Journal of Risk and Financial Management

22 pages, 331 KB

Open AccessArticle

The Nonlinear Effect of Financial Development on Income Inequality: New Evidence from a Multi-Dimensional Analysis

by Zheng Li and Christos I. Giannikos

J. Risk Financial Manag. 2025, 18(10), 592; https://doi.org/10.3390/jrfm18100592 - 20 Oct 2025

Viewed by 613

Over the past three decades, rising income inequality has undermined economic performance and posed challenges for policymakers, highlighting the need to identify its underlying drivers to design effective policy responses. Financial development is often considered a potential driver of inequality, yet the theoretical [...] Read more.

Over the past three decades, rising income inequality has undermined economic performance and posed challenges for policymakers, highlighting the need to identify its underlying drivers to design effective policy responses. Financial development is often considered a potential driver of inequality, yet the theoretical and empirical literature on how financial development affects inequality remains inconclusive. Moreover, prior studies have primarily relied on traditional indicators, which do not comprehensively reflect the multidimensional nature of financial development. To address these gaps, we provide the first study to employ the IMF’s Financial Development Index and all its sub-indices within both fixed-effects and system GMM frameworks to examine whether financial development and its dimensions exhibit a nonlinear relationship with income inequality. Unlike traditional indicators, these indices offer a more comprehensive view of financial development. Using panel data for 130 countries from 1980 to 2019, we find that financial development and its dimensions—access to financial institutions (financial inclusion) and depth of financial institutions—initially reduce inequality but exacerbate it once their respective thresholds are exceeded. These results are not driven by systemic banking crises. Our study contributes by providing a more comprehensive assessment, demonstrating nonlinear effects, identifying thresholds, and offering policy implications for countries at different income levels. Full article

(This article belongs to the Section Economics and Finance)

33 pages, 8048 KB

Open AccessArticle

Using Markov Chains and Entropy to Explain Value at Risk in European Electricity Markets

by Oscar Walduin Orozco-Cerón, Orlando Joaqui-Barandica and Diego F. Manotas-Duque

J. Risk Financial Manag. 2025, 18(10), 591; https://doi.org/10.3390/jrfm18100591 - 20 Oct 2025

Viewed by 515

Abstract

The increasing complexity of energy systems amid the global push for decarbonization raises important questions about how transitions in the energy matrix affect financial risk in electricity markets. This study investigates the relationship between structural changes in national energy matrices and the systemic [...] Read more.

The increasing complexity of energy systems amid the global push for decarbonization raises important questions about how transitions in the energy matrix affect financial risk in electricity markets. This study investigates the relationship between structural changes in national energy matrices and the systemic risk associated with electricity prices in Europe from 2015 to 2022. Using daily electricity price data, we calculate log returns and estimate the Value at Risk (VaR) at the 1% level as a measure of extreme financial loss. We incorporate energy market variables, including the volatility of Brent oil and coal prices, and an entropy-based indicator derived from the Shannon index, which captures the degree of technological dispersion in the energy mix over time. A fixed-effects panel regression model is applied across 21 European countries to identify the drivers of energy-related financial risk. Results show that higher volatility in Brent and coal prices significantly increases the VaR, and that greater entropy reflecting a more complex and dynamic energy transition also correlates with higher systemic risk. These findings suggest that while energy diversification is a goal of sustainability, it may entail short-term instability. The study contributes to the understanding of how structural transformations in energy systems interact with financial vulnerabilities in liberalized electricity markets. Full article

(This article belongs to the Section Economics and Finance)

► Show Figures

Figure 1

26 pages, 445 KB

Open AccessArticle

Assessing the Early Impact of Industry 4.0 Technologies on the Activity, Efficiency, and Profitability of Croatian Micro-, Small-, and Medium-Sized Enterprises

by Rajka Hrbić

J. Risk Financial Manag. 2025, 18(10), 590; https://doi.org/10.3390/jrfm18100590 - 17 Oct 2025

Viewed by 560

Abstract

This study examines the early impact of Industry 4.0 (I4.0) implementation on the financial performance of Croatian companies, focusing on indicators of profitability, efficiency, and activity. The research investigates whether firms adopting I4.0 technologies achieve superior results compared to traditional companies. A unique [...] Read more.

This study examines the early impact of Industry 4.0 (I4.0) implementation on the financial performance of Croatian companies, focusing on indicators of profitability, efficiency, and activity. The research investigates whether firms adopting I4.0 technologies achieve superior results compared to traditional companies. A unique feature of this study is its integration of primary data—collected via an online survey of Croatian enterprises—with secondary data from publicly available financial reports. Statistical methods, including Analysis of Variance (ANOVA) and linear regression, were employed to test the hypotheses. The results show that I4.0 adopters perform significantly better in terms of net profit margin, return on assets, business efficiency, and supplier bonding days, while no significant difference was found in days sales outstanding. This paper contributes to the literature by offering one of the first empirical analyses of early-stage I4.0 adoption in the context of a transition economy, using firm-level financial data. The findings provide valuable insights for managers, policymakers, and investors aiming to understand the tangible business benefits of digital transformation. The results also highlight the importance of supporting I4.0 adoption strategies to enhance competitiveness and recovery in post-pandemic economic conditions. Full article

(This article belongs to the Section Business and Entrepreneurship)

► Show Figures

Figure 1

32 pages, 753 KB

Open AccessArticle

How Does the Mauritanian Exchange Rate React During a Crisis? The Case of COVID-19

by Mohamed Said Diah, Mohamedou Cheikh Tourad, Youssef Lamrani Alaoui, Mohamedade Farouk Nanne and Mohamed Abdallahi Beddi

J. Risk Financial Manag. 2025, 18(10), 589; https://doi.org/10.3390/jrfm18100589 - 17 Oct 2025

Viewed by 589

Abstract

This paper examines the impact of the COVID-19 pandemic on the volatility of the EUR/MRU and USD/MRU exchange rates using GARCH-type models. Symmetric GARCH(1,1) and asymmetric specifications—EGARCH and GJR-GARCH—are applied to capture potential leverage effects over two periods: pre-COVID (January 2017–December 2019) and [...] Read more.

