International Journal of Financial Studies

30 pages, 659 KB

Open AccessArticle

Hedge Fund Activism, Voice and Value Creation

by Christos Bouras and Efstathios Karpouzis

Int. J. Financial Stud. 2025, 13(4), 200; https://doi.org/10.3390/ijfs13040200 (registering DOI) - 24 Oct 2025

We construct a novel hand-collected large dataset of 205 U.S. hedge funds and 1025 activist events over the period 2005–2013, which records both the Schedule 13D filing date and the voice date, and explore the role of voice in value creation. We employ [...] Read more.

We construct a novel hand-collected large dataset of 205 U.S. hedge funds and 1025 activist events over the period 2005–2013, which records both the Schedule 13D filing date and the voice date, and explore the role of voice in value creation. We employ alternative inferential statistical approaches, including parametric, non-parametric, and heteroscedasticity-robust tests. We reveal that the voice date is important in creating short-term firm value and provide strong evidence that voice is associated with positive abnormal returns. These findings suggest that voice leads to information revelation, with implications for U.S. stock market arbitrage. Full article

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21 pages, 520 KB

Open AccessArticle

Digital Financial Inclusion as a Mediator of Digital Financial Literacy and Government Support in MSME Performance

by Charles Tandilino, Grace T. Pontoh, Darmawati Darmawati and Aini Indrijawati

Int. J. Financial Stud. 2025, 13(4), 199; https://doi.org/10.3390/ijfs13040199 - 24 Oct 2025

Viewed by 217

Abstract

The digital economy creates new opportunities for micro, small, and medium enterprises (MSMEs) in Indonesia to enhance their competitiveness through the adoption of financial technology. This study examines how digital financial inclusion (DFI) mediates the effects of digital financial literacy (DFL) and government [...] Read more.

The digital economy creates new opportunities for micro, small, and medium enterprises (MSMEs) in Indonesia to enhance their competitiveness through the adoption of financial technology. This study examines how digital financial inclusion (DFI) mediates the effects of digital financial literacy (DFL) and government support (GS) on MSME performance. This mediating relationship remains underexplored in developing countries, offering new insights into how it drives business advancement. A quantitative approach was applied using partial least squares structural equation modeling (PLS-SEM) based on survey data from 260 culinary MSME owners. The results indicate that knowledge-based resources and institutional support positively influence performance through DFI. DFI drives improvement by expanding market reach, increasing operational efficiency, facilitating transactions, optimizing the value of financial activities, and broadening access to financing. These findings underline the importance of policies that promote inclusive digital ecosystems and strengthen digital capability. Future research approaches should emphasize the integration of behavioral factors, institutional support, and business performance within the evolving MSME ecosystem and can be further developed through longitudinal or cross-sectoral studies to understand the sustainable dynamics of digital transformation. Full article

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19 pages, 2763 KB

Open AccessArticle

Bridging the ESG Data Gap: Transparent Metrics and Rankings for Emerging Financial Markets

by Azhar Rim Qachach, Badr El Mahrad, Omar Kharbouch, Aniss Moumen, Sara El Aoufi, Manal El Gueddari and Soukaina Abdallah-Ou-Moussa

Int. J. Financial Stud. 2025, 13(4), 198; https://doi.org/10.3390/ijfs13040198 - 20 Oct 2025

Viewed by 297

Abstract

Environmental, Social, and Governance (ESG) performance has become a pivotal driver of firm valuation, investment flows, and capital market stability and a critical dimension of corporate sustainability and investor decision-making. Yet, emerging markets face structural barriers to standardized ESG measurement due to limited [...] Read more.

Environmental, Social, and Governance (ESG) performance has become a pivotal driver of firm valuation, investment flows, and capital market stability and a critical dimension of corporate sustainability and investor decision-making. Yet, emerging markets face structural barriers to standardized ESG measurement due to limited data availability and inconsistent disclosures. This study addresses this gap by developing a simplified, transparent and indicator-based ESG assessment model tailored to the Moroccan capital market using publicly available data from 20 companies listed in the MASI ESG Index on the Casablanca Stock Exchange. The framework evaluates 12 equally weighted indicators across environmental, social, and governance pillars, and employs the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), a Multi-Criteria Decision-Making (MCDM) method, to generate firm-level ESG scores and rankings. In addition to equal-weighted rankings, the model was stress-tested using entropy-based and expert-informed weights. Results reveal a wide disparity in ESG maturity: while environmental reporting is relatively advanced, social and governance disclosures lag behind. Top-ranking firms align closely with international frameworks such as GRI, whereas others lack fundamental transparency. By offering a replicable, low-data ESG scoring method applicable to other emerging markets, this research provides actionable insights for investors, regulators, and corporate leaders. The findings contribute to the financial literature on ESG integration, support the design of sustainable investment strategies, and advance policy efforts to strengthen capital market resilience across the MENA region. Full article

