{"title":"Artificial intelligence and corporate ESG: Evidence from Chinese listed enterprises","authors":"Changlong Wang , Yi Zhang , YuMeng Miao","doi":"10.1016/j.frl.2025.108547","DOIUrl":"10.1016/j.frl.2025.108547","url":null,"abstract":"<div><div>With the accelerated development of the digital economy, artificial intelligence (AI) has emerged as an increasingly important catalyst for corporate sustainable development. Utilizing comprehensive data from Chinese A-share listed companies spanning 2008 to 2023, this study analyzes AI’s influence on corporate environmental, social, and governance (ESG) performance. The findings demonstrate that AI adoption substantially improves ESG performance, mainly through the enhancement of research and development capacity and green innovation potential, while digital transformation (DT) serves to strengthen these positive impacts. Heterogeneity analysis shows the beneficial effects of AI on ESG performance are particularly evident in state-owned enterprises, capital-intensive businesses, and firms located in eastern regions, with robustness tests confirming these conclusions. The study emphasizes AI’s pivotal position in promoting corporate sustainability within emerging economies and identifies its crucial boundary conditions concerning DT and green economic development. Thus, it provides both practical implications and theoretical contributions for corporate decision-making and policy formulation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108547"},"PeriodicalIF":6.9,"publicationDate":"2025-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145217314","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}
{"title":"Tail risk in Bitcoin under the Basel framework","authors":"Huei-Wen Teng , Hsin-Pei Huang , Yu-Chuan Shih","doi":"10.1016/j.frl.2025.108528","DOIUrl":"10.1016/j.frl.2025.108528","url":null,"abstract":"<div><div>We examine Bitcoin’s tail risk within the Basel framework using Value-at-Risk and Expected Shortfall. Daily data from 2018 to 2024 are analyzed by comparing the Stochastic Volatility with Correlated Jumps (SVCJ) model with its nested specifications and standard GARCH-type benchmarks (Duffie et al., 2000). The SVCJ framework is particularly suitable for cryptocurrencies, as it jointly captures stochastic volatility and correlated jumps in both returns and variance. Empirical results indicate that SVCJ delivers more accurate tail-risk forecasts than alternative models across horizons and confidence levels. To our knowledge, this is the first study to systematically evaluate the SVCJ model for Bitcoin tail risk, underscoring its relevance for robust risk management under Basel standards.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108528"},"PeriodicalIF":6.9,"publicationDate":"2025-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145155773","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}
{"title":"The impact of environmental protection tax law on corporate innovation","authors":"Jiayin Liu","doi":"10.1016/j.frl.2025.108534","DOIUrl":"10.1016/j.frl.2025.108534","url":null,"abstract":"<div><div>This paper examines the intrinsic relationship between environmental protection tax and corporate innovation. Employing a difference-in-differences approach complemented by case study analysis, we systematically investigate how environmental tax policies affect innovation behaviors across different firm types. The results demonstrate that environmental protection tax significantly promotes corporate innovation. The tax reform stimulates innovation output by enhancing firms' ESG performance, with state-owned enterprises and large firms exhibiting more pronounced innovation responses. These findings provide empirical evidence for policymakers to refine environmental taxation systems.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108534"},"PeriodicalIF":6.9,"publicationDate":"2025-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145182887","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}
{"title":"The relationship between bonuses and firm performance","authors":"Balázs Reizer","doi":"10.1016/j.frl.2025.108514","DOIUrl":"10.1016/j.frl.2025.108514","url":null,"abstract":"<div><div>I investigate the relationship between bonus payments and firm performance using a large-scale Hungarian linked employer-employee database. I found that firms with a 10% higher share of workers with bonuses have a 3.9%–4.6% higher value added per worker and 3 percent higher total factor productivity. This relationship is linear in the share of workers receiving bonuses, suggesting that bonuses are more effective when more workers receive them within a firm. At the same time, the relationship between firm performance and bonus payments is independent of labour share and firm size, although it is stronger in the service sector.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108514"},"PeriodicalIF":6.9,"publicationDate":"2025-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145182893","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}
{"title":"Machine learning models to predict stock market spillovers","authors":"Letizia Del Nero, Paolo Giudici","doi":"10.1016/j.frl.2025.108508","DOIUrl":"10.1016/j.frl.2025.108508","url":null,"abstract":"<div><div>We propose a set of machine learning models, based on recurrent neural networks, for the prediction of stock market spillovers. While classic spillover models, such as the Diebold–Yilmaz approach, can explain which are the spillover effects, we aim to predict them, and provide an early warning system. To assess the effectiveness of our proposal, we compare our predictions to the actual return and volatility spillovers across fourteen major equity market indices, spanning the period from January 2000 through January 2024, and considering two hundred rolling window test samples. Our empirical findings show that the predictions are quite accurate, and that the Gate Recurrent Unit network consistently outperforms the other models, primarily due to its ability to capture complex and non-linear dependencies.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108508"},"PeriodicalIF":6.9,"publicationDate":"2025-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145155806","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}
