predictions
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Middle East conflict and energy companies: The effect of air and drone strikes on global energy stocks Finance Research Letters (IF 7.4) Pub Date : 2024-08-29 Mohammad Zoynul Abedin, Michael A. Goldstein, Nidhi Malhotra, Miklesh Prasad Yadav
The recent April 2024 Israel-Iran conflict had a notable impact on global energy markets. Returns on the top ten global energy stocks indicate investor apprehension up to 10 days before the event started on April 13, 2024. Energy stocks had significant negative returns on the event day itself, with positive CAARs pre-event and negative CAARs post-event. The dynamic market response highlights the heightened
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AI-driven capital-skill complementarity: Implications for skill premiums and labor mobility Finance Research Letters (IF 7.4) Pub Date : 2024-08-29 Shuo Wang, Yuzhang Wang, Chengyou Li
To explain the newly discovered coevolution of capital and labor structures, this study presents a modified capital-skill complementarity hypothesis within the framework of structural transformation. We propose that artificial intelligence (AI) and skilled labor exhibit relative complementarity. Specifically, advancements in AI services or AI-enhanced technologies incentivize the mobilization of skilled
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ESG Disclosures in the Private Equity Industry Journal of Accounting Research (IF 4.9) Pub Date : 2024-08-29 JEFFERSON ABRAHAM, MARCEL OLBERT, FLORIN VASVARI
This paper offers the first systematic evidence on environmental, social, and governance (ESG) disclosures provided by a large global sample of private equity (PE) firms. Using historical websites from 2000 to 2022, we develop and validate a novel dictionary‐based measure of voluntary PE firm ESG disclosures. Descriptive statistics reveal an increasing time trend in these disclosures, with social topics
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Business environment and quality of economic development–Evidence from countries along the Belt and Road Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Jing Ma, Zhangyin He
This study examines the impact of the business environment on economic development quality in 66 Belt and Road Initiative countries from 2015 to 2020. It finds that the business environment significantly boosts economic development quality, with the total labor force serving as a mediating variable. Further analysis shows that the impact is more pronounced in countries with higher economic development
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Economic uncertainty and time-varying return predictability Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Li Liu
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Carbon pricing: Necessary but not sufficient Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Sean Cleary, Neal Willcott
Global carbon pricing has been recognized as one of the most efficient mechanisms that can be used to reduce CO emissions, but questions remain about the of the price and the of implementation. We examine this important issue by extending the Dynamic Integrated Climate and Economy (DICE) model to estimate global carbon prices that will be required to reach various warming scenarios. Our analysis suggests
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Effect of green supply chain collaboration on the HSE performance of manufacturing SMEs Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Hong Nai, Qiang Mei, Suxia Liu, Jingjing Zhang
To clarify the effect of green supply chain collaboration (GSCC) on the HSE performance of manufacturing SMEs, through theoretical and literature analysis, a conceptual model of the effect of GSCC on the HSE performance of manufacturing SMEs is constructed, and the model and hypotheses are empirically tested using structural equation modeling. The research results show that GSCC positively affects
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Guest Editorial: Recent advances and future directions in macrofinance: Geopolitical Risk and Uncertainty – University Jaume I - 2023 Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Laura Ballester, Ana González-Urteaga, Juan Angel Lafuente
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The endogenous growth and asset prices nexus revisited with closed-form solution Finance Research Letters (IF 7.4) Pub Date : 2024-08-28 Palma Filep-Mosberger, Lorant Kaszab
Endogenous growth models exhibit long-run risks, which are considered a potential explanation of the equity premium puzzle. Unlike previous literature, we use a closed-form solution of a simplified model to make the following contributions. First, we derive a set of conditions for a positive and large equity premium. Second, we match a key driver of endogenous growth, the R&D spending-to-GDP ratio
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Capital Commitment J. Financ. (IF 7.6) Pub Date : 2024-08-27 ELISE GOURIER, LUDOVIC PHALIPPOU, MARK M. WESTERFIELD
Twelve trillion dollars are allocated to private market funds that require outside investors to commit to transferring capital on demand. We show within a novel dynamic portfolio allocation model that ex-ante commitment has large effects on investors' portfolios and welfare, and we quantify those effects. Investors are underallocated to private market funds and are willing to pay a larger premium to
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The Working Capital Credit Multiplier J. Financ. (IF 7.6) Pub Date : 2024-08-27 HEITOR ALMEIDA, DANIEL CARVALHO, TAEHYUN KIM
We provide novel evidence that funding frictions can limit firms’ short‐term investments in receivables and inventories, reducing their production capacity. We propose a credit multiplier driven by these considerations and empirically isolate its importance by comparing how a similar firm responds to shocks differently when these shocks are initiated in their most profitable quarter (“main quarter”)