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18 pages, 549 KB

Open AccessArticle

Does Bitcoin Add to Risk Diversification of Alternative Investment Fund Portfolio?

by Manu Sharma

Int. J. Financial Stud. 2025, 13(4), 197; https://doi.org/10.3390/ijfs13040197 - 20 Oct 2025

Viewed by 311

Abstract

Venture capital investment and hedge fund investment are two asset classes of alternative investment fund portfolios. The purpose of this study was to determine whether the digital currency named bitcoin truly adds to diversification in an alternative investment fund portfolio. Vector auto regression [...] Read more.

Venture capital investment and hedge fund investment are two asset classes of alternative investment fund portfolios. The purpose of this study was to determine whether the digital currency named bitcoin truly adds to diversification in an alternative investment fund portfolio. Vector auto regression was used to determine any unidirectional or bidirectional relationship between variables. The DCC-GARCH test was conducted to determine any conditional correlations that impact volatility transmission over a shorter and longer duration of time between variables. The results showed that there was no unidirectional or bidirectional relationship between bitcoin and FTSE venture capital index, as well as between bitcoin and the Barclays Hedge Fund Index. The DCC model showed no volatility transmission between bitcoin and the Barclays Hedge Fund Index, whereas volatility persists between bitcoin and the FTSE Venture Capital Index, connecting risk between the financial time series with only low correlations. These findings suggest that bitcoin could be used by investors, policy makers, and hedgers for diversification in alternative investment fund portfolios. Full article

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18 pages, 2384 KB

Open AccessArticle

Empirical Analysis of Economic Impact of Monetary Policy and Fiscal Policy in China Under Global Uncertainty

by Warattaya Chinnakum, Htwe Ko, Jianming Xie, Minglang Wu and Chukiat Chaiboonsri

Int. J. Financial Stud. 2025, 13(4), 196; https://doi.org/10.3390/ijfs13040196 - 20 Oct 2025

Viewed by 382

Abstract

This study examines how monetary and fiscal policies affect economic growth in China under global economic uncertainty. We estimate a Markov Switching Regression (MSR) model using quarterly data from 1996: Q1 to 2024: Q4. We also apply Bayesian Model Averaging (BMA) to choose [...] Read more.

This study examines how monetary and fiscal policies affect economic growth in China under global economic uncertainty. We estimate a Markov Switching Regression (MSR) model using quarterly data from 1996: Q1 to 2024: Q4. We also apply Bayesian Model Averaging (BMA) to choose the relevant control variables. During expansions, higher policy rates, government revenue, moderate inflation, FDI inflows, and export growth support growth. Government expenditure can crowd out private investment. During recessions, higher policy rates reduce growth. Government expenditure has limited impact, but revenue collection remains growth-supportive. Global uncertainty steadily reduces growth. Government expenditure shows negative effects, which indicates possible crowding out. The findings support that monetary and fiscal policies coordination may sustain long-term growth in China and strengthen the resilience amid global uncertainty. The Impulse response functions (IRFs) from Bayesian Vector Autoregression (BVAR) confirm the persistence and dynamics of policy shocks under global uncertainty. This study adds to the empirical literature on the role of macroeconomic policies in shaping economic growth in the case of China. Full article

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18 pages, 1838 KB

Open AccessArticle

Quantitative Modeling of Speculative Bubbles, Crash Dynamics, and Critical Transitions in the Stock Market Using the Log-Periodic Power-Law Model

by Avi Singh, Rajesh Mahadeva, Varun Sarda and Amit Kumar Goyal

Int. J. Financial Stud. 2025, 13(4), 195; https://doi.org/10.3390/ijfs13040195 - 17 Oct 2025

Viewed by 341

Abstract

The global economy frequently experiences cycles of rapid growth followed by abrupt crashes, challenging economists and analysts in forecasting and risk management. Crashes like the dot-com bubble crash and the 2008 global financial crisis caused huge disruptions to the world economy. These crashes [...] Read more.

