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Emerging Trends and Innovations in Corporate Finance and Governance
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Emerging Trends and Innovations in Corporate Finance and Governance

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Business and Entrepreneurship".

Deadline for manuscript submissions: 31 May 2026 | Viewed by 89534

Special Issue Editor

Prof. Dr. Ştefan Cristian Gherghina

E-Mail Website
Guest Editor
Department of Finance, Faculty of Finance and Banking, Bucharest University of Economic Studies, 010552 Bucharest, Romania
Interests: corporate finance; corporate governance; quantitative finance; sustainable development
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

The field of corporate finance and governance is continuously evolving, with emerging trends and innovations reshaping how companies operate and interact with stakeholders. One key trend is the growing importance of Environmental, Social, and Governance (ESG) factors in decision making. Investors and consumers are increasingly prioritizing companies that demonstrate a commitment to sustainability, ethical practices, and social responsibility, leading firms to integrate ESG criteria into their financial strategies and corporate governance frameworks. Another significant development is the rise of digital transformation, particularly through the adoption of advanced technologies like artificial intelligence (AI), machine learning, and blockchain. These innovations are revolutionizing financial reporting, risk management, and transaction processes, providing more efficiency, transparency, and real-time decision making. Blockchain, in particular, is enhancing security in financial transactions and enabling decentralized finance (DeFi), which is challenging traditional banking systems. In the realm of corporate governance, there is a push towards greater transparency and accountability. Shareholder activism is on the rise, with investors pushing for more influence over company decisions, particularly related to executive compensation, diversity, and long-term strategic direction. This shift is driving companies to adopt more inclusive and responsive governance structures, with an emphasis on board diversity and stakeholder engagement. Furthermore, the rise of remote work and the changing nature of global business have prompted companies to rethink their financial strategies. Digital tools for virtual collaboration and management, coupled with the globalization of markets, are pushing businesses to develop more agile financial models that can adapt to rapidly changing environments. Therefore, the convergence of technological advancements, sustainability concerns, and evolving governance practices is redefining corporate finance, leading to a more transparent, efficient, and socially responsible business landscape. These changes are likely to continue influencing how companies operate and interact with stakeholders in the future.

The topics could cover a broad range of contemporary issues that blend theoretical perspectives and empirical research, not limited to the role of corporate governance in promoting sustainability, FinTech and the disruption of traditional corporate finance, blockchain technology in corporate governance, AI and machine learning in financial decision making, governance structures and CEO pay–performance sensitivity, corporate governance in the wake of financial crises, and behavioral biases in corporate decision making.

Prof. Dr. Ştefan Cristian Gherghina
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • corporate finance
  • financial innovation
  • sustainable finance
  • ESG (environmental, social, and governance)
  • shareholder value
  • corporate social responsibility (CSR)
  • FinTech
  • blockchain in finance
  • digital transformation in governance
  • risk management
  • corporate restructuring
  • investor behavior
  • executive compensation
  • financial regulations
  • debt and equity markets
  • mergers and acquisitions (M&A)
  • corporate transparency
  • ownership structures
  • financial reporting
  • corporate ethics
  • alternative investments
  • behavioral finance
  • innovative financial models
  • impact investing

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Published Papers (28 papers)

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Research

22 pages, 697 KB  
Article
Breaking Barriers: How Fintech Expands Access to Finance?
by Andromahi Kufo, Ardit Gjeçi, Gentjan Çera and Kserdi Cenolli
J. Risk Financial Manag. 2026, 19(4), 297; https://doi.org/10.3390/jrfm19040297 - 20 Apr 2026
Viewed by 996
Abstract
Financial technologies (Fintech) have rapidly reshaped access to financial services, particularly in developing countries where traditional banking remains limited. This study investigates fintech’s role in advancing financial inclusion by analyzing panel data from 89 developing economies gathered from Global Findex reports (2011–2021), complemented [...] Read more.
Financial technologies (Fintech) have rapidly reshaped access to financial services, particularly in developing countries where traditional banking remains limited. This study investigates fintech’s role in advancing financial inclusion by analyzing panel data from 89 developing economies gathered from Global Findex reports (2011–2021), complemented by International Monetary Fund (IMF), UNU-WIDER, and PRIO datasets. We applied a random-effects regression model and GMM, incorporating fintech adoption alongside macroeconomic and institutional variables such as education, governance quality, and trade openness. Our results show that fintech is the most significant driver of financial inclusion, especially in expanding account ownership, with education and institutional quality further enhancing outcomes. Conversely, we show that population growth and income disparities constrain progress, while government expenditure and GDP growth display mixed effects. We also find that fintech reduces transaction costs and barriers, yet its impact depends on digital literacy, infrastructure, and governance. In conclusion, our findings highlight that fintech represents a transformative but unevenly utilized tool, capable of fostering broader economic participation and reducing inequality when paired with supportive policies and institutional frameworks. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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17 pages, 293 KB  
Article
ESG Disclosure and Financial Analysts’ Accuracy in Saudi Arabia: The Moderating Role of the 2021 ESG Guidelines
by Taoufik Elkemali
J. Risk Financial Manag. 2026, 19(4), 275; https://doi.org/10.3390/jrfm19040275 - 9 Apr 2026
Cited by 1 | Viewed by 470
Abstract
This study explores how environmental, social and governance (ESG) disclosure relates to analysts’ forecast accuracy in Saudi Arabia, focusing on the ESG disclosure guidelines introduced by the Saudi Stock Exchange (Tadawul) in 2021. It suggests that ESG disclosure enhances corporate transparency, decreases information [...] Read more.
