Pacific-Basin Finance Journal最新文献

{"title":"Pricing family leadership: Evidence from audit fees","authors":"Fuxiu Jiang ,&nbsp;Mingqi Pei ,&nbsp;Yiqian Cai ,&nbsp;Xiaojia Zheng","doi":"10.1016/j.pacfin.2024.102657","DOIUrl":"10.1016/j.pacfin.2024.102657","url":null,"abstract":"<div><div>This paper examines whether the controlling family holding the chairmanship affects audit pricing. Using a sample of Chinese A-share listed family firms from 2008 to 2019, we find that the presence of family chairs is associated with an audit fee discount. A path analysis shows that firms with family chairs are subject to less insider expropriation through related-party transactions and higher quality of financial information disclosures, with consequent lower audit risk and thus lower audit fees. Additionally, the audit fee reduction effect of family chairs is driven primarily by internally promoted family chairs and founder family chairs, who have strong incentives and power to build the image and reputation of controlling families. We also find that this effect is more pronounced when controlling families are more concerned about their reputation and when firms are located in regions with weaker institutional environments. Finally, we exclude the alternative explanation that the lower audit fees are due to family chairs' proactively selecting low-quality auditors.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102657"},"PeriodicalIF":4.8,"publicationDate":"2024-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151935","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":"Does ESG rating policy reduce corporate risk-taking? Evidence from China","authors":"Shilei Wu ,&nbsp;Fu-You Zhou ,&nbsp;Deng-Kui Si ,&nbsp;Jiawei Hao","doi":"10.1016/j.pacfin.2024.102654","DOIUrl":"10.1016/j.pacfin.2024.102654","url":null,"abstract":"<div><div>This paper investigates the impact of environmental, social, and governance (ESG) ratings on corporate risk-taking using non-financial listed firms from 2010 to 2020 in China. We find a significantly negative correlation between ESG ratings and corporate risk-taking, indicating that higher ESG ratings are associated with reduced corporate risk-taking behavior. The result remains held to address endogeneity concerns and various robustness checks. We identify the channels of reducing information asymmetry, enhancing investment efficiency, and improving trade credit through which ESG rating inhibits corporate risk-taking. Further analysis shows that the negative impact of ESG ratings on corporate risk-taking is more pronounced for firms with lower audit quality, voluntary ESG disclosures, and lower institutional ownership. This paper provides a novel theoretical view of the relationship between ESG ratings and corporate risk-taking.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102654"},"PeriodicalIF":4.8,"publicationDate":"2024-12-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151940","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":"Financial literacy and household financial behavior in Singapore","authors":"Joelle H. Fong","doi":"10.1016/j.pacfin.2024.102651","DOIUrl":"10.1016/j.pacfin.2024.102651","url":null,"abstract":"<div><div>Ordinary consumers make a variety of various financial decisions over their life course, and this has become more challenging over time given the proliferation of financially complex products in the retail marketplace. Using a representative survey in Singapore, we show that that financial literacy explains a wide range of savings, investment, and borrowing decisions among households. Financially savvy individuals are more likely to allocate their savings to assets such as stocks, retirement annuities, and life insurance, and additionally, demonstrate greater propensity to own at least two financially complex products. There is also suggestive evidence that Singaporeans are using debt instruments in an informed manner: while financially literate respondents have more debt, they are also far more likely to repay their debt on time. We provide empirical evidence that these relationships are causal. Accordingly, boosting financial literacy can help strengthen household balance sheets on both the asset and liability sides.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102651"},"PeriodicalIF":4.8,"publicationDate":"2024-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151936","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Do political preferences shape retail investors' decisions? Evidence from the Taiwan stock market","authors":"Weng Ian Hoi ,&nbsp;Chi-Yu Chen ,&nbsp;Pei-Shih Weng","doi":"10.1016/j.pacfin.2024.102649","DOIUrl":"10.1016/j.pacfin.2024.102649","url":null,"abstract":"<div><div>This study investigates the impact of political preferences on retail investors' trading decisions in Taiwan, focusing on China concept stocks.