International Review of Financial Analysis最新文献

{"title":"Investor sentiment, financing constraints, and corporate risk-taking: Mechanisms and heterogeneity analysis","authors":"Cui-Xia Zhao ,&nbsp;Yan Li ,&nbsp;Hao-Kui Wang","doi":"10.1016/j.irfa.2025.104629","DOIUrl":"10.1016/j.irfa.2025.104629","url":null,"abstract":"<div><div>This study uses panel data from Chinese A-share listed companies from 2009 to 2023 to examine the intrinsic relationships among investor sentiment, financing constraints, and corporate risk-taking through econometric modeling. The empirical findings are threefold: first, investor sentiment is significantly and positively associated with corporate risk-taking; second, the financing constraints faced by firms exert a marked inhibitory effect on such risk-taking; and third, financing constraints play a significant moderating role in the relationship between investor sentiment and corporate risk-taking. Heterogeneity tests further show that the influence of investor sentiment on corporate risk-taking varies substantially between high-tech and nonhigh-tech enterprises, as well as across different regions.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104629"},"PeriodicalIF":9.8,"publicationDate":"2025-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145060934","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Managerial overconfidence and pay-for-luck","authors":"Xiaoqin (Alex) Wei","doi":"10.1016/j.irfa.2025.104607","DOIUrl":"10.1016/j.irfa.2025.104607","url":null,"abstract":"<div><div>This paper examines how CEO overconfidence amplifies the “pay-for-luck” phenomenon in executive compensation. Using a decomposition of firm performance into exogenous “luck” and firm-specific “skill” components, we find that overconfident CEOs receive disproportionately higher rewards for positive market shocks while avoiding equivalent penalties for negative shocks. To address endogeneity concerns, we instrument CEO overconfidence using the industry-level density of overconfident CEOs and Lewbel’s (2012) internal IV approach. Our results remain robust across alternative overconfidence measures, empirical specifications, and governance conditions. Further analysis suggests that overconfident CEOs engage in greater risk-taking behaviors and higher R&amp;D investments which reinforce the effects of CEO overconfidence on pay-for-luck. Additionally, we find that stronger corporate governance and DoDD-Frank Act mitigates the extent of overconfident CEOs’ pay-for-luck. These findings contribute to the literature on executive compensation and behavioral corporate finance, offering implications for incentive design and governance reforms.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104607"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145049147","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Business tax reform and human capital in service industry firms: Evidence from China","authors":"Zhinan Liu ,&nbsp;Chao Han ,&nbsp;Wendi Hou","doi":"10.1016/j.irfa.2025.104634","DOIUrl":"10.1016/j.irfa.2025.104634","url":null,"abstract":"<div><div>This study investigates the impacts of tax incentives on firms' human capital upgrading in the service industry. Using China's Business Tax reform as a natural experiment, based on the capital-skill complementarity hypothesis, we analyze how the reform reduces corporate tax burdens, stimulates capital investment, and boosts the demand for skilled labor. Utilizing panel data from China's A-share listed service firms and employing a Difference-in-Differences (DID) methodology, we find that the reform significantly increases the relative demand for skilled workers in pilot firms, thereby promoting human capital upgrading. Mechanism analyses reveal that the reform enhances human capital through capital-skill complementarity, particularly in firms that are more digitalized, more labor-intensive, subject to tighter financing constraints, and located in regions with a larger registered population. Our findings underscore the critical role of tax policies in shaping firm-level human capital dynamics, offering novel insights into fiscal incentives and labor market evolution.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104634"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Capital allocation efficiency of SMEs: Global evidence","authors":"Liang Ma ,&nbsp;Xiaowen Zhang","doi":"10.1016/j.irfa.2025.104596","DOIUrl":"10.1016/j.irfa.2025.104596","url":null,"abstract":"<div><div>Leveraging a comprehensive cross-country dataset, this study systematically examines whether and how small and midsize enterprises (SMEs) differ from large firms regarding capital allocation efficiency, which is an essential matter of economic efficiency. We find that SMEs exhibit significantly lower investment responsiveness to growth opportunities compared to large firms. This divergence is not driven by the differences in growth opportunities, cash flows or external dependence between small and large public firms. While we did not find evidence suggesting larger financial market size enhances SMEs’ capital allocation efficiency, we documented that a more informative financial market substantially improves SMEs’ investment sensitivity to growth opportunities. These findings provide important global policy insights specifically relevant for enhancing SMEs’ efficiency and growth.