Assil Guizani, Hamza Nizar, Faten Lakhal, Taher Hamza, Ramzi Benkraiem
{"title":"Does climate risk vulnerability affect the value of excess cash? International evidence","authors":"Assil Guizani, Hamza Nizar, Faten Lakhal, Taher Hamza, Ramzi Benkraiem","doi":"10.1002/ijfe.3035","DOIUrl":"https://doi.org/10.1002/ijfe.3035","url":null,"abstract":"<p>In this paper, we investigate the impact of climate risk on the value of excess cash. Based on an international sample of 6468 firm-year observations from 2010 to 2019, the results show that climate risk vulnerability positively affects the value of excess cash. This suggests that investors may consider firms with excess cash to be better positioned to challenge extreme weather events by using cash reserves to cover up expenses and maintain operations. This positive effect is more pronounced for firms operating in countries with strong investor protection, for those with strong governance quality, and for those with high corporate social responsibility performance. However, it is less accentuated in the presence of financial constraints. Overall, our findings have significant practical implications for decision-makers, investors, and policymakers.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2662-2681"},"PeriodicalIF":2.8,"publicationDate":"2024-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144514712","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The term structure of interest rates as predictor of stock market volatility","authors":"Anastasios Megaritis, Alexandros Kontonikas, Nikolaos Vlastakis, Athanasios Triantafyllou","doi":"10.1002/ijfe.3029","DOIUrl":"10.1002/ijfe.3029","url":null,"abstract":"<p>We examine the forecasting power of the volatility of the slope of the US Treasury yield curve on US stock market volatility. Consistent with theoretical asset pricing models, we find that the volatility of the slope of the term structure of interest rates has significant forecasting power on stock market volatility for forecasting horizon ranging from 1 up to 12 months. Moreover, the term structure volatility has significant forecasting power when used for volatility predictions of the intra-day returns of S&P500 constituents, with the predictive power being higher for stocks belonging to the telecommunications and financial sector. Our forecasting models show that the forecasting power of yield curve volatility is higher to and absorbs that of Economic Policy Uncertainty and Monetary Policy Uncertainty, showing that the main channel through which the yield curve volatility affects the stock market is not only related with uncertainty about monetary policy actions or policy rates, but also with uncertainty regarding the future cash flows and dividend payments of US equities. Lastly, we show that the forecasting power of term structure volatility significantly increases during the post-2007 Great recession period which coincides with the Fed adopting unconventional monetary policies to stimulate the economy.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"3212-3229"},"PeriodicalIF":2.8,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142205574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Patented innovation and left-tail risk: Evidence from China","authors":"Shaoqing Jia, Liuyong Yang, Fangzhao Zhou, Jiayao Li, Yawei Qi","doi":"10.1002/ijfe.3032","DOIUrl":"https://doi.org/10.1002/ijfe.3032","url":null,"abstract":"<p>This study investigates the impact of patented innovation on the left-tail risk of stock price, measured as the 1% value at risk (VaR) and expected shortfall (ES). Using the sample of all listed firms in the Chinese A-share market from 2007 to 2020, we find that the quantity and quality of patents significantly decrease left-tail risk. Second, the effect is more pronounced for firms in regions with patent pledge systems or stronger intellectual property rights protection. Short-selling constraints and the engagement of retail investors hinder patented innovation from reducing left-tail risk. Third, we further explore the mechanisms and find that patented innovation enhances financial performance, mitigates financial constraints, and attracts long-term institutional investors, thereby decreasing left-tail risk.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2622-2646"},"PeriodicalIF":2.8,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144514550","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Reputational risk and target selection: An evidence from China","authors":"Tanveer Hussain, Abubakr Saeed, Hammad Riaz","doi":"10.1002/ijfe.3030","DOIUrl":"https://doi.org/10.1002/ijfe.3030","url":null,"abstract":"<p>Do bidders with pre-deal lower (higher) reputational risk select targets with lower (higher) reputational risk in the existing and new markets? Past research on the role of reputation suggests that reputable firms make conservative investment decisions to maintain their reputation. Using data from the Chinese takeover market over the time period 2010 to 2018, we examine the effect of reputational risk similarity on target selection and bidder returns. The results show that bidders with pre-deal lower (higher) reputational risk select targets with lower (higher) reputational risk and this pattern of target selection only holds in the existing market whilst bidders entering into the new markets select targets with different levels of reputational risk. We also find that bidders with lower reputational risk earn higher announcement returns in both existing and new markets and pay fairer premiums to win the bid auction.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2574-2602"},"PeriodicalIF":2.8,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/ijfe.3030","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144514551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Christian Nedu Osakwe, Oluwatobi A. Ogunmokun, Islam Elgammal, Darya Baeva, Victoria Kamneva
