International Journal of Financial Studies

Research

26 pages, 1228 KB

Open AccessArticle

Inclusive Growth of Russian Companies as a Driver of Socio-Economic Development: Insights from the Metallurgical Sector

by Irina Ivashkovskaya, Sergei Grishunin, Elena Makeeva and Egor Pashkov

Int. J. Financial Stud. 2026, 14(5), 120; https://doi.org/10.3390/ijfs14050120 - 6 May 2026

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Inclusive growth has increasingly emerged as a central framework for understanding how firms can align economic performance with social inclusion and environmental responsibility, particularly in emerging markets characterized by institutional volatility. In the context of geopolitical shocks and economic sanctions, such as those [...] Read more.

Inclusive growth has increasingly emerged as a central framework for understanding how firms can align economic performance with social inclusion and environmental responsibility, particularly in emerging markets characterized by institutional volatility. In the context of geopolitical shocks and economic sanctions, such as those faced by Russia during 2022–2023, the normative meaning of inclusive growth is redefined toward prioritizing employment stability, industrial continuity, and strategic resilience at the firm level. This study aims to develop a systematic and transparent firm-level measure of inclusive growth that integrates strategic resilience with long-term business model potential. It further seeks to empirically assess cross-firm heterogeneity in inclusive growth performance within the Russian metallurgical and mining sector under geopolitical disruption conditions. This study constructs a composite Inclusive Growth Index using publicly available financial and non-financial disclosures, combining indicator normalization, variance-based weighting, and geometric aggregation. The index is applied to a panel of major Russian metallurgical and mining companies for the period 2021–2024 to evaluate their strategic resilience, business model potential, and industry-level dynamics under sanctions. The results reveal substantial heterogeneity in inclusive growth performance across firms, with higher index values being associated with stronger strategic resilience and more stable operational outcomes. The analysis further identifies a divergence between improving resilience and declining business model potential during 2022–2024, indicating a trade-off between short-term stabilization and long-term inclusive growth capabilities under the geopolitical stress. The findings suggest that inclusive growth at the firm level in a sanctioned emerging market context follows a distinct sovereignty-oriented logic in which employment stability and operational continuity take precedence over long-term innovation and governance enhancement. Overall, the proposed Inclusive Growth Index provides a robust analytical framework for assessing corporate adaptation to structural shocks and informing managerial and policy decisions in emerging market economies. Full article

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

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44 pages, 2046 KB

Open AccessArticle

From ESG Alignment to Value: Post-Merger ESG Dynamics and Market Valuation in Global M&As

by Selin Kamiloğlu and Elif Güneren Genç

Int. J. Financial Stud. 2026, 14(3), 58; https://doi.org/10.3390/ijfs14030058 - 2 Mar 2026

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Abstract

This study examines whether targets’ environmental, social, and governance (ESG) performance is associated with acquirers’ post-merger ESG outcomes and market valuation over the merger year and the subsequent two years. We treat controversies-adjusted ESG scores (ESGC) as outcome-based indicators. Using a global panel [...] Read more.

This study examines whether targets’ environmental, social, and governance (ESG) performance is associated with acquirers’ post-merger ESG outcomes and market valuation over the merger year and the subsequent two years. We treat controversies-adjusted ESG scores (ESGC) as outcome-based indicators. Using a global panel of 4572 acquirer-year observations from 47 countries between 2002 and 2023, we analyze the association between targets’ ESGC and acquirers’ post-merger ESG trajectories and market value. Tobit estimations trace combined and pillar-level ESG dynamics over the merger year and the first two post-merger years. The results indicate that target ESG performance is associated with persistent improvements in acquirer sustainability, with the strongest effects in social and environmental dimensions and more gradual adjustments in governance, reflecting institutional and organizational integration complexity. Heterogeneity analyses reveal that cross-border within-industry acquisitions generate the largest ESG gains, whereas domestic within-industry transactions are associated with ESG deterioration. Regarding market valuation, acquirers’ own ESG performance is reflected in Tobin’s Q, while target ESG becomes value-relevant with a one-year lag, highlighting a two-stage valuation mechanism linked to post-merger absorption and institutionalization. Adopting a multi-period perspective, the study shows that ESGC track post-merger sustainability outcomes in ways consistent with learning, institutionalization, and legitimacy-based interpretations. Full article

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

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19 pages, 444 KB

Open AccessArticle

Board Gender Diversity and the Value Effect of Climate Change Reporting: Empirical Evidence from an Emerging Market

by Musaab Alnaim and Abdelmoneim Bahyeldin Mohamed Metwally

Int. J. Financial Stud. 2026, 14(3), 57; https://doi.org/10.3390/ijfs14030057 - 2 Mar 2026

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Abstract

The current research examines the impact of climate change disclosure (CCD) on firm value (FV) of Egyptian listed non-financial companies. The current research also investigates the moderating role of board gender diversity (BGD). The study sample incorporates Egyptian non-financial companies indexed in EGX [...] Read more.

