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Journal Description

International Journal of Financial Studies

International Journal of Financial Studies is an international, peer-reviewed, scholarly open access journal on financial market, instruments, policy, and management research published monthly online by MDPI.

Open Access— free for readers, with article processing charges (APC) paid by authors or their institutions.
High Visibility: indexed within Scopus, ESCI (Web of Science), EconLit, EconBiz, RePEc, and other databases.
Journal Rank: JCR - Q2 (Business, Finance) / CiteScore - Q2 (Finance)
Rapid Publication: manuscripts are peer-reviewed and a first decision is provided to authors approximately 19.7 days after submission; acceptance to publication is undertaken in 5.9 days (median values for papers published in this journal in the second half of 2025).
Recognition of Reviewers: reviewers who provide timely, thorough peer-review reports receive vouchers entitling them to a discount on the APC of their next publication in any MDPI journal, in appreciation of the work done.

Impact Factor: 2.2 (2024); 5-Year Impact Factor: 2.3 (2024)

Imprint Information Journal Flyer Open Access ISSN: 2227-7072

Latest Articles

17 pages, 282 KB

Open AccessArticle

Can Regional New Digital Infrastructure Promote the Level of Green Finance? Empirical Evidence from Chinese Cities

by Hanzhong Zheng, Xuemeng Guo and Lingpeng Kong

Int. J. Financial Stud. 2026, 14(6), 165; https://doi.org/10.3390/ijfs14060165 - 12 Jun 2026

Using panel data for 135 Chinese prefecture-level cities from 2007 to 2023, this study investigates the impact of new digital infrastructure on green finance development. The new digital infrastructure indicator is constructed based on the proportion of relevant keywords appearing in government work [...] Read more.

Using panel data for 135 Chinese prefecture-level cities from 2007 to 2023, this study investigates the impact of new digital infrastructure on green finance development. The new digital infrastructure indicator is constructed based on the proportion of relevant keywords appearing in government work reports, while the green finance index is reconstructed using the entropy-weighting method across seven dimensions. The estimation results indicate that new digital infrastructure exerts a significant positive effect on green finance development. This conclusion remains robust after a series of robustness checks, including alternative variable measurements, winsorization treatment, and instrumental-variable estimation. Mechanism analysis reveals that industrial structure upgrading, particularly the advancement of industrial structure, serves as an important transmission channel. Further heterogeneity analysis shows that the promoting effect is more pronounced in cities with larger economic scale, those located outside major urban agglomerations, and cities with higher levels of financial resource aggregation. These findings provide empirical evidence for the role of digital infrastructure in fostering green finance and facilitating sustainable regional development. Full article

20 pages, 867 KB

Open AccessArticle

Macroeconomic Drivers of House Price Cycles in the EU: Are They Synchronized Across Member States?

by Vytautas Snieska, Daiva Burksaitiene and Valentinas Navickas

Int. J. Financial Stud. 2026, 14(6), 164; https://doi.org/10.3390/ijfs14060164 - 12 Jun 2026

This paper examines the drivers of house price cycles across EU countries between 2005 and 2024 and measures their synchronicity. We used panel data methods—fixed effects, dynamic panel models (Arellano–Bond GMM), and a pooled VAR framework—to capture static and dynamic relationships between house [...] Read more.

This paper examines the drivers of house price cycles across EU countries between 2005 and 2024 and measures their synchronicity. We used panel data methods—fixed effects, dynamic panel models (Arellano–Bond GMM), and a pooled VAR framework—to capture static and dynamic relationships between house price growth and key macroeconomic variables. The results show that the dynamics of house prices are highly persistent. GDP growth has a clear positive effect, while higher unemployment and interest rates push prices down. Migration flows, however, are not statistically significant at the EU aggregate level. Property taxation shows a positive coefficient, which probably reflects structural and institutional differences rather than a direct dampening effect on prices. Dynamic analysis suggests that macroeconomic shocks have persistent and economically meaningful impacts on house price growth. Hierarchical cluster analysis revealed three distinct groups of countries, meaning that house price cycles are only partially synchronized across the EU. Unlike previous studies that typically examine individual determinants or synchronization separately, this study integrates panel econometric methods, dynamic VAR analysis, and hierarchical clustering within a unified framework to jointly assess macroeconomic drivers, dynamic interactions, and structural heterogeneity of house price cycles across EU countries. In general, common macroeconomic drivers and structural heterogeneity coexist—this is important for the stability of the housing market and sustainable development. Full article

(This article belongs to the Special Issue Real Estate Markets and Financial Intermediation: Policy Shocks, Micro Responses, and Economic Consequences)

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30 pages, 375 KB

Open AccessArticle

Energy Market Uncertainty, ESG Performance, and Corporate Financial Stability

by Abdulazeez Y. H. Saif-Alyousfi, Abdullah Alsadan and Ahmed Alrashed

Int. J. Financial Stud. 2026, 14(6), 163; https://doi.org/10.3390/ijfs14060163 - 12 Jun 2026

This study examines how energy market uncertainty affects corporate financial stability and whether environmental, social, and governance (ESG) performance mitigates this relationship. Using a panel of 168 non-financial Australian firms from 2011 to 2023, we employ a two-step system generalized method of moments [...] Read more.