The global economy frequently experiences cycles of rapid growth followed by abrupt crashes, challenging economists and analysts in forecasting and risk management. Crashes like the dot-com bubble crash and the 2008 global financial crisis caused huge disruptions to the world economy. These crashes have been found to display somewhat similar characteristics, like rapid price inflation and speculation, followed by collapse. In search of these underlying patterns, the Log-Periodic Power-Law (LPPL) model has emerged as a promising framework, capable of capturing self-reinforcing dynamics and log-periodic oscillations. However, while log-periodic structures have been tested in developed and stable markets, they lack validation in volatile and developing markets. This study investigates the applicability of the LPPL framework for modeling financial crashes in the Brazilian stock market, which serves as a representative case of a volatile market, particularly through the Bovespa Index (IBOVESPA). In this study, daily data spanning 1993 to 2025 is analyzed to model pre-crash oscillations and speculative bubbles for five major market crashes. In addition to the traditional LPPL model, autoregressive residual analysis is incorporated to account for market noise and improve predictive accuracy. The results demonstrate that the enhanced LPPL model effectively captures pre-crash oscillations and critical transitions, with low error metrics. Eigenstructure analysis of the Hessian matrices highlights stiff and sloppy parameters, emphasizing the pivotal role of critical time and frequency parameters. Overall, these findings validate LPPL-based nonlinear modeling as an effective approach for anticipating speculative bubbles and crash dynamics in complex financial systems. Full article

(This article belongs to the Special Issue Stock Market Developments and Investment Implications)

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26 pages, 1010 KB

Open AccessReview

Harmonizing Sustainability and Resilience: The Integral Role of Internal Audit in ESG Implementation—A Review

by Spyridon D. Lampropoulos, Georgios L. Thanasas, Alexandros Garefalakis and Ioannis Passas

Int. J. Financial Stud. 2025, 13(4), 194; https://doi.org/10.3390/ijfs13040194 - 16 Oct 2025

Viewed by 539

Abstract

This comprehensive literature review delves into the dynamic role of Internal Audit (IA) in addressing sustainability, resilience, and Environmental, Social, and Governance (ESG) considerations within organizations. It addresses two fundamental inquiries: Firstly, it examines how Internal Audit actively contributes to an organization’s sustainability [...] Read more.

This comprehensive literature review delves into the dynamic role of Internal Audit (IA) in addressing sustainability, resilience, and Environmental, Social, and Governance (ESG) considerations within organizations. It addresses two fundamental inquiries: Firstly, it examines how Internal Audit actively contributes to an organization’s sustainability and resilience initiatives through the effective implementation of ESG strategies. Secondly, it investigates methods for quantifying the additional value generated by ESG implementation. The review underscores the pivotal role of corporate responsibility (CR) and sustainable, responsible investment (SRI) in shaping the value proposition of ESG practices. Synthesizing diverse research findings, the review reveals that robust ESG practices not only foster enhanced profitability but also bolster market value. Significantly, it underscores the indispensable role of Internal Audit in effectively navigating the complex and evolving ESG landscape, thereby ensuring organizational resilience and sustainable growth. Full article

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17 pages, 305 KB

Open AccessArticle

Determinants of Financial Fragility in Jordanian Non-Financial Firms: Empirical Evidence Based on the Financial Instability Hypothesis

by Firas Naim Dahmash, Al-Anood Khaled Melhem, Ibrahim N. Khatatbeh and Abdallah Bader AlZoubi

Int. J. Financial Stud. 2025, 13(4), 193; https://doi.org/10.3390/ijfs13040193 - 16 Oct 2025

Viewed by 306

Abstract

Financial fragility among non-financial corporations (NFCs) has become a critical concern in developing economies, where both firm-specific and macroeconomic conditions shape corporate financial stability. Understanding these dynamics is essential to enhancing corporate resilience and informing effective regulatory interventions. This study is motivated by [...] Read more.

Financial fragility among non-financial corporations (NFCs) has become a critical concern in developing economies, where both firm-specific and macroeconomic conditions shape corporate financial stability. Understanding these dynamics is essential to enhancing corporate resilience and informing effective regulatory interventions. This study is motivated by Minsky’s Financial Instability Hypothesis (FIH), to empirically investigate the determinants of financial fragility in Jordanian non-financial firms (NFCs) using panel data from 71 companies listed on the Amman Stock Exchange (ASE) between 2015 and 2021. By employing a panel logistic regression analysis, results reveal that Return on Assets (ROA) significantly supports financial stability, while inflation negatively impacts it, underlining the detrimental impact of increasing inflation rates on corporate financial health. The beneficial effects of GDP growth and institutional quality also emphasize how important governance and economic conditions are in promoting financial stability. The study offers an original insight on the dynamics of financial fragility in a developing market, with important ramifications for regulators, business managers, and policymakers looking to boost institutional quality, control inflation, and increase corporate profitability. The findings extend Minsky’s hypothesis to a developing-market context and provide implications for policymakers seeking to strengthen institutional frameworks, contain inflationary pressures, and promote corporate financial stability. Full article

