This paper examines whether regulatory minority shareholders can curb unethical financial reporting in emerging markets characterized by limited investor protection. We exploit the 2016 introduction of China's Securities Investor Services Center (CSISC) shareholding pilot program, under which a regulator-affiliated institution acquires a symbolic equity stake in listed firms and actively exercises shareholder rights. Using a difference-in-differences design based on 22,676 firm-quarter observations, we find that CSISC shareholding significantly reduces the likelihood of financial restatements. Mechanism analyses show that the effect operates through heightened minority shareholder activism and improved information transparency. Cross-sectional tests indicate that the effect is stronger among firms with weaker internal governance and external monitoring, suggesting that regulatory minority shareholders serve as a substitute for conventional governance mechanisms. Overall, our findings highlight regulatory minority shareholding as a scalable governance tool for protecting minority investors and improving financial reporting quality in settings where legal enforcement is limited.

Firms are ethically responsible for proactively supporting the community in which they operate. These ethical commitments go beyond regulatory or legal obligations (i.e. formal institutions). Accordingly, we provide novel evidence on how executives’ hometown identity inspires firms to ethically engage in poverty alleviation efforts. Using a unique sample of Chinese listed firms from 2016 to 2020, our key findings are threefold. First, we find that firms headquartered in executives’ hometown are more likely to engage in poverty alleviation initiatives. This finding indicates that poverty alleviation can be viewed as an ethical responsibility rooted in community connections rather than being viewed solely as a reaction to external institutional requirements. Second, the results of the mediation analyses suggest that agency costs, political capital and corporate reputation mediate the relationship between executives’ hometown identity and corporate poverty alleviation. Third, our moderating results suggest that state ownership negatively moderates the main relationship, while Confucian culture and media pressure positively moderate it. Our results are robust across different sensitivity and endogeneity tests and matching and sample selection techniques. This study extends the literature on firms’ pro-ethical and humanitarian engagement in emerging markets and offers policy implications for both government authorities and corporations.

Productivity serves as the core driving force for corporate development, but with the period of the global supply chain reconfiguration, the remarkable increase in supply chain uncertainty has posed severe challenges to the improvement of corporate productivity. We examine the impact of supply chain stability on corporate productivity under uncertainty using a sample of Chinese A-share listed companies from 2009 to 2023. This study indicates that supply chain stability can play a safeguarding role in promoting corporate total factor productivity. The underlying mechanisms are that supply chain stability promotes corporate total factor productivity through improvements in resource accessibility, operational performance, and governance effectiveness. Further heterogeneity analysis reveals that the positive effect is more pronounced in firms with high supply chain risk, weak supply chain power, and low social capital. This study provides new perspectives and knowledge for maintaining supply chain stability and promoting corporate total factor productivity.

This study critically reviews the scholarship on CEO overconfidence from 2005 to 2024, analyzing its intellectual, social, and conceptual structures to identify key themes and future research directions using a bibliometric approach. The study finds that the Journal of Corporate Finance is the most influential in the field, with notable contributions from scholars in China, the United States, and the United Kingdom. Performance and conceptual analyses identify relevant concepts and niche, motor, basic, and emerging themes that suggest promising avenues for further research. This study enhances the understanding of the field's intellectual and social structures, enriches the theoretical discourse, and offers a foundation for future scholarly inquiries. The findings underscore the importance of addressing CEO overconfidence in corporate governance and strategic decision-making. Policymakers and practitioners can utilize these insights to develop frameworks that mitigate the risks associated with overconfident leadership, particularly in contexts involving risk-taking and investment decisions.

In promoting high-quality economic development, this study investigates the relationship between corporate financialization and total factor productivity (TFP) through the lens of internal resource allocation. Using a sample of Chinese non-financial listed firms from 2007 to 2022, we identify an inverted U-shaped relationship between financialization and TFP, with investment efficiency and corporate innovation as key underlying mechanisms. Additionally, gambling culture positively moderates this relationship and intensifies the curve’s steepness, while Confucian culture negatively moderates this relationship and flattens the curve. Heterogeneity analysis reveals that the curve is steeper for state-owned enterprises (SOEs) compared to non-SOEs, and the turning points shift to the right under higher financing constraints. Our further categorization of financial assets into monetary, investment, and speculative types demonstrates that monetary financial assets, characterized by more precautionary savings, exert a more significant nonlinear impact on TFP than the other two types. These findings illustrate the nuanced effects of corporate financialization on TFP and offer practical insights for leveraging financial assets to enhance high-quality economic development.

While the determinants of firms’ financial derivatives usage have been extensively studied, the influence of managerial characteristics on this decision-making process has received relatively little attention. This study explores the role of a critical managerial characteristic, namely managerial ability, in shaping financial derivatives usage. We investigate this question within the context of China, a major emerging market. Using data from listed Chinese firms from 2009 to 2024, we find a positive relationship between managerial ability and financial derivatives usage. Mediation analysis identifies two key mechanisms underlying this relationship: information processing capacity and managerial overconfidence. Notably, the increased use of financial derivatives associated with managerial ability is linked to higher firm risk. Cross-sectional analyses suggest that effective monitoring may curb excessive derivatives use among high-ability managers. Furthermore, our results indicate that this increase in financial derivatives usage corresponds to a decline in firm value. While both information processing capacity and managerial overconfidence contribute to the positive relationship between managerial ability and financial derivatives usage, our analysis suggests that managerial overconfidence acts as the dominant factor, ultimately leading to negative consequences for firm value.

This paper investigates the effect of financial derivatives usage on stock price crash risk within the context of the Chinese emerging market. We develop two competing hypotheses: the risk-increasing hypothesis and the risk-reducing hypothesis. Using a sample of Chinese listed firms from 2009 to 2024, we find robust evidence supporting the risk-reducing hypothesis: firms with financial derivatives usage exhibit significantly lower stock price crash risk. Mechanism analyses reveal that derivatives usage mitigates crash risk through three channels: reducing cash flow volatility, inhibiting managerial self-interested behavior, and improving information disclosure quality. Cross-sectional analyses indicate that this risk-reducing effect is less pronounced in state-owned enterprises (SOEs), firms with high-ability managers, CEOs with financial backgrounds, and firms located in regions with higher levels of marketization. This study contributes to the literature on financial derivatives usage and stock price crash risk, providing critical insights for regulators and investors to assess firms’ financial derivatives usage and manage financial risks in emerging markets.

This study examines the impact of customer geographical proximity on corporate financialisation. The results show that customer geographical proximity exacerbates corporate financialisation rather than alleviates it. Moreover, this impact can be achieved by reducing corporate profitability and enhancing the turnover of firms' working capital. Furthermore, the findings also suggest that the impact of customer geographical proximity on corporate financialisation is more pronounced in firms with higher levels of earnings management, whereas good corporate governance can help to reduce this effect. Our study provides substantial evidence for understanding corporate financialisation at the supply chain level and offers specific policy implications for the governance of corporate financialisation.

This study examines the relationship between local happiness and firm total factor productivity at the firm level. We find that local happiness is positively associated with firms’ total factor productivity. Our mechanism analysis indicates that local happiness improves firms’ total factor productivity by attracting human and capital resources, promoting labor productivity, and stimulating innovation. We also find that the positive effect of local happiness on total factor productivity is more pronounced in firms with low human capital, firms located in regions with advanced digital infrastructure, and in non-state-owned firms. Our research offers recommendations for governments on how to prioritize people’s well-being and achieve economic objectives

Purpose This paper aims to