This study examines how energy market uncertainty affects corporate financial stability and whether environmental, social, and governance (ESG) performance mitigates this relationship. Using a panel of 168 non-financial Australian firms from 2011 to 2023, we employ a two-step system generalized method of moments (GMM) with extensive robustness checks. The results reveal three central findings. First, energy market uncertainty exerts a statistically significant and economically meaningful negative effect on corporate financial stability, indicating that heightened energy price volatility amplifies firms’ financial fragility. Second, ESG performance is positively associated with financial stability, suggesting that sustainability-oriented firms exhibit superior risk management and resilience. Third, ESG performance significantly attenuates the adverse impact of energy market uncertainty, providing strong evidence that ESG functions as an effective shock-absorbing mechanism. These findings are robust to alternative measures of financial stability and energy uncertainty, different lag structures, alternative estimation methods, and a wide range of subsample analyses. Further analyses show that the moderating role of ESG is not driven by a single pillar; rather, environmental, social, and governance dimensions jointly enhance firms’ capacity to withstand energy-related shocks. The buffering effect of ESG is stronger among high-ESG firms, in knowledge- and technology-intensive sectors, and during periods of heightened systemic stress such as the COVID-19 pandemic. Overall, the study provides novel firm-level evidence that ESG performance enhances corporate resilience to energy market uncertainty. The findings have important implications for policymakers, investors, and corporate managers seeking to strengthen financial stability in an era of elevated energy volatility and accelerating sustainability transitions. Full article

28 pages, 357 KB

Open AccessArticle

Inflation Hedging Potential of Commodity Indices and Futures for U.S. Investors

by Ramesh Adhikari and YoungHa Ki

Int. J. Financial Stud. 2026, 14(6), 162; https://doi.org/10.3390/ijfs14060162 - 11 Jun 2026

This study provides a comprehensive examination of the inflation-hedging potential of commodity indices and futures for U.S. investors using monthly data spanning July 1959 to December 2025 for 27 individual commodities, and January 1947 to November 2025 for 13 commodity indices. We employ [...] Read more.

This study provides a comprehensive examination of the inflation-hedging potential of commodity indices and futures for U.S. investors using monthly data spanning July 1959 to December 2025 for 27 individual commodities, and January 1947 to November 2025 for 13 commodity indices. We employ multiple complementary methodologies, including optimal hedge ratios with Newey–West standard errors, asymmetric hedging analysis, long-horizon regressions, rolling window stability tests, Granger causality analysis, out-of-sample validation, and Markov-switching vector error correction models (MS-VECM). Our results reveal substantial heterogeneity in hedging effectiveness across commodity sectors. Energy commodities, particularly gasoline and crude oil, demonstrate the strongest inflation-hedging properties with higher hedge ratios and hedging effectiveness. Industrial metals, represented by copper, also provide reliable hedging with stable performance across market conditions. In contrast, precious metals, including gold and silver, show weak contemporaneous hedging ability despite their traditional safe-haven reputation, though they may offer protection during specific market regimes. Agricultural commodities and livestock exhibit minimal or negative hedging effectiveness. The MS-VECM analysis confirms that hedging relationships are time-varying, with effectiveness differing significantly between stable and turbulent market regimes. These findings have important implications for portfolio construction and risk management strategies. Full article

30 pages, 521 KB

Open AccessReview

Earnings Management Revisited: A Synthesis of Theory, Evidence, and Measurement from the 100 Most Influential Studies

by Fadi Al-Asfour

Int. J. Financial Stud. 2026, 14(6), 161; https://doi.org/10.3390/ijfs14060161 - 10 Jun 2026

This paper provides a theory-informed synthesis of earnings management research through a review of the 100 most cited studies in the accounting literature. Rather than functioning as a purely bibliometric review, the study integrates theoretical, empirical, methodological, and survey-based contributions to examine how [...] Read more.

