Deli Wang , Xiaoyuan Liu , Shiyang Hu , Shangrui Wu
{"title":"The value of digital government transformation: Evidence from R&D subsidy efficiency in China","authors":"Deli Wang , Xiaoyuan Liu , Shiyang Hu , Shangrui Wu","doi":"10.1016/j.irfa.2025.104106","DOIUrl":"10.1016/j.irfa.2025.104106","url":null,"abstract":"<div><div>Exploiting a quasi-natural experiment in China in which the Big Data Administration was established in various cities across different times (i.e., pilot cities), we explore the role that digital government transformation plays in curbing firms' R&D manipulation activities. We rely on a staggered difference-in-differences research design and find that firms located in pilot cities significantly reduce the magnitude of their R&D manipulation from the pre- to the post- digital government transformation period, compared to firms located in nonpilot cities during the same time frame. Our analysis shows that digital government transformation mitigates R&D manipulation by strengthening government regulatory powers and normalizing corporate R&D practices. Additionally, we find that this impact is more pronounced in non-state-owned enterprises, manufacturing companies, smaller businesses, and those with less rigorous external oversight. Moreover, we identify a regulatory effect similar to “poverty alleviation” in China, where digital governance has a more substantial impact on R&D manipulation in economically developed areas. Our results also demonstrate that digital government transformation significantly improves the efficiency of governmental R&D subsidies and the quality of firms' innovation outputs. Collectively, these findings indicate that digital transformation can amplify the effectiveness of industrial policies. Our study, therefore, contributes to the literature by offering theoretical perspectives and vital microeconomic evidence on how to optimize subsidy efficiency through the rapid development of big data and other cutting-edge digital technologies.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104106"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143619685","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 CSR, local ownership and firm value","authors":"Taylan Mavruk","doi":"10.1016/j.irfa.2025.104091","DOIUrl":"10.1016/j.irfa.2025.104091","url":null,"abstract":"<div><div>This paper examines how local/global CSR activity induced local/remote ownership affects firm performance. The results show that local CSR activity generates positive externality to local owners, who in turn increase their ownership, and hence, also their monitoring role in local firms. Global CSR activity builds public image, and thus attract remote investors to local firms, which increases diversification and hence, liquidity of firm stock. The shift in local ownership increases firm value more for global CSR activities that target a broader group of stakeholders. Thus, some monitoring by local owners is necessary to prevent overinvestment in CSR that might lead to the manifestation of agency problems. In the short-run stock returns increase more for positive news on global CSR activities, partly, because of overreaction. In the long-run there is a return reversal, however, stock returns are still positive, indicating that CSR activities not only generate overreaction but also influence firm fundamentals.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104091"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143619684","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Structure of interest-bearing liabilities and corporate ESG performance","authors":"Qiming Yang , Ruilin Xiang","doi":"10.1016/j.irfa.2025.104117","DOIUrl":"10.1016/j.irfa.2025.104117","url":null,"abstract":"<div><div>Using sample data from all Chinese A-share manufacturing listed companies from 2017 to 2022, this study investigates the impact of interest-bearing liability structure on corporate environmental, social, and governance (ESG) performance. Findings show that a substantial negative correlation exists between the amount of interest-bearing liabilities, ratio of short-term to interest-bearing borrowings, ratio of long-term to interest-bearing borrowings, and corporate ESG performance. This implies that as corporate interest-bearing liabilities increase, their ESG performance tends to decline. Furthermore, a higher amount of interest-bearing liabilities inhibits corporate research and development investment, affecting performance in technical innovation, environmental protection, and social responsibility and thus lowering ESG performance. Furthermore, this study determines that the cash-holding ratio negatively moderates the inhibitory influence of interest-bearing liability structure on corporate ESG performance.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104117"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143629588","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}
Xiangqiang Liu , Yuling Peng , Qinyang Li , Chu-Hua Wu