This study explores how environmental, social and governance (ESG) disclosure relates to analysts’ forecast accuracy in Saudi Arabia, focusing on the ESG disclosure guidelines introduced by the Saudi Stock Exchange (Tadawul) in 2021. It suggests that ESG disclosure enhances corporate transparency, decreases information asymmetry, and provides analysts with additional non-financial information that can improve the earnings forecast quality. Furthermore, the introduction of ESG guidelines is likely to enhance the consistency and reliability of sustainability reporting, thereby strengthening the informational environment of the capital market. Based on a sample of listed firms from 2017 to 2024 and employing panel regression techniques, including fixed-effects and two-step system generalized method of moments (GMM) estimations, the results indicate that a higher ESG disclosure is associated with lower analyst forecast errors, reflecting an improved forecast accuracy. The findings also reveal that the forecast accuracy increased following the ESG guidelines’ introduction and that the connection between ESG disclosure and analysts’ forecast accuracy became greater after the implementation of the guidelines. Our results demonstrate the informational value of ESG disclosure and suggest that ESG reporting initiatives can boost the quality of financial information in emerging markets. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
23 pages, 873 KB  
Article
When AI Disclosure Intensifies: Nonlinear Effects on Governance-Risk Disclosures in Selected U.S. Public Firms
by Marco I. Bonelli
J. Risk Financial Manag. 2026, 19(4), 271; https://doi.org/10.3390/jrfm19040271 - 8 Apr 2026
Viewed by 913
Abstract
Artificial intelligence (AI) has become increasingly prominent in corporate disclosure, yet its relationship with governance-risk disclosure remains unclear. This study examines whether AI disclosure intensity is nonlinearly associated with governance-risk disclosures among selected U.S. public firms. Drawing on competing governance mechanisms, it argues [...] Read more.
Artificial intelligence (AI) has become increasingly prominent in corporate disclosure, yet its relationship with governance-risk disclosure remains unclear. This study examines whether AI disclosure intensity is nonlinearly associated with governance-risk disclosures among selected U.S. public firms. Drawing on competing governance mechanisms, it argues that rising AI disclosure may initially coincide with heightened control and accountability concerns during periods of organizational and technological transition, but at higher levels may be associated with more stable governance-reporting environments. Using a balanced panel of 53 selected large U.S. public firms observed from 2020 to 2024, the study measures AI disclosure intensity through dictionary-based counts of AI-related terminology in annual Form 10-K filings and captures governance-risk disclosure through references to internal-control weaknesses, restatements, non-reliance statements, and regulatory investigations. Firm and year fixed-effects models with a quadratic specification indicate a robust inverted U-shaped association: governance-risk disclosures rise at low to moderate levels of AI disclosure intensity and decline at higher levels. The findings support a stage-dependent interpretation of AI-related disclosure patterns while underscoring that the evidence is disclosure-based rather than a direct measure of AI governance capability or implementation quality. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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31 pages, 817 KB  
Article
Managerial Tone, Information Complexity and Abnormal Returns to Company Investment Announcements
by Kuburat Olayinka Lawal, Edward Jones and Jia Lu
J. Risk Financial Manag. 2026, 19(3), 184; https://doi.org/10.3390/jrfm19030184 - 4 Mar 2026
Viewed by 1101
Abstract
This paper examines the stock market’s valuation of the tone and information complexity of new investment decisions. Abnormal returns are estimated for a sample of 517 investment announcements for listed UK firms for the period 2013 to 2021. We test whether the tone [...] Read more.
This paper examines the stock market’s valuation of the tone and information complexity of new investment decisions. Abnormal returns are estimated for a sample of 517 investment announcements for listed UK firms for the period 2013 to 2021. We test whether the tone conveyed in investment announcements is positively viewed by market participants and examine the relationship between information complexity and abnormal returns to investment announcements. The relationship between positive tone and abnormal returns to investment announcements is positive and significant. Further, the data sample is categorized and tested for 90 announcements with a sustainability agenda (sustainable investment) and 427 announcements without a sustainability agenda (non-sustainable investment) and shows that the stock market reacts positively to the positive tone of sustainable investments. Information complexity is negatively associated with abnormal returns for both sets of investments suggesting that higher complexity reduces the stock market’s valuation of investment announcements. The findings suggest that the positive market valuation of managerial tone may lead to price discovery which investors can use to evaluate the prospects of investment decisions. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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24 pages, 365 KB  
Article
The Effects of Green Innovation on Stock Liquidity: Evidence from US Companies
by Xinze Qian, Haizhi Wang, Yiqiao Xu and Richard Zhang
J. Risk Financial Manag. 2026, 19(2), 147; https://doi.org/10.3390/jrfm19020147 - 14 Feb 2026
Viewed by 706
Abstract
This study investigates whether green innovation (GI) enhances stock liquidity by mitigating information asymmetry. Using a hand-collected panel of 4752 unique U.S. publicly listed firms from 2010 to 2024, we employ OLS regressions to show that GI is associated with significantly higher stock [...] Read more.
This study investigates whether green innovation (GI) enhances stock liquidity by mitigating information asymmetry. Using a hand-collected panel of 4752 unique U.S. publicly listed firms from 2010 to 2024, we employ OLS regressions to show that GI is associated with significantly higher stock liquidity. Our empirical evidence indicates that the relation between GI and market liquidity is highly contingent on firms’ market and accounting environments. Specifically, the liquidity-enhancing effect of GI is stronger for firms facing higher exposure to climate change risk and environmental regulatory uncertainty, where green signaling is most valuable. Furthermore, we find that a strong stakeholder orientation both stimulates green innovation and amplifies its positive impact on stock liquidity. Finally, the liquidity benefits of GI are more pronounced among firms adopting conservative financial reporting practices, suggesting that reporting conservatism mitigates the endogenous risks associated with GI and enhances the credibility of innovation-related disclosures. Overall, our findings establish a robust link between product market sustainability and financial market efficiency, highlighting the role of green innovation in reducing information frictions. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
31 pages, 299 KB  
Article
Diversity at the Top: How Ethnic Composition of Management Influences Corporate Performance in U.S. Companies
by Silvia-Andreea Peliu
J. Risk Financial Manag. 2026, 19(2), 114; https://doi.org/10.3390/jrfm19020114 - 3 Feb 2026
Viewed by 747
Abstract
This paper aims to investigate the impact of ethnic diversity among employees and managers on firm performance, focusing on return on assets and return on equity. The analysis is conducted on a sample of 391 U.S. companies over a five-year period, 2020–2024. The [...] Read more.
