This study explores whether ESG-linked executive compensation influences carbon reporting by China's A-share listed firms and whether this influence is mediated by board-level climate governance. Based on stakeholder theory, agency theory, and upper echelons theory, the study suggests that ESG-linked executive compensation positively affects carbon disclosure quality and that board-level climate governance mediates this relationship, reinforcing the effect of ESG-linked incentives on disclosure practices. The study of firm-level panel data spanning 2021 to 2023 indicates that companies with ESG-linked executive compensation tend to have credible and transparent carbon disclosures. Furthermore, ESG-linked executive compensation pushes companies to establish board climate oversight, and board climate oversight helps the quality of disclosure outcomes. The findings show that board climate oversight functions as a mediator that connects ESG-linked executive compensation with carbon disclosure practices. The mediation results show that ESG-linked executive compensation affects carbon reporting through two separate channels. Board climate oversight is seen as the governing mechanism that connects the two channels. The results of this research suggest that investors, regulators and boards can consider readjusting their climate practices in response to new regulatory requirements.
FinTech has emerged as a critical engine of sustainable development in the banking sector. This study investigates how FinTech adoption affects bank profitability, with a particular focus on the mediating role of bank risk. Using panel data from 82 Chinese commercial banks over the period 2013–2023, we construct a bank-level FinTech adoption index based on textual analysis and the entropy weighting method. The results show that FinTech adoption significantly enhances bank profitability, with risk mitigation serving as an important transmission mechanism. Specifically, FinTech adoption reduces credit and liquidity risk, with the credit risk channel playing the most prominent mediating role. Heterogeneity analyses further indicate that these effects are more pronounced for regional banks and in regions with less developed digital infrastructure, highlighting FinTech’s role in alleviating structural disadvantages. The findings remain robust through a series of robustness checks and endogeneity tests. Overall, this study suggests that the profitability gains from FinTech adoption are closely linked to its capacity to reshape banks’ risk–return trade-offs through comprehensive risk reduction. These results emphasize the importance of aligning digital transformation strategies with risk management objectives and offer policy-relevant insights for regulators and policymakers in emerging economies.
Despite the rapid development of Malaysia’s capital market and broader access to investment platforms, retail investor participation remains limited due to low financial literacy, reliance on informal information sources, and cautious savings behaviour. This study aims to investigate the determinants of Malaysian retail investors’ participation in the capital market by examining demographic and socio-economic factors, capital market literacy, financial capability, access to financial product information and planning services, and perceptions toward financial planners. It further analyses the combined effects of these variables to provide a comprehensive understanding of the drivers influencing market engagement. This study employed a purposive sampling approach, involving 1,500 Malaysians aged 18 to 64 from diverse socio-economic groups, and collected data via closed-ended questionnaires. Data were analysed using SPSS with inferential statistics to examine their influence on capital market participation. The study finds that capital market participation in Malaysia is significantly influenced by education, employment status, income level, ethnicity, age, income adequacy, and investment allocation ratio. Specifically, graduates, employed individuals, higher-income groups, individuals of Chinese ethnicity, younger respondents, those with adequate income, and those with higher investment allocation ratios demonstrate greater participation in the capital market. Capital market literacy and financial awareness positively affect capital market participation, while financial behaviour is not significant. Access to product information through colleague support participation while negative perceptions toward financial planners hinder participation. The findings emphasise that improving market information, financial planner training, and investor education especially for lower-income and middle-income households, can encourage participation and promote inclusive financial growth in Malaysia.
This study examines the impact of digital payments on financial development by comparing emerging and developed economies, specifically BRICS and G7 countries, over the period from 2012 to 2023. This study assesses how digital payment deepening, measured by the volume of electronic money payments, influences financial development and what this may imply for future CBDC readiness. The analysis considers macroeconomic variables, including interest rate, inflation, unemployment, and gross domestic product growth. Financial development is measured by domestic credit to the private sector as a percentage of gross domestic product. Panel data econometric techniques are employed, with model selection guided by statistical tests and robustness checks. The findings reveal that digital payment expansion significantly enhances financial development in BRICS economies, likely due to improved access to digital financial services and inclusion. In contrast, the effect is statistically insignificant in G7 countries, where mature financial systems may reduce the marginal impact of additional payment digitalization. This divergence highlights the varying developmental roles of digital currencies across economic structures. The results also offer implications for CBDCs, suggesting that economies with stronger digital payment ecosystems may be better positioned to support CBDC implementation and diffusion. Recommendations include integrating digital currency initiatives with broader financial inclusion and employment strategies in emerging markets and enhancing regulatory and cybersecurity frameworks in developed nations.
This study examined whether restricting the investable universe to Shariah-compliant equities was associated with a performance trade-off in the Malaysian equity market. Using monthly data from December 2000 to December 2023, the analysis compared unrestricted, non-Shariah, and Shariah stock universes. Within each universe, firms were ranked by market capitalisation, the 30 largest stocks were retained, and three portfolios were formed. They were value-weighted, equal-weighted, and a 10-stock dividend-yield portfolio drawn from the same top-30 group. Performance was evaluated using average return, compound return, the Sharpe ratio, the Treynor ratio, and Fama-French three-factor alpha. Pairwise differences in alphas and Sharpe ratios were formally tested using Newey-West HAC-adjusted long-short spread regressions and the Jobson-Korkie statistic with the Memmel variance correction. The evidence did not indicate a systematic performance trade-off associated with Shariah screening in the Malaysian large-cap segment. Across the full sample, dividend-yield portfolios produced the strongest results, with the non-Shariah dividend-yield portfolio leading on realised-return measures and the Shariah dividend-yield portfolio recording the highest factor-adjusted performance. Formal pairwise tests showed that within each universe, the dividend-yield rule significantly outperformed both value- and equal-weighted portfolios. Across universes, the Shariah and non-Shariah dividend-yield portfolios did not differ significantly. The same distinction remained visible in the later sub-period, even though market conditions were weaker. Additional tests based on alternative portfolio formation months showed that the main results were not driven by the January formation convention. Overall, the findings revealed that relative performance varied with the screen that defined the investable universe, the portfolio construction rule, and the performance measure used in the evaluation.