This paper provides a theory-informed synthesis of earnings management research through a review of the 100 most cited studies in the accounting literature. Rather than functioning as a purely bibliometric review, the study integrates theoretical, empirical, methodological, and survey-based contributions to examine how influential research has conceptualized, measured, and interpreted earnings management. Citation data were collected from Web of Science and Google Scholar as of 5 January 2025 using predefined search criteria, filtering procedures, and classification protocols. While citation counts are used to identify influential studies, they are not treated as direct indicators of research quality due to concerns regarding citation bias, publication visibility, and proxy limitations. The review organizes the literature around major themes, including corporate governance, audit quality, managerial incentives, institutional environments, market reactions, and regulatory change. The analysis highlights enduring debates concerning proxy validity, endogeneity and identification challenges, the distinction between statistical detection and economic significance, and the trade-off between accrual-based and real earnings management. The synthesis also incorporates emerging research streams involving family firms, gender diversity, ESG reporting, textual analysis, and AI-assisted analytics within broader agency and institutional theory perspectives. A central contribution of the paper is the development of an integrative analytical framework linking proxy validity, strategic substitution between reporting mechanisms, and institutional constraints within a unified interpretation of earnings management behavior. The review shows that advances in empirical design, textual analysis, machine learning, and predictive analytics extend rather than replace foundational insights, while persistent limitations in causal inference and measurement remain unresolved. Overall, the findings suggest that earnings management is best understood as a strategic response to incentives, monitoring, and institutional constraints rather than as a uniform indicator of opportunistic behavior. The paper concludes by outlining future research directions focused on theory-driven empirical design, methodological triangulation, AI-assisted detection approaches, and improved measurement frameworks across diverse reporting environments. Full article

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18 pages, 1398 KB

Open AccessFeature PaperArticle

Legal Origins, Central Bank Independence and Inflation Stability: Institutional Determinants of Sustainable Monetary Policy

by Viktor Koziuk and Jurij Klapkiv

Int. J. Financial Stud. 2026, 14(6), 160; https://doi.org/10.3390/ijfs14060160 - 10 Jun 2026

This paper examines whether legal origins influence the anti-inflationary effectiveness of central banks. While prior literature emphasizes the role of institutional frameworks in shaping financial systems, less attention has been paid to how legal traditions affect the relationship between central bank independence and [...] Read more.

This paper examines whether legal origins influence the anti-inflationary effectiveness of central banks. While prior literature emphasizes the role of institutional frameworks in shaping financial systems, less attention has been paid to how legal traditions affect the relationship between central bank independence and inflation stability. Using a distance-to-frontier approach, we construct a gap measure between central bank independence and inflation performance. The results indicate that countries with a common law origin exhibit a significantly larger negative gap, suggesting higher anti-inflationary effectiveness despite lower formal central bank independence. In contrast, civil law countries tend to rely more heavily on formal institutional strengthening to achieve comparable inflation outcomes. Regression analysis confirms that the common law proxy remains statistically significant across most model specifications and demonstrates stronger explanatory power than traditional governance indicators such as the rule of law. Full article

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23 pages, 765 KB

Open AccessArticle

Balancing Financial Stability and Credit Access: The Role of Capital Buffers and Bail-In Instruments in Indonesian Banking

by Titi Khoiriah, Rofikoh Rokhim and Buddi Wibowo

Int. J. Financial Stud. 2026, 14(6), 159; https://doi.org/10.3390/ijfs14060159 - 10 Jun 2026

The 2008 financial crisis pushed policymakers around the world to rethink how banks could manage risk, leading to the implementation of stricter regulations, including capital buffers and bail-in mechanisms, aimed at making the financial system more resilient. This study examines how three key [...] Read more.

The 2008 financial crisis pushed policymakers around the world to rethink how banks could manage risk, leading to the implementation of stricter regulations, including capital buffers and bail-in mechanisms, aimed at making the financial system more resilient. This study examines how three key regulations under Basel III, namely, the Countercyclical Capital Buffer (CCyB), the Capital Conservation Buffer (CCB), and the Capital Surcharge (CS), shape lending patterns in Indonesian banks. The effectiveness of the bail-in policy in helping banks strengthen their capital base is also examined. This study uses difference-in-differences analysis on panel data from 97 banks between 2010 and 2024 to examine the impact of stricter capital regulations on banks’ ability to channel credit to the public and business sectors. Basel III aims to strengthen the resilience of banks; however, this policy could impact credit access and banking stability in Indonesia. This study found a positive impact on LDR of large banks after the treatment, which indicates the banks’ efforts to use the funds collected through credit distribution. This study empirically examines the impact of capital buffer regulation and the bail-in instrument in Indonesia as an emerging-market country with a segmented banking sector and banks’ classification by ownership and core capital value. Full article

(This article belongs to the Special Issue Banking Stability, Credit Risk and Financial Resilience in Emerging Markets)

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28 pages, 1432 KB

Open AccessFeature PaperArticle

The Winner’s Curse Reloaded: How Public Subscription Affects IPO First-Day Returns on Hong Kong’s Growth Enterprise Market

by Eddie Y. M. Lam, Joseph K. W. Fung and Calvin Y. C. Lee

Int. J. Financial Stud. 2026, 14(6), 158; https://doi.org/10.3390/ijfs14060158 - 9 Jun 2026

This study revisits the winner’s curse hypothesis in Hong Kong’s Growth Enterprise Market, examining how public retail participation is associated with IPO first-day returns from 1999 to 2023. IPOs allocated through placement-only and placement plus sale methods deliver extraordinary first-day returns of 200.9% [...] Read more.