<span><span>¹</span></span> Utilizing detailed stock transaction data from the Taiwan Stock Exchange and electoral statistics, we examine how voting patterns in different regions correlate with local investors' trading behaviors. Our analysis reveals that investors in areas with stronger support for China-friendly coalition (known as the “pan-blue” coalition) exhibit a higher propensity to trade China concept stocks, especially around election periods. This tendency is particularly pronounced in regions transitioning from leaders aligned with the “pan-green” coalition (generally considered more China-critical) to those aligned with the pan-blue coalition. Importantly, we find that these politically influenced investment decisions often lead to suboptimal short-term trading performance, suggesting that such choices may be driven more by sentiment than rational analysis. These findings are robust to alternative specifications of political preferences and remain consistent after accounting for the uneven distribution of brokerage branches across regions. The study contributes to the behavioral finance literature by extending the research on political preferences and investment behaviors to an Asian context with complex geopolitical considerations. It demonstrates that political attitudes influence not just broad market participation but also specific stock selections tied to political ideologies, underscoring the importance of analyzing financial investment decisions through social dimensions.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102649"},"PeriodicalIF":4.8,"publicationDate":"2024-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151939","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":"Does board demographic diversity constrain related party transactions? Evidence from India","authors":"Satya Prakash Mani,&nbsp;Shashank Bansal","doi":"10.1016/j.pacfin.2024.102653","DOIUrl":"10.1016/j.pacfin.2024.102653","url":null,"abstract":"<div><div>This study examines the effects of board demographic diversity on expropriative and propping related party transactions (RPT) of Indian listed firms. We find a significantly negative relation between the board demographic diversity and expropriative RPT, indicating the monitoring role of board diversity in mitigating expropriative RPT. This effect is dominant among firms with weaker shareholder activism and lower institutional ownership, highlighting that board diversity mitigates expropriative RPT where there are higher agency problems. The effect is also prominent in the absence of family directors on the board and lower founder ownership, indicating that board diversity mitigates expropriative RPT when there is less influence of founders on the board. In contrast, we find a significantly negative relation between board diversity and propping RPT for firms with family directors on the board and higher founder ownership, indicating that board diversity mitigates propping RPT where there is higher founder influence in the firm. The effect is also prominent for firms with lower institutional investors and lower leverage, indicating that board diversity mitigates propping RPT when there are weak external governance mechanisms. Our finding has important implications for regulators.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102653"},"PeriodicalIF":4.8,"publicationDate":"2024-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143153010","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":"Robot adoption and corporate pollution emissions: Evidence from China","authors":"Rui Xu ,&nbsp;Hao Zhang ,&nbsp;Minghui Han ,&nbsp;Leo Yang Yang","doi":"10.1016/j.pacfin.2024.102647","DOIUrl":"10.1016/j.pacfin.2024.102647","url":null,"abstract":"<div><div>This study examines whether and how industrial robot adoption affects corporate pollution emissions. Using a sample of 163,301 firm-year observations from the Chinese industrial enterprises for the period 2004–2014, we find that firm's robot adoption is positively related to pollution emissions reduction. Further mechanism tests show that the adoption of robots in production can improve a firm's productivity and alleviate a firm's financial constraint, thereby increasing the firm's pollution emissions reduction. In addition, we find that the above-mentioned effect of robot adoption on a firm's pollution emissions reduction is more pronounced for firms headquartered in regions with strong environmental regulations, firms that are high efficiency of pollution treatment and high technology-intensive, firms that have gone public and state-owned enterprises. Altogether, this study provides the first micro evidence on the relationship between robot adoption and corporate pollution emissions, providing significant implications for the world's sustainable development.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102647"},"PeriodicalIF":4.8,"publicationDate":"2024-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143153012","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 supply chain financing role of government's stock purchase rescue policy: Stock market stabilization funds and trade credit financing of Chinese listed firms","authors":"Zheng Yang ,&nbsp;Xingquan Yang ,&nbsp;Xiaoyi Ren","doi":"10.1016/j.pacfin.2024.102650","DOIUrl":"10.1016/j.pacfin.2024.102650","url":null,"abstract":"<div><div>Few studies on trade credit financing have addressed the government's specific behaviors or policies that support the healthy development of the stock market, even though the healthy development of the stock market will ultimately exert influence on the cooperative trust relationship between listed firms and upstream and downstream firms (UDFs) and consequently affect the listed firms' trade credit financing. Therefore, the research on trade credit financing cannot ignore the influences from the governmental behaviors that support the healthy development of the stock market, especially the government bailout programs. We use the introduction of the stock market stabilization funds (SMSFs) by the China Securities