The current research examines the impact of climate change disclosure (CCD) on firm value (FV) of Egyptian listed non-financial companies. The current research also investigates the moderating role of board gender diversity (BGD). The study sample incorporates Egyptian non-financial companies indexed in EGX 100 whose reports were available from 2018 to 2023. The final sample comprises 82 companies with 492 observations. Statistical analysis was conducted using a POLS and Fixed Effects Model, GMM, and the 2SLS method to address potential endogeneity and dynamic panel concerns. The results revealed a positive and significant impact of CCD on FV. Furthermore, BGD had a positive and significant moderating impact as BGD enhanced the relationship between CCD and FV. Moreover, the critical mass (CM) analysis of female representation revealed that the number of females on the board significantly moderates the CCD-FV relationship; as CM increases, the effect on the CCD-FV relationship becomes stronger. Although advanced panel techniques and instrumental variable approaches are used to mitigate identification concerns, the results should be interpreted in light of the observational nature of the data and the reliance on disclosure-based proxies. These findings are significant for governments, regulators, investors, and company leaders because the moderating role of BGD demonstrates how board governance affects firm value, particularly in emerging markets. This research adds to the academic discussion by emphasizing the beneficial effects of both BGD and CCD on FV, with a particular focus on developing economies. Full article

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

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27 pages, 1175 KB

Open AccessArticle

ESG Integration and the Financial Stability Trade-Off in Emerging Markets

by Luis Ángel Meneses Cerón, Julián Mauricio Gómez López, Yudith Cristina Caicedo Domínguez and Juana Patricia Diaz Olaya

Int. J. Financial Stud. 2026, 14(2), 26; https://doi.org/10.3390/ijfs14020026 - 2 Feb 2026

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Abstract

This study investigates the impact of ESG practices on the financial stability in a multisector sample of 86 publicly listed Brazilian firms, focusing on the Weighted Average Cost of Capital (WACC) and Altman Z-Score (AZS) as a proxy for insolvency risk. Using Bloomberg [...] Read more.

This study investigates the impact of ESG practices on the financial stability in a multisector sample of 86 publicly listed Brazilian firms, focusing on the Weighted Average Cost of Capital (WACC) and Altman Z-Score (AZS) as a proxy for insolvency risk. Using Bloomberg data from 2010 to 2021, this research applies advanced econometric methods, including Ordinary Least Squares (OLS), Vector Autoregression (VAR) and Fully Modified Ordinary Least Squares (FMOLS), to capture both short- and long-term effects. The findings reveal a financial learning curve: in the short term, ESG adoption can temporarily increase WACC and insolvency risk due to initial implementation costs, whereas in the long term, it reduces financial risk, enhances operational efficiency, and strengthens corporate resilience. These results underscore ESG practices as a strategic determinant of long-term value creation and financial stability. This study offers actionable insights for policymakers, investors, and corporate leaders aiming to align sustainability initiatives with financial performance in emerging market contexts. Full article

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

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19 pages, 567 KB

Open AccessArticle

The Impact of Philanthropic Donations on Corporate Future Stock Returns Under the Sustainable Development Philosophy—From the Perspective of ESG Rating Constraints

by Yunqiao Chen, Yawen Wang and Cunjing Liu

Int. J. Financial Stud. 2026, 14(1), 5; https://doi.org/10.3390/ijfs14010005 - 1 Jan 2026

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Abstract

Fulfilling social responsibilities within the ESG framework has gradually become a core competitive advantage for sustainable corporate development that also serves to enhance future returns. Charitable donations constitute a crucial method through which corporations fulfill social responsibilities and represent a primary indicator in [...] Read more.