This paper examines the impact of the COVID-19 pandemic on the volatility of the EUR/MRU and USD/MRU exchange rates using GARCH-type models. Symmetric GARCH(1,1) and asymmetric specifications—EGARCH and GJR-GARCH—are applied to capture potential leverage effects over two periods: pre-COVID (January 2017–December 2019) and COVID (January 2017–December 2021). The results indicate that the pandemic increased short-run volatility for EUR/MRU, while its impact on USD/MRU was comparatively weaker. Asymmetric models reveal that COVID-19 altered the response of volatility to shocks, with EUR/MRU exhibiting heightened sensitivity and USD/MRU showing contrasting asymmetries. In addition, an out-of-sample backtesting exercise confirms the superior predictive performance of asymmetric models, particularly EGARCH for EUR/MRU and GJR-GARCH for USD/MRU. These findings underscore distinct volatility dynamics and the transmission of external shocks in a small open economy during periods of global uncertainty. Full article

(This article belongs to the Section Financial Markets)

► Show Figures

Figure 1

15 pages, 379 KB

Open AccessArticle

Bias-Corrected Method of Moments Estimation of the Hurst Parameter for Improved Option Pricing Under the Fractional Black-Scholes Model

by Hana Sagor, Edward L. Boone and Ryad Ghanam

J. Risk Financial Manag. 2025, 18(10), 588; https://doi.org/10.3390/jrfm18100588 - 16 Oct 2025

Viewed by 395

Abstract

The Hurst parameter H plays a critical role in modeling long-memory behavior in financial time series, particularly within the framework of the fractional Black–Scholes model (fBSM). While the Method of Moments (MOM) provides a fast, closed-form estimator for H, it suffers from [...] Read more.

The Hurst parameter H plays a critical role in modeling long-memory behavior in financial time series, particularly within the framework of the fractional Black–Scholes model (fBSM). While the Method of Moments (MOM) provides a fast, closed-form estimator for H, it suffers from increasing negative bias, especially as H grows beyond 0.6. This paper proposes a bias-corrected version of the MOM estimator based on a quadratic regression fit derived from simulation data. The corrected estimator substantially reduces estimation error while retaining computational efficiency. Through extensive simulations, we quantify the impact of MOM bias on option pricing and demonstrate how our correction method leads to more accurate pricing under the fBSM. We apply the methodology to real financial assets—including Natural Gas, Apple, Gold, and Crude Oil—and show that the corrected Hurst estimates reduce option pricing error by up to USD 0.47 per contract relative to the uncorrected estimator, depending on the asset’s volatility structure. These results underscore the importance of accurate Hurst parameter estimation for derivative pricing, particularly in volatile markets such as energy and commodities, while also remaining relevant to equities and precious metals. The corrected estimator thus offers practitioners a simple yet effective tool to improve financial decision-making. Full article

(This article belongs to the Section Mathematics and Finance)

► Show Figures

Figure 1

24 pages, 596 KB

Open AccessArticle

Market Reactions to Fintech M&A: Evidence from Event Study Analysis of Financial Institutions

by Gimede Gigante, Lorenzo Galotta and Francesca Scarlini

J. Risk Financial Manag. 2025, 18(10), 587; https://doi.org/10.3390/jrfm18100587 - 16 Oct 2025

Viewed by 710

Abstract

The rise of fintech has disrupted traditional financial services, prompting banks and asset managers to respond strategically, often through mergers and acquisitions. This study investigates the short-term market reaction to M&A announcements involving fintech targets by incumbent financial institutions. Using an event study [...] Read more.

The rise of fintech has disrupted traditional financial services, prompting banks and asset managers to respond strategically, often through mergers and acquisitions. This study investigates the short-term market reaction to M&A announcements involving fintech targets by incumbent financial institutions. Using an event study methodology centered on different event windows and cumulative abnormal returns computed via the market model, the analysis incorporates regression models with bidder-, deal-, and target-level variables to identify the drivers of performance. The results show that, on average, financial institutions experience negative abnormal returns around announcement dates, suggesting limited short-term value creation. Higher market-to-book ratios and tax rates are positively associated with CARs, while lower profit margins are linked to better market reactions. Subsample comparisons reveal that U.S. acquirers underperform their European peers, commercial banks fare worse than asset managers and investment banks, and pre-COVID-19 deals yield more favorable returns than post-COVID-19 ones. Robustness checks using different market benchmarks demonstrate that key patterns—especially those related to geography and timing—are sensitive to benchmark selection. Overall, this study highlights market skepticism toward fintech acquisitions by traditional financial institutions, particularly in specific contexts, and emphasizes the importance of controlling for structural factors when interpreting abnormal returns. Full article

(This article belongs to the Section Business and Entrepreneurship)

► Show Figures

Figure 1

24 pages, 710 KB

Open AccessArticle

On Fintech and Financial Inclusion: Evidence from Qatar

by Ashwaq Al-Sharshani, Fatma Al-Sharshani and Ali Malik

J. Risk Financial Manag. 2025, 18(10), 586; https://doi.org/10.3390/jrfm18100586 - 15 Oct 2025

Viewed by 869

Abstract

This study examines the role of fintech adoption in enhancing financial inclusion in Qatar, with a particular focus on the mediating influence of access barriers. A structured questionnaire was administered to 220 respondents, of which 200 valid responses were retained for analysis after [...] Read more.

This study examines the role of fintech adoption in enhancing financial inclusion in Qatar, with a particular focus on the mediating influence of access barriers. A structured questionnaire was administered to 220 respondents, of which 200 valid responses were retained for analysis after screening for completeness and outliers. The constructs of fintech adoption (FA), financial inclusion (FI), and access barriers (AB) were measured using validated multi-item scales adapted from prior literature. Measurement reliability and validity were confirmed through Cronbach’s alpha, composite reliability, and average variance extracted (AVE), alongside confirmatory factor analysis (CFA) for construct validity. A structural equation modeling (SEM) approach was employed to test the hypothesized relationships, using maximum likelihood estimation with bootstrap standard errors and confidence intervals. Model fit indices indicated excellent fit (χ² = 48.983, df = 51, p = 0.554; CFI = 1.000; TLI = 1.003; RMSEA = 0.000; SRMR = 0.036). Factor loadings were all significant (p < 0.001), supporting convergent validity. However, the structural paths from FA to FI (β = −0.020, p = 0.827), AB to FI (β = −0.077, p = 0.394), and FA to AB (β = 0.054, p = 0.527) were not significant. The indirect mediation effect of AB was also statistically insignificant (β = −0.004, p = 0.700). Full article

(This article belongs to the Special Issue Behavioral Finance and Sustainable Green Investing)

► Show Figures

Figure A1

26 pages, 737 KB

Open AccessArticle

Forecast Bias in Analysts’ Initial Coverage: The Influence of Firm ESG Disclosures

by Mohammadali Fallah, Sulei Han and Le Zhao

J. Risk Financial Manag. 2025, 18(10), 585; https://doi.org/10.3390/jrfm18100585 - 15 Oct 2025

Viewed by 573

Abstract

This study examines analyst forecast bias during the initial coverage of a firm using a sample of 631,660 firm-quarter analyst forecasts from 2007 to 2022. Estimating OLS regressions with firm, analyst, and time fixed effects, we find that analysts’ initial EPS forecasts are [...] Read more.