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Treasury Bill Shortages and the Pricing of Short‐Term Assets J. Financ. (IF 7.6) Pub Date : 2024-08-26 ADRIEN D'AVERNAS, QUENTIN VANDEWEYER
We propose a model of post‐Great Financial Crisis (GFC) money markets and monetary policy implementation. In our framework, capital regulation may deter banks from intermediating liquidity derived from holding reserves to shadow banks. Consequently, money markets can be segmented, and the scarcity of Treasury bills available to shadow banks is the main driver of short‐term spreads. In this regime,
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Currency Management by International Fixed‐Income Mutual Funds J. Financ. (IF 7.6) Pub Date : 2024-08-26 CLEMENS SIALM, QIFEI ZHU
Investments in international fixed‐income securities are exposed to significant currency risks. We collect novel data on currency derivatives used by U.S. international fixed‐income funds. We document that while 90% of funds use currency forwards, they hedge, on average, only 18% of their currency exposure. Funds' currency forward positions differ substantially based on risk management demands related
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Geopolitical conflict and firm bankruptcy risk Finance Research Letters (IF 7.4) Pub Date : 2024-08-26 Tonoy Roy, Rubaiyat Ahsan Bhuiyan, Sarwar Uddin Ahmed, Mohammad Abdullah
This study examines the impact of geopolitical risk on corporate bankruptcy. We utilize a global dataset of 36,802 firms from 42 countries covering 2004-2022. Our baseline result indicates that geopolitical risk increases firm bankruptcy risk. Our results remain robust after controlling for endogeneity using 2SLS, propensity score, and entropy balancing techniques, as well as using alternative proxies
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Market-based patent value of green transformation technologies Finance Research Letters (IF 7.4) Pub Date : 2024-08-26 Yosuke Kimura
This paper employs the green technology classification published by the Japan Patent Office to estimate the values of green and non-green innovations. By computing patent values based on stock price reactions to the announcement of patent issuance, this paper finds that, on average, green patents have higher values than non-green patents in the pooled sample. However, results from the matched sample
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Joint credit system and corporate green innovation: Evidence from a quasi-natural experiment on implementing the Administration of Joint Credit Finance Research Letters (IF 7.4) Pub Date : 2024-08-25 Liwen Sun, Ying Han
Banking institutions are crucial in providing capital to firms, making credit resources a vital requirement for enterprises' operations. How to ensure credit capital resources is imperative to consistently and proficiently facilitate firms' green innovation. Based on a sample of A-share listed companies from 2013 to 2022, this study reveals a significant enhancement of joint credit systems in corporate
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Liquidity hoarding and bank profitability: The role of economic policy uncertainty Finance Research Letters (IF 7.4) Pub Date : 2024-08-25 Jijun Niu
We examine the relation between liquidity hoarding and bank profitability in the context of economic policy uncertainty (EPU). Using data on bank liquidity hoarding from Berger et al. (2022), we find that liquidity hoarding is negatively associated with profitability when EPU is low, but positively associated with profitability when EPU is high. Our results hold both in normal and crisis periods, and
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Lying to Speak the Truth: Selective Manipulation and Improved Information Transmission J. Financ. (IF 7.6) Pub Date : 2024-08-19 PAUL POVEL, GÜNTER STROBL
We analyze a principal-agent model in which an effort-averse agent can manipulate a publicly observable performance report. The principal cannot observe the agent's cost of effort, her effort choice, and whether she manipulated the report. An optimal contract links compensation to the realized output and the (possibly manipulated) report. Manipulation can be beneficial to the principal because it can
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Uncertainty about what is in the price J. Financ. Econ. (IF 10.4) Pub Date : 2024-08-24 Joël Peress, Daniel Schmidt
A critical question facing speculators contemplating to trade on private information is whether their signal has already been priced in by the market. In our model, speculators assess the novelty of their information based on recent price movements, and market makers are aware that speculators might be trading on stale news. An asymmetric response to past price movements ensues: after price increases
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Bailout Stigma J. Financ. (IF 7.6) Pub Date : 2024-08-23 YEON-KOO CHE, CHONGWOO CHOE, KEEYOUNG RHEE
We develop a model of bailout stigma in which accepting a bailout signals a firm's balance-sheet weakness and reduces its funding prospects. To avoid stigma, high-quality firms withdraw from subsequent financing after receiving bailouts or refuse bailouts altogether to send a favorable signal. The former leads to a short-lived stimulation followed by a market freeze even worse than if there were no
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Dynamic margin optimization Finance Research Letters (IF 7.4) Pub Date : 2024-08-23 Edina Berlinger, Zsolt Bihary, Barbara Dömötör
In response to the Global Financial Crisis of 2007–2009, by now, most of the financial transactions must be cleared through central counterparties operating a dynamic margin setting mechanism. High margin calls can reduce counterparty risk in a turbulent market, but at the same time, increase liquidity risk and escalate systemic risk. In this paper, we construct a theoretical model to address this