24 pages, 1637 KB

Open AccessArticle

Inverse DEA for Portfolio Volatility Targeting: Industry Evidence from Taiwan Stock Exchange

by Temitope Olubanjo Kehinde, Sai-Ho Chung and Oludolapo Akanni Olanrewaju

Int. J. Financial Stud. 2025, 13(4), 192; https://doi.org/10.3390/ijfs13040192 - 15 Oct 2025

Viewed by 963

Abstract

This work develops an inverse data envelopment analysis (Inverse DEA) framework for portfolio optimization, treating return as a desirable output and volatility as an undesirable output. Using 20 industry-level portfolios from the Taiwan Stock Exchange (1365 stocks; FY-2020), we first evaluate efficiency with [...] Read more.

This work develops an inverse data envelopment analysis (Inverse DEA) framework for portfolio optimization, treating return as a desirable output and volatility as an undesirable output. Using 20 industry-level portfolios from the Taiwan Stock Exchange (1365 stocks; FY-2020), we first evaluate efficiency with a directional-distance DEA model and identify 7 inefficient industries. We then formulate an Inverse DEA model that holds inputs and desirable outputs fixed and estimates the maximum feasible reduction in volatility. Estimated reductions range from 0.000827 to 0.007610, and substituting these targets into the base model drives each portfolio’s inefficiency score to zero

(ϕ = 0)

, thereby making them efficient. To test robustness, we extend the analysis to a calm pre-crisis year (2019) and a recovery year (2021), which confirm that inefficiency and volatility-reduction targets behave logically across regimes, smaller cuts in stable markets, larger cuts in stressed conditions, and intermediate adjustments during recovery. We interpret these targets as theoretical envelopes that inform risk-reduction priorities rather than investable guarantees. The approach adds a forward-planning layer to DEA-based performance evaluation and provides portfolio managers with quantitative, regime-sensitive volatility-reduction targets at the industry level. Full article

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17 pages, 758 KB

Open AccessArticle

Impact of ESG Preferences on Investors in China’s A-Share Market

by Yihan Sun, Diyang Jiao, Yiqu Yang, Yumeng Peng and Sang Hu

Int. J. Financial Stud. 2025, 13(4), 191; https://doi.org/10.3390/ijfs13040191 - 15 Oct 2025

Viewed by 421

Abstract

This study explores the time-varying influence of Environmental, Social, and Governance (ESG) factors on asset pricing in China’s A-share market from 2017 to 2023, integrating investor heterogeneity categorized as ESG-unaware (Type-U), ESG-aware (Type-A), and ESG-motivated (Type-M). taxonomy. It adopts a linear regression model [...] Read more.

This study explores the time-varying influence of Environmental, Social, and Governance (ESG) factors on asset pricing in China’s A-share market from 2017 to 2023, integrating investor heterogeneity categorized as ESG-unaware (Type-U), ESG-aware (Type-A), and ESG-motivated (Type-M). taxonomy. It adopts a linear regression model with seven control variables (including firm systematic risk, asset turnover ratio, and ownership concentration) to quantify ESG’s marginal effect on stock returns. Annual regressions (2017–2022) reveal distinct ESG coefficient shifts: insignificant negative coefficients in 2017–2018, significantly positive coefficients in 2019–2020, and significantly negative coefficients in 2021–2022. Heterogeneity analysis across five non-financial industries (Utilities, Properties, Conglomerates, Industrials, Commerce) shows industry-specific ESG effects. Portfolio performance tests using 2023 data (stocks divided into eight ESG groups) indicate that portfolios with medium ESG scores outperform high/low ESG portfolios and the traditional mean-variance model in risk-adjusted returns (Sharpe ratio) and volatility control, avoiding poor governance risks (low ESG) and excessive ESG resource allocation issues (high ESG). Overall, policy shocks and institutional maturation transformed the market from ESG indifference to ESG-motivated pricing within a decade, offering insights for stakeholders in emerging ESG markets. Full article

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21 pages, 498 KB

Open AccessArticle

Employee Tenure, Earnings Management, and the Moderating Role of Foreign Investors: Evidence from South Korea

by Dongkuk Lim and Dong Hyun Son

Int. J. Financial Stud. 2025, 13(4), 190; https://doi.org/10.3390/ijfs13040190 - 14 Oct 2025

Viewed by 298

Abstract

This study examines the influence of employee tenure on earnings management and the moderating role of foreign investors in Korean listed firms. Drawing on agency theory and entrenchment perspectives, we argue that longer employee tenure, while fostering stability and firm-specific expertise, can entrench [...] Read more.