This study examines analyst forecast bias during the initial coverage of a firm using a sample of 631,660 firm-quarter analyst forecasts from 2007 to 2022. Estimating OLS regressions with firm, analyst, and time fixed effects, we find that analysts’ initial EPS forecasts are closer to the consensus than ongoing coverage forecasts. Our results suggest that ESG considerations influence analysts’ initial assessments of the firm. Higher ESG disclosure scores attenuate this tendency to issue consensus-aligned forecasts, particularly for analysts with a more favorable assessment of the firms than the consensus. We observe this effect when EPS forecast dispersion is high, indicating that ESG disclosures influence analysts’ initial assessments when uncertainty and disagreement among analysts are high. Our findings are robust to restricting the sample to small brokerage firms where analyst coverage assignments are more likely to be exogenous. We also find that analysts issue more optimistic price target estimates for firms with higher ESG disclosure scores. Full article

(This article belongs to the Special Issue ESG and Sustainability Finance: Addressing Climate Change and Climate Risk)

► Show Figures

Figure 1

33 pages, 528 KB

Open AccessArticle

Accounting Manipulation and Value Creation: An Empirical Study of EVA and Accounting Quality in NYSE and NASDAQ Companies

by Szilárd Hegedűs, Ervin Denich and Áron Lajos Baracsi

J. Risk Financial Manag. 2025, 18(10), 584; https://doi.org/10.3390/jrfm18100584 - 15 Oct 2025

Viewed by 771

Abstract

Accounting manipulation undermines the integrity of financial reporting and can distort key performance indicators, yet its quantitative effects on accounting quality (AQ) and value-related metrics remain underexplored. This study analyses U.S. publicly traded firms involved in accounting manipulation between 2017 and 2019, comparing [...] Read more.

Accounting manipulation undermines the integrity of financial reporting and can distort key performance indicators, yet its quantitative effects on accounting quality (AQ) and value-related metrics remain underexplored. This study analyses U.S. publicly traded firms involved in accounting manipulation between 2017 and 2019, comparing them with matched non-manipulative industry peers to assess differences in AQ. It also examines potential links between manipulation-related AQ distortions and changes in Economic Value Added (EVA), stock prices, trading volumes, and dividend payouts. The sample includes 57 manipulation-affected firms and 57 matched controls, identified through SEC enforcement filings and the Violation Tracker database. Financial and stock data were sourced from EDGAR, ORBIS, and Morningstar. AQ was measured using discretionary accruals estimated via the Kasznik model. Correlation analysis tested associations between AQ and the selected performance indicators. Results show that firms involved in accounting manipulations had significantly lower AQ than their peers. However, no consistent correlations were found between AQ and EVA, dividends, stock prices, or volumes during the manipulation period. These findings suggest that the performance effects of manipulations are case-specific and shaped by additional factors, underscoring the importance of strong regulatory oversight and high-quality accounting practices. Ethically, our evidence underscores that misreporting corrodes investor trust and the public-interest mandate of financial reporting; accordingly, we stress the duties of boards, executives, auditors, and regulators to uphold faithful representation and timely disclosure, and to remediate misreporting when detected. Full article

(This article belongs to the Special Issue Accounting Ethics and Financial Management)

► Show Figures

Figure 1

26 pages, 327 KB

Open AccessArticle

Corporate GHG Emissions and Financial Performance: A Cross-Country Panel Analysis of Sectoral Heterogeneity in Advanced and Emerging Economies

by Marco Hernandez-Vega

J. Risk Financial Manag. 2025, 18(10), 583; https://doi.org/10.3390/jrfm18100583 - 15 Oct 2025

Viewed by 478

Abstract

As the urgency to address climate change intensifies, understanding the financial implications of corporate greenhouse gas (GHG) emission reduction has become critical. This study examines the relationship between emission reductions and corporate financial performance (CFP) in 468 companies across advanced and emerging market [...] Read more.

As the urgency to address climate change intensifies, understanding the financial implications of corporate greenhouse gas (GHG) emission reduction has become critical. This study examines the relationship between emission reductions and corporate financial performance (CFP) in 468 companies across advanced and emerging market economies (EMEs) from 2010 to 2022. Using a standardized emissions score to mitigate inconsistencies in greenhouse gas (GHG) reporting, we analyze how sectoral and regional dynamics influence financial outcomes using a panel fixed-effects model. The results are mixed: emission reductions are positively associated with CFP in advanced economies and low-emitting sectors. However, companies in high-emitting industries experience a negative relationship between emission reductions and CFP. The findings underscore the need for policies and corporate strategies calibrated by sector and country development status, as the emissions–profitability relationship varies across contexts. Full article

(This article belongs to the Special Issue Sustainable Finance and ESG Investment)

27 pages, 405 KB

Open AccessArticle

The Role of Abnormal Tone in Board Reports in Shaping CSR Performance

by Roghayeh Mahmoudi yekebaghi, Milad Darvishi, Farzaneh Nassirzadeh and Davood Askarany

J. Risk Financial Manag. 2025, 18(10), 582; https://doi.org/10.3390/jrfm18100582 - 15 Oct 2025

Viewed by 490

Abstract

Purpose: This study examines how tone management in board reports influences corporate social responsibility (CSR) performance in emerging markets, focusing on the Tehran Stock Exchange. It addresses the underexplored qualitative aspects of CSR disclosures, particularly how abnormal tone signals transparency or concealment in [...] Read more.

Purpose: This study examines how tone management in board reports influences corporate social responsibility (CSR) performance in emerging markets, focusing on the Tehran Stock Exchange. It addresses the underexplored qualitative aspects of CSR disclosures, particularly how abnormal tone signals transparency or concealment in sustainability reporting. Design/methodology/approach: This paper is based on a postgraduate study completed in 2022. Using a dataset of 987 firm-year observations (2016–2022), we measure abnormal tone through textual analysis of board reports and assess its impact on six CSR dimensions. The methodology combines vocabulary-based tone detection with regression analysis, controlling for firm-specific factors. Findings: The results reveal a significant negative relationship between abnormal tone and CSR performance, particularly in environmental and energy dimensions. The adverse effects persist into subsequent years, highlighting the long-term consequences of tone manipulation. Originality/value: This study contributes to the social and environmental accounting literature by analysing tone management in an emerging market context. It introduces vocabulary combinations as a novel approach to detecting nuanced tone variations, offering practical insights for regulators and firms aiming to enhance CSR transparency. Full article

(This article belongs to the Special Issue Corporate Social Responsibility and Governance)

21 pages, 1549 KB

Open AccessArticle

Analyzing Financial Behavior in Undergraduate Students in Economics, Administration and Accounting Sciences

by Isabel Mendoza-Ávila, Alejandro Vega-Muñoz, Guido Salazar-Sepúlveda, Nicolás Contreras-Barraza and Dante Castillo

J. Risk Financial Manag. 2025, 18(10), 581; https://doi.org/10.3390/jrfm18100581 - 14 Oct 2025

Viewed by 775

Abstract

This study examines the financial behavior of university students in Economics, Business Administration, and Accounting in Tegucigalpa, Honduras, using the FB–13 instrument. Exploratory and confirmatory factor analyses validate a three-dimensional structure: (1) financial planning and control, (2) savings and financial preparation, and (3) [...] Read more.