This paper aims to investigate the impact of ethnic diversity among employees and managers on firm performance, focusing on return on assets and return on equity. The analysis is conducted on a sample of 391 U.S. companies over a five-year period, 2020–2024. The quantitative framework includes a wide range of indicators related to financial performance, ethnic diversity among employees, ethnic categories of managers, and other control variables. The research methodology employs the ordinary least squares (OLS) method to highlight these effects, using fixed-effects and random-effects regression models, both linear and nonlinear. By estimating the regression models, the empirical results support the hypotheses established in the current state of the literature, indicating that ethnic diversity affects firm performance in a mixed manner, with both positive and negative effects on ROA and ROE. These findings are particularly relevant for practitioners, given the need to integrate minority representation into performance assessment, risk evaluation, and decision-making processes. Furthermore, regarding the female component within firms, this dimension contributes to the promotion of sustainability and a sound ESG-oriented approach. Consequently, social factors such as ethnicity can influence companies’ financial performance and shape how firms are perceived by investors. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
69 pages, 510 KB  
Article
Exploring Gender Diversity, Board Heterogeneity, and Corporate Risk Outcomes: Evidence from STOXX600 Firms
by Nicoleta Tiloiu
J. Risk Financial Manag. 2026, 19(2), 113; https://doi.org/10.3390/jrfm19020113 - 3 Feb 2026
Cited by 1 | Viewed by 761
Abstract
This study examines the evolving role of board heterogeneity, including gender diversity, board attributes, and governance practices, in shaping corporate risk outcomes. In mature governance settings, corporate risk management emerges from the interaction between board structure, independence, leadership arrangements, and boardroom composition, such [...] Read more.
This study examines the evolving role of board heterogeneity, including gender diversity, board attributes, and governance practices, in shaping corporate risk outcomes. In mature governance settings, corporate risk management emerges from the interaction between board structure, independence, leadership arrangements, and boardroom composition, such that gender diversity in isolation may no longer fully capture board effectiveness. We argue that while gender diversity remains relevant, its explanatory power operates in conjunction with other board characteristics that condition the quality of decision-making in already well-functioning boards. Using multiple regression estimations on a sample of STOXX600 firms, our main outcomes show that in mature European boards gender diversity (1) improves the operational efficiency, conditional by model specification, (2) increase debts level to finance growth, thereby enabling more rapid expansion than would otherwise be possible, without pushing to extensive borrowing, while reduce leverage starting 33% (3) prevents corporate failure starting 40% women on board (4) gender-diverse boards increase liquidity when critical mass is met (33%). Overall, the findings suggest that gender-diverse boards contribute to a reconfiguration of firms’ risk exposure across operational, financial, liquidity, and failure dimensions, rather than a uniform reduction in risk. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
20 pages, 658 KB  
Article
Climate Performance and Firm Valuation: A Meta-Analysis of Tobin’s Q in the Post-IPCC AR6 Era
by Akanksha Akanksha and Thirupathi Manickam
J. Risk Financial Manag. 2026, 19(2), 112; https://doi.org/10.3390/jrfm19020112 - 3 Feb 2026
Viewed by 1064
Abstract
This study examines whether corporate climate performance is reflected in firm valuation by synthesising recent empirical evidence, using Tobin’s Q as a forward-looking indicator of market expectations. Employing a random-effects meta-analysis of 30 peer-reviewed studies published between 2020 and 2025 across multiple industries [...] Read more.
This study examines whether corporate climate performance is reflected in firm valuation by synthesising recent empirical evidence, using Tobin’s Q as a forward-looking indicator of market expectations. Employing a random-effects meta-analysis of 30 peer-reviewed studies published between 2020 and 2025 across multiple industries and regions, the findings reveal a modest yet statistically significant positive association between stronger climate performance and higher market valuations, suggesting that investors increasingly incorporate climate-related information into firm pricing. Contrary to prevailing assumptions in the literature, proactive climate strategies, such as emissions-reduction initiatives, do not systematically generate greater valuation benefits than disclosure-oriented approaches; both exhibit comparable positive effects. Similarly, valuation outcomes do not differ materially between self-reported and externally verified climate data. Meta-regression analysis identifies data source as the only statistically significant moderator, although its influence remains nuanced. Overall, the results indicate that climate performance enhances firm valuation in a context-dependent manner, challenging the view that only proactive strategies or externally verified data are uniquely rewarded by financial markets. The study contributes to the sustainable and corporate finance literature by clarifying how capital markets price climate-related corporate behaviour under heterogeneous strategic responses. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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28 pages, 1066 KB  
Article
Breaking Free from Managerial Myopia: Government and Corporate Governance as Catalysts for Firm Innovation
by Junchang Pan, Hamish Anderson, Junshi Chen and Jing Chi
J. Risk Financial Manag. 2026, 19(1), 94; https://doi.org/10.3390/jrfm19010094 - 22 Jan 2026
Viewed by 1140
Abstract
Employing textual analysis of the “short-term vision” vocabulary in annual reports, we investigate the impact of managerial myopia on firm innovation and performance. Our results indicate that managerial myopia hampers innovation, and this result remains robust across a battery of robustness checks. Managerial [...] Read more.
Employing textual analysis of the “short-term vision” vocabulary in annual reports, we investigate the impact of managerial myopia on firm innovation and performance. Our results indicate that managerial myopia hampers innovation, and this result remains robust across a battery of robustness checks. Managerial myopia also weakens the positive impact of innovation on firm growth, and value in the long run. We find that state ownership and good corporate governance mitigate the negative impact of managerial myopia. The evidence supports the upper echelon theory and time orientation theoretical framework. This paper enriches the research on the influencing factors of corporate innovation, by providing evidence that people’s perception of time affects decision making and provides support for government ownership and strong corporate governance practices in alleviating the negative consequences of managerial myopia. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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20 pages, 666 KB  
Article
The Effects of Fintech Adoption on CEO Compensation: Evidence from JSE-Listed Banks
by Rudo Rachel Marozva and Frans Maloa
J. Risk Financial Manag. 2026, 19(1), 56; https://doi.org/10.3390/jrfm19010056 - 8 Jan 2026
Cited by 2 | Viewed by 1105
Abstract
Over the last decade, there has been a significant increase in banks’ investment in technology, alongside a substantial rise in CEO compensation. Research on executive compensation has primarily focused on traditional performance metrics, such as return on assets and return on equity, as [...] Read more.