{"title":"Private benefits of control, contingent capital and investment timing","authors":"Xiaolin Wang , Jinhui Cheng , Chunjie Lou","doi":"10.1016/j.frl.2025.108552","DOIUrl":"10.1016/j.frl.2025.108552","url":null,"abstract":"<div><div>By establishing a real options model, this paper investigates, for the first time, how the controlling shareholder’s private benefits of control affect the endogenous default threshold, investment policy, and risk-shifting incentive under contingent convertible bonds financing. The results indicate three key findings. First, the default threshold rises with the controlling shareholder's equity ratio, conversion ratio, and the magnitude of investor protection. Second, contingent convertible bonds can mitigate overinvestment. Specifically, the controlling shareholder’s incentive to overinvest declines as investor protection strengthens, but increases with the controlling shareholder's equity ratio. There exists an optimal conversion ratio related to the private benefits of control that effectively eliminates inefficient investment. Finally, the controlling shareholder’s risk-shifting incentive increases slightly with stronger investor protection, while the effect of the controlling shareholder's equity ratio on such incentives depends on the firm’s current cash flow level.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108552"},"PeriodicalIF":6.9,"publicationDate":"2025-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145217236","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}
{"title":"Excessive administrative expenses, customer dependence, and financial support in enterprises","authors":"Tong Yang , Fang Gao","doi":"10.1016/j.frl.2025.108554","DOIUrl":"10.1016/j.frl.2025.108554","url":null,"abstract":"<div><div>This paper conducts a regression analysis using data from Chinese listed companies between 2008 and 2023, and finds the following: First, financial support significantly increases firms’ customer dependence; second, financial support indirectly promotes the enhancement of customer dependence by reducing firms’ excess administrative expenses; third, further heterogeneity analysis reveals that the impact of financial support on customer dependence varies significantly depending on whether the firm is audited by a Big Four accounting firm, with the effect being more pronounced in firms not audited by a Big Four firm.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108554"},"PeriodicalIF":6.9,"publicationDate":"2025-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145155810","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}
{"title":"Can digital finance promote the digital technology innovation of enterprises?","authors":"Chia-Yang Ning , HsienYu Shun","doi":"10.1016/j.frl.2025.108555","DOIUrl":"10.1016/j.frl.2025.108555","url":null,"abstract":"<div><div>Based on the panel data of city-enterprise from 2011 to 2023, this paper empirically tests the influence of digital finance on enterprise digital technology innovation. The results show that: ① Digital finance can significantly promote enterprise digital technology innovation. Compared with the coverage of digital finance, the promotion effect of the depth of digital finance on digital technology innovation is more prominent. ② The influence of digital finance on digital technology innovation of enterprises of different scales is different. Compared with small and medium-sized enterprises, the promotion effect of digital finance on digital technology innovation of large-scale enterprises is obviously stronger. ③ The promotion effect of digital finance on digital technology innovation mainly comes from the easing of financing constraints and the decline of financing costs. ④ The digital finance not only promotes local digital technology innovation, but also shows significant spatial spillover effect on digital technology innovation in surrounding areas. ⑤ Further discussion shows that, with the improvement of digital finance level, the promotion effect of digital finance on digital technology innovation tends to strengthen. Meanwhile, the traditional financial endowment and financial supervision have a significant and positive regulatory effect on the digital finance and the promotion of digital technology innovation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108555"},"PeriodicalIF":6.9,"publicationDate":"2025-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145217229","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}
{"title":"Green paradox of Ai: short-term pain and long-term redemption—The two faces of Chinese enterprises’ sustainable development","authors":"Jing Fang , Jingshuo Li , Pengfei Bi","doi":"10.1016/j.frl.2025.108544","DOIUrl":"10.1016/j.frl.2025.108544","url":null,"abstract":"<div><div>This study examines the impact of artificial intelligence (AI) adoption on corporate sustainability using a panel of Chinese A-share listed firms from 2011 to 2023. Focusing on operational sustainability, environmental information disclosure, and carbon emissions performance, the results reveal a dual effect of AI that incurs short-term operational pressure of adoption costs and integration challenges, followed by substantial long-term gains in environmental transparency and emissions reduction. AI remarkably improves the quality and quantity of environmental disclosure while lowering carbon intensity. These findings demonstrate the tradeoff between short-term costs and long-term benefits, enriching the literature on digital transformation and sustainability. We provide actionable policy insights, emphasizing the influence of AI in advancing corporate environmental responsibility and supporting China’s carbon neutrality agenda.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108544"},"PeriodicalIF":6.9,"publicationDate":"2025-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145217313","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}
{"title":"Local government competition, fiscal decentralization, and environmental governance efficiency","authors":"Guoyuan Li , Ping Zhou , Rui Wu","doi":"10.1016/j.frl.2025.108537","DOIUrl":"10.1016/j.frl.2025.108537","url":null,"abstract":"<div><div>This study investigates the impact of local government competition on environmental governance efficiency using a panel dataset of Chinese prefecture-level cities from 2011 to 2022. The baseline regression results indicate that intergovernmental competition significantly enhances environmental governance efficiency. Mediation analysis further reveals that promoting fiscal decentralization serves as an important channel through which local government competition improves environmental outcomes. Moderation analysis confirms that public environmental concern, green total factor energy efficiency, and total factor productivity all strengthen the positive relationship between government competition and environmental governance efficiency. Moreover, heterogeneity analysis shows that the effects of local government competition vary depending on the level of green innovation and economic density across cities.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"86 ","pages":"Article 108537"},"PeriodicalIF":6.9,"publicationDate":"2025-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145217308","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}