This study revisits the winner’s curse hypothesis in Hong Kong’s Growth Enterprise Market, examining how public retail participation is associated with IPO first-day returns from 1999 to 2023. IPOs allocated through placement-only and placement plus sale methods deliver extraordinary first-day returns of 200.9% and 231.0%, while those with public subscription dropped to 32.5% and 10.5%. Regression analysis further confirms the negative correlation between retail allocation and first-day returns. The study also underscores policy implications of the 2018 reforms mandating at least 10% public allocation, which coincide with, and may have contributed to, the sharp decline in the number of Hong Kong’s GEM IPOs. Full article

(This article belongs to the Special Issue Advances in Corporate Finance: Theory and Practice)

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20 pages, 5472 KB

Open AccessReview

Corporate Governance and Financial Performance: Bibliometric–Systematic Literature Reviews (B-SLR)

by Birhanu Daba Chali and Vilmos Lakatos

Int. J. Financial Stud. 2026, 14(6), 157; https://doi.org/10.3390/ijfs14060157 - 9 Jun 2026

This bibliometric review examines the relationship between corporate governance and financial performance by synthesising evidence from a broad range of empirical studies. It also identifies key patterns in publication output, citation trends, and scholarly impact within the field. Following the PRISMA guidelines, a [...] Read more.

This bibliometric review examines the relationship between corporate governance and financial performance by synthesising evidence from a broad range of empirical studies. It also identifies key patterns in publication output, citation trends, and scholarly impact within the field. Following the PRISMA guidelines, a bibliometric review was conducted using articles indexed in the Scopus database. A total of 2095 articles published between 2020 and September 2025 were initially retrieved synthesising via a keyword search with the string “Corporate Governance” AND “Financial Performance.” After applying the inclusion criteria (full-text availability, English language, and relevance to the topic), 887 articles were retained for analysis. The findings indicate that most studies report a positive association between corporate governance practices and financial performance. The literature is primarily concentrated around themes such as corporate governance, financial performance, ESG practices, and board characteristics, with the connection between governance and a firm’s financial performance appearing generally positive, albeit context dependent. The results also reveal a growing research emphasis on sustainability-oriented governance, particularly ESG-related factors, reflecting a broader shift in the field towards long-term value creation. This review underscores the importance of nuanced corporate governance frameworks for stakeholders seeking to enhance the sustainability of financial performance, while also deepening understanding of the impact of governance on firm financial performance among both academics and practitioners. In addition, the review offers a broader perspective on the existing literature and identifies several gaps that warrant further investigation. Full article

(This article belongs to the Special Issue Corporate Financial Performance and Sustainability Practices)

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25 pages, 2706 KB

Open AccessArticle

The Interplay of Macroeconomic Sentiments at Financial Markets: A Comparison of S&P Stock and Cryptocurrency Index

by Muhammad Haroon Rasheed, Rabia Farooq, Abdulrahman Alomair and Mohammed Alomair

Int. J. Financial Stud. 2026, 14(6), 156; https://doi.org/10.3390/ijfs14060156 - 9 Jun 2026

The global financial system is constantly evolving through technological integration. This has led to the inception and rise in the cryptocurrency market, opening new avenues of comparative studies on market behavior. Therefore, the current study aimed to identify nuances in stock and cryptocurrency [...] Read more.

The global financial system is constantly evolving through technological integration. This has led to the inception and rise in the cryptocurrency market, opening new avenues of comparative studies on market behavior. Therefore, the current study aimed to identify nuances in stock and cryptocurrency behavior. Based on the socionomic theory of finance, the study is a pioneer in considering the interplay of economic, market, and social media sentiments while providing a comparative view of cryptocurrencies and stocks. The study utilizes data of economic news sentiments, cryptocurrency fear and greed index, CNN fear and greed index, and Twitter sentiments against the movement of S&P Cryptocurrencies and S&P 500 stock index return spanning from 2018 to 2023. The study applied a vector autoregressive-based spillover model to assess the theorized linkage and applied robustness measures, including linear regression and the Granger causality test, for validation. The findings unveil distinct weak and moderate associations of sentiments across cryptocurrencies and stocks, respectively. The former is primarily driven by market sentiments while shaping economic news and social media sentiments. Meanwhile, the findings for stock return movements are found to be significantly associated with economic and market sentiments. This led to the inference that the cryptocurrency environment is an isolated system driven by internal sentiments, while stock markets are more economically integrated, and in both cases, social media sentiments are found to be the receiver of market spillover, weakly influencing economic news. The study is pioneering in its exploration of the interlinkage between selected macroeconomic sentiments; additionally, the comparative findings further add to the existing debate on influence of sentiment across financial markets. The varying realities identified in the findings hold significant practical implications for portfolio optimization, risk assessment and policy making. Full article