Over the last decade, there has been a significant increase in banks’ investment in technology, alongside a substantial rise in CEO compensation. Research on executive compensation has primarily focused on traditional performance metrics, such as return on assets and return on equity, as well as governance factors. Investigating the nexus between fintech adoption and CEO compensation introduces a new perspective on the determinants of CEO pay and how technological transformation influences executive remuneration structures. This study investigated the relationship between Chief Executive remuneration and fintech adoption among banks listed on the Johannesburg Stock Exchange. There is a lack of literature on the impact of technology adoption on CEO compensation in developing and emerging economies. The quantitative longitudinal study, conducted over 15 years from 2010 to 2024, collected secondary data from the annual reports of six banks and the IRESS database. A panel data fixed effects regression analysis was employed to analyze the data. CEO compensation included both salary and total compensation. Fintech variables used for the study included automated teller machines, mobile banking, and internet banking. The findings revealed a positive relationship between CEO salary and the rollout of ATMs and mobile banking, while an inverse relationship was noted between salary and internet banking. Similarly, total compensation showed an inverse relationship with the adoption of ATMs and internet banking, whereas mobile banking had a positive effect on total compensation. Understanding how technology impacts CEO compensation can help remuneration committees ensure that CEO pay is linked to the value that infrastructure investments bring to an organization, rather than simply the number of innovations introduced. This understanding will also help solve the principal-agent problem, as it will ensure technology innovations that enhance firm performance are rewarded. In the context of emerging markets, the study’s findings suggest that organizations should recognize and formalize pay linked to digital transformation, rather than focusing solely on short-term financial metrics. This also suggests the need to develop guidelines for executive remuneration disclosure related to the technology sector. The close connection between fintech adoption and technological and regulatory risks highlights the need to balance incentive structures that reward innovation with risk-adjusted performance measures. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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12 pages, 264 KB  
Article
Emerging Use of AI and Its Relationship to Corporate Finance and Governance
by John De Leon, John E. Gamble, Katherine Taken Smith and Lawrence Murphy Smith
J. Risk Financial Manag. 2026, 19(1), 52; https://doi.org/10.3390/jrfm19010052 - 8 Jan 2026
Cited by 2 | Viewed by 1646
Abstract
Artificial intelligence (AI) use has become a major emerging trend in corporate finance and governance. AI is used for a variety of business tasks, such as assessing credit risk, document analysis, corporate default forecasting, and detecting fraud. This study first provides an overview [...] Read more.
Artificial intelligence (AI) use has become a major emerging trend in corporate finance and governance. AI is used for a variety of business tasks, such as assessing credit risk, document analysis, corporate default forecasting, and detecting fraud. This study first provides an overview of the development of AI applications related to financial reporting and corporate governance and then examines the financial performance of firms rated highly for their use of AI. AI applications can improve risk management, auditing processes, financial distress, fraud detection, and board performance. The findings can help directors, managers, financial personnel, and others interested in AI. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
13 pages, 227 KB  
Article
Investment in Internal Accounting Control Personnel and Corporate Bond Yield Spreads: Evidence from South Korea
by Hyunjung Choi
J. Risk Financial Manag. 2026, 19(1), 49; https://doi.org/10.3390/jrfm19010049 - 7 Jan 2026
Viewed by 515
Abstract
Internal accounting control personnel constitute the operational foundation through which firms ensure the accuracy and reliability of financial reporting, yet their relevance to capital market outcomes remains insufficiently documented. This study evaluates whether investment in internal accounting control personnel is incorporated into corporate [...] Read more.
Internal accounting control personnel constitute the operational foundation through which firms ensure the accuracy and reliability of financial reporting, yet their relevance to capital market outcomes remains insufficiently documented. This study evaluates whether investment in internal accounting control personnel is incorporated into corporate bond pricing by considering both the quantitative dimension of staffing levels and the qualitative dimension of personnel expertise. Corporate bond issuance data are merged with mandatory disclosures on internal accounting control personnel for manufacturing firms listed on the Korea Exchange between 2011 and 2021. The analysis shows a significantly negative association between internal accounting control personnel and corporate bond yield spreads, with personnel expertise further reinforcing this relationship. These patterns are consistent with the view that enhanced monitoring capacity and stronger reporting credibility reduce information asymmetry and perceived default risk among bond investors. The evidence positions internal accounting control personnel as an operational and signaling indicator of internal control effectiveness reflected in debt market pricing and suggests that investment in internal control staff extends beyond compliance to produce measurable financial benefits through lower borrowing costs. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
17 pages, 618 KB  
Article
Unmasking Short-Term Wealth Effects of M&A Deals in India: A Multi-Model Analysis
by Debi Prasad Satapathy, Tarun Kumar Soni and Ashok Kumar Mishra
J. Risk Financial Manag. 2025, 18(12), 718; https://doi.org/10.3390/jrfm18120718 - 16 Dec 2025
Viewed by 1039
Abstract
This study analyzes the short-term capital market wealth effects of acquiring companies in India. The study has taken 449 cases of merger and acquisition announcement effects on shareholder wealth by using multiple models, including the market model, CAPM, and matched firm analysis. This [...] Read more.
This study analyzes the short-term capital market wealth effects of acquiring companies in India. The study has taken 449 cases of merger and acquisition announcement effects on shareholder wealth by using multiple models, including the market model, CAPM, and matched firm analysis. This study documents that the acquiring firm generates a positive and significant return in the pre-announcement period, suggesting possible market anticipation or possible market reaction, and that the acquiring firm tends to be negative in the post-announcement period. We also find that shareholder wealth is eroded by acquiring firms during the announcement period. These results are consistent with agency theory, which explains how managerial motivations and information asymmetries contribute to the observed erosion of shareholder wealth around M&A announcements, and signaling theory, which suggests that market reactions reflect investors’ interpretations of the quality of the signals. The results of this study point towards improving transparency and compliance standards in the case of Indian M&As, which can help in preventing speculative trading and information asymmetry, which can skew market reactions. The results also highlight the importance of adopting rigorous due diligence and enhanced transparency procedures by firms regarding the strategic rationale for mergers, which could help mitigate negative post-announcement returns and market skepticism. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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24 pages, 1039 KB  
Article
False Stability? How Greenwashing Shapes Firm Risk in the Short and Long Run
by Rahma Mirza, Tanvir Bhuiyan and Ariful Hoque
J. Risk Financial Manag. 2025, 18(12), 691; https://doi.org/10.3390/jrfm18120691 - 3 Dec 2025
Cited by 2 | Viewed by 2384
Abstract
This study examines the relationship between greenwashing and firm risk among listed Australian firms from 2014 to 2023. We construct a firm-level greenwashing score as the residual based on regressions of composite ESG on Scope 1–2 CO2 emissions; positive residuals indicate overstated [...] Read more.