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104596"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145049691","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Impact of client information technology applications on audit fees","authors":"Chenxi Wang ,&nbsp;Wenqi Han ,&nbsp;Deli Wang ,&nbsp;Xincai Deng","doi":"10.1016/j.irfa.2025.104635","DOIUrl":"10.1016/j.irfa.2025.104635","url":null,"abstract":"<div><div>Based on a sample of Chinese listed firms, this paper investigates the relationship between enterprise information technology (IT) applications and audit fees. Our findings indicate that IT adoption significantly reduces audit fees. This effect is more pronounced among firms with higher levels of inventory and accounts receivable, as well as those audited by the Big Four or by firms that specialize in digital auditing. Further analysis reveals that IT primarily reduces audit fees by lowering auditors' required audit effort. Additionally, IT applications do not have a significant impact on audit risk, audit quality, or the effectiveness of internal control systems. These results remain robust when alternative measures of IT are employed and when potential endogeneity concerns are addressed.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104635"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096481","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Leverage effects, volatility innovation spillovers, and inter- and intra-market asymmetric dependencies in cryptocurrencies and CFDs on equity indices: Evidence from high-frequency around-the-clock data","authors":"Fahad Ali ,&nbsp;Muhammad Usman Khurram","doi":"10.1016/j.irfa.2025.104636","DOIUrl":"10.1016/j.irfa.2025.104636","url":null,"abstract":"<div><div>Using 5-min high-frequency data around-the-clock, this study is the first to comprehensively examine asymmetric leverage effects, volatility innovation spillovers, and dependencies between six major developed equity markets – US, UK, France, Germany, Australia, and Japan – and seven major well-studied cryptocurrencies: Bitcoin (BTC), Litecoin (LTC), Ether (ETH), Dash (DSH), EOS, Tron (TRX), and Basic Attention Token (BAT). We employ the contract for differences (CFDs) on the equity indices for data during non-trading periods, several symmetric and asymmetric GARCH-based econometric tools, and a comprehensive sample period spanning from August 5, 2019, to January 31, 2023, consisting of 363,024 observations for each asset. Using sign bias tests, we first identify that leverage effects – a stronger impact of negative innovations on the conditional volatility of returns than the positive innovations of the same size – in cryptocurrencies are more pronounced in the post-Covid period, whereas in equities, they exisit across the sample period, except the first year of the Covid-19, consistent with the notion of fear of missing out during rapid recovery and boom periods. This asymmetric leverage effect is robust using the SAARCH, TGARCH, and APARCH models. We document that spillovers among cryptocurrencies and between equities and cryptocurrencies due to innovation (lagged standardized errors) are stronger than those of persistence (lagged conditional covariances). Regarding inter-class asset hedging opportunities, which we measure via negative coefficients of the innovation term, we find that pairing UK-LTC, US-DSH, Germany-DSH, US-EOS, Japan-EOS, and Germany-TRX are most likely to offer several diversification benefits to investors. Additionally, we examine asymmetric dynamic conditional correlations in inter-class asset settings and find that BAT and LTC among cryptocurrencies and the Australian and French markets among equities are weakly connected with other asset classes, suggesting their potential role in portfolio optimization. Our findings hold practical importance and guide investors in making hedging and diversification decisions and in optimizing cryptocurrency-equity portfolios during different economic, geopolitical, and market conditions around the clock.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104636"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096488","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Stock market participation, work from home, and inequality","authors":"Lorenz Meister ,&nbsp;Lukas Menkhoff ,&nbsp;Carsten Schröder","doi":"10.1016/j.irfa.2025.104604","DOIUrl":"10.1016/j.irfa.2025.104604","url":null,"abstract":"<div><div>Stock market participation among working household heads jumped upwards in 2020 - in Germany by about 25 %. A major cause is the required use of work from home (WfH). We show this by adding WfH to a large set of explanatory variables. Moreover, we implement an instrumental variables estimation based on industry-specific levels of WfH-capacity. The transmission channels seem to work via increased available time and time flexibility. Moreover, we show that WfH makes the stock market accessible to a broader population, including lower income groups, which may contribute to lower income and wealth inequality in the future.