{"title":"CEO pay structure and ESG rating disagreement","authors":"Xiangqiang Liu , Yuling Peng , Qinyang Li , Chu-Hua Wu","doi":"10.1016/j.irfa.2025.104101","DOIUrl":"10.1016/j.irfa.2025.104101","url":null,"abstract":"<div><div>As the concept of sustainable development continues to gain prominence, environmental, social, and governance (ESG) ratings have become critical factors in investment decision-making. However, discrepancies among ESG rating agencies have led to inefficiencies in capital market pricing. This study investigates the relationship between CEO compensation structure and ESG rating disagreement, utilizing ESG ratings from six agencies for A-share listed companies. The findings indicate that a higher proportion of equity-based compensation in a CEO's pay structure is associated with lower ESG rating disagreement. Mechanism tests suggest that equity pay can reduce ESG rating discrepancies by improving the quality of ESG disclosures and ESG practices. Cross section analysis demonstrate that this relationship is more pronounced in firms with greater CEO power, weaker information environments, fewer green investors, as well as in Non-SOE enterprises and in Non-heavily polluting industries.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104101"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143685637","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":"Explicit deposit insurance, active risk taking, and bank efficiency in China","authors":"Ning Ding , Lei Xu , Xiao Wu , Zixuan Dai","doi":"10.1016/j.irfa.2025.104139","DOIUrl":"10.1016/j.irfa.2025.104139","url":null,"abstract":"<div><div>China, the largest bank-based economy, has raised concerns that its explicit deposit insurance system (DIS) may substantially increase risky assets. We examine the impact of DIS on bank efficiency from the perspective of active risk-taking. Through panel data from 107 Chinese banks from 2009 to 2020, we find explicit DIS decreases bank efficiency by boosting active risk-taking, and such a link exhibits a U-shaped pattern. Furthermore, credit risk management capabilities, capital adequacy levels, and bank franchise values can act as crucial mitigating factors, which in turn alleviate the negative effects of DIS on bank efficiency.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104139"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143628657","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":"Regulatory influence on corporate cash holdings: Minority shareholder activism by regulators","authors":"Rongrong Chen , Xiaomeng Charlene Chen","doi":"10.1016/j.irfa.2025.104105","DOIUrl":"10.1016/j.irfa.2025.104105","url":null,"abstract":"<div><div>Focusing on an exogenous shock to minority investor activism, we investigate the effect of the China Securities Investor Services Center (CSISC), a minority shareholder protection mechanism introduced by the China Securities Regulatory Commission, on corporate cash holdings. Using a firm-quarter sample of Chinese listed companies from 2015 to 2017, we find that firms increased their cash holdings after CSISC became a minority shareholder. Channel tests and estimates of the cash flow sensitivity of cash reveal that this increase is primarily driven by precautionary motives, as firms prepare for potential financial uncertainties under CSISC's oversight. We further explore the role of governance-related factors—internal control quality, institutional ownership, and analyst coverage—and find that while CSISC's involvement strengthens governance by mitigating agency motives, it maintains a strong precautionary basis for increased cash holdings in response to heightened regulatory monitoring. This research highlights CSISC's critical role in influencing corporate liquidity management and enhancing investor protection in emerging markets.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104105"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143686107","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}
Paolo Fiorillo , Antonio Meles , Antonio Ricciardi , Vincenzo Verdoliva
{"title":"ESG performance and the cost of debt. Evidence from the corporate bond market","authors":"Paolo Fiorillo , Antonio Meles , Antonio Ricciardi , Vincenzo Verdoliva","doi":"10.1016/j.irfa.2025.104097","DOIUrl":"10.1016/j.irfa.2025.104097","url":null,"abstract":"<div><div>We study the impact of ESG performance on the cost of debt in the primary corporate bond market. Using an international sample of 25,234 bonds from 2677 ESG-rated issuers, we analyse yield spreads between bonds from high- and low-ESG-rated issuers, finding lower yields (by about 10 bps) for high-ESG firms. Our results are robust to additional tests, including controls for endogeneity, and are mainly explained by the environmental and social pillars. We also find that this result is driven by more developed financial markets, likely affected by lower information frictions, and by countries where bankruptcy rules guarantee higher protection for bondholders, making them more willing to grant ESG premia. Finally, we observe lower yield spreads for bond issues that occurred after the introduction of the SFDR, highlighting the importance of regulations promoting socially responsible investments. Overall, our results suggest that firms can benefit from superior ESG performance in the form of lower borrowing costs in the corporate bond market.