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22 pages, 4286 KB

Open AccessArticle

More than a Band-Aid: The Alleviating Effect and Channels of the Industry–Finance Cooperation Pilot Policy on Corporate Financing Constraints

by Yifei Chen and Shuo Wang

Int. J. Financial Stud. 2026, 14(6), 155; https://doi.org/10.3390/ijfs14060155 - 8 Jun 2026

As a major policy initiative, China’s Industry–Finance Cooperation (IFC) Pilot Program aims to address the enduring difficulties enterprises face in securing affordable financing. Despite its intent, the policy’s actual efficacy in alleviating corporate financing constraints remains ambiguous. Based on panel data of Chinese [...] Read more.

As a major policy initiative, China’s Industry–Finance Cooperation (IFC) Pilot Program aims to address the enduring difficulties enterprises face in securing affordable financing. Despite its intent, the policy’s actual efficacy in alleviating corporate financing constraints remains ambiguous. Based on panel data of Chinese A-share listed firms (2011–2023, 19,742 observations), this paper adopts a difference-in-differences (DID) estimator to investigate the effect of China’s IFC Pilot Policy on corporate financing constraints. The results demonstrate that the IFC Pilot Policy significantly alleviates such constraints. Further mechanism and heterogeneity analyses reveal that it operates primarily by reducing earning management, lowering financing costs, and mitigating business risks. This study contributes to the field by establishing the finance-easing effect and risk management mechanism of industry–finance cooperation, offering valuable guidance for policymakers seeking to refine and optimize similar supply-side financial reform measures. Full article

(This article belongs to the Special Issue Advances in Financial Risk Management)

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23 pages, 709 KB

Open AccessArticle

Firm-Level Determinants of the Cost of Debt: New Empirical Evidence from a Bank-Based Economy

by Zouhair Boumlik, Olivier Colot and Badia Oulhadj

Int. J. Financial Stud. 2026, 14(6), 154; https://doi.org/10.3390/ijfs14060154 - 8 Jun 2026

The purpose of this paper is to investigate the firm-level determinants of the cost of debt in a bank-based emerging economy, where debt serves as the primary external financing mechanism, enabling firms to maintain operations, pursue growth opportunities, and ensure long-term financial sustainability. [...] Read more.

The purpose of this paper is to investigate the firm-level determinants of the cost of debt in a bank-based emerging economy, where debt serves as the primary external financing mechanism, enabling firms to maintain operations, pursue growth opportunities, and ensure long-term financial sustainability. Using panel data from non-financial firms listed on the Casablanca Stock Exchange over the period 2018–2024, we document a robust nonlinear relationship between financial leverage and the cost of debt, whereby low and moderate debt levels reduce borrowing costs by signaling creditworthiness and financing capacity, while excessive indebtedness reverses this effect, with an optimal threshold estimated at approximately 34.8% of total assets. Firms with stronger growth prospects further benefit from more favorable financing conditions, as creditors interpret sustained asset expansion as a signal of financial strength and long-term viability. Financial performance is also found to reduce the cost of debt, although this effect is not fully robust to endogeneity controls. In contrast, asset tangibility, firm size, firm age, and liquidity do not emerge as significant determinants, suggesting that creditors in the Moroccan market adopt a financial health-oriented approach when assessing credit risk, placing greater emphasis on leverage and growth prospects than on collateral-based or reputational signals. Overall, the study highlights the coexistence of linear and nonlinear dynamics in debt pricing, thereby enriching the corporate finance literature and providing insights for managers and policymakers seeking to reduce borrowing costs, enhance access to debt financing, and support sustainable value creation. Full article

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19 pages, 351 KB

Open AccessArticle

The Role of Firm Attributes in Shaping Value Relevance: Evidence from Saudi Arabia

by Abdulaziz S. Al Naim, Abdulrahman Alomair, Alan Farley and Helen Yang

Int. J. Financial Stud. 2026, 14(6), 153; https://doi.org/10.3390/ijfs14060153 - 8 Jun 2026

This study examines the moderating effect of firm attributes on the value relevance of accounting information in Saudi Arabia. Using a sample of 630 firm-year observations from 126 Saudi listed firms over 2018–2022, the research evaluates whether audit quality, size, leverage, growth potential, [...] Read more.

