Search Results (10)

This paper presents a review of globalization by examining its main characteristics, types, and the advantages and disadvantages associated with each type with regard to people, firms, and nations. It synthesizes the literature and provides a structured analysis of the multifaceted impacts of globalization. The review combines the theoretical constructs of globalization characteristics and types, with empirical observations of the contributions and challenges of each type of globalization—based on multiple levels of an analysis—including micro, meso, and macro. Each type of globalization is analyzed to identify how it contributes to economic growth, cultural exchange, political cooperation, technological advancement, and environmental collaboration, while also presenting significant challenges, such as inequality, cultural homogenization, political dependency, digital divide, and ecological degradation. Understanding the multidimensional nature of globalization allows policymakers, business leaders, and individuals to navigate its complexities more effectively, while recognizing both the opportunities and risks. Although much of the literature examined globalization through a single lens, this paper offers an integrative and comparative perspective across the various dimensions. By categorizing the impacts into various levels according to type, it contributes to a more comprehensive and nuanced understanding of globalization. Full article

This study examines the impact of military cultural atmosphere on corporate innovation risk-taking within the unique institutional context of China. Leveraging an unbalanced panel dataset of 3506 Chinese A-share listed companies, comprising 15,381 observations from 2010 to 2022, this empirical analysis captures dynamic firm-level changes over time. Using ordinary least squares (OLS) regression to assess the effects of military cultural atmosphere and two-stage least squares (2SLS) to address potential endogeneity concerns, this study ensures robust results. The findings reveal that military cultural atmosphere, characterized by discipline, hierarchy, and collective responsibility, significantly enhances firms’ propensity for innovation risk-taking. Additionally, political connections emerge as a key mediating factor in this relationship, while perceived power within the organization moderates the mediation effect, exhibiting a negative moderation. These results underscore the critical role of military backgrounds among senior executives in shaping corporate culture and strategic decision-making, particularly in China’s policy-driven market environment. This study offers valuable insights for fostering long-term corporate resilience and strategic innovation, while also contributing to a deeper understanding of the interaction between corporate culture and innovation across different institutional settings. Full article

Political risk, one of the most significant uncertainty shocks, affects firms’ future attitudes toward risks and plays a crucial role in their decision making. A stock price crash risk is a classical topic in financial markets; therefore, this paper probes the relationship between firm-level political risk and stock price crash risk based on a sample of Chinese listed firms from 2011 to 2020. This paper collects the MD&A textual material of Chinese listed firms and calculates the firm-level political risk of Chinese listed firms. Our results show that a firm’s stock price crash risk is positively associated with its firm-level political risk exposure. Our findings hold after conducting various robustness tests, including instrument variable regression and altering the measurement of stock price crash risk. Further discussion reveals that political involvement mitigates the positive effect of firm-level political risk on the risk of a stock price jump. Full article

Corruption influences firm behavior and performance even in relatively transparent countries like the United States. In this paper, we examine whether corruption at the state level affected bank failures during the subprime mortgage crisis. Our measure of corruption is the number of corruption convictions of government employees (adjusted for population) based on the Public Integrity Section (PIN) reports from the Department of Justice, capturing the degree of “public corruption” in the US. After disaggregating the data based on bank size and geography, we find that corruption is associated with more bank failures for smaller banks and fewer bank failures for banks located in the South. This research marks a pioneering attempt to examine the connection between corruption and bank failures while underscoring the significance of political risk for financial institutions. Given the recent setbacks experienced by Silicon Valley Bank, Signature Bank, and First Republic Bank, this research provides valuable recommendations for policymakers. The findings suggest the need for regulators to mandate greater transparency regarding banks’ exposure to undisclosed risks, such as political risk. It also advocates for implementing internal control mechanisms to curb corrupt activities. Full article

Communities and businesses continue to experience the effects of climate change as global temperatures rise and extreme weather events become more frequent. In the United States (US), the public sector has traditionally been responsible for mitigating these risks; however, engaging the private sector is crucial, given industrial impacts on and vulnerability to climate change. Private-sector mitigation and adaptation efforts are critical in the Great Lakes Region due to aging infrastructure as well as its economic, environmental, and political importance in the US and Canada. This study explores private-sector resilience efforts in three Great Lakes cities to identify opportunities and trends that could inform climate resilience strategies in the region. Climate-related commitments and actions of nine major firms in Toronto, Chicago, and Cleveland are evaluated in relation to seven climate resilience criteria on a five-level maturity scale from January to May 2022. The results indicate a moderate level of maturity, with efforts mainly at facility and community levels of engagement. Overall, this study suggests that major firms participate in climate resilience efforts, but to a limited extent, and may have varying priorities that affect the initiatives they pursue. This study could contribute to advancing climate resilience efforts in the public and private sectors from regional to global levels. Full article