This study examines the influence of employee tenure on earnings management and the moderating role of foreign investors in Korean listed firms. Drawing on agency theory and entrenchment perspectives, we argue that longer employee tenure, while fostering stability and firm-specific expertise, can entrench practices that enable opportunistic reporting. In contrast, consistent with resource dependence theory, foreign investors act as effective external monitors who can mitigate such behavior, particularly in emerging markets with weaker governance institutions. Using 11,381 firm-year observations from 2011 to 2019, we estimate discretionary accruals with the modified Jones model and performance-matched model. The results indicate that employee tenure is positively associated with accrual-based earnings management, but this effect is significantly reduced in firms with higher foreign investor ownership. Robustness tests, including instrumental variable estimation, confirm the validity of these findings. This study’s main contributions are introducing employee tenure as an underexplored governance factor, integrating internal and external monitoring perspectives, and showing that foreign investors moderate workforce-related risks. Practically, it highlights that investors can use tenure as a reporting risk signal, managers should complement workforce stability with strong governance, and policymakers should promote tenure disclosure and foreign participation to enhance transparency. Full article

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23 pages, 3292 KB

Open AccessArticle

Implication of Digital Marketing in the Supply Chain Finance of the Beverage Industry

by Nikolaos T. Giannakopoulos, Damianos P. Sakas, Kanellos Toudas and Panagiotis Karountzos

Int. J. Financial Stud. 2025, 13(4), 189; https://doi.org/10.3390/ijfs13040189 - 13 Oct 2025

Viewed by 393

Abstract

This paper investigates the role of digital marketing signals as alternative data for understanding financial and operational dynamics in the beverage supply chain. Drawing on web analytics covering multiple actors across a five-month horizon, we analyze traffic composition, user engagement, and acquisition channels [...] Read more.

This paper investigates the role of digital marketing signals as alternative data for understanding financial and operational dynamics in the beverage supply chain. Drawing on web analytics covering multiple actors across a five-month horizon, we analyze traffic composition, user engagement, and acquisition channels through a panel econometric framework. Descriptive statistics reveal pronounced heterogeneity in channel reliance, with some firms emphasizing organic search visibility while others depend more on paid campaigns or social referrals. Correlation patterns indicate strong substitution between organic and paid search, while display advertising is positively associated with session depth, suggesting that differentiated digital strategies influence user engagement. Analysis of variance confirms significant structural differences across firms, with an effect size exceeding 0.90. A two-way fixed-effects regression demonstrates that brand-specific factors explain the vast majority of variation in digital visibility, overshadowing short-term fluctuations. These results highlight the potential of web-derived marketing metrics to serve as leading indicators of supply chain finance outcomes such as revenue growth, working-capital efficiency, and investor sentiment. By integrating digital signals into financial econometrics, this study contributes to emerging research on alternative data in supply chain contexts and offers practical implications for managers, investors, and policymakers. Full article

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24 pages, 395 KB

Open AccessArticle

ESG Disclosure and Firm Value: Do Audit Committee Characteristics and Sustainability Committee Matter?

by Abdelmoneim Bahyeldin Mohamed Metwally, Gaber Sallam Salem Abdalla, Saleh Aly Saleh Aly and Mohamed Ali Shabeeb Ali

Int. J. Financial Stud. 2025, 13(4), 188; https://doi.org/10.3390/ijfs13040188 - 6 Oct 2025

Viewed by 1109

Abstract

This study examines how ESG disclosure (ESGD) influences firm value (FV) in Saudi Arabia. It also analyzes the moderating roles of audit committee (AC) characteristics and sustainability committees (SC) on this relationship. The sample consists of 100 top non-financial firms listed on the [...] Read more.

This study examines how ESG disclosure (ESGD) influences firm value (FV) in Saudi Arabia. It also analyzes the moderating roles of audit committee (AC) characteristics and sustainability committees (SC) on this relationship. The sample consists of 100 top non-financial firms listed on the Saudi stock exchange (Tadawul) from 2015 to 2022, yielding 800 firm-year observations. Using pooled ordinary least squares (OLS), fixed effects regression, and GMM methods, the findings indicate a significant positive effect of ESGD on FV. Moreover, all AC characteristics and the sustainability committee positively and significantly strengthened this relationship. These findings carry important implications for investors, regulators, and corporate managers by highlighting how governance structures can influence financial performance, especially in emerging markets. This study contributes to the literature by expanding the discussion on the beneficial impact of AC characteristics and SC on FV within developing economies. Unlike earlier research that mainly focused on the direct link between ESGD and FV, this work underscores the role of governance factors in enhancing that relationship. Full article