This study examines the financial behavior of university students in Economics, Business Administration, and Accounting in Tegucigalpa, Honduras, using the FB–13 instrument. Exploratory and confirmatory factor analyses validate a three-dimensional structure: (1) financial planning and control, (2) savings and financial preparation, and (3) fulfillment of obligations, with high internal consistency (α = 0.915), supporting its psychometric robustness in Latin American academic contexts. Based on a sample of 714 students with diversity in gender, age, work experience, and parental status, the analyses confirmed that the FB–13 model best fits a three-factor structure. Significant correlations were identified between financial behavior and experiential variables such as age, work experience, and parenthood, while traditional sociodemographic attributes such as gender, residence, marital status, employment, and educational level showed limited associations. These findings suggest that personal experiences have a greater influence on the configuration of financial practices than conventional demographic categories. The study acknowledges limitations related to cross-sectional design, non-probabilistic sampling, and self-reported data, yet these do not diminish its contributions. By validating the FB–13 in Honduras, the research offers comparative evidence and promotes cultural diversity in financial behavior literature. Future research should move toward longitudinal and qualitative studies that explore the role of family dynamics, work contexts, and personal aspirations in responsible financial behaviors. Full article

(This article belongs to the Special Issue Behavioral Influences on Financial Decisions)

► Show Figures

Graphical abstract

12 pages, 255 KB

Open AccessArticle

eSLR Adjustments and Stock Price Reactions of Eight Global Systemically Important Banks

by Srinivas Nippani, FNU Pratima and Kenneth M. Washer

J. Risk Financial Manag. 2025, 18(10), 580; https://doi.org/10.3390/jrfm18100580 - 13 Oct 2025

Viewed by 431

Abstract

On Wednesday, 25 June 2025, the Federal Reserve voted to make changes to the Tier 1 Capital requirements for eight global systemically important banks. The changes include a cut to the enhanced supplementary leverage ratio (eSLR). The purpose of this study is to [...] Read more.

On Wednesday, 25 June 2025, the Federal Reserve voted to make changes to the Tier 1 Capital requirements for eight global systemically important banks. The changes include a cut to the enhanced supplementary leverage ratio (eSLR). The purpose of this study is to examine the immediate impact of this announcement on the stock prices of these eight systemically important banks. Using event study analysis and controlling for interest rate movements and general market conditions, we find that most of these banks generated superior returns during the event period. When compared to the KBW Index, however, results are mixed. Some banks do have superior returns even on pre-event day. The heterogeneous effects among banks emphasize that the benefits of capital regulation changes depend on a bank’s size, structure, and scope of operations. Full article

(This article belongs to the Section Banking and Finance)

22 pages, 693 KB

Open AccessArticle

Integrated Reporting as a Path to Value: The Moderating Role of CEO Integrity from the Indian Perspective

by Najul Laskar

J. Risk Financial Manag. 2025, 18(10), 579; https://doi.org/10.3390/jrfm18100579 - 12 Oct 2025

Viewed by 519

Abstract

This study determines the role of integrated reporting (Int_Re) in affecting firm value and investigates how CEO integrity (CEOI) moderates this effect among firms listed on the Indian stock exchange. The sample consists of 150 firms listed on the Indian stock exchange who [...] Read more.

This study determines the role of integrated reporting (Int_Re) in affecting firm value and investigates how CEO integrity (CEOI) moderates this effect among firms listed on the Indian stock exchange. The sample consists of 150 firms listed on the Indian stock exchange who published an integrated report between the years of 2018–19 and 2022–23. This study relies on secondary data from company websites. The outcome of the multiple regression analysis reveals that there is a significant positive influence of Int_Re on firm value. The analysis also found that CEOI strengthens the relationship between Int_Re and firm value, attributable to ethical leadership exhibited by the CEO. There are some future practical implications that the study proposes: Indian firms need to engage in Int_Re practices to a greater extent; firms need to encourage ethical leadership at the executive level consistent with Int_Re; supervisory boards are limited by an obligation to monitor Int_Re adoption and CEO performance to keep the organization in line with its commitments to transparency, character, and sustainable value creation in the changing corporate governance landscape in India. Full article

(This article belongs to the Special Issue Financial Reporting and Auditing)

37 pages, 3528 KB

Open AccessReview

Exploring the Research Landscape of Impact Investing and Sustainable Finance: A Bibliometric Review

by Saurav Chandra Talukder, Zoltán Lakner and Ágoston Temesi

J. Risk Financial Manag. 2025, 18(10), 578; https://doi.org/10.3390/jrfm18100578 - 12 Oct 2025

Viewed by 1240

Abstract

Impact investing and sustainable finance are crucial in addressing social and environmental issues while developing a more resilient, equitable, and sustainable world. The purpose of this article is to analyze, synthesize, and evaluate the existing literature on the impact investing and sustainable finance [...] Read more.

Impact investing and sustainable finance are crucial in addressing social and environmental issues while developing a more resilient, equitable, and sustainable world. The purpose of this article is to analyze, synthesize, and evaluate the existing literature on the impact investing and sustainable finance research domain. Using PRISMA protocol, data was extracted from the Web of Science and Scopus databases, resulting in the compilation of 498 documents. Researchers use Biblioshiny and VOSviewer to analyze the bibliographic meta data. The findings show that the number of publications in this field has increased significantly over the last five years. In terms of journal productivity, Sustainability is the most prominent source, followed by Resources Policy and Journal of Cleaner Production. The results indicate that China published 189 articles, securing the first position, followed by India with 82 articles and the UK with 72 articles. Thematic map analysis underscores the significance of impact investing in renewable energy for sustainable economic growth. In addition, four research themes have emerged from the co-occurrence of keywords analysis. These themes are “sustainable finance for sustainable economic development”; “the rise of ESG investing in the changing world”; “corporate governance and CSR in enhancing firm performance”; and “mobilizing sustainable finance to tackle climate changes”. Furthermore, the research gives a complete summary of current research trends, future research directions and policy recommendations to assist academic researchers, investors, policymakers, business organizations and financial institutions in better understanding the impact investment and sustainable finance. Full article

(This article belongs to the Special Issue Behavioral Finance and Sustainable Green Investing)

► Show Figures

Figure 1

10 pages, 269 KB

Open AccessArticle

External Habit Persistence and Individual Portfolio Choice

by Timothy K. Chue

J. Risk Financial Manag. 2025, 18(10), 577; https://doi.org/10.3390/jrfm18100577 - 11 Oct 2025

Viewed by 287

Abstract

This paper shows that a common form of external habit persistence, despite having much success in asset pricing, implies an extreme degree of conformity in investors’ portfolio choice. If an investor with this utility function uses US aggregate consumption as her external habit [...] Read more.