This study examines the relationship between greenwashing and firm risk among listed Australian firms from 2014 to 2023. We construct a firm-level greenwashing score as the residual based on regressions of composite ESG on Scope 1–2 CO2 emissions; positive residuals indicate overstated sustainability relative to emissions. Using realized volatility as a measure of firm risk and applying the Generalized Method of Moments (GMM) regression framework, we uncover three key findings. First, contemporaneous greenwashing significantly lowers volatility, which is consistent with legitimacy and signalling theory, as overstated ESG credentials create a temporary perception of stability. Second, the risk-reducing effect is strongest with a one-period lag, likely reflecting delayed ESG and emissions reporting cycles and investor reaction times. Third, by the two-period lag, the effect reduces in magnitude, suggesting that markets eventually recognize the misalignment between ESG claims and environmental performance. Robustness checks with the E-pillar confirm these dynamics. Additional tests excluding the COVID-19 period (2020 and 2021) reveal that the risk-mitigating effects of greenwashing are even stronger during normal market conditions, implying that pandemic-related volatility may have muted the signalling power of ESG narratives. While firm fundamentals (e.g., book-to-market) explain part of risk variation, greenwashing-driven effects are economically meaningful yet short-lived. The findings underscore that greenwashing offers only temporary risk mitigation; as transparency improves and regulatory enforcement strengthens, firms relying on inflated ESG narratives face diminishing benefits and potential long-term risk penalties. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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15 pages, 380 KB  
Article
Corporate Bitcoin Holdings: A Cross-Sectional Analysis of Sectoral Risk, Regulatory Influence, and Decentralized Governance
by Amirreza Kazemikhasragh
J. Risk Financial Manag. 2025, 18(11), 642; https://doi.org/10.3390/jrfm18110642 - 14 Nov 2025
Cited by 2 | Viewed by 4575
Abstract
The integration of Bitcoin into corporate treasuries constitutes a critical strategic choice, motivated by its capacity to bolster liquidity and serve as an inflation hedge, while simultaneously being encumbered by pronounced financial volatility and regulatory ambiguity. This investigation examines sectoral variations in Bitcoin [...] Read more.
The integration of Bitcoin into corporate treasuries constitutes a critical strategic choice, motivated by its capacity to bolster liquidity and serve as an inflation hedge, while simultaneously being encumbered by pronounced financial volatility and regulatory ambiguity. This investigation examines sectoral variations in Bitcoin adoption, with particular attention to the manner in which financial risks, regulatory structures, and decentralized governance mechanisms shape corporate conduct across the technology, cryptocurrency mining, retail, healthcare, and e-commerce sectors. Drawing on a cross-sectional dataset encompassing 102 publicly traded firms collectively holding 1,001,861 BTC, the analysis employs MAD-based volatility, Firth logistic regression incorporating a U.S. regulatory dummy to account for the BITCOIN Act of 2025, and heatmap visualization to evaluate risk profiles and adoption patterns. Results demonstrate marked sectoral disparities: the technology and mining sectors command predominant holdings yet confront heightened risk exposure, whereas retail and healthcare sectors proceed with greater caution, guided by considerations of cost-value efficiency and regulatory adherence. The U.S. regulatory dummy is significant, indicating the BITCOIN Act facilitates high Bitcoin adoption, while recent transactional activity is marginally significant. The heatmap accentuates the technology sector’s pre-eminence in aggregate Bitcoin reserves and illuminates the differential influence of regulatory frameworks in non-U.S. jurisdictions. Anchored in Institutional Theory, the Technology Acceptance Model, and Transaction Cost Economics, the study advances the field by quantifying sector-specific risks and visually representing regulatory impacts, thereby furnishing actionable insights for treasury risk management and regulatory policy formulation within a decentralized financial ecosystem. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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30 pages, 546 KB  
Article
Beyond the Hype: What Drives the Profitability of S&P 500 Technology Firms?
by Georgiana Danilov
J. Risk Financial Manag. 2025, 18(11), 641; https://doi.org/10.3390/jrfm18110641 - 13 Nov 2025
Viewed by 1834
Abstract
The corporate finance field is inherently engaging, with a strong focus on factors influencing various performance indicators. This study analyzes 66 companies from the Information and Technology sector, all part of the Standard and Poor’s 500 index, over a 22-year period from 2003 [...] Read more.
The corporate finance field is inherently engaging, with a strong focus on factors influencing various performance indicators. This study analyzes 66 companies from the Information and Technology sector, all part of the Standard and Poor’s 500 index, over a 22-year period from 2003 to 2024. I applied linear, nonlinear, and interaction-variable models to identify the causal relationship between profitability and key influencing factors. The results reveal that firm size, sales growth rate, current ratio, long-term debt to total capital, free cash flow, asset turnover, receivable turnover, number of board meetings, percentage of women on the board, CEO age, audit committee independence, the presence of compensation and nomination committees, and a pandemic dummy variable all had positive effects on performance. In contrast, firm age, dividend payout ratio, effective tax rate, board size, CEO duality, and the presence of a corporate social responsibility committee negatively impacted firm performance. This research also explores corporate governance by evaluating the role of regulations and internal policies designed to promote financial transparency and protect shareholders’ interests. Additionally, it highlights the importance of board independence, the effectiveness of specialized committees, and the role of ethical leadership in driving long-term corporate success. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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32 pages, 1340 KB  
Article
Beyond Quotas: The Influence of Board Gender Diversity on Capital Structure in Firms from Latin America and the Caribbean
by Juan David González-Ruiz, Nini Johana Marín-Rodríguez and Camila Ospina-Patiño
J. Risk Financial Manag. 2025, 18(9), 505; https://doi.org/10.3390/jrfm18090505 - 11 Sep 2025
Viewed by 1847
Abstract
Board gender diversity (BGD) has gained attention as a governance mechanism that may influence corporate financial decisions. However, empirical evidence from Latin America and the Caribbean (LAC) remains limited despite the region’s significant gender disparities in corporate leadership and distinct institutional characteristics. This [...] Read more.