Regulatory Commission (CSRC) in 2015 as an external shock, finding that SMSFs can significantly enhance trade credit financing, implying that China's SMSFs have a supply chain financing promotion effect. The channel tests reveal that enhancing insider governance and the eye-catching star effect, reducing corporate operation risk, and improving accounting information quality are crucial channels for SMSFs to increase trade credit financing. Additionally, we discover that the positive effect of the SMSFs to enhance corporate trade credit financing is stronger when the level of SMSFs' shareholding is higher, SMSFs increase their shareholdings, SMSFs are among the top 10 shareholders and there are multiple SMSFs major shareholders. We also find that SMSFs have a higher beneficial impact on trade credit financing when a firm has weaker corporate governance, more severe financing constraints, and faces higher economic policy uncertainty (EPU). Furthermore, we find that SMSFs can increase corporate value while optimizing supply chain financing. Overall, we link the literature on government rescue, SMSFs, and trade credit financing. We broaden the study of the influencing factors on trade credit financing from the dual perspectives of governmental rescue actions that promote the stock market's healthy development and state-owned special institutional investors. Also, our research will help to deepen the understanding of the positive effects of China's SMSFs and offer valuable lessons for other East Asian or emerging economies.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102650"},"PeriodicalIF":4.8,"publicationDate":"2024-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143153013","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":"Social norm differences and innovation: do institutional investors always spur corporate innovation?","authors":"So Yean Kwack,&nbsp;Jinhee Kim","doi":"10.1016/j.pacfin.2024.102644","DOIUrl":"10.1016/j.pacfin.2024.102644","url":null,"abstract":"<div><div>This paper examines how culture/social norms affect the role of institutional investors in fostering corporate innovation. We find that foreign institutional ownership has a positive association with innovation output only if these investors are from countries with more creative or less risk-averse cultures, compared to the country in which a firm is incorporated. The positive role of these institutions holds true even when they are non-independent investors, are from weak governance countries, or tend to invest in less-innovative industries. The results suggest that foreign institutions with more innovation-friendly social norms enhance corporate innovation primarily through the social norm channel, rather than through governance mechanisms or selective investment in innovative firms. In other words, these institutions could help a firm to overcome cultural barriers to innovation by bringing positive attitudes toward innovation.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102644"},"PeriodicalIF":4.8,"publicationDate":"2024-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143153011","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":"Does bid-ask spread explains the smile? On DVF and DML","authors":"Pengshi Li ,&nbsp;Yan Lin ,&nbsp;Xing Yu ,&nbsp;Guifang Liu","doi":"10.1016/j.pacfin.2024.102645","DOIUrl":"10.1016/j.pacfin.2024.102645","url":null,"abstract":"<div><div>In this paper, we investigate the potential effect of the bid-ask spread on pricing and implied volatilities of the newly established CSI 300 index options in China. We use the deterministic volatility function (DVF) to analyze the pricing errors and employ the double machine learning (DML) technique to evaluate the effect of liquidity costs on implied volatility in the presence of economic confounders. Our research shows that the deterministic volatility function modified to incorporate the bid-ask spread work better than the Black-Scholes model. And a sizable and statistically liquidity costs effect on implied volatility is observed in the CSI 300 options market.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102645"},"PeriodicalIF":4.8,"publicationDate":"2024-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143153014","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":"Environmental credit regulation and environmental investment in heavily polluting firms","authors":"Wenhao Tan ,&nbsp;Yusheng Fan ,&nbsp;Xin Ding ,&nbsp;Yixuan Kang","doi":"10.1016/j.pacfin.2024.102648","DOIUrl":"10.1016/j.pacfin.2024.102648","url":null,"abstract":"<div><div>We examine the impact of environmental credit regulation on the environmental investment of heavily polluting firms. The empirical results show that the policy significantly increases environmental investment by heavily polluting firms, leveraging mechanisms such as media attention, investor attention, executives' green cognition, and financial risk. Moreover, the policy effects are more pronounced in regions with a high proportion of institutional investor ownership or low levels of digital financial development. The policy also significantly reduces carbon emissions of heavily polluting firms and enhances their fulfillment of social responsibility.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"90 ","pages":"Article 102648"},"PeriodicalIF":4.8,"publicationDate":"2024-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143151937","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}