This paper shows that a common form of external habit persistence, despite having much success in asset pricing, implies an extreme degree of conformity in investors’ portfolio choice. If an investor with this utility function uses US aggregate consumption as her external habit benchmark, she has to hold all non-redundant securities contained in the US aggregate wealth portfolio. Even for an investor who uses the average consumption of a more narrowly-defined community as her benchmark, she is still required to hold non-zero positions in all (non-redundant) individual stocks held by any other member of the community. If markets are incomplete, even if an individual investor holds a financial portfolio that conforms perfectly with that associated with the external habit benchmark, it is still impossible for the investor to ensure that consumption exceeds habit in all states of the world. Because of this implication, this form of external habit is unlikely to describe the preferences of individual investors—notwithstanding its success as a model for the representative agent in asset pricing. Full article

(This article belongs to the Special Issue Innovative Approaches to Financial Modeling and Decision-Making)

20 pages, 4231 KB

Open AccessArticle

Detecting Bank-Level Liquidity Shifts: Evidence from U.S. Regulatory Data

by Ayse Durukan Sonmez, Jinyan Kuang, Osman Nal and James Marzolf-Miller

J. Risk Financial Manag. 2025, 18(10), 576; https://doi.org/10.3390/jrfm18100576 - 10 Oct 2025

Viewed by 471

Abstract

In the wake of the 2008–2009 Global Financial Crisis, the Federal Reserve began paying interest on reserves (IOR) on 1 October 2008—an intervention that, along with others, constituted a regime change for U.S. banks. In this study, we investigate whether banks’ liquidity adjustment [...] Read more.

In the wake of the 2008–2009 Global Financial Crisis, the Federal Reserve began paying interest on reserves (IOR) on 1 October 2008—an intervention that, along with others, constituted a regime change for U.S. banks. In this study, we investigate whether banks’ liquidity adjustment was progressive and continuous or abrupt and regime-defining, and how adjustment timing differed across institutions. Using quarterly regulatory call reports from 2002:Q4 to 2015:Q4, we estimate a Gaussian hidden Markov model (HMM) to detect bank-specific regime shifts. We then use the inferred break dates in a regression framework that classifies banks’ liquidity behavior over time. We find a discrete upward shift in liquidity around 2008–2009 with pronounced cross-bank heterogeneity. The patterns persist when we stratify by asset size and remain highly concordant across geographic regions and primary regulators. To illustrate its broader relevance, we extend the framework to the COVID-19 era (2017–2023) for the four largest U.S. banks, showing that it captures comparable regime dynamics across successive phases of quantitative tightening and easing. Full article

(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)

► Show Figures

Figure 1

22 pages, 775 KB

Open AccessArticle

Digital Transformation and Corporate Tax Avoidance: Evidence from Moroccan Listed Firms

by Anas Azenzoul, Nacer Mahouat, Khalil Mokhlis and Abdellatif Moussaid

J. Risk Financial Manag. 2025, 18(10), 575; https://doi.org/10.3390/jrfm18100575 - 10 Oct 2025

Viewed by 936

Abstract

This study aims to investigate the impact of digital transformation on corporate tax avoidance. In fact, this revolution has pervasively affected firms in different aspects and represents a significant opportunity to modernize their internal processes, bringing alongside a set of challenges that they [...] Read more.

This study aims to investigate the impact of digital transformation on corporate tax avoidance. In fact, this revolution has pervasively affected firms in different aspects and represents a significant opportunity to modernize their internal processes, bringing alongside a set of challenges that they must overcome. One hypothesis posits that digitalization enhances information transparency and internal control, reducing tax avoidance, while the other one suggests that the increase in digitalization leads to more complex and opaque transactions, leaving avenues for more aggressive tax strategies. This paper uses data of listed firms in the Casablanca Stock Exchange from 2020 to 2024, excluding the financial sector due to its specific tax regulation, leaving a final sample of 56 companies and 272 firm-year observations. It applies an OLS regression to assess the relation between the two variables, controlling for a set of firm and governance characteristics. The aim of the article is to address the scholarly debate by providing insights into an emerging economy where there is little research on the subject. The findings reveal that digital transformation contributes to the decrease in corporate tax avoidance in conjunction with governance variables like the presence of independent directors on the board and the duality of a CEO position, strongly supporting the first hypothesis. Notably, the OLS regression results show that an increase in digitalization by 1 point is associated with a decrease of 40.4755 in the book-tax differences, significant at the 5% level. The results provide high support for firms to invest in technologies in order to optimize their internal processes and improve their data quality; it also calls for tax authorities to strengthen their digital audit capacities and integrate data-driven tools to detect and interpret signals of potential tax-aggressive strategies. Full article

(This article belongs to the Special Issue Synergizing Accounting Practices and Tax Governance)

► Show Figures

Figure 1

21 pages, 439 KB

Open AccessArticle

Mitigating Tax Evasion by improving the organizational structure of VAT on Digital Imports into South Africa

by Muneer Hassan

J. Risk Financial Manag. 2025, 18(10), 574; https://doi.org/10.3390/jrfm18100574 - 10 Oct 2025

Viewed by 561

Abstract

The South African Value-Added Tax (VAT) Act exhibits an illogical structure for digital imports. The complexity of digital import taxation creates uncertainty and has an impact on compliance, resulting in tax avoidance and diminished tax revenues. This study analysed the organisational structure of [...] Read more.

The South African Value-Added Tax (VAT) Act exhibits an illogical structure for digital imports. The complexity of digital import taxation creates uncertainty and has an impact on compliance, resulting in tax avoidance and diminished tax revenues. This study analysed the organisational structure of digital imports in the VAT Act as a legally complex element. This study established that the organisation of the VAT on digital imports complicates legislation and introduces ambiguity, leading to increased tax evasion and compliance, as well as administrative expenses. This study employed existing guidelines to simplify the VAT Act and improve the organisational structure regarding the VAT implications of digital imports. The methods used included a qualitative research technique utilising a doctrinal approach, as well as applied research. This study is the first to apply Hassan, Bornman and Sawyer’s VAT simplification framework to South African digital imports. The guidelines developed by these authors encompass section grouping, headings and subheadings, and explicit signposting, which were implemented in this article to effectively demonstrate and simplify the VAT consequences for digital imports. A logically structured VAT framework will improve clarity in digital import compliance, thereby reducing tax evasion. Therefore, this study contributes to tax compliance theory by proposing that a reduction in complexity and improvement in transparency mitigate tax evasion. Full article

(This article belongs to the Special Issue Tax Avoidance and Earnings Management)

► Show Figures

Figure 1

26 pages, 999 KB

Open AccessArticle

Drivers of Blockchain Adoption in Accounting and Auditing Services: Leveraging Theory of Planned Behavior with Identity and Moral Norms

by Nikolaos Gkekas, Nikolaos Ireiotis and Theodoros Kounadeas

J. Risk Financial Manag. 2025, 18(10), 573; https://doi.org/10.3390/jrfm18100573 - 9 Oct 2025

Viewed by 704

Abstract

Blockchain technology has become a game changer in sectors like accounting and auditing. Its usage is still restricted due to a lack of insight into what drives people to adopt it for financial services like accounting and auditing. This research delves into the [...] Read more.