Board gender diversity (BGD) has gained attention as a governance mechanism that may influence corporate financial decisions. However, empirical evidence from Latin America and the Caribbean (LAC) remains limited despite the region’s significant gender disparities in corporate leadership and distinct institutional characteristics. This study examines how BGD affects capital structure decisions in LAC firms, drawing on agency theory and resource dependency theory. We analyze a panel dataset of 403 firms from 2015 to 2022, sourced from the London Stock Exchange Group database, using fixed effects models with Driscoll–Kraay standard errors to control for firm heterogeneity and econometric concerns. Results show that BGD is significantly and negatively associated with leverage ratios, with a one percentage point increase in female board representation corresponding to a 0.15 to 0.25 percentage point decrease in debt-to-capital ratios. This relationship is robust across multiple specifications and exhibits threshold effects, with stronger impacts when female representation reaches 20% or higher. The negative association is more pronounced for larger firms, consistent with enhanced governance benefits in complex organizations. Our findings suggest that gender-diverse boards exercise more effective oversight of financial decisions, leading to more conservative capital structures in emerging markets where governance mechanisms are particularly important for firm credibility and stakeholder confidence. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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26 pages, 484 KB  
Article
Exploring Governance Failures in Australia: ESG Pillar-Level Analysis of Default Risk Mediated by Trade Credit Financing
by Thuong Thi Le, Tanvir Bhuiyan, Thi Le and Ariful Hoque
J. Risk Financial Manag. 2025, 18(8), 464; https://doi.org/10.3390/jrfm18080464 - 20 Aug 2025
Cited by 1 | Viewed by 3438
Abstract
This study examines the impact of overall Environmental, Social, and Governance (ESG) performance and its pillars on the default probability of Australian-listed firms. Using a panel dataset spanning 2014 to 2022 and applying the Generalized Method of Moments (GMM) regression, we find that [...] Read more.
This study examines the impact of overall Environmental, Social, and Governance (ESG) performance and its pillars on the default probability of Australian-listed firms. Using a panel dataset spanning 2014 to 2022 and applying the Generalized Method of Moments (GMM) regression, we find that firms with higher ESG scores exhibit a significantly lower likelihood of default. Disaggregating the ESG components reveals that the Environmental and Social pillars have a negative association with default risk, suggesting a risk-mitigating effect. In contrast, the Governance pillar demonstrates a positive relationship with default probability, which may reflect potential greenwashing behavior or an excessive focus on formal governance mechanisms at the expense of operational and financial performance. Furthermore, the analysis identifies trade credit financing (TCF) as a partial mediator in the ESG–default risk nexus, indicating that firms with stronger ESG profiles rely less on external short-term financing, thereby reducing their default risk. These findings provide valuable insights for corporate management, investors, regulators, and policymakers seeking to enhance financial resilience through sustainable practices. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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24 pages, 759 KB  
Article
The Mediating Role of the Firm Image in the Relationship Between Integrated Reporting and Firm Value in GCC Countries
by Mohammed Saleem Alatawi, Zaidi Mat Daud and Jalila Johari
J. Risk Financial Manag. 2025, 18(8), 438; https://doi.org/10.3390/jrfm18080438 - 6 Aug 2025
Cited by 1 | Viewed by 2411
Abstract
In the context of the GCC, the adoption of integrated reporting (IR) remains limited, due in part to weak regulatory enforcement, a lack of awareness of the strategic benefits of IR, and a strong focus on short-term financial results. This limited reporting context [...] Read more.
In the context of the GCC, the adoption of integrated reporting (IR) remains limited, due in part to weak regulatory enforcement, a lack of awareness of the strategic benefits of IR, and a strong focus on short-term financial results. This limited reporting context presents a significant challenge for firms to credibly demonstrate their value to the market and attract potential investors, thus communicating long-term value. Given these limitations, this study considers how IR contributes to firm value, but also examines the mediating role that firm image (FI) plays in this relationship as a reputational construct representing stakeholder perspectives of a firm’s transparency and accountability. The research employs a quantitative methodology, analysing secondary data from corporate governance and integrated reports spanning 2017–2018 to 2022–2023. Findings indicate a positive and robust relationship between integrated reporting and the firm’s value, which was assessed using Tobin’s Q. The findings highlight the significant mediating role of firm image, illustrating how IR practices, via increased transparency, accountability, and sustainability, enhance firm value. This study provides significant insights for researchers, policymakers, and corporate managers, highlighting the strategic relevance of IR in the GCC region. The findings demonstrate that integrated reporting improves transparency, accountability, and sustainability, thereby assisting corporate managers in utilising IR to enhance firm image and facilitate value creation. Policymakers can utilise these insights to develop regulatory frameworks that promote integrated reporting practices, thereby enhancing transparency and sustainable growth within the corporate sector. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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25 pages, 527 KB  
Article
Do Board Characteristics Influence Leverage and Debt Maturity? Empirical Evidence from a Transitional Economy
by Adja Hamida, Olivier Colot and Rabah Kechad
J. Risk Financial Manag. 2025, 18(8), 418; https://doi.org/10.3390/jrfm18080418 - 28 Jul 2025
Cited by 1 | Viewed by 1956
Abstract
This study examines the impact of board characteristics on capital structure decisions in the context of a transition economy, focusing on Algeria, where governance institutions are underdeveloped and the financial market remains immature. Using the Generalized Method of Moments (GMM) on a panel [...] Read more.
