International Journal of Financial Studies

22 pages, 831 KB

Open AccessArticle

Promoting Financial Inclusion by Optimising Financial Interest Rates Based on Artificial Intelligence in Microfinance Institutions

by Ana Martín-Schubert, Juan Lara-Rubio and Andrés Navarro-Galera

Int. J. Financial Stud. 2025, 13(4), 237; https://doi.org/10.3390/ijfs13040237 - 10 Dec 2025

Abstract

In recent years, the financial sustainability and survival of microfinance institutions (MFIs) have been seriously threatened by factors such as the reduction in donations, cooperation funds and international aid, and increased competition from commercial banks. Faced with this hostile scenario, which may limit [...] Read more.

In recent years, the financial sustainability and survival of microfinance institutions (MFIs) have been seriously threatened by factors such as the reduction in donations, cooperation funds and international aid, and increased competition from commercial banks. Faced with this hostile scenario, which may limit access to credit for disadvantaged groups, MFIs must apply techniques to improve their efficiency, viability, lending capacity and survival. The objective of this study is to design a microcredit pricing model based on the Internal Ratings-Based approach, Basel III and probability of default to enhance access to credit for disadvantaged groups. We analysed a sample of 4550 microcredit transactions and 30 influential variables (25 idiosyncratic and 5 systemic). Our empirical results reveal that the IRB system is more equitable for borrowers and more efficient for MFIs, as it allows lower interest rates to be applied to borrowers with better credit histories. The application of the proposed IRB model can improve the sustainability, competitiveness and viability of MFIs by promoting operational efficiency and reducing default rates, thus contributing to financial inclusion by increasing supply. Full article

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31 pages, 492 KB

Open AccessArticle

Corporate Income Tax Differential and Subsidiaries’ Profitability in Morocco: Profit-Shifting Evidence from a Pseudo-Ordinary Least Squares Framework

by Mohamed Rachidi and Abdeslam El Moudden

Int. J. Financial Stud. 2025, 13(4), 236; https://doi.org/10.3390/ijfs13040236 - 10 Dec 2025

Abstract

This study provides empirical evidence of tax-induced profit-shifting by multinational corporations (MNCs) operating in Morocco, an underexplored developing country context characterized by notable tax arbitrage potential. Using a micro-level panel dataset of foreign-owned subsidiaries from 2014 to 2023, we employ a pseudo-ordinary least [...] Read more.

This study provides empirical evidence of tax-induced profit-shifting by multinational corporations (MNCs) operating in Morocco, an underexplored developing country context characterized by notable tax arbitrage potential. Using a micro-level panel dataset of foreign-owned subsidiaries from 2014 to 2023, we employ a pseudo-ordinary least squares (POLS) framework to examine how corporate income tax (CIT) differentials affect subsidiaries’ earnings before interest and taxes (EBIT). The results indicate that higher CIT differentials significantly reduce reported profits, supporting the indirect evidence on corporate profit-shifting behaviour. Our findings also document that the effect of the CIT differential on EBIT is moderated by firm capitalization. However, contrary to investment distortion theory, subsidiaries do not reduce investment in response to higher effective capital costs. This study also assesses the impact of Morocco’s implementation of BEPS, the COVID-19 shock, and institutional quality indicators on subsidiaries’ reported EBIT. The findings highlight the strategic role of capital structure and governance in shaping MNCs’ tax-motivated behaviour. This study contributes to the literature on international taxation and corporate finance and offers important policy implications for developing economies seeking to balance revenue integrity, investment incentives, and robust anti-avoidance enforcement. Full article

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17 pages, 314 KB

Open AccessArticle

CSR and Stock Price Crash Risk: Does the Firm Life Cycle Matter? An Emerging Economy Perspective

by Muhammad Zahid Iqbal, Sadia Ashraf, Abaid Ullah, Syed Sikander Ali Shah and Tamas-Szora Attila

Int. J. Financial Stud. 2025, 13(4), 235; https://doi.org/10.3390/ijfs13040235 - 9 Dec 2025

Abstract

Corporate social responsibility (CSR) plays a growing role in fostering transparency, stakeholder trust, and long-term firm sustainability, particularly in emerging markets. Firms that actively engage in CSR are more likely to disclose credible financial information, which can reduce the incentive to withhold adverse [...] Read more.