{"title":"An integrative model for understanding cryptocurrency investment-related behaviours: A comparison between millennials and pre-millennials","authors":"Christian Nedu Osakwe, Oluwatobi A. Ogunmokun, Islam Elgammal, Darya Baeva, Victoria Kamneva","doi":"10.1002/ijfe.3031","DOIUrl":"10.1002/ijfe.3031","url":null,"abstract":"<p>This article adopts the value-attitude-behavioural (VAB) and attitude-behaviour-context (ABC) theoretical lenses to develop an integrative model to examine attitudinal and behavioural responses to cryptocurrency investment. It also investigates the moderating role of generational differences (pre-millennials vs. millennials). The study showed that perceived value is closely associated with the attitude towards cryptocurrency investment which, in turn, is strongly associated with the willingness to make and recommend cryptocurrency investments. Results further reveal that contextual factors such as convertibility and sugrophobia, which reflect the fear of being duped, strongly influence individuals' willingness to recommend cryptocurrency investments to others. Finally, results indicate that generational differences play an important moderating role.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2603-2621"},"PeriodicalIF":2.8,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/ijfe.3031","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142205576","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The impact of new millennium crises on the power of Islamic banks in deposit markets","authors":"Maryam Alhalboni, Kenneth Baldwin","doi":"10.1002/ijfe.3034","DOIUrl":"10.1002/ijfe.3034","url":null,"abstract":"<p>We investigate the impact of three crises on the power of Islamic banks in deposit markets: the Global Financial Crisis, 2007–2009 (GFC), the Arab Spring political crisis, 2011–2013, and the COVID-19 health crisis, 2020–2022. Applying difference-in-difference (DID) and GMM techniques to panel data for 2004–2022, we find that the power of Islamic banks increased in countries most affected by the GFC, but only for oil-exporters, as elevated oil prices inflated deposited liquidity. In contrast to the GFC, the market power of countries highly affected by the Arab Spring decreased as depositors withdrew <i>en masse</i>. For these countries, oil export status was irrelevant, and whilst government integrity is significant, it accounts for a small amount of heterogeneity in the country-level cross-section due to widely held public attitudes towards institutions during the crisis. For COVID-19, the market power of Islamic banks initially increased at the outset of the pandemic due to a surge in precautionary deposits, but later decreased due to economic activity constraints. The stringency of lockdowns had little effect on market power in countries that suffered the highest COVID-19 death rates. These and other findings specific to each crisis provide a rich array of private and public policy implications relevant to crises of different types for bank liquidity crisis management, financial conduct policies, and state-backed lending stimulus packages.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"3230-3260"},"PeriodicalIF":2.8,"publicationDate":"2024-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/ijfe.3034","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142205579","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Green banks versus non-green banks: A financial stability comparative analysis in terms of CAMEL ratios","authors":"Ioannis Malandrakis, Konstantinos Drakos","doi":"10.1002/ijfe.3028","DOIUrl":"10.1002/ijfe.3028","url":null,"abstract":"<p>This study examines green and non-green-banks from a financial stability point of view and specifically whether there are any discernible performance differences between the two groups. Using the supervisory ratios namely CAMEL variables, and employing panel data techniques (random effects model) and a global panel data set of 165 banks from 38 countries for the period 1999 to 2021, we adopt the Differences-In-Differences approach to examine whether green (“treatment” group) and non-green (“control” group) banks exhibit differential behaviour, using the outbreak of the financial crisis (2008) as the time of intervention. Our results mainly show that green banks differ (and specifically perform better than their non-green counterparts) only in terms of Total Capital, Tier 1 Capital, and NPLs/Reserve for Loan Losses ratios during and after the financial crisis. As for the rest of the CAMEL factors, it seems that both groups exhibit the same behaviour, especially in the post-crisis period. Thus, green banks are not stronger in total than their non-green counterparts in terms of financial stability. We also find that the financial crisis had either a positive or a negative effect on most of the CAMEL factors of <i>both</i> bank types, except for the Leverage Ratio (a capital adequacy proxy) and Operational Expenses/Operational Income ratios (a management quality proxy), which proved crisis-insensitive.