(This article belongs to the Special Issue Editorial Board Members’ Collection Series: ESG Ratings and Disclosures)

22 pages, 3211 KB

Open AccessArticle

The Measurement and Characteristic Analysis of the Chinese Financial Cycle

by Siyuan Qiu

Int. J. Financial Stud. 2025, 13(4), 187; https://doi.org/10.3390/ijfs13040187 - 3 Oct 2025

Viewed by 449

Abstract

In this paper, based on Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, five financial serials are dynamically weighted, and then China’s Financial Conditions Index is synthesized to measure China’s financial cycle. After that, using the monthly data of 2000–2023 as sample space, this paper [...] Read more.

In this paper, based on Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, five financial serials are dynamically weighted, and then China’s Financial Conditions Index is synthesized to measure China’s financial cycle. After that, using the monthly data of 2000–2023 as sample space, this paper utilizes the Markov Switching (MS) model to analyze the characteristics of China’s financial cycle and to investigate the four-zone system. Then, the Vector Autoregression (VAR) model focuses on investigating the macroeconomic effects of China’s financial cycle. The findings are as follows: Firstly, the dynamic weighting approach based on GARCH model is more suitable for valuating China’s financial cycle. Secondly, China’s financial cycle has a strong inertia at the state of transition and the imbalance of China’s overall financial situation is very common. Additionally, China’s financial cycle is distinctly characterized by the double asymmetry of fewer contractions and more expansions, shorter expansions, and longer expansions. Thirdly, China’s financial expansion offers a nine-month short-term stimulus to output and exerts lasting upward pressure on prices. Full article

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20 pages, 3021 KB

Open AccessArticle

Spot Volatility Measurement Using a Change-Point Duration Model in the High-Frequency Market

by Zhicheng Li, Haipeng Xing and Yan Wang

Int. J. Financial Stud. 2025, 13(4), 186; https://doi.org/10.3390/ijfs13040186 - 3 Oct 2025

Viewed by 385

Abstract

Modeling high-frequency volatility is an important topic of market microstructure, as it provides the empirical tools to measure and analyze the rapid price movements. Yet, volatility at a high frequency often exhibits abrupt shifts driven by news and trading activity, making accurate estimation [...] Read more.

Modeling high-frequency volatility is an important topic of market microstructure, as it provides the empirical tools to measure and analyze the rapid price movements. Yet, volatility at a high frequency often exhibits abrupt shifts driven by news and trading activity, making accurate estimation challenging. This study develops a change-point duration (CPD) model to estimate spot volatility, in which price-change intensities remain constant between events but may shift at random change points. Using simulations and empirical analysis of Nasdaq limit order book data, we demonstrate that the CPD model achieves a favorable balance between responsiveness to sudden shocks and stability in volatility dynamics. Moreover, it outperforms benchmark approaches, including the classical autoregressive conditional duration model, nonparametric duration-based estimators, and candlestick-based measures. These findings highlight the CPD framework as an effective tool for volatility estimation in high-frequency trading environments. Full article

(This article belongs to the Special Issue Market Microstructure and Liquidity)

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23 pages, 402 KB

Open AccessArticle

The Impact of Climate Risk on Corporate Financialization—Based on Empirical Evidence of Chinese A-Share Listed Companies

by Hongjian Lu, Jingjing Tang and Zhengge Song

Int. J. Financial Stud. 2025, 13(4), 185; https://doi.org/10.3390/ijfs13040185 - 2 Oct 2025

Viewed by 490

Abstract

Climate risk, as a significant factor affecting human sustainable development, has emerged as a focal topic of concern for governments and all sectors of society. Using a dataset from China’s Shanghai and Shenzhen A-share markets spanning 2007 to 2019, this study empirically examines [...] Read more.