Corporate social responsibility (CSR) plays a growing role in fostering transparency, stakeholder trust, and long-term firm sustainability, particularly in emerging markets. Firms that actively engage in CSR are more likely to disclose credible financial information, which can reduce the incentive to withhold adverse news and thereby limit stock price crash risk (SPCR). This study investigates the impact of CSR on SPCR, while also examining whether this relationship varies across different stages of the firm life cycle (FLC). The analysis is based on an unbalanced panel of listed non-financial firms from the Pakistan Stock Exchange (PSX), covering the period from 2009 to 2023. Financial data were obtained from the State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP), while market data were collected from the PSX. Employing fixed-effects robust regression models and two crash risk proxies, negative conditional skewness (NCSKEW) and down-to-up volatility (DUVOL), the results reveal a consistent and significant negative association between CSR and SPCR. This suggests that firms with stronger CSR engagement are less prone to extreme negative stock returns. However, the moderating effect of FLC is only evident at the introduction and decline stages, indicating that the effectiveness of CSR in reducing crash risk depends on a firm’s position in its organizational life cycle. These findings contribute to the literature on CSR and financial stability in emerging markets and offer practical implications for investors, managers, and policymakers seeking to promote risk-aware, socially responsible corporate strategies. Full article

36 pages, 457 KB

Open AccessArticle

From ESG to Financial Stability: Unpacking the Multi-Dimensional Impact of AI-Driven FinTech-Related Technology Adoption on Bank Performance

by Amina Hamdouni

Int. J. Financial Stud. 2025, 13(4), 234; https://doi.org/10.3390/ijfs13040234 - 8 Dec 2025

Abstract

This study examines the association between Saudi banks’ internal adoption of AI-enabled FinTech-related digital tools and their financial performance, sustainability performance, and financial stability over the period 2015–2024. Using a panel dataset of 10 banks, the analysis investigates how the adoption of AI-driven [...] Read more.

This study examines the association between Saudi banks’ internal adoption of AI-enabled FinTech-related digital tools and their financial performance, sustainability performance, and financial stability over the period 2015–2024. Using a panel dataset of 10 banks, the analysis investigates how the adoption of AI-driven technologies—such as machine-learning credit assessment, robo-advisory systems, and automated compliance tools—is related to market performance (Tobin’s Q), accounting performance (ROA and ROE), financial stability (Z-Score), and sustainability outcomes measured by both Bloomberg ESG Disclosure Score and the LSEG ESG performance-oriented score. To ensure robust inference and reduce simultaneity concerns, the empirical strategy employs Pooled OLS and Fixed Effects Models with Driscoll–Kraay standard errors, as well as a dynamic Fixed Effects Models incorporating lagged dependent variables, lagged independent variables, and shock-interaction terms. Bank-specific characteristics—including size, age, leverage, liquidity, loan-to-deposit ratio, non-performing loans, net interest margin, market capitalization, and board size—are included as controls. The findings indicate a positive and statistically significant relationship between banks’ internal adoption of AI-enabled digital/FinTech-related technologies and their financial performance, sustainability performance, and financial stability. These relationships remain robust across estimation approaches, providing insights for policymakers, regulators, and bank managers seeking to advance digital transformation while safeguarding financial soundness and supporting sustainable development in the Saudi banking sector. Full article

(This article belongs to the Special Issue Artificial Intelligence in Banking and Insurance)

32 pages, 1955 KB

Open AccessReview

Sustainable Finance, Green Bonds and Financial Performance—A Literature Review

by Roberto Rodrigues Loiola, Herbert Kimura and Ludmila de Melo Souza

Int. J. Financial Stud. 2025, 13(4), 233; https://doi.org/10.3390/ijfs13040233 - 4 Dec 2025

Abstract

The growing relevance of sustainable finance has positioned green bonds as central instruments in debates on how capital markets can contribute to climate transition while creating value for firms. This article conducts a literature review to examine the relationship between green bond issuance, [...] Read more.