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2536-2573"},"PeriodicalIF":2.8,"publicationDate":"2024-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/ijfe.3028","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142205577","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Connectedness in exchange rates and news sentiment in the Asia-Pacific region","authors":"Tjeerd M. Boonman, Jens C. Fittje","doi":"10.1002/ijfe.3021","DOIUrl":"10.1002/ijfe.3021","url":null,"abstract":"<p>Exchange rate co-movements can be pathways for contagion and reduce the ability for diversification. News sentiment on the currency, as a high frequency proxy for market expectations, may affect exchange rate dynamics. We use the connectedness approach from Diebold and Yilmaz (<i>International Journal of Forecasting</i>, 2012, 28(1), 57–66) to model co-movements of exchange rate changes and news sentiment of 14 Asian-Pacific currencies from 1998 to 2022. Our results indicate that the connectedness between the exchange rate changes increases over time, especially among advanced economies after the Global Financial Crisis. We do not find evidence that currency news sentiment can serve as an early warning indicator for exchange rate changes.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2389-2406"},"PeriodicalIF":2.8,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141920137","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Is transparency in sustainability the fruit of business trust: Evidence from sustainability disclosure?","authors":"Yanqi Sun, Kun Su, Wei Cai, Min Bai","doi":"10.1002/ijfe.3022","DOIUrl":"10.1002/ijfe.3022","url":null,"abstract":"<p>This research explores the relationship between sustainability disclosures and business trust within a dataset comprising 689 publicly listed companies in China spanning from 2006 to 2018. Our analysis delves into how business trust influences levels of sustainability disclosure, revealing a positive correlation between the two. To ensure the reliability of our findings, we conducted additional tests to address potential endogeneity concerns. Supplementary analyses indicate that this positive relationship between sustainability disclosure and business trust is particularly notable among non-state-owned enterprises (non-SOEs) and companies operating in regions characterized by lower levels of marketization. Our study aligns with the principles of neo-institutional theory, indicating that business trust, functioning as an informal institution, shapes firms' sustainability disclosure practices through normative pressures. Moreover, we observe that business trust holds more sway over sustainability disclosure practices in contexts where formal institutions are weaker. These findings contribute fresh perspectives on the determinants of sustainability disclosures and underscore the pivotal role of business trust in fostering such disclosures. Based on our findings, we suggest that policymakers should foster a business environment that enhances trust among stakeholders, encouraging firms, especially in regions with weak formal institutions, to engage more rigorously in sustainability disclosure. Such policy initiatives could include developing clearer guidelines for sustainability reporting and promoting transparency as a core business value. The implications of our research extend to managers, regulators, and investors alike, highlighting the need for integrated approaches to enhance transparency and trust in the business sector.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2407-2426"},"PeriodicalIF":2.8,"publicationDate":"2024-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141920350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Climate risk and trade credit financing: Evidence from China","authors":"Jinyu Chen, Xinyu Guo, Yuan Geng, Ran Liu","doi":"10.1002/ijfe.3027","DOIUrl":"https://doi.org/10.1002/ijfe.3027","url":null,"abstract":"<p>Using A-share listed firms from 2009 to 2020 as a research sample, this study constructs firm-level climate risk through textual analysis to examine whether and how corporate climate risk affect trade credit financing. The empirical results show that increased climate risk inhibits the level of trade credit financing of firms. The results are more prominent for those enterprises without government-enterprise linkages and firms in cities with high levels of environmental regulation intensity and low levels of city trust. Furthermore, mechanism tests suggest that operational risk and information asymmetry are the main channels affecting the above relationships. In addition, we find that the negative impact of climate risk on trade credit financing will weaken firm value. This paper enriches the research on the impact of climate risk on microeconomic agents and provides new perspectives to alleviate corporate financing constraints.</p>","PeriodicalId":47461,"journal":{"name":"International Journal of Finance & Economics","volume":"30 3","pages":"2514-2535"},"PeriodicalIF":2.8,"publicationDate":"2024-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144514830","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}