This study examines the moderating effect of firm attributes on the value relevance of accounting information in Saudi Arabia. Using a sample of 630 firm-year observations from 126 Saudi listed firms over 2018–2022, the research evaluates whether audit quality, size, leverage, growth potential, board diversity, and profitability complement the valuation role of earnings per share (EPS) and book value per share (BVPS) and if so then which direction of the attribute gave greater value relevance. Results reveal that all the firm attributes tested have a significant moderating effect on value relevance. Lower leverage, higher growth potential, greater board diversity, and profitability all lead to higher predicted market value for given EPS and BVPS. Big 4 audit quality and larger firm size are found to moderate the value relevance of accounting information rather than to influence share price directly. Both attributes strengthen the value relevance of earnings per share (EPS)—the EPS coefficient is significantly higher for firms audited by a Big 4 firm and for larger firms—while weakening the value relevance of book value per share (BVPS), with the BVPS coefficient being significantly lower in both cases. The combined effect is that earnings carry greater pricing weight, and book values carry lesser pricing weight, when audit quality is high and when firms are larger. Results also reveal that cohorts with Big 4 auditor, larger size, lower leverage, higher growth potential, more diverse boards, and profitability all have greater value relevance (higher R²) than cohorts with the alternative for each attribute. Hence, tests provide evidence that these attributes strengthen the association between selective accounting figures (EPS and BVPS) and share prices. The findings contribute to agency, information asymmetry, and value-relevance theory by showing that firm attributes condition the EPS and BVPS pricing weights rather than affecting price directly. The results have implications for regulators and firms seeking to improve financial reporting credibility and usefulness amid concentrated ownership. This study contributes timely empirical evidence on the multifaceted drivers of value relevance in an under-researched Middle Eastern emerging market. Full article

25 pages, 3513 KB

Open AccessArticle

Learning from Hospital Financial Distress Associated with Negative Cash Reserves

by Ramalingam Shanmugam, Michael Mileski, Bradley Beauvais, Zo Ramamonjiarivelo, Jose Betancourt, Gerald Pacheco and Rohit Pradhan

Int. J. Financial Stud. 2026, 14(6), 152; https://doi.org/10.3390/ijfs14060152 - 5 Jun 2026

This study introduces a multivariate distance-based framework for analyzing hospital liquidity stress using three financial indicators: cash reserves, days with negative cash, and accounts receivable. Using Definitive Healthcare data from 2020–2025, the study applies principal component analysis (PCA), Mahalanobis distance, Aitchison distance, and [...] Read more.

This study introduces a multivariate distance-based framework for analyzing hospital liquidity stress using three financial indicators: cash reserves, days with negative cash, and accounts receivable. Using Definitive Healthcare data from 2020–2025, the study applies principal component analysis (PCA), Mahalanobis distance, Aitchison distance, and ternary plots to characterize structural relationships among these liquidity variables. The results show that the first two principal components explain more than 94% of the variation in the transformed variables, indicating that the joint financial structure can be represented in a lower-dimensional space. Beginning in 2023, accounts receivable became more geometrically separated from the cash-based variables, suggesting that revenue-cycle dynamics may have become a more independent dimension of hospital liquidity stress. Importantly, this manuscript does not directly predict hospital closure or bankruptcy because verified event/non-event outcome data are not available in the analytic file. Instead, its contribution is methodological and exploratory: it demonstrates how distance-based and compositional methods can identify structural liquidity instability and potential early warning signals that warrant further validation with longitudinal closure, bankruptcy, or severe-distress outcomes. Full article

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28 pages, 2391 KB

Open AccessFeature PaperArticle

State-Dependent Value of News Sentiment in S&P 500 Direction Forecasting

by Prabin Bajgai and Zhaoxian Zhou

Int. J. Financial Stud. 2026, 14(6), 151; https://doi.org/10.3390/ijfs14060151 - 5 Jun 2026

Next-day S&P 500 direction forecasting matters for allocation, hedging, and risk management because broad-index movements transmit quickly across portfolios. Does structured news sentiment help predict next-day S&P 500 direction? We test four feature sets over 2008–2023 in an ablation sequence: technical indicators only [...] Read more.

Next-day S&P 500 direction forecasting matters for allocation, hedging, and risk management because broad-index movements transmit quickly across portfolios. Does structured news sentiment help predict next-day S&P 500 direction? We test four feature sets over 2008–2023 in an ablation sequence: technical indicators only (Set A), with FinBERT headline sentiment (Set B), with BERTopic topic-linked sentiment (Set C), and with realized-volatility weighting (Set D). This design makes two contributions: it separates the incremental value of increasingly structured sentiment features, and it tests whether sentiment value is state-dependent across volatility regimes. CatBoost, XGBoost, LightGBM, LSTM, and GRU are evaluated under walk-forward cross-validation, nested cross-validation, and formal statistical tests. On the full sample, sentiment does not deliver a measurable forecasting edge. Walk-forward AUCs sit near 0.50 for every feature set, and pairwise tests find no significant differences. However, this average masks a consistent pattern. Sentiment becomes more informative during high-volatility periods, suggesting that its value is state-dependent rather than uniform. Rolling AUC swings from 0.28 to 0.71 depending on the market period. When we split by VIX regime, Set D reaches 0.5684 AUC during high-volatility episodes (

n = 50

, permutation

p = 0.213

) while adding almost nothing in calm markets. Set D also has the lowest fold-to-fold variance and the shallowest drawdown in trading simulations. These results imply that the relevant question is not whether sentiment works in general, but when it does. Sentiment does not help on average; whether it helps during stress is suggestive but unconfirmed and needs more crisis-period data to settle. Full article