The growing relevance of sustainable finance has positioned green bonds as central instruments in debates on how capital markets can contribute to climate transition while creating value for firms. This article conducts a literature review to examine the relationship between green bond issuance, corporate financial performance, and the cost of debt. Using the PRISMA 2020 protocol, 59 articles published between 2019 and 2025 were identified and classified according to study type, methodological approach, analytical technique, sectoral and geographic focus, and performance indicators. A bibliometric analysis was also performed to map publication trends, research clusters, and thematic evolution. The results indicate a fragmented but expanding field, with most studies concentrated in developed markets, especially Europe, the United States, and China, and limited evidence from emerging economies. Empirical findings converge on modest but heterogeneous financial benefits, frequently reflected in the so-called “Greenium,” typically ranging between 1 and 63 basis points. Accounting-based effects on profitability (ROA, ROE) remain mixed, while econometric/regression, panel analysis and event studies dominate the empirical landscape. The paper’s incremental contribution lies in consolidating these quantitative insights into a reproducible classification framework that enables systematic comparison between developed and emerging markets, supporting future research on long-term financial and sustainability outcomes. Full article

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19 pages, 484 KB

Open AccessArticle

The Impact of Social Trust on the Development of Digital Finance

by Fan Zeng and Benyong Hu

Int. J. Financial Stud. 2025, 13(4), 232; https://doi.org/10.3390/ijfs13040232 - 4 Dec 2025

Abstract

Social trust is a fundamental element in the evolution of digital finance, significantly influencing its development. This study presents an innovative exploration of the role and internal mechanisms of social trust in digital finance, utilizing using provincial panel data from 27 provinces in [...] Read more.

Social trust is a fundamental element in the evolution of digital finance, significantly influencing its development. This study presents an innovative exploration of the role and internal mechanisms of social trust in digital finance, utilizing using provincial panel data from 27 provinces in China spanning the period from 2012 to 2021. By focusing on trust as a core element, the study enriches the research framework on digital finance development, revealing that beyond traditional factors such as technology and the economy, social and psychological factors also affect digital finance growth. These findings provide new perspectives on understanding digital finance development. The study elucidates the complex substitution and interdependence between formal and informal institutions, offering valuable insights for optimizing institutional frameworks to promote digital finance. It also uncovers significant regional heterogeneity in the influence of social trust on digital finance, and social trust primarily enhances the depth and digitization of digital finance, while its effect on the breadth of digital finance is statistically insignificant. These insights serve as a valuable reference for policymakers aiming to ensure the sustainable expansion of the digital finance sector. Full article

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25 pages, 492 KB

Open AccessArticle

The Influence of Investor Sentiment on the South African Property Market: A Comparative Assessment of JSE Indices

by Charlize Nel, Fabian Moodley and Sune Ferreira-Schenk

Int. J. Financial Stud. 2025, 13(4), 231; https://doi.org/10.3390/ijfs13040231 - 3 Dec 2025

Abstract

Investor sentiment has increasingly been recognized as a behavioural factor influencing asset prices beyond traditional rational asset pricing models, yet evidence from South Africa’s property remains limited. This study investigates the short-run and long-run relationship between investor sentiment and FTSE/JSE-listed property indices, to [...] Read more.

Investor sentiment has increasingly been recognized as a behavioural factor influencing asset prices beyond traditional rational asset pricing models, yet evidence from South Africa’s property remains limited. This study investigates the short-run and long-run relationship between investor sentiment and FTSE/JSE-listed property indices, to determine the influence of sentiment on property index pricing within the South African context. Using monthly data for selected JSE/FTSE property indices, a composite investor sentiment index was constructed through a principal component analysis (PCA) of multiple market-based sentiment proxies. Consequently, a Vector Error Correction Model (VECM) was estimated to examine both the long-run and short-run relationships, integrated with the VEC Granger causality tests to determine the direction of influence between variables. The findings report a novel relationship between investor sentiment and the FTSE/JSE property indices, as they provide new insights at the disaggregated level, which is overlooked in the literature. In the short run, the findings suggest that market psychology drives short-term property price adjustments. Moreover, in the long run, the relationship remains significant, indicating that this effect persists, underscoring the enduring influence of sentiment on market valuation. Additionally, the Granger causality results indicate uni-directional relationships, where investor sentiment drives listed property pricing and macroeconomic variables, reinforcing its predictive role. The study concludes that investor sentiment is a key determinant of South Africa’s listed property market, consistent with the rationale of behavioural finance theory, and underscores that investment decisions within this market are substantially influenced by investor psychology, contributing to property market volatility. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics 2nd Edition)