Climate risk, as a significant factor affecting human sustainable development, has emerged as a focal topic of concern for governments and all sectors of society. Using a dataset from China’s Shanghai and Shenzhen A-share markets spanning 2007 to 2019, this study empirically examines how climate risk influences corporate financialization. The empirical results show that heightened climate risk significantly reduces the level of corporate financialization, a finding that remains robust across multiple tests. Further heterogeneity analyses indicate that the suppressive effect of climate risk is particularly evident among state-owned enterprises, firms operating in intensely competitive industries, and those located in regions subject to more stringent environmental policies. Mechanism analysis suggests that climate risk inhibits corporate financialization primarily by intensifying firms’ financing constraints while simultaneously stimulating their innovation capacity. These findings imply that corporate financialization in China is largely driven by profit-maximizing behaviors rooted in “investment substitution” and “real-sector intermediation” motives. Collectively, this research enhances understanding of the channels through which climate risk impacts corporate financial behavior and offers valuable empirical insights for policymakers aiming to optimize climate regulations and redirect financial resources toward productive real-sector activities. Full article

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20 pages, 413 KB

Open AccessArticle

The Effect of Financial Mismatch on Corporate ESG Performance: Evidence from Chinese A-Share Companies

by Xiaoli Li, Wenxin Heng, Hangyu Zeng and Chengyi Xian

Int. J. Financial Stud. 2025, 13(4), 184; https://doi.org/10.3390/ijfs13040184 - 2 Oct 2025

Viewed by 605

Abstract

This study examines the effect of financial mismatch on corporate ESG performance in the context of China’s developmental strategy and its dual-carbon goals. Using panel data for Chinese A-share firms spanning 2009–2023 and employing fixed-effects regression models, we find that financial mismatch significantly [...] Read more.

This study examines the effect of financial mismatch on corporate ESG performance in the context of China’s developmental strategy and its dual-carbon goals. Using panel data for Chinese A-share firms spanning 2009–2023 and employing fixed-effects regression models, we find that financial mismatch significantly weakens ESG performance. Further analysis reveals that this negative effect mainly operates through three channels: increased financing constraints, weakened internal control quality, and reduced innovation capability. The results remain robust across a series of alternative specifications and sensitivity tests. This study contributes to the literature by identifying financial mismatch as a key determinant of ESG outcomes and by clarifying the mechanisms through which it exerts influence. From a practical perspective, the findings suggest that alleviating financial mismatch by fostering patient capital, improving internal governance structures, and supporting firms’ green and sustainable investments is essential for enhancing corporate ESG performance and achieving China’s dual-carbon targets. Full article

(This article belongs to the Special Issue Emerging Trends in Corporate Finance: ESG, Climate Risk, and Other Contemporary Issues)

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55 pages, 4152 KB

Open AccessFeature PaperArticle

Compliance with the Euro Area Financial Criteria and Economic Convergence in the European Union over the Period 2000–2023

by Constantin Duguleana, Liliana Duguleana, Klára-Dalma Deszke and Mihai Bogdan Alexandrescu

Int. J. Financial Stud. 2025, 13(4), 183; https://doi.org/10.3390/ijfs13040183 - 1 Oct 2025

Viewed by 715

Abstract

The two groups of EU economies, the euro area and the non-euro area, are statistically analyzed taking into account the fulfillment of the euro area financial criteria and economic performance over the period 2000–2023. Compliance with financial criteria, economic performance, and their significant [...] Read more.

The two groups of EU economies, the euro area and the non-euro area, are statistically analyzed taking into account the fulfillment of the euro area financial criteria and economic performance over the period 2000–2023. Compliance with financial criteria, economic performance, and their significant influencing factors are presented comparatively for the two groups of countries. The long-run equilibrium between economic growth and its factors is identified by econometric approaches with the error correction model (ECM) and autoregressive distributed lag (ARDL) models for the two data panels. In the short term, economic shocks are taken into account to compare their different influences on economic growth within the two groups of countries. The GMM system is used to model economic convergence at the EU level over the period under review. Comparisons between GDP growth and its theoretical values from econometric models have led to interesting conclusions regarding the existence and characteristics of economic convergence at the group and EU level. EU countries outside the euro area have higher economic growth rates than euro area economies over the period 2000–2023. In the long run, investment brings a higher increase in economic development in EU countries outside the euro area than in euro area countries. Economic shocks have been felt more deeply on economic growth in the euro area than in the non-euro area. The speed of adjustment towards long-run equilibrium in econometric models is slower for non-euro area economies than in the euro area over a one-year period. At the level of the European Monetary Union, change policies have a faster impact on economic development and a faster speed of adjustment towards equilibrium. Full article

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14 pages, 1056 KB

Open AccessArticle

Financial Inclusion in Zimbabwe: Lessons from the Commercial Banking Sector

by Auxilia Kawara, Binganidzo Muchara and Huibrecht M. van der Poll

Int. J. Financial Stud. 2025, 13(4), 182; https://doi.org/10.3390/ijfs13040182 - 1 Oct 2025

Viewed by 565

Abstract

Financial institutions, researchers, and policymakers are taking steps to promote financial inclusion, a crucial aspect for social and economic development. This study explores the extent of financial inclusion (FI) in Zimbabwe’s commercial banks. This study employed a mixed-methods approach. A relationship mapping was [...] Read more.