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104097"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143610437","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Supply chain digitalization, corporate governance, and enterprise carbon emissions","authors":"Dan Li","doi":"10.1016/j.irfa.2025.104115","DOIUrl":"10.1016/j.irfa.2025.104115","url":null,"abstract":"<div><div>This study explores the impact of supply chain digital transformation on corporate carbon emissions. Utilizing a Propensity Score Matching-Difference in Differences (PSM-DID) approach and a sample of A-share listed companies in China from 2010 to 2021, we assess the effect of supply chain digitalization policies on corporate carbon emissions. The findings reveal that supply chain digital transformation contributes to reducing corporate carbon emissions, a conclusion supported by both baseline regression analysis and robustness checks. Further mechanism tests uncover the internal and external mechanisms through which supply chain digital transformation lowers carbon emissions, highlighting the crucial roles of enhanced corporate governance and support from governments and industry organizations. Additionally, heterogeneity tests indicate that non-state-owned enterprises exhibit more pronounced carbon reduction effects in the process of supply chain digital transformation. In summary, supply chain digital transformation emerges as an effective pathway to reduce corporate carbon emissions. Governments and businesses should strengthen cooperation to promote its in-depth implementation, thereby achieving more environmentally friendly and sustainable development goals.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104115"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143629587","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":"Reevaluating the carbon premium: Evidence of green outperformance","authors":"Christoph Hambel, Floor van der Sanden","doi":"10.1016/j.irfa.2025.104042","DOIUrl":"10.1016/j.irfa.2025.104042","url":null,"abstract":"<div><div>The carbon premium refers to the excess returns of brown firms over their green counterparts. Our findings provide robust evidence supporting a negative carbon premium in the US based on a sample with more than 3,500 publicly listed firms from 2007 to 2023, indicating that green firms tend to outperform brown firms. The key findings carry over to the global sample with more than 10,000 firms across 90 countries. We show how this conclusion is contingent upon several critical factors, including the treatment of unscaled emissions, the inclusion of vendor-estimated emissions, temporal considerations regarding emissions and accounting data, and the empirical framework employed. We demonstrate that those findings are primarily driven by vendor-estimated emissions, and the carbon premium becomes non-significant if we restrict the sample to firms that report their emissions.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104042"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143628655","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"How does top management team recomposition affect corporate trade credit financing","authors":"Shuai Xu , Suge Zhang , Chen Cheng","doi":"10.1016/j.irfa.2025.104108","DOIUrl":"10.1016/j.irfa.2025.104108","url":null,"abstract":"<div><div>We empirically examine the impact of top management team (TMT) recomposition on corporate trade credit financing. Utilizing a sample of A-share listed firms in China from 2009 to 2022, we discover that TMT recomposition exhibits a negative and significant correlation with corporate trade credit financing. Our finding remains robust after addressing endogeneity concerns and conducting rigorous tests for verification. This effect is particularly pronounced among firms with younger management teams and core executive turnover. Mechanism tests reveal that a restructured TMT may erode credit providers' trust by heightening operational risks and diminishing the quality of disclosed information. This underscores the importance of reducing operational risks and enhancing transparency in information as crucial pathways for securing trade credit financing. This study aids in comprehending the significance of a steadfast top management team and its internal mechanisms, offering clear implications for enhancing corporate trade credit financing.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104108"},"PeriodicalIF":7.5,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143619678","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}