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20 pages, 333 KB

Open AccessArticle

ESG Ratings and Financial Performance: An Empirical Analysis

by Guido Abate, Ignazio Basile and Pierpaolo Ferrari

Int. J. Financial Stud. 2025, 13(4), 230; https://doi.org/10.3390/ijfs13040230 - 3 Dec 2025

Abstract

In light of the growing interest in sustainable finance among investors and academics, in this study, we present an empirical analysis designed to understand whether sustainable investments outperform, underperform, or perform neutrally relative to conventional investments. The literature presents a spectrum of often-opposed [...] Read more.

In light of the growing interest in sustainable finance among investors and academics, in this study, we present an empirical analysis designed to understand whether sustainable investments outperform, underperform, or perform neutrally relative to conventional investments. The literature presents a spectrum of often-opposed conclusions, precluding the establishment of a definitive, consensus-driven judgment. Therefore, our analysis examines the behavior of sustainable investments within the Eurozone equity market from January 2019 to December 2023. Twenty portfolios are constructed to simulate sustainable investment strategies differentiated by environmental, social, and governance (ESG) strategy; stock inclusion/exclusion thresholds; and the type of ESG rating employed in the selection process. The analysis reveals that sustainable investments do not statistically significantly outperform or underperform traditional investments. This finding is significant for investors committed to ESG principles, as it suggests that they can align their investment choices with their ethical convictions without sacrificing performance. Full article

33 pages, 552 KB

Open AccessArticle

Data Asset Disclosure and Stock Price Crash Risk: A Double Machine Learning Study of Chinese A Share Firms

by Junzuo Zhou, Zhaoyang Zhu, Huimeng Wang, Yuki Gong, Yuge Zhang and Frank Li

Int. J. Financial Stud. 2025, 13(4), 229; https://doi.org/10.3390/ijfs13040229 - 2 Dec 2025

Abstract

In the digital economy, data assets have become key drivers of firm competitiveness and market stability. This study examines the association between data asset information disclosure and stock price crash risk. Using annual reports of Chinese A-share listed firms from 2010 to 2023, [...] Read more.

In the digital economy, data assets have become key drivers of firm competitiveness and market stability. This study examines the association between data asset information disclosure and stock price crash risk. Using annual reports of Chinese A-share listed firms from 2010 to 2023, we construct a Data Asset Information Disclosure Index through textual analysis. A double machine learning framework is employed to flexibly control for high-dimensional confounders, and the results indicate that greater disclosure is associated with lower crash risk across multiple specifications. Generalized random forest analysis further highlights heterogeneous relationships, with disclosures on both internally used and transactional data assets showing stronger negative associations with crash risk. Mechanism evidence suggests that disclosure may facilitate information dissemination, strengthen investor confidence, and improve analyst forecast accuracy. The association is more pronounced in firms with weaker corporate governance, higher reporting transparency, more competitive industries, and in regions with less developed digital economies. An industry spillover pattern is also observed, whereby one firm’s disclosure is linked to reduced crash risk among peers. Overall, this study contributes to the literature on data asset disclosure and corporate risk management by providing empirical evidence from a major emerging market and by highlighting the potential relevance of enhanced transparency for digital governance and capital market resilience. Full article

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39 pages, 3352 KB

Open AccessArticle

Mapping Financial Contagion in Emerging Markets: The Role of the VIX and Geopolitical Risk in BRICS Plus Spillovers

by Chourouk Kasraoui, Naif Alsagr, Ahmed Jeribi and Sahbi Farhani

Int. J. Financial Stud. 2025, 13(4), 228; https://doi.org/10.3390/ijfs13040228 - 2 Dec 2025

Abstract

Using a time-frequency and quantile connectedness approach, our study examines the complex return spillovers dynamics between BRICS Plus stock markets, the volatility index (VIX), and the global geopolitical risk index (GPRD). By employing advanced models such as TVP-VAR, quantile connectedness, and spectral decomposition, [...] Read more.

