Journal of Risk and Financial Management

We evaluated the contributions of ten intrinsic and extrinsic factors readily available from website data to individual home sale prices for three major U.S. cities using a P-spline generalized additive model (GAM). We identified the relative significance of each factor by evaluating the change in the adjusted $R^2$ value resulting from its removal from the model. We combined this with information from correlation matrices to identify the added predictive value of a factor. For these three cities, the tests revealed that living area and location (latitude, longitude) had the strongest impact on explained variance, and each factor independently added predictive value. Relative impacts of the other factors were city-dependent. We utilized this information to develop an improved GAM with superior concurvity values. The improved GAM required the use of linear orthogonalization of factors combined with smoothing functions based on tensor products of correlated factors.

This study empirically examines the joint effects of innovation strategy intensity and gender diversity in boardrooms on firms’ environmental, social, and governance (ESG) performance. Drawing on the Resource-Based View and Upper Echelons Theory, we analyse a panel of financial and non-financial firms listed in the FTSE 350 on the London Stock Exchange over the period 2012–2023. Using panel regression models, we find that innovation intensity is positively associated with ESG performance across both sectors. Board gender diversity also exhibits a positive relationship with ESG performance; however, the effect is economically weaker and statistically insignificant for non-financial firms. The proportion of women employees shows sector-specific effects, being negatively related to ESG performance in financial firms but positively related in non-financial firms. While women in management positions are positively associated with ESG performance in nested models, this relationship weakens in full specifications, suggesting the influence of competing organisational factors. Notably, the presence of female executives consistently enhances ESG performance across models. Overall, the findings highlight the importance of gender diversity in senior leadership for advancing ESG outcomes and raise questions about whether conventional innovation metrics adequately capture sustainability-oriented innovation. The study offers important theoretical and managerial implications.

In an increasingly volatile global financial environment, strong institutions and sound governance are essential for safeguarding banking stability and mitigating systemic risks in emerging economies. Across the 11 emerging economies examined, weaknesses in institutional quality and inconsistencies in governance frameworks continue to elevate credit risk and undermine financial resilience. This study investigates the effects of institutional quality (IQ) and corporate governance (CGG) on bank stability, drawing on the Financial Stability and Risk Management (FSRM) theory, which highlights robust institutions, effective risk oversight, and sound governance as core determinants of financial system strength. Using dynamic panel data from 2011–2024, the study applies the generalized method of moments (GMM) approach to assess bank performance through non-performing loans (NPLs) and Z-Score as key dependent variables. The model incorporates IQ, CGG, bank-specific characteristics (bank assets, capital adequacy, cost-to-income ratio), and macroeconomic indicators (GDP, inflation, exchange rate, real interest rate) as explanatory factors, addressing endogeneity, unobserved heterogeneity, and persistence in banking outcomes. The results reveal strong persistence in NPLs (lag = 0.965, p < 0.01) and Z-Score (lag = 0.920, p < 0.01), indicating notable path dependence in bank performance. Institutional quality significantly enhances bank stability (Z-Score coefficient = 0.073, p = 0.040), while BA shows a negative but insignificant effect (coefficient = 0.005, p = 0.432), implying that rapid asset growth without prudent risk management may weaken resilience. CGG shows negative but insignificant effects, while macroeconomic factors also appear insignificant, indicating limited short-term impact. Countries with stronger institutions, such as South Korea, display lower NPLs and higher stability, whereas weaker institutional environments like Iran, Pakistan, and Bangladesh face higher credit risk and reduced stability. Overall, the study highlights IQ and prudent balance sheet management as key to stronger bank stability, urging policymakers to reinforce institutional frameworks, tighten regulatory discipline, and ensure controlled asset growth to reduce systemic vulnerabilities.