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38 pages, 1742 KB

Open AccessFeature PaperArticle

Equity Market Structure and Trading Diversification: Insights from Panel Data, Clustering, and Machine Learning

by Angelo Leogrande, Fabio Anobile, Alberto Costantiello, Carlo Drago and Massimo Arnone

Int. J. Financial Stud. 2026, 14(6), 150; https://doi.org/10.3390/ijfs14060150 - 4 Jun 2026

This paper studies the topic that has been rather less explored until now—the internal diversification of trading. Unlike looking at aggregate measures of financial development such as market capitalization and liquidity, the study focuses on trading diversification, defined as the portion of trading [...] Read more.

This paper studies the topic that has been rather less explored until now—the internal diversification of trading. Unlike looking at aggregate measures of financial development such as market capitalization and liquidity, the study focuses on trading diversification, defined as the portion of trading volume attributed to firms other than the ten most actively traded (VTX). The empirical analysis is based on the World Bank’s Global Financial Development database. It covers an unbalanced cross-country dataset of 2004–2021. Due to limited data availability, the resulting database became smaller and has an unbalanced panel structure. Four main independent variables in the core regression specification are related to financial structure (bank deposits) and financial integration (remittances, international public debt), as well as external measures of financial development (market capitalization, excluding firms within VTX). A broad range of control variables are introduced into the model to account for macroeconomic conditions, financial development, market size, liquidity, and participation. Lagged regressors are introduced to address persistence, delays, and potential endogeneity issues. The methodology relies on panel data econometrics, hierarchical clustering, and machine learning. The findings show that market structure and remittances positively affect trading diversification, whereas banks’ dominance and international public debt contribute to its concentration. The results persist across alternative specifications and robustness tests. The country-level analysis shows a core–periphery pattern, while machine learning demonstrates the critical importance of market structure. Full article

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30 pages, 2825 KB

Open AccessReview

Two Decades of Research on Sustainability and Sovereign Ratings: Trends, Research Puzzles and Future Directions

by Insaf Arfa, Wided Khiari, Houssein Ballouk and Foued Ben Said

Int. J. Financial Stud. 2026, 14(6), 149; https://doi.org/10.3390/ijfs14060149 - 4 Jun 2026

The article provides a systematic and bibliometric review of the literature on the relationship between countries’ ESG scores and their sovereign ratings. The study, which follows the PRISMA 2020 guidelines, employs a bibliometric methodology using a sample of 168 peer-reviewed articles sourced from [...] Read more.

The article provides a systematic and bibliometric review of the literature on the relationship between countries’ ESG scores and their sovereign ratings. The study, which follows the PRISMA 2020 guidelines, employs a bibliometric methodology using a sample of 168 peer-reviewed articles sourced from Scopus and WoS (2006–2024) to analyze the progression of research in this growing area. The analysis shows that academic output is concentrated in Europe (35% of publications) and North America (12% of publications), and that there is increasing interest in incorporating ESG factors into sovereign risk assessment, especially since 2019. The bibliometric mapping shows that themes concerning ESG integration into sovereign risk assessment, rating methodologies, and sustainability-driven financial risk pricing are predominant. Four main research streams are revealed through co-occurrence and clustering analyses, which also highlight an expanding yet disjointed body of knowledge. The results also suggest large differences in how ESG ratings are calculated, which brings into question how comparable and reliable they are for use in empirical studies. This study helps structure the field and proposes a more coherent research agenda by identifying four key research puzzles. Future research should concentrate on enhancing ESG measurement, breaking down its components, and crafting tailored approaches for emerging markets. Full article

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36 pages, 1083 KB

Open AccessArticle

Horizon- and Regime-Dependent Performance of GARCH-Type Models: Evidence from Volatility Forecasting in a Frontier Market

by Abraham Kisembe Wawire, Christine Nanjala Simiyu, Munene Laiboni and Rogers Ochenge

Int. J. Financial Stud. 2026, 14(6), 148; https://doi.org/10.3390/ijfs14060148 - 4 Jun 2026

In frontier markets, financial volatility exhibits long-memory properties and regime-dependent asymmetries that standard linear models do not capture. This leads to inaccuracies in forecasting risk when a single model is applied across regimes. This study investigates the horizon- and regime-dependent performance of volatility [...] Read more.