Using a time-frequency and quantile connectedness approach, our study examines the complex return spillovers dynamics between BRICS Plus stock markets, the volatility index (VIX), and the global geopolitical risk index (GPRD). By employing advanced models such as TVP-VAR, quantile connectedness, and spectral decomposition, we demonstrate how these markets interact across different market conditions and periods. Our results indicate that the VIX consistently acts as the dominant net transmitter of shocks, especially during periods of heightened uncertainty such as the COVID-19 pandemic, the Russian-Ukraine conflict, and the Trump-era U.S.-China trade tensions. In contrast, the GPRD functions predominantly as a net receiver of shocks, indicating its potential role as a hedge during geopolitical crises. BRICS Plus markets exhibit heterogeneous behavior: Brazil, South Africa, and Russia frequently emerge as net transmitters, while China, India, Egypt, Saudi Arabia, and the UAE primarily act as net receivers. Spillovers are strongest at the extremes of the return distribution and are mainly driven by short-term dynamics, underscoring the importance of high-frequency reactions over persistent long-term effects. These findings highlight the asymmetric, nonlinear, and state-dependent nature of global financial contagion, offering important insights for risk management, asset allocation, and macroprudential policy design in emerging market contexts. Full article

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35 pages, 4264 KB

Open AccessArticle

Smart Tangency Portfolio: Deep Reinforcement Learning for Dynamic Rebalancing and Risk–Return Trade-Off

by Jiayang Yu and Kuo-Chu Chang

Int. J. Financial Stud. 2025, 13(4), 227; https://doi.org/10.3390/ijfs13040227 - 2 Dec 2025

Abstract

This paper proposes a dynamic portfolio allocation framework that integrates deep reinforcement learning (DRL) with classical portfolio optimization to enhance rebalancing strategies and risk–return management. Within a unified reinforcement-learning environment for portfolio reallocation, we train actor–critic agents (Proximal Policy Optimization (PPO) and Advantage [...] Read more.

This paper proposes a dynamic portfolio allocation framework that integrates deep reinforcement learning (DRL) with classical portfolio optimization to enhance rebalancing strategies and risk–return management. Within a unified reinforcement-learning environment for portfolio reallocation, we train actor–critic agents (Proximal Policy Optimization (PPO) and Advantage Actor–Critic (A2C)). These agents learn to select both the risk-aversion level—positioning the portfolio along the efficient frontier defined by expected return and a chosen risk measure (variance, Semivariance, or CVaR)—and the rebalancing horizon. An ensemble procedure, which selects the most effective agent–utility combination based on the Sharpe ratio, provides additional robustness. Unlike approaches that directly estimate portfolio weights, our framework retains the optimization structure while delegating the choice of risk level and rebalancing interval to the AI agent, thereby improving stability and incorporating a market-timing component. Empirical analysis on daily data for 12 U.S. sector ETFs (2003–2023) and 28 Dow Jones Industrial Average components (2005–2023) demonstrates that DRL-guided strategies consistently outperform static tangency portfolios and market benchmarks in annualized return, volatility, and Sharpe ratio. These findings underscore the potential of DRL-driven rebalancing for adaptive portfolio management. Full article

(This article belongs to the Special Issue Financial Markets: Risk Forecasting, Dynamic Models and Data Analysis)

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21 pages, 755 KB

Open AccessArticle

The Moderating Role of FinTech in the Relationship Between Customer Satisfaction and Retention in the Banking Sector

by Mousa Ajouz, Maha Shehadeh, Sara Issa and Haya Nawawra

Int. J. Financial Stud. 2025, 13(4), 226; https://doi.org/10.3390/ijfs13040226 - 1 Dec 2025

Abstract

This study investigates the influence of banking service quality and customer trust on customer retention behavior, considering the mediating role of customer satisfaction and the moderating role of FinTech. In light of the growing digitalization in the banking sector, the study aims to [...] Read more.