Blockchain technology has become a game changer in sectors like accounting and auditing. Its usage is still restricted due to a lack of insight into what drives people to adopt it for financial services like accounting and auditing. This research delves into the factors that influence the adoption of blockchain systems in accounting and auditing services by utilizing an enhanced edition of the Theory of Planned Behavior. In this study, alongside the previously established elements like Attitude, subjective norm, and Perceived Behavioral Control, self-perception and personal moral values are included to reflect how identity and ethics impact decision-making processes. Data were gathered via an online survey (N = 751) conducted on the Prolific platform, and the hypotheses were tested using Structural Equation Modeling. The hypotheses were examined through the Structural Equation Modeling method. The findings indicate that each of the five predictors plays a significant role in influencing Behavioral Intention, with personal moral values being the influential factor followed by subjective norm and Perceived Behavioral Control. Attitude plays an important role in shaping adoption choices and showcases the complexity involved in such decisions. As such, it is crucial to take into account ethical factors when encouraging the use of blockchain technology. This study adds to the existing knowledge of the Theory of Planned Behavior framework, offering insights for companies aiming to boost the implementation of blockchain systems in professional settings. Future research avenues and real-world implications are explored with an emphasis placed on developing targeted strategies that align technological adoption with personal values and organizational objectives. Full article

(This article belongs to the Section Financial Technology and Innovation)

► Show Figures

Figure 1

31 pages, 367 KB

Open AccessArticle

The Role of Artificial Intelligence in Enhancing ESG Outcomes: Insights from Saudi Arabia

by Amina Hamdouni

J. Risk Financial Manag. 2025, 18(10), 572; https://doi.org/10.3390/jrfm18100572 - 8 Oct 2025

Cited by 1 | Viewed by 909

Abstract

This study investigates the relationship between artificial intelligence (AI) adoption and environmental, social, and governance (ESG) performance among 100 listed Saudi Arabian firms over the period 2015–2024. Drawing on panel data regression techniques, including fixed effects models with Driscoll–Kraay standard errors, pooled OLS [...] Read more.

This study investigates the relationship between artificial intelligence (AI) adoption and environmental, social, and governance (ESG) performance among 100 listed Saudi Arabian firms over the period 2015–2024. Drawing on panel data regression techniques, including fixed effects models with Driscoll–Kraay standard errors, pooled OLS with industry and year controls, and dynamic panel estimations using system GMM, the analysis reveals a significant and positive association between AI implementation and overall ESG scores. Disaggregated analysis shows that AI adoption is particularly associated with improvements in the environmental and social dimensions, with a more moderate relationship to governance practices. To address potential issues of cross-sectional dependence and heterogeneity, the study applies the Common Correlated Effects Mean Group (CCEMG) and Mean Group (MG) estimators as robustness checks, which confirm the consistency of the main findings. In addition, the Dumitrescu–Hurlin panel Granger causality test indicates that AI adoption Granger-causes ESG performance—especially in the environmental and social dimensions—while no reverse causality is observed. The results suggest that AI technologies are positively linked to firms’ sustainability strategies and performance, supporting the integration of digital transformation into national and corporate ESG agendas, particularly in emerging markets like Saudi Arabia. Full article

(This article belongs to the Special Issue Artificial Intelligence and Machine Learning in Transforming Business and Finance Across Different Sectors)

20 pages, 311 KB

Open AccessArticle

ESG Compliance in Greek Real Estate: Current Gaps and Future Directions

by Kornilios Vezyroglou and Fotios Siokis

J. Risk Financial Manag. 2025, 18(10), 571; https://doi.org/10.3390/jrfm18100571 - 8 Oct 2025

Viewed by 500

Abstract

This study analyzes the ESG (Environmental, Social, and Governance) reporting practices of Greek Real Estate Investment Companies (REICs). Our findings reveal significant variation in compliance levels. This can be attributed to loose regulations, combined with a lack of self-commitment. Environmental performance is the [...] Read more.

This study analyzes the ESG (Environmental, Social, and Governance) reporting practices of Greek Real Estate Investment Companies (REICs). Our findings reveal significant variation in compliance levels. This can be attributed to loose regulations, combined with a lack of self-commitment. Environmental performance is the least reported ESG pillar. We further explore the quality of Greek REICs’ ESG reporting. The results indicate that reporting per se does not necessarily ensure adherence to globally acknowledged reporting principles. Our work highlights that Greek REICs should be either motivated or enforced by law to align their ESG practices with broader market trends and regulatory developments. At the same time, our study is a call to policymakers for clear ESG guidelines. Despite the plethora of legislation and principles, the elephant in the room remains: many firms continue to do less than needed, or even the bare minimum, just because they can. Full article

(This article belongs to the Section Sustainability and Finance)

29 pages, 1631 KB

Open AccessArticle

Bitcoin Supply, Demand, and Price Dynamics

by Murray A. Rudd and Dennis Porter

J. Risk Financial Manag. 2025, 18(10), 570; https://doi.org/10.3390/jrfm18100570 - 8 Oct 2025

Viewed by 1401

Abstract

We refine a bottom-up, quantity-clearing framework of Bitcoin price formation that couples its fixed 21-million-coin cap with plausible demand growth and execution behavior. This approach relies on first-principles economic supply-and-demand dynamics rather than assumptions about anticipated Bitcoin price appreciation, its price history, or [...] Read more.

We refine a bottom-up, quantity-clearing framework of Bitcoin price formation that couples its fixed 21-million-coin cap with plausible demand growth and execution behavior. This approach relies on first-principles economic supply-and-demand dynamics rather than assumptions about anticipated Bitcoin price appreciation, its price history, or its potential effectiveness in demonetizing other asset classes. We considered five key high-level factors that may affect price determination: level of market demand; intertemporal investment preferences; fiat-denominated withdrawal sensitivity; initial liquid supply; and daily withdrawal levels from liquid supply. With a goal of both increasing understanding of the impacts of price drivers and developing probabilistic forecasts, we show two models: (1) a baseline to assess the impacts of parameter changes, alone and in combination, on Bitcoin price trajectories and liquid supply over time and (2) a Monte Carlo simulation that incorporates uncertainty across a range of uncertain parameterizations and presents probabilistic price and liquid supply forecasts to 2036. Our baseline model highlighted the importance of liquid supply and withdrawal sensitivity in price impacts. The Monte Carlo simulation results suggest a 50% likelihood that Bitcoin price will exceed USD 5.17 M by April 2036. Generally, prices from the low single millions to the low tens of millions per Bitcoin by 2036 emerge under broad parameter sets; hyperbolic paths to higher price levels are relatively rare and concentrate when liquid supply falls near or below BTC 2 M and withdrawal sensitivity is low. Our results help locate where right-tail risk and disorderly market outcomes concentrate and suggest that policy tools are available to help guide trajectories. Full article