The growth of tourism in the Middle East suffers from ongoing political unrest and conflicts across the region. While previous studies have discussed the impact of psychological factors and political unrest on the tourism industry in the Arab world at an aggregated level, the role of major and dominant political factors such as perceived risks, media, and neutral diplomatic foreign relations on tourism have not yet been investigated. The objectives of this study are to compare the differences between local and international tourists, in the psychological and political risk factors affecting their loyalty to Oman as a tourist destination; investigate how attitudinal and behavioral loyalty is influenced by tourists’ satisfaction, perceived value, attachment, familiarity, and motivations; and measure the extent to which political factors could mitigate the risk of political instability in the region, thereby enhancing the tourism industry in the case of Oman. This study employed qualitative (descriptive and comparison analyses) and quantitative (multiple regression and ordinal logistic models) techniques in the analyses. Findings reveal that international tourists have developed both attitudinal and behavioral loyalty toward Oman in which its neutrality does matter, despite risk perceptions of the region. International tourists significantly report higher satisfaction than locals’ satisfaction with Oman as a tourism destination. It can be concluded that the psychological factors of Omani tourists have outperformed the risk factors associated with the region. Results are important for decision-makers as they reveal the best practices to increase the quantity and quality of tourists based on their characteristics, knowledge, and behaviors. This study reveals potential reforms to increase re-visitations that contain important implications for tourism agencies and private sectors—improving services around tourism sites; investing in sports, wildlife, and adventure tourism; hiring public relations firms for tourism marketing; eliminating any bureaucracy around investors and businesses and welcoming competition; and enhancing domestic tourism in stimulating the economy during downturns. Full article

This paper investigates whether firm-level (idiosyncratic) political risk (PR) affects the relationship between corporate social responsibility (CSR) and firm value using a sample of 16,518 firm-year observations which correspond to 2055 unique firms belonging to the Russell 3000 Index over the sample period 2010–2020. Our main findings are as follows: First, firm-level PR does not affect firm value. Second, CSR is positively related to firm value, which is mainly driven by the social component of CSR. Finally, PR has no effect on the CSR–firm value relationship, regardless of the PR type. Our evidence suggests that firm-level PR is not priced in the financial market and as such it does not affect the CSR–firm value relationship. This is consistent with portfolio theory which suggests that only systematic risk is priced. Full article

This paper aims to investigate the main drivers of sustainable profitability trends in the Serbian insurance industry over the years 2008–2019 (inclusive). Our study is motivated by the fact that insurance companies contribute to economic growth, and thus it is essential to understand the factors that contribute to their financial strength and stability. We use a set of standard panel regression models, including the mixed-effects model, followed by a more robust GMM estimation to uncover the linkage between selected micro-specific, macroeconomic, and institutional factors, and return of assets (ROA) and return on total premiums (ROTP). The present paper constitutes a significant contribution to the existing literature on the account of its comprehensiveness both in terms of the institutional datasets that we use, and in terms of the methodologies we apply (in particular, mixed effects and the generalized method of moments (GMM)). The estimated parameters are model-specific, and we find that firm size, GDP, the population growth rates, political stability, and the degree of specialization (in some empirical models) all lead to higher profitability. On the other hand, we observe that excessive risk-taking and inflation (in some specifications) are inversely related to profitability. Finally, we note that regulatory quality, average wage, and life expectancies are found to be not statistically significant. Accordingly, we argue that a profitability-centric managerial strategy should be based on expanded market share and stringent risk management protocols. At the macro level, we conclude that pro-growth and pro-population policies, combined with a well-oiled institutional setting that ensures political stability, constitute the best possible prescription for strong operational performance and profit sustainability in the Serbian insurance industry. Full article

This study investigates the country-level determinants of liquidity synchronization and degrees of liquidity synchronization during economic growth volatility. As a non-diversifiable risk factor, liquidity co-movement shock spreads market-wide and thus disrupts the overall functioning of the financial market. Firms in Asian markets operate in legal and regulatory environments distinct from those of firms analyzed in the previous literature. Comprehensive analyses of liquidity synchronicity in emerging markets are limited. A major knowledge gap pertaining to Asian emerging markets serves as the primary motivation for this study. Seven Asian emerging economies are selected from the MSCI emerging market index: Bangladesh, China, India, Indonesia, Malaysia, Pakistan and the Philippines for analysis from 2010 to 2019. The empirical findings show high levels of liquidity synchronicity in weaker economic and financial environments with low GDP growth, high inflation and interest rates and underdeveloped financial systems taking the form of low levels of private credit. Liquidity synchronicity is also affected by poor investor protection, political instability, weak rule of law and government ineffectiveness. Moreover, levels of liquidity synchronicity are higher in a period of economic growth volatility. Full article

This study examines the relationship between firm-level political connections and stock price crash risk in Indonesia. It employs the difference-in-difference design to deal with the self-selection bias issue regarding the choice of the firms to become a politically connected firm. We use the sudden resignation of the former President of Indonesia, Suharto, to show that politically connected firms are associated with lower stock price crash risk and that the risk for these politically connected firms increased after Suharto resigned. Furthermore, we found evidence that these negative associations are more pronounced in firms with more complex firm structures. Full article