This study investigates the influence of banking service quality and customer trust on customer retention behavior, considering the mediating role of customer satisfaction and the moderating role of FinTech. In light of the growing digitalization in the banking sector, the study aims to understand how these constructs interact to drive long-term customer loyalty. A quantitative research approach was adopted using data collected through a structured questionnaire administered to banking customers. The relationships among variables were examined using Partial Least Squares Structural Equation Modeling (PLS-SEM), assessing both direct and indirect effects. The results show that banking service quality and customer trust significantly enhance customer satisfaction, which in turn positively influences customer retention behavior. Moreover, satisfaction was found to mediate the relationships between both service quality and trust with retention. FinTech demonstrated a strong direct effect on retention and also significantly moderated the satisfaction–retention link, amplifying its impact when FinTech services are effectively utilized. This study contributes to the relationship marketing literature by introducing FinTech as a novel moderating variable in the satisfaction–retention framework. It offers practical insights for banks aiming to enhance retention by improving service quality, fostering trust, and leveraging digital technologies to strengthen customer relationships. Full article

(This article belongs to the Special Issue InsurTech and FinTech Innovations: Transforming Risk Management and Governance in the Digital Era)

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22 pages, 410 KB

Open AccessArticle

The Impact of Tax Avoidance on Earnings Management: The Moderating Role of Board Governance Characteristics

by Abdullah Almulhim and Abdelmoneim Bahyeldin Mohamed Metwally

Int. J. Financial Stud. 2025, 13(4), 225; https://doi.org/10.3390/ijfs13040225 - 1 Dec 2025

Abstract

The study aims to investigate the impact of tax avoidance (TA) on earnings management practices (EM). The current research also investigates the moderating role of board governance characteristics on this relationship in the Egyptian context. The sample incorporates all the non-financial companies included [...] Read more.

The study aims to investigate the impact of tax avoidance (TA) on earnings management practices (EM). The current research also investigates the moderating role of board governance characteristics on this relationship in the Egyptian context. The sample incorporates all the non-financial companies included in the Egyptian Stock Exchange between 2017 and 2021. The final sample comprises 120 enterprises from 12 industries, with 600 observations. Statistical analysis employs fixed effects regression, pooled OLS, and GMM estimations to test the proposed hypotheses. We found a significant positive impact of TA on the level of EM. Further, board gender diversity (BGD) and board independence (BIND) were found to have a negative moderating impact as they alleviate the effect of TA on the level of EM. Finally, CEO duality (CEOD) was found to have no moderating impact. To the authors’ knowledge, this is the first study examining how board governance characteristics moderate and influence the level of EM in emerging markets. This adds new insights to the TA and EM literature, as previous research mainly focused on the direct effects of BGD, BIND, and CEOD on EM levels. The current study provides fresh evidence from an emerging market context. Full article

(This article belongs to the Special Issue Financial Reporting, Reputation, and Earnings Quality)

33 pages, 2738 KB

Open AccessArticle

Quantile Connectedness Between Stock Market Development and Macroeconomic Factors for Emerging African Economies

by Maroua Ben Salem, Naif Alsagr, Samir Belkhaoui and Sahbi Farhani

Int. J. Financial Stud. 2025, 13(4), 224; https://doi.org/10.3390/ijfs13040224 - 1 Dec 2025

Abstract

This paper investigates the frequency dynamics of financial and macroeconomic connectedness by measuring tail-risk and uncertainty for two emerging African economies, namely Morocco and Tunisia, over the quarterly period Q2-2010 to Q4-2024. We employ a quantile connectedness approach, which, unlike traditional mean-based methods, [...] Read more.