This study examines the impact of board characteristics on capital structure decisions in the context of a transition economy, focusing on Algeria, where governance institutions are underdeveloped and the financial market remains immature. Using the Generalized Method of Moments (GMM) on a panel dataset of 120 firms over the period 2015 to 2019, we identify a U-shaped relationship between board size and leverage, and an inverted U-shaped relationship between board size and debt maturity. Furthermore, increased nationality diversity on boards is found to significantly reduce debt maturity. These findings highlight the critical role of board composition in shaping corporate financing strategies in transition economies and provide novel insights into corporate governance dynamics in a relatively underexplored institutional context. The results are particularly relevant for national entities such as COSOB and Hawkama El Djazaïr and may guide banking sector practices by promoting the integration of board governance criteria into credit evaluation processes. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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21 pages, 1175 KB  
Article
The Effects of ESG Scores and ESG Momentum on Stock Returns and Volatility: Evidence from U.S. Markets
by Luis Jacob Escobar-Saldívar, Dacio Villarreal-Samaniego and Roberto J. Santillán-Salgado
J. Risk Financial Manag. 2025, 18(7), 367; https://doi.org/10.3390/jrfm18070367 - 2 Jul 2025
Cited by 5 | Viewed by 18087
Abstract
The impact of Environmental, Social, and Governance (ESG) scores on financial performance remains a subject of debate, as the literature reports mixed evidence regarding their effect on stock returns. This research aims to examine the relationship between ESG ratings and the change in [...] Read more.
The impact of Environmental, Social, and Governance (ESG) scores on financial performance remains a subject of debate, as the literature reports mixed evidence regarding their effect on stock returns. This research aims to examine the relationship between ESG ratings and the change in ESG scores, or ESG Momentum, concerning both returns and risk of a large sample of stocks traded on U.S. exchanges. The study examined a sample of 3856 stocks traded on U.S. exchanges, considering 20 years of quarterly data from December 2002 to December 2022. We applied multi-factor models and tested them through pooled ordinary, fixed effects, and random effects panel regression methods. Our results show negative relationships between ESG scores and stock returns and between ESG Momentum and volatility. Contrarily, we find positive associations between ESG Momentum and returns and between ESG scores and volatility. Although high ESG scores are generally associated with lower long-term stock returns, an increase in a company’s ESG rating tends to translate into immediate positive returns and reduced risk. Accordingly, investors may benefit from strategies that focus on companies actively improving their ESG performance, while firms themselves stand to gain by signaling continuous advancement in ESG-related areas. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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26 pages, 2184 KB  
Article
Analyzing the Criteria of Private Equity Investment in Emerging Markets: The Case of Tunisia
by Amira Neffati, Wided Khiari, Azhaar Lajmi and Farah Mejri
J. Risk Financial Manag. 2025, 18(7), 358; https://doi.org/10.3390/jrfm18070358 - 1 Jul 2025
Cited by 1 | Viewed by 3426
Abstract
Restrictive conditions that financial institutions require on credit allocation remain the main constraints to developing and creating new businesses. In this context, the concept of private equity came to fill this problem. However, because it is a riskier business, investors thoroughly assess before [...] Read more.
Restrictive conditions that financial institutions require on credit allocation remain the main constraints to developing and creating new businesses. In this context, the concept of private equity came to fill this problem. However, because it is a riskier business, investors thoroughly assess before investing in a firm’s capital. This work aims to analyze the criteria of private equity investment and explore how Tunisian private equity investors make investment decisions. The methodology applied aligns with prior works studying investment criteria used by private equity investors. Results show that 100% of investors prefer to invest in firms that aim to achieve some growth and are in the development phase. In addition, under informational asymmetry between entrepreneurs and investors, the latter place greater importance on the business plan, information gathered during interviews with promoters, and information on the products. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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18 pages, 434 KB  
Article
Extending the Resource-Based View of Social Entrepreneurship: The Role of Artificial Intelligence in Scaling Impact
by Steven William Day, Howard Jean-Denis and Erastus Karanja
J. Risk Financial Manag. 2025, 18(7), 341; https://doi.org/10.3390/jrfm18070341 - 20 Jun 2025
Cited by 3 | Viewed by 6056
Abstract
This paper extends the resource-based view (RBV) of social entrepreneurship by introducing artificial intelligence (AI) as a dynamic, integrative capability that enhances the acquisition and optimization of four foundational forms of capital: human, social, political, and financial. While social ventures have long faced [...] Read more.
This paper extends the resource-based view (RBV) of social entrepreneurship by introducing artificial intelligence (AI) as a dynamic, integrative capability that enhances the acquisition and optimization of four foundational forms of capital: human, social, political, and financial. While social ventures have long faced constraints in scaling impact due to resource limitations and institutional barriers, AI technologies—such as predictive analytics, machine learning, and natural language processing—offer new pathways for improving operational efficiency, stakeholder engagement, advocacy strategies, and financial sustainability. Through the development of a conceptual model and a series of theoretical propositions, this study positions AI as a transformative force that not only strengthens individual resource domains but also enables synergistic feedback loops across them. In doing so, the paper contributes to emerging debates on technology adoption in hybrid organizations, scalability in resource-constrained contexts, and the evolution of strategic management theory in the digital age. Practical implications are outlined for social entrepreneurs, policymakers, and funders seeking to responsibly integrate AI into social impact ecosystems, and future research directions are proposed to empirically test the framework across sectors and global settings. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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19 pages, 443 KB  
Article
The Impact of Audit Committee Oversight on Investor Rationality, Price Expectations, Human Capital, and Research and Development Expense
by Rebecca Abraham, Venkata Mrudula Bhimavarapu and Hani El-Chaarani
J. Risk Financial Manag. 2025, 18(6), 321; https://doi.org/10.3390/jrfm18060321 - 11 Jun 2025
Cited by 2 | Viewed by 3861
Abstract
Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, [...] Read more.
Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, and research and development expenses. It extends the literature to non-financial outcomes of audit committee oversight. The literature thus far has focused on the financial effects of audit committee oversight, such as return on assets, return on equity, risk, debt capacity, and firm value. Data was collected from 588 publicly traded firms in the U.S. pharmaceutical industry and energy industry from 2010 to 2022. Audit oversight was measured by the novel measurement of the frequency of the term ‘audit committee’ in annual reports and Form 10Ks from the SeekEdgar database. COMPUSTAT provided the remainder of the data. Panel Data fixed-effects models were used to analyze the data. Audit committee oversight significantly increased investor rationality, significantly reduced price expectations, and significantly increased human capital investment. An inverted U-shaped relationship occurred for audit committee oversight and research and development expenses, with audit oversight first increasing research and development expenses, then decreasing them. The study makes several contributions. First, the study uses a novel measure of audit oversight. Second, the study predicts the effect of audit committee oversight on unexplored non-financial measures, such as human capital and research and development expense. Third, the study offers a current test of the Miller model, as the last tests were performed over 20 years ago. Fourth, the study examines the impact of auditing on market measures that have not been explored in the literature, such as investor rationality and short selling. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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17 pages, 4962 KB  
Article
Examining the Research Taxonomy of Credit Default Swaps Literature Through Bibliographic Network Mapping
by Tabassum, Jasvinder Sidhu and Najul Laskar
J. Risk Financial Manag. 2025, 18(6), 303; https://doi.org/10.3390/jrfm18060303 - 4 Jun 2025
Viewed by 2073
Abstract
This study presents a bibliometric analysis, using spatial approach, of 943 articles from 2003 to March 2025 showing the growing importance of CDSs in the literature and their role in credit risk management. The Web of Science’s Core Collection database was used for [...] Read more.
This study presents a bibliometric analysis, using spatial approach, of 943 articles from 2003 to March 2025 showing the growing importance of CDSs in the literature and their role in credit risk management. The Web of Science’s Core Collection database was used for bibliometric mapping. The bibliographic data were grouped and analyzed using VOSviewer to create network visualization maps that included country-wise, document-wise, and source-wise citations analysis, bibliographic coupling, and the co-occurrence of keywords. Subsequently, significant terms were identified through the analyses where risk assessment, risk management, and credit derivatives were found to be the most used keywords. Further, USA turns out to be the country where the most research was published on CDSs with maximum citations, highlighting the growing popularity of this research topic in this region. In addition, bibliographic coupling appears to capture information from 13 clusters formed during the analysis on bibliographically linked documents with their link strength. The bibliometric analysis of the CDS literature illustrates the intellectual framework of research on this topic, traces the progression of the research topic over time, and identifies the areas where this research field might develop in the future. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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19 pages, 308 KB  
Article
The Impact of CEO and Firm Attributes on ESG Performance: Evidence from an Emerging Market
by Fahad Alrobai and Maged M. Albaz
J. Risk Financial Manag. 2025, 18(5), 268; https://doi.org/10.3390/jrfm18050268 - 15 May 2025
Cited by 5 | Viewed by 6315
Abstract
The research aims to unveil the impact of CEO traits and firm attributes on corporate environmental, social, and governance (ESG) performance within the Egyptian context as an emerging market. Using the quantitative research approach, we analyzed a panel of data from 43 listed [...] Read more.
The research aims to unveil the impact of CEO traits and firm attributes on corporate environmental, social, and governance (ESG) performance within the Egyptian context as an emerging market. Using the quantitative research approach, we analyzed a panel of data from 43 listed firms in the S&P/EGX ESG index from 2014 to 2022 through three statistical models to examine how CEO power, confidence, and tenure influence corporate sustainability practices. Our findings reveal that CEO power and confidence influence ESG performance and shape the firm’s strategy. However, there is no significant influence related to CEO tenure. Moreover, we found mixed evidence regarding the impact of firm financial attributes, such as the positive impact of firm size and operating cash flow on ESG performance and the negative impact of firm listing tenure. Our findings contribute to the literature by adding new empirical evidence in this arguable area from an emerging market and provide new insights into the significant influence of the firm’s first man (CEO) in shaping its sustainability practices, especially ESG. In addition, it gives professional authorities and policymakers insights into the nexus between the CEO and the firm’s ESG strategies, disclosure, and performance. Moreover, it can motivate future research to re-examine the role of CEO traits in shaping ESG performance in other countries to create a comprehensive understanding of this knowledge field. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
19 pages, 292 KB  
Article
Voluntary Audits of Nonfinancial Disclosure and Earnings Quality
by Sunita S. Rao, Carlos Ernesto Zambrana Roman and Norma Juma
J. Risk Financial Manag. 2025, 18(5), 256; https://doi.org/10.3390/jrfm18050256 - 8 May 2025
Cited by 1 | Viewed by 2436
Abstract
We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as [...] Read more.
We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as “greenwashing”. To credibly signal the CSR report is reliable, a firm can incur the additional costs to voluntarily obtain assurance. Our results show that strong corporate governance plays a crucial role in limiting earnings management. The most consistent improvements in earnings quality occur when firms combine strong governance with CSR assurance from a non-accounting provider (NonACCT). The combination of strong governance and NonACCT assurance appears to be mutually reinforcing, suggesting a symbolic legitimacy strategy that is also substantively effective. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
30 pages, 635 KB  
Article
Unlock Your Firm Value with ESG Performance? Evidence from ASX-Listed Companies
by Jingyan Zhou, Wen Hua Sharpe, Abdel K. Halabi, Helen Song and Sisira Colombage
J. Risk Financial Manag. 2025, 18(5), 247; https://doi.org/10.3390/jrfm18050247 - 1 May 2025
Cited by 3 | Viewed by 9476
Abstract
A research gap exists concerning the moderating roles of corporate governance mechanisms on the nexus of environmental, social, and governance (ESG) performance and firm value. This study aims to address this gap in the Australian corporate context. We examine whether ESG performance can [...] Read more.
A research gap exists concerning the moderating roles of corporate governance mechanisms on the nexus of environmental, social, and governance (ESG) performance and firm value. This study aims to address this gap in the Australian corporate context. We examine whether ESG performance can enhance firm value and whether this relationship is moderated by the corporate governance mechanisms to balance stakeholder interests. Drawing on a sample from the ASX, we find that while high ESG performance can increase firm value, this effect diminishes in the presence of the large number of supply chain contracts. We further discovered a negative moderating effect of board independence and audit quality on ESG performance and firm value. Our findings highlight the contingent nature of ESG value creation, indicating that while ESG activities can enhance firm value, their impact depends on firms’ governance context and contractual arrangements that shape shareholders’ outcomes collectively. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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