Financial institutions, researchers, and policymakers are taking steps to promote financial inclusion, a crucial aspect for social and economic development. This study explores the extent of financial inclusion (FI) in Zimbabwe’s commercial banks. This study employed a mixed-methods approach. A relationship mapping was conducted on the bank customers’ survey, and a thematic analysis was performed on bank executives to evaluate bank challenges and strategies. The findings confirmed positive strides towards achieving financial inclusion. Gaps in financial inclusion were identified in the high rate of people using informal channels and the limited policies in creating a conducive environment for financial inclusion. The study contributes to the ongoing debate by the World Bank in support of financial inclusion as an effective solution for countries like Zimbabwe, which is experiencing a severe macro crisis. The study adds to the emerging financial inclusion literature, proposing solutions to reduce financial exclusion in developing economies. Based on the study findings, policymakers should create a conducive environment for commercial banks and consumers of financial products and services in Zimbabwe. Full article

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22 pages, 338 KB

Open AccessFeature PaperArticle

Is U.S. CEO Equity and Cash Compensation Aligned with Agency Theory to Maximize Shareholder Returns?

by Gurupdesh Pandher, David Koslowsky and Yosef Bonaparte

Int. J. Financial Stud. 2025, 13(4), 181; https://doi.org/10.3390/ijfs13040181 - 30 Sep 2025

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Abstract

Recent international studies on CEO pay in Europe, Japan, and South Korea reveal significant differences from the U.S. in the use and effectiveness of equity-based CEO compensation, raising questions about the ability of conventional contracts based on agency theory to align with actual [...] Read more.

Recent international studies on CEO pay in Europe, Japan, and South Korea reveal significant differences from the U.S. in the use and effectiveness of equity-based CEO compensation, raising questions about the ability of conventional contracts based on agency theory to align with actual CEO compensation practices. Our study contributes to this debate by evaluating nine hypotheses from an extended principal–agent framework in which CEO equity and cash incentives are jointly determined in the shareholder return-maximizing contract. The extended model also incorporates the noisy market valuation relationship between firm income and its market equity value, and distinguishes between firm ‘business risk’ and ‘equity risk’. Our empirical results show that CEO cash incentives increase with firm growth prospects and equity risk and decline with firm business risk and firm scale as predicted by the model; meanwhile, CEO equity incentives are partially consistent. Overall, given the dominance of equity compensation in U.S. CEO pay, our results show that cash pay tied to firm business performance (e.g., operating cash flow) is efficient and plays an important role in aligning CEO and shareholder interests and reducing corporate governance risks associated with agency misalignment. Full article

22 pages, 370 KB

Open AccessArticle

The Role of ESG Committee on Indonesian Companies in Promoting Sustainable Practice to Creditors: Symbolic or Substantive?

by Muhammad Putra Aprullah, Yossi Diantimala, Muhammad Arfan and Irsyadillah Irsyadillah

Int. J. Financial Stud. 2025, 13(4), 180; https://doi.org/10.3390/ijfs13040180 - 26 Sep 2025

Viewed by 1150

Abstract

This study investigates whether the presence of an ESG committee in promoting sustainable practices is symbolic or substantive to creditors when setting costs. With unbalanced panel data, the study used 1518 company-year observations from non-financial firms listed on the IDX period 2018 to [...] Read more.

This study investigates whether the presence of an ESG committee in promoting sustainable practices is symbolic or substantive to creditors when setting costs. With unbalanced panel data, the study used 1518 company-year observations from non-financial firms listed on the IDX period 2018 to 2023. The hypothesis testing of this study was conducted by using moderated regression analysis (MRA). Hypothesis testing using a fixed effects model indicates that ESG disclosure can significantly lower the cost of debt. The role of the ESG committee is to act as a quasi-moderator for the relationship between ESG disclosure and the cost of debt. While the presence of an ESG committee can significantly reduce the cost of debt, the committee itself weakens the relationship between ESG disclosure and the cost of debt. Therefore, these findings suggest that the role of the ESG committee in promoting ESG disclosure to creditors in determining the cost of debt is becoming more substantive, moving away from a merely symbolic role that focuses on maintaining the company’s reputation and strengthening substantive management to control governance risk. The results of this study are expected to contribute to formulating policies that strengthen the role of ESG committees in improving corporate governance and sustainability practices by providing stakeholders with important and relevant ESG disclosure information for investment and funding decisions. Full article

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Int. J. Financial Stud., Volume 13, Issue 4 (December 2025) – 21 articles

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