This paper investigates the frequency dynamics of financial and macroeconomic connectedness by measuring tail-risk and uncertainty for two emerging African economies, namely Morocco and Tunisia, over the quarterly period Q2-2010 to Q4-2024. We employ a quantile connectedness approach, which, unlike traditional mean-based methods, leads to capturing asymmetries, tail-risk dependencies, and state-dependent spillovers, and to providing early warning signals of systemic stress and financial uncertainty. Our results reveal a stark divergence between the two stock markets in their roles in transmitting and absorbing shocks. The Moroccan stock market acts as a net transmitter, occasionally driving macroeconomic conditions and propagating uncertainty throughout the system. In contrast, the Tunisian stock market acts as a net receiver, with macroeconomic fundamentals, particularly GDP and money supply. These findings highlight how structural differences in emerging markets affect the transmission of shocks and offer actionable insights for policymakers, regulators, and investors to manage financial risks and uncertainty. Full article

(This article belongs to the Special Issue Risks and Uncertainties in Financial Markets)

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21 pages, 270 KB

Open AccessArticle

The Independence–Tenure Tradeoff in the Boardroom: The Impact of Excess Board Tenure on Executive Compensation and Accountability

by Paweł Mielcarz and Dmytro Osiichuk

Int. J. Financial Stud. 2025, 13(4), 223; https://doi.org/10.3390/ijfs13040223 - 25 Nov 2025

Abstract

The goal of the study is to inquire into how longer tenure on the board may undermine directors’ independence and distort the efficiency of executive compensation mechanisms. Our empirical findings based on an international panel database and static panel regression modeling demonstrate that [...] Read more.

The goal of the study is to inquire into how longer tenure on the board may undermine directors’ independence and distort the efficiency of executive compensation mechanisms. Our empirical findings based on an international panel database and static panel regression modeling demonstrate that director tenure is positively associated with executive compensation with the effect being amplified by the degree of managerial capture of the board. Longer director tenure is also shown to reduce the sensitivity of executive compensation to negative earnings surprises while simultaneously contributing to the lower overall probability of management departures even in the event of a negative earnings surprise. Board independence is evidenced to play no significant role in intermediating the studied relationships. Overall, while postulating the existence of an independence–tenure tradeoff, the paper posits a need for revision of the currently applicable formal criteria of board independence in order for them to accommodate the possible impact of director tenure on the quality of corporate oversight. The present study extends upon the existing literature by expanding the geographical scale of the sample and focusing on indirect symptoms of reduced supervisory effectiveness of the boards. Full article

26 pages, 1097 KB

Open AccessArticle

Exploring the Interplay of Life Attitude and Cognitive Ability in Shaping the Intention to Stock Market Participation Among Young Professionals in the Philippines

by Eugene Burgos Mutuc

Int. J. Financial Stud. 2025, 13(4), 222; https://doi.org/10.3390/ijfs13040222 - 25 Nov 2025

Abstract

The stability of life purpose and coherence as dimensions of life attitude shapes the cognitive structures underpinning financial decision-making. This study examines how cognitive ability mediates the effect of life attitude profile on the intention to stock-market participation of 195 randomly selected young [...] Read more.

The stability of life purpose and coherence as dimensions of life attitude shapes the cognitive structures underpinning financial decision-making. This study examines how cognitive ability mediates the effect of life attitude profile on the intention to stock-market participation of 195 randomly selected young professionals in the Philippines. This study adopted a quantitative, cross-sectional framework, employing Partial least squares–Structural Equation Modeling to evaluate both predictive and mediating influence. The findings revealed that individuals with stronger life purpose, greater goal-seeking tendencies, and an overall positive outlook toward life exhibit a higher propensity to participate in stock market investments. Cognitive ability, proxied by financial literacy, emerged as a crucial mechanism that reinforces this relationship—suggesting that psychological readiness alone is not sufficient unless complemented by the knowledge and capacity to make informed financial decisions. This study contributes to the intersection of psychology and finance by demonstrating that investment intentions are not solely products of rational calculation but are shaped by the individual’s sense of meaning, life orientation, and cognitive preparedness. Full article

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30 pages, 384 KB

Open AccessArticle

Does ESG Performance Reduce Bankruptcy Risk?

by Bei Gao, Haodong Liu, Shenghui Tong and Yanbo Jin

Int. J. Financial Stud. 2025, 13(4), 221; https://doi.org/10.3390/ijfs13040221 - 21 Nov 2025

Abstract

This study examines how environmental, social, and governance (ESG) performance affects firms’ bankruptcy risk and explores the mechanisms linking ESG engagement to financial stability. Using a panel dataset of Chinese-listed firms from 2009 to 2022, we employ multivariate regression analyses, instrumental variable estimation, [...] Read more.