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104604"},"PeriodicalIF":9.8,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145158319","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"It's only words? ESG disclosure and corporate sustainability in Brazil","authors":"Antônio Filgueira ,&nbsp;Lars Norden","doi":"10.1016/j.irfa.2025.104633","DOIUrl":"10.1016/j.irfa.2025.104633","url":null,"abstract":"<div><div>We investigate the effects of ESG disclosure on the corporate sustainability performance of listed firms in Brazil. Building on the concept of extensive and intensive margins, we differentiate between voluntary and mandatory ESG disclosure. First, we find that smaller firms and those with initially low ESG scores benefit significantly from voluntary ESG disclosure (extensive margin). Second, firms with initially high ESG scores benefit significantly from greater scale and scope in mandatory ESG disclosures (intensive margin), particularly in the environmental domain. Our study provides novel and differentiated evidence on the effects of ESG disclosure and offers implications for managers, investors, and policymakers.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"108 ","pages":"Article 104633"},"PeriodicalIF":9.8,"publicationDate":"2025-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145183426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"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 implicit debt and corporate bankruptcy: Evidence from China","authors":"Liang Yin ,&nbsp;Shiyang Hu ,&nbsp;Huijun Yan","doi":"10.1016/j.irfa.2025.104617","DOIUrl":"10.1016/j.irfa.2025.104617","url":null,"abstract":"<div><div>We examine the impact of local government implicit debt on corporate bankruptcy risk using data on China's government implicit debt and firm registration records from 2017 to 2022. Our findings show that higher levels of local government implicit debt lead to a significant increase in the bankruptcy rates of regional firms. This result remains robust after a series of endogeneity checks, including controls for policy impacts and instrumental variable estimation. Mechanism analyses suggest the effect is primarily driven by increased government fines on firms and reductions in infrastructure investment. Furthermore, we show that the effect of local government implicit debt on bankruptcy rate is more pronounced in regions with stronger government intervention and non-first-tier cities. We also find that higher levels of implicit debt are associated with lower rates of new firm entry. Overall, these findings shed light on the broader economic consequences of local government financing practices.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104617"},"PeriodicalIF":9.8,"publicationDate":"2025-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145049692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Impact of extreme weather events on manufacturing productivity: Evidence from typhoon shocks in China","authors":"Meiqi Shao ,&nbsp;Jieyu Li ,&nbsp;Changzheng Zhang ,&nbsp;Xiaomin Zhang","doi":"10.1016/j.irfa.2025.104624","DOIUrl":"10.1016/j.irfa.2025.104624","url":null,"abstract":"<div><div>Business stability and development may face escalating threats due to extreme weather events, particularly in developing countries with large manufacturing sectors. Focusing on enterprises' vulnerabilities and adaptive capacity, we investigate how typhoon disasters affect manufacturing firms' productivity in China. Using panel data from Chinese listed companies from 2007 to 2022, in conjunction with a meteorological wind field model to quantify localized typhoon damage intensity, we empirically examine its impact on firm productivity. Our findings reveal a 2 % fall in firm productivity per standard deviation increase in typhoon disaster severity. Empirical results confirm three main transmission mechanisms: asset loss, increased financial constraints, and elevated supply chain disruption risk. The negative impacts are unevenly distributed, with enterprises having larger assets, those in nonhigh-tech sectors, and those operating in less competitive markets exhibiting higher susceptibility to typhoon shocks. By focusing on the microlevel mechanisms through which extreme weather events affect firm productivity, this study provides new insights into how recurring natural disasters disrupt enterprise operations. Our findings contribute to the growing body of literature on extreme weather impacts in emerging markets and have relevant policy implications for strengthening firms' climate resilience and ensuring production continuity.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104624"},"PeriodicalIF":9.8,"publicationDate":"2025-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145118567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}