(This article belongs to the Section Financial Technology and Innovation)

► Show Figures

Figure 1

17 pages, 402 KB

Open AccessArticle

From Toxic to Transparent: The Effect of Greenpeace’s Detox Campaign on Market Volatility

by Antonios Sarantidis, Vasileios Bougioukos, Fotios Mitropoulos and Konstantinos Kollias

J. Risk Financial Manag. 2025, 18(10), 569; https://doi.org/10.3390/jrfm18100569 - 7 Oct 2025

Viewed by 493

Abstract

In the contemporary structure of political economy, one of the leading actors is Non-Governmental Organisations (NGOs). Some of these organisations, to promote their goals, often engage in public disputes with enterprises that have publicly traded shares on the stock market. Consequently, they serve [...] Read more.

In the contemporary structure of political economy, one of the leading actors is Non-Governmental Organisations (NGOs). Some of these organisations, to promote their goals, often engage in public disputes with enterprises that have publicly traded shares on the stock market. Consequently, they serve as channels for negative information relevant to these enterprises that falls within their discourse. In this paper, we examine the impact on the share price volatility of these enterprises due to the public debate initiated by an NGO aiming to change the enterprise’s behaviour on a particular matter (e.g., using more eco-friendly materials). Data from Greenpeace’s Detox Campaign are used to examine its influence on several enterprises. Using GARCH, OLS, and Difference-in-Differences models, we find that volatility increased significantly during the campaign for firms like Burberry (13.71%), Adidas (5.40%), and VFC Group (3.96%). After companies complied, volatility declined, notably in Burberry (−16.84%), Marks & Spencer (−3.24%), and VFC Group (−4.88%). These results highlight how NGO activism can heighten investor uncertainty in the short term but stabilise markets once companies respond, offering key insights for policymakers on the financial impact of civil Society’s engagement. Full article

(This article belongs to the Special Issue AI and Sustainable Growth in Economics and Finance: Global Trends and Challenges)

► Show Figures

Figure 1

14 pages, 1152 KB

Open AccessArticle

Financial Swing for Well-Being: Jazz Economy and Modelling the Social Return of Sustainable Capital Markets

by Sonja Brlečić Valčić, Anita Peša and Dijana Čičin-Šain

J. Risk Financial Manag. 2025, 18(10), 568; https://doi.org/10.3390/jrfm18100568 - 7 Oct 2025

Viewed by 369

Abstract

This paper examines how shifts in sustainable capital markets influence societal well-being through the lens of a “Jazz Economy”, highlighting improvisation and adaptability in financial systems while grounding the analysis in empirical modelling. A panel of EUROSTAT indicators for 27 EU member states [...] Read more.

This paper examines how shifts in sustainable capital markets influence societal well-being through the lens of a “Jazz Economy”, highlighting improvisation and adaptability in financial systems while grounding the analysis in empirical modelling. A panel of EUROSTAT indicators for 27 EU member states (2019–2022) was analyzed, including green bond issuance, market capitalization, environmental taxation, social spending, life expectancy, and subjective life satisfaction. Hierarchical clustering grouped these indicators into coherent patterns of “financial swings”, which were then linked to a composite quality-of-life index through an Adaptive Neuro-Fuzzy Inference System (ANFIS), with results benchmarked against linear regression and random forests. The inclusion of time lags between fiscal, financial, and social indicators strengthens the causal interpretation of the results, moving beyond simple correlations. Findings show that higher public environmental protection spending combined with a strong net international investment position consistently predicts greater life satisfaction, whereas income and longevity alone do not guarantee improvements in subjective well-being, reflecting nonlinear interactions among fiscal, financial, and social variables. Robustness checks, including the exclusion of pandemic years, confirm the stability of outcomes. The study concludes that cohesive fiscal–financial strategies, integrating environmental policy and macro-financial resilience, are essential for enhancing quality of life and that sustainable finance can deliver tangible social benefits beyond metaphorical framing. Full article

(This article belongs to the Special Issue Sustainable Finance and Capital Market)

► Show Figures

Figure 1

32 pages, 990 KB

Open AccessArticle

Explaining the Determinants of International Financial Reporting Standard (IFRS) Disclosure: Evidence from Latin American Countries

by Rosa Isabel González Muñoz, Yeny Esperanza Rodríguez and Stella Maldonado

J. Risk Financial Manag. 2025, 18(10), 567; https://doi.org/10.3390/jrfm18100567 - 7 Oct 2025

Viewed by 800

Abstract

This study investigates the firm- and country-level determinants that influence the extent of financial disclosure under International Financial Reporting Standards (IFRS) in selected Latin American Organisation for Economic Co-operation and Development (OECD) members or countries in the accession process in the period under [...] Read more.

This study investigates the firm- and country-level determinants that influence the extent of financial disclosure under International Financial Reporting Standards (IFRS) in selected Latin American Organisation for Economic Co-operation and Development (OECD) members or countries in the accession process in the period under analysis. Using a sample of 168 publicly listed companies from Argentina, Chile, Colombia, Mexico, and Peru, we construct a self-developed disclosure index based on compliance with International Accounting Standards IAS 16 (Property, Plant and Equipment) and IAS 2 (Inventories). These standards were selected due to their relevance across a broad range of sectors in emerging markets. Drawing on agency theory, stakeholder theory, institutional theory, signaling theory, and legitimacy theory, we examine how internal firm characteristics, macroeconomic performance, and institutional quality impact disclosure practices. Our empirical findings show that firm size, leverage, Gross Domestic Product (GDP) growth, and shareholder protection have a positive and statistically significant influence on the level of IFRS disclosure. However, not all institutional variables are equally effective, highlighting the complex interplay between regulatory environments and corporate reporting behavior in developing countries. The study contributes to the ongoing debate on the applicability and effectiveness of IFRS in emerging economies by offering evidence from underexplored Latin American markets and emphasizing the need for context-specific policy and regulatory interventions. Full article

(This article belongs to the Special Issue Financial Reporting and Auditing)

► Show Figures

Figure 1

20 pages, 3181 KB

Open AccessArticle

The Causal Impact of Board Structure on Firm Profitability: Evidence from a Crisis

by Azin Sharifi, Shiva Zamani and Luis Seco

J. Risk Financial Manag. 2025, 18(10), 566; https://doi.org/10.3390/jrfm18100566 - 7 Oct 2025

Viewed by 569

Abstract

This study investigates the causal impact of board governance structures on firm profitability. We develop the Board Structure Influence (BSI) index, a composite metric that captures board independence, diversity, and role distribution—which we conceptualize as three structural pillars of Separation, Variety, and Disparity—to [...] Read more.