Fulfilling social responsibilities within the ESG framework has gradually become a core competitive advantage for sustainable corporate development that also serves to enhance future returns. Charitable donations constitute a crucial method through which corporations fulfill social responsibilities and represent a primary indicator in ESG ratings, ratings that in turn have an impact on future stock market returns. This study, based on data from listed companies on the Shanghai and Shenzhen stock exchanges from 2018 to 2022, employed a fixed effects model to analyze the influence of charitable donations on future returns under ESG rating constraints. The research reveals that ESG rating constraints can reduce speculative charitable donations and help to optimize the peak value of a company’s future returns. After a series of robustness tests, including using the one-period lagged explanatory variable, changing the measurement method of the explained variable, replacing the ESG with the assignment method for value determination, and considering the impact of outliers, the conclusion still holds. Heterogeneity analysis indicates that in state-owned enterprises, companies in a recessionary phase, and industries with lower levels of competition, a decelerating effect of ESG ratings on the impact of charitable donations on future returns dominates. Conversely, for mature companies, ESG ratings accelerate the positive effect of charitable donations on future returns. This paper contributes to the ESG economic consequences literature by offering empirical evidence on corporate social responsibility implementation under sustainability strategies. Full article

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

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22 pages, 631 KB

Open AccessEditor’s ChoiceArticle

Executive Pay-Rank Inversion and M&A Decisions: Evidence from Chinese State-Owned Enterprises

by Shaoni Zhou, Qiyue Du and Zhitian Zhou

Int. J. Financial Stud. 2025, 13(4), 239; https://doi.org/10.3390/ijfs13040239 - 15 Dec 2025

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Abstract

In typical executive compensation structures, higher corporate ranks are associated with greater pay. However, the reform of state-owned enterprises (SOEs) in China introduced strict salary caps for top executives, while lower-tier managers continued to receive market-based compensation, resulting in a phenomenon of pay-rank [...] Read more.

In typical executive compensation structures, higher corporate ranks are associated with greater pay. However, the reform of state-owned enterprises (SOEs) in China introduced strict salary caps for top executives, while lower-tier managers continued to receive market-based compensation, resulting in a phenomenon of pay-rank inversion—where subordinates earn more than their superiors. Leveraging this anomaly as a quasi-natural experiment, this study investigates the specific impact and underlying mechanism of pay-rank inversion on mergers and acquisitions (M&A) decisions and subsequent value realization within Chinese SOEs, thereby addressing the broad academic discourse on optimal executive compensation design. Employing a difference-in-differences (DID) approach with panel data spanning from 2007 to 2022, our analysis reveals that pay-rank inversion significantly reduces firms’ M&A intentions. Mechanistic analysis suggests that this negative effect arises primarily from diminished executive risk-taking. Furthermore, we find that the adverse impact is attenuated when CEOs possess longer tenures or receive equity-based incentives, but it ultimately undermines the realization of value post-M&A. These findings highlight the unintended consequences of high-level compensation reforms and emphasize the critical role of a well-structured pay hierarchy in sustaining executive incentives for strategic decision-making. Despite providing robust evidence, this study is subject to limitations, including its focus on measuring inversion only between the first and second management tiers. Future research should extend the analysis to the pay inversion between the listed firm and its controlling SOE group and explore alternative causal pathways beyond risk-taking, such as CEO work motivation, to deepen the understanding of high-level executive behavior. Full article

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

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20 pages, 413 KB

Open AccessArticle

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

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

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

Cited by 1 | Viewed by 2412

Abstract

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

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

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

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14 pages, 1268 KB

Open AccessArticle

Debt, Equity, and the Pecking Order: Evidence from Financing Decisions of Dividend-Paying Firms

by Konstantinos Kakouris and Dimitrios Psychoyios

Int. J. Financial Stud. 2025, 13(3), 161; https://doi.org/10.3390/ijfs13030161 - 1 Sep 2025

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Abstract

This study investigates whether, and to what extent, dividend-paying firms follow pecking order behavior when altering their capital structure. Using a panel of 3173 U.S. firms from 1960 to 2020 (49,424 firm-year observations), we examine four financing activities: equity and debt issuance under [...] Read more.

This study investigates whether, and to what extent, dividend-paying firms follow pecking order behavior when altering their capital structure. Using a panel of 3173 U.S. firms from 1960 to 2020 (49,424 firm-year observations), we examine four financing activities: equity and debt issuance under a financing deficit, and equity repurchases and debt redemptions under a financing surplus. We find that firms generally follow the pecking order when issuing or redeeming debt but deviate from it when issuing or repurchasing equity. Adherence to the pecking order also varies with issuance and repurchase size. Very large debt issues and redemptions are associated with lower pecking order coefficients, while large equity issues and repurchases are associated with higher pecking order coefficients, although equity coefficients remain below 0.7. Our findings provide novel evidence of how financing choices, along with issuance and repurchase magnitudes, shape pecking order behavior among dividend-paying firms, offering new insights into capital structure literature. Full article

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

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