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Does firm-level carbon assurance matter for trade credit? Finance Research Letters (IF 7.4) Pub Date : 2024-08-23 Md Safiullah, Linh Thi My Nguyen
We are among the first to examine the influence of carbon assurance on trade credit. Drawing on a sample of publicly listed U.S. firms, we document that firms with high carbon assurance obtain more trade credit from their suppliers. Our channel analysis tests show that high carbon assurance translates into higher trade credit by reducing risk and information asymmetry. Our results are robust with alternative
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Political uncertainty, corporate social responsibility, and firm performance The British Accounting Review (IF 5.5) Pub Date : 2024-08-23 Yi Hu, Chao Yin
Our study reveals that companies with higher Corporate Social Responsibility (CSR) ratings exhibit superior stock returns compared to their counterparts with lower ratings during periods of political uncertainty. This phenomenon is more pronounced in a closely contested election with a higher degree of unpredictability. Our results remain robust after addressing potential endogeneity issue and are
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In search of a unicorn: Dynamic agency with endogenous investment opportunities J. Account. Econ. (IF 5.4) Pub Date : 2024-08-23 Felix Zhiyu Feng, Robin Yifan Luo, Beatrice Michaeli
We study the optimal dynamic contract that provides incentives for an agent (e.g., SPAC sponsor, VC general partner, CTO) to exploit investment opportunities/targets that arrive randomly over time via a costly search process. The agent is privy to the arrival as well as to the quality of the target and can take advantage of this for rent extraction during the search process and the ensuing production
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Does transparency about banks’ lending costs lower firms’ borrowing costs? Evidence from India J. Account. Econ. (IF 5.4) Pub Date : 2024-08-23 Prasanna Tantri, Nitin Vishen
We study the impact of transparency about banks’ costs on loan interest rates. The Indian Central Bank required banks to disclose a cost-based benchmark interest rate instead of the prime rate. The banks could price loans using any spread to the cost-based benchmark. We find that this change, which made banks’ cost structures more transparent, lowers the interest rates charged and leads to increases
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The Effect of the Federal Judicial System on Public Enforcement: Evidence from SEC Enforcement Actions Journal of Accounting Research (IF 4.9) Pub Date : 2024-08-23 YANRONG JIA
This study examines whether the efficiency of federal district courts affects the likelihood of SEC enforcement. The results indicate that the SEC is less likely to initiate enforcement actions against firms in less efficient federal district courts. In addition, the study examines the implications of court efficiency for firms’ financial reporting quality (FRQ). The evidence suggests that firms residing
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Founder-CEO Compensation and Selection into Venture Capital-Backed Entrepreneurship J. Financ. (IF 7.6) Pub Date : 2024-08-22 MICHAEL EWENS, RAMANA NANDA, CHRISTOPHER STANTON
We show theoretically that a critical determinant of the attractiveness of venture capital (VC)-backed entrepreneurship for high-earning potential founders is the expected time to develop a startup's initial product. This is because founder-CEOs' cash compensation increases substantially after product development, alleviating the nondiversifiable risk that founders face at startup birth. Consistent
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Financial literacy and digital product consumption - An analysis based on CFPS data Finance Research Letters (IF 7.4) Pub Date : 2024-08-22 Panlin Xie, Ke Fu
This study explores the profound connection between financial literacy and the utilization of digital products. The research uncovers a substantial rise in digital product usage as one's financial knowledge improves. Moreover, household income and social interaction serve as significant mediators in this relationship. Additional investigations revealed that gender, geographical location, and urban/rural
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A dynamic duration approach to venture capital exit Finance Research Letters (IF 7.4) Pub Date : 2024-08-22 Yuet-Yee Wong
This study explores the extent to which correlated multiple stage funding explains variation in the speed of venture exit. I cast venture capital matches in a multivariate survival setting. I construct a panel of nascent entrepreneurs using SDC Platinum-VentureXpert (1990–2000) and use it to estimate the model. I find significant correlation across funding stages. Market effects is the most important
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Female board representation and firm value: International evidence Finance Research Letters (IF 7.4) Pub Date : 2024-08-22 Wendi Huang
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Information flow dynamics between cryptocurrency returns and electricity consumption: A comparative analysis of Bitcoin and Ethereum Finance Research Letters (IF 7.4) Pub Date : 2024-08-22 Dora Almeida, Andreia Dionísio, Paulo Ferreira
Understanding energy consumption associated with cryptocurrency mining gained increasing attention, with the literature focusing mainly on Bitcoin. This study uses data from the two energy consumption indices, to estimate static and dynamic transfer entropies. The results provide a nuanced understanding of the bidirectional relationships and their implications. The dominant direction of information