This study investigates the causal impact of board governance structures on firm profitability. We develop the Board Structure Influence (BSI) index, a composite metric that captures board independence, diversity, and role distribution—which we conceptualize as three structural pillars of Separation, Variety, and Disparity—to provide a comprehensive measure of governance effectiveness. Using a Difference-in-Differences (DiD) framework centered on the COVID-19 pandemic as an exogenous shock, we identify firms with strong governance and top BSI quartiles and compare their financial performance—measured by net profit margin—against firms with weaker board structures. Our results demonstrate that firms with higher BSI scores experience a statistically significant increase in profitability post-COVID-19. A Causal Forest analysis further reveals that this positive effect is heterogeneous, with the largest firms benefiting most significantly from strong board governance. Robustness checks—including placebo tests, parallel trends validation, and a SUTVA test—affirm the credibility of our findings. This research highlights the strategic importance of board structure for firm resilience during crises. It provides management insights for corporate leaders, investors, and policymakers aiming to align governance reform with financial profitability. Full article

(This article belongs to the Section Business and Entrepreneurship)

► Show Figures

Figure 1

21 pages, 1287 KB

Open AccessArticle

The US Reciprocal Tariff Announcement: An Analysis of Market Reactions

by Caner Özdurak and Pelin Yantur

J. Risk Financial Manag. 2025, 18(10), 565; https://doi.org/10.3390/jrfm18100565 - 6 Oct 2025

Viewed by 1622

Abstract

This paper examines the high-frequency impact of tariff rhetoric on financial markets, a topic largely unexplored in existing literature. Unlike previous studies that focus on the long-term, macroeconomic effects of enacted trade policies, our research utilizes a novel, sentiment-based proxy variable for non-legislated [...] Read more.

This paper examines the high-frequency impact of tariff rhetoric on financial markets, a topic largely unexplored in existing literature. Unlike previous studies that focus on the long-term, macroeconomic effects of enacted trade policies, our research utilizes a novel, sentiment-based proxy variable for non-legislated tariff announcements. We demonstrate that political communication itself—not just formal policy changes—is a potent source of investor uncertainty and market volatility. Our analysis, employing a multi-model framework including VAR and EGARCH models, reveals several key findings. We find that trade-related shocks contribute significantly to market volatility by altering investor expectations and increasing perceived risk. A key discovery is a unique unidirectional causality where shocks to the S&P 500 preceded changes in our tariff variable, suggesting that market movements can influence policy rhetoric. Furthermore, our EGARCH analysis uncovers distinct volatility characteristics across asset classes, including an atypical positive asymmetry in the Chinese CSI 300. These results collectively provide robust empirical evidence that tariff rhetoric has a measurable and significant impact on asset prices and disproportionately increases market volatility, highlighting the need for policymakers to consider the financial market implications of their public statements. Full article

(This article belongs to the Section Economics and Finance)

► Show Figures

Figure 1

36 pages, 610 KB

Open AccessArticle

Top Management Team Educational Background and Stock Liquidity: Evidence from China

by Jingyu Wu, Shaun McDowell, Cagri Berk Onuk and Jianing Zhang

J. Risk Financial Manag. 2025, 18(10), 564; https://doi.org/10.3390/jrfm18100564 - 6 Oct 2025

Viewed by 617

Abstract

Using a panel of 3515 Chinese listed firms from 2011 to 2023, this study shows that the education level of the top management team (TMT) positively influences firm stock liquidity. The beneficial effect of TMT education on stock liquidity is stronger in settings [...] Read more.

Using a panel of 3515 Chinese listed firms from 2011 to 2023, this study shows that the education level of the top management team (TMT) positively influences firm stock liquidity. The beneficial effect of TMT education on stock liquidity is stronger in settings with lower industry competition, higher information disclosure quality, and bull market periods. Mediation analysis indicates that analyst coverage provides a weak channel through which TMT education affects stock liquidity. Endogeneity concerns are alleviated by reverse causality tests, two-stage least squares regressions, propensity score matching, and generalized method of moments. The results are also robust to alternative liquidity measures and alternative definitions of TMT education. This study offers practical implications for investors, corporate executives, and policymakers seeking to promote market efficiency and liquidity. Full article

(This article belongs to the Section Financial Technology and Innovation)

► Show Figures

Figure 1

25 pages, 3228 KB

Open AccessArticle

Sustainable vs. Non-Sustainable Assets: A Deep Learning-Based Dynamic Portfolio Allocation Strategy

by Fatma Ben Hamadou and Mouna Boujelbène Abbes

J. Risk Financial Manag. 2025, 18(10), 563; https://doi.org/10.3390/jrfm18100563 - 3 Oct 2025

Viewed by 758

Abstract

This article aims to investigate the impact of sustainable assets on dynamic portfolio optimization under varying levels of investor risk aversion, particularly during turbulent market conditions. The analysis compares the performance of two portfolio types: (i) portfolios composed of non-sustainable assets such as [...] Read more.

This article aims to investigate the impact of sustainable assets on dynamic portfolio optimization under varying levels of investor risk aversion, particularly during turbulent market conditions. The analysis compares the performance of two portfolio types: (i) portfolios composed of non-sustainable assets such as fossil energy commodities and conventional equity indices, and (ii) mixed portfolios that combine non-sustainable and sustainable assets, including renewable energy, green bonds, and precious metals using advanced Deep Reinforcement Learning models (including TD3 and DDPG) based on risk and transaction cost- sensitive in portfolio optimization against the traditional Mean-Variance model. Results show that incorporating clean and sustainable assets significantly enhances portfolio returns and reduces volatility across all risk aversion profiles. Moreover, the Deep Reinforcing Learning optimization models outperform classical MV optimization, and the RTC-LSTM-TD3 optimization strategy outperforms all others. The RTC-LSTM-TD3 optimization achieves an annual return of 24.18% and a Sharpe ratio of 2.91 in mixed portfolios (sustainable and non-sustainable assets) under low risk aversion (λ = 0.005), compared to a return of only 8.73% and a Sharpe ratio of 0.67 in portfolios excluding sustainable assets. To the best of the authors’ knowledge, this is the first study that employs the DRL framework integrating risk sensitivity and transaction costs to evaluate the diversification benefits of sustainable assets. Findings offer important implications for portfolio managers to leverage the benefits of sustainable diversification, and for policymakers to encourage the integration of sustainable assets, while addressing fiduciary responsibilities. Full article

(This article belongs to the Special Issue Sustainable Finance for Fair Green Transition)

► Show Figures

Figure 1

Journal Menu

Journal Browser

J. Risk Financial Manag., Volume 18, Issue 10 (October 2025) – 63 articles

Further Information

Guidelines

MDPI Initiatives

Follow MDPI