This study examines how environmental, social, and governance (ESG) performance affects firms’ bankruptcy risk and explores the mechanisms linking ESG engagement to financial stability. Using a panel dataset of Chinese-listed firms from 2009 to 2022, we employ multivariate regression analyses, instrumental variable estimation, and robustness tests to address potential endogeneity. The results indicate that higher ESG performance significantly reduces bankruptcy risk. Mechanism analyses reveal that ESG engagement lowers bankruptcy risk by improving information transparency, alleviating financing constraints, enhancing operating performance, and reducing leverage. The effect is more pronounced for non-state-owned enterprises, firms in economically developed regions, highly competitive industries, and those in the growth and maturity stages. Among the three ESG pillars, corporate governance exerts the strongest influence on mitigating bankruptcy risk. These findings provide new evidence from an emerging market and offer important implications for sustainable corporate finance and risk management. Full article

12 pages, 484 KB

Open AccessArticle

Quantum Blockchain: A Theoretical Framework and Applications in Cryptocurrency

by Yosef Bonaparte

Int. J. Financial Stud. 2025, 13(4), 220; https://doi.org/10.3390/ijfs13040220 - 20 Nov 2025

Abstract

Blockchain technology has emerged as the backbone of cryptocurrencies and decentralized finance, yet its long-term resilience is increasingly threatened by advances in quantum computing. Quantum algorithms, such as Shor’s algorithm, can undermine public-key cryptography, while Grover’s algorithm accelerates brute-force search, weakening proof-of-work schemes. [...] Read more.

Blockchain technology has emerged as the backbone of cryptocurrencies and decentralized finance, yet its long-term resilience is increasingly threatened by advances in quantum computing. Quantum algorithms, such as Shor’s algorithm, can undermine public-key cryptography, while Grover’s algorithm accelerates brute-force search, weakening proof-of-work schemes. In this paper, we propose a Quantum Blockchain Framework that integrates quantum communication protocols, quantum consensus mechanisms, and quantum-resistant cryptography. We construct a theoretical model of quantum-secured distributed ledgers, where qubits, entanglement, and quantum key distribution (QKD) enhance security and efficiency. Applications to cryptocurrency are explored, highlighting how quantum blockchain can mitigate security risks, improve consensus speed, and enable quantum-native digital assets. Full article

(This article belongs to the Special Issue Cryptocurrency and Blockchain: Opportunities and Challenges for Financial Systems)

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27 pages, 702 KB

Open AccessArticle

Exploring the Psychological Drivers of Cryptocurrency Investment Biases: Evidence from Indian Retail Investors

by Manabhanjan Sahu, Furquan Uddin and Md Billal Hossain

Int. J. Financial Stud. 2025, 13(4), 219; https://doi.org/10.3390/ijfs13040219 - 18 Nov 2025

Abstract

Cryptocurrency investment in India has quickly become a mainstream financial activity, but it is still highly prone to psychological factors that impact the decision-making of retail investors. This study examines the effect of personality traits on cryptocurrency investment behavior using the mediating variable [...] Read more.

Cryptocurrency investment in India has quickly become a mainstream financial activity, but it is still highly prone to psychological factors that impact the decision-making of retail investors. This study examines the effect of personality traits on cryptocurrency investment behavior using the mediating variable of behavioral biases. Based on the Big Five Personality Model and the theory of Behavioral Finance, data were gathered from 716 Indian retail investors using a structured questionnaire. Partial Least Squares Structural Equation Modeling (PLS-SEM) was conducted to analyze the relationships among the variables. Results show that Openness to experience and Agreeableness significantly predict Availability Bias, whereas Extraversion and Agreeableness affect the Disposition Effect. The theoretical framework shows how bias-driven investment behavior in volatile markets such as cryptocurrency is triggered by personality-based predispositions. The study adds to the behavioral finance literature by taking psychological profiling outside the realms of traditional investment contexts into digital asset investing and provides practical insights for regulators, fintech platforms, and investment advisors to design interventions to mitigate bias and enhance investor education. Full article

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