In frontier markets, financial volatility exhibits long-memory properties and regime-dependent asymmetries that standard linear models do not capture. This leads to inaccuracies in forecasting risk when a single model is applied across regimes. This study investigates the horizon- and regime-dependent performance of volatility models within a horizon- and regime-sensitive evaluation framework that applies single-regime Generalized Autoregressive Conditional Heteroscedasticity (GARCH) variants alongside a Hidden Markov Model (HMM). We evaluate the predictive accuracy of GARCH, Exponential GARCH (EGARCH), Glosten-Jagannathan-Runkle GARCH (GJR-GARCH), Asymmetric Power ARCH (APARCH), Fractionally Integrated GARCH (FIGARCH), and an HMM. Diebold–Mariano test statistics reveal that predictive superiority is sensitive to the chosen benchmark. When EGARCH is the benchmark, results highlight the importance of leverage effects, whereas a FIGARCH benchmark demonstrates that short-memory models are rejected as horizons increase. While short-memory models capture immediate clustering, FIGARCH maintains stable performance via hyperbolic decay. HMM provides a superior in-sample fit by capturing transitions between calm and turbulent regimes. Economic validation through Value-at-Risk (VaR) and Expected Shortfall (ES) backtesting indicates that FIGARCH and APARCH offer more reliable coverage for early warning systems during market stress. The findings emphasize that forecasting in a frontier market requires asset-specific approaches where benchmark selection dictates the interpretation of model superiority. Full article

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22 pages, 398 KB

Open AccessArticle

The Role of Financial Development in Economic Complexity: An Analysis of Asymmetry and Nonlinearity Perspectives

by Clement Olalekan Olaniyi

Int. J. Financial Stud. 2026, 14(6), 147; https://doi.org/10.3390/ijfs14060147 - 3 Jun 2026

This study enhances the knowledge base by providing an empirical inquiry into the asymmetric sensitivity of economic complexity (ECI) to changes in financial development (FD), using data from 30 African countries for the period of 1995–2023. To deliver robust estimates in the face [...] Read more.

This study enhances the knowledge base by providing an empirical inquiry into the asymmetric sensitivity of economic complexity (ECI) to changes in financial development (FD), using data from 30 African countries for the period of 1995–2023. To deliver robust estimates in the face of econometric pitfalls, this study employs estimators such as Hatemi-J data decomposition procedures, robust standard-error regression of Driscoll and Kraay, Feasible Generalised Least Squares, Lewbel’s IV-Two-Stage Least Squares, and Quantile regression via moments. The findings from the linear model indicate that FD enhances ECI upgrades in Africa. The findings provide robust evidence of asymmetric structures in ECI’s sensitivity to changes in FD. It highlights that both positive and negative change components (financial sector expansionary and contractionary policies, respectively) in the FD significantly contribute to ECI upgrades. These findings reveal the obscure aspects of how FD change components contribute differently to ECI upgrades in African countries. These findings highlight that expansionary financial sector policies aid the development of knowledge-based productivity, technology diffusion, and manufacturing capabilities, enabling the production of a chain of high-tech, high-quality, and globally competitive products for export. On the other hand, contractionary financial sector policies in African countries spur cumulative reductions in the channelling of financial resources and other technical support to ECI-impeding initiatives, thereby making more resources available to fund ECI-enhancing initiatives that aid the manufacturing of quality, competitive products for exports. This study draws and outlines relevant policy implications of the findings. Full article

(This article belongs to the Special Issue Advances in Financial Econometrics)

28 pages, 1709 KB

Open AccessArticle

Financial Fraud Detection Based on an Explainable Multi-Layer Framework

by Hui Xia, Yilong Huang, Shanshan Fang, Qin Wang and Jinyu Shen

Int. J. Financial Stud. 2026, 14(6), 146; https://doi.org/10.3390/ijfs14060146 - 3 Jun 2026

Financial information plays a critical role in decision-making for stakeholders, including investors, regulators, and corporate managers. However, financial data is susceptible to deliberate manipulation, where some firms may distort disclosures to mislead stakeholders and potentially engage in fraudulent activities. With the rapid expansion [...] Read more.

Financial information plays a critical role in decision-making for stakeholders, including investors, regulators, and corporate managers. However, financial data is susceptible to deliberate manipulation, where some firms may distort disclosures to mislead stakeholders and potentially engage in fraudulent activities. With the rapid expansion of capital markets and advancements in information technology, financial fraud has grown increasingly sophisticated and concealed. As a result, conventional detection methods often struggle to identify emerging fraud patterns, rendering fraud prevention increasingly complex and less effective. In this paper, we propose a novel multi-layer architecture model that integrates business, internal control, and strategic features. Our framework leverages multi-layer neural networks for effective feature extraction and concatenates their outputs for classification. Furthermore, we develop this framework by incorporating explainable artificial intelligence (XAI) techniques to enhance interpretability. Empirical results show that the proposed framework provides competitive discriminatory ability and produces conservative, low-false-alarm fraud warnings under the full multi-layer feature setting while also offering interpretable insights for the diverse needs of stakeholders. This study contributes to the development of fraud detection tools that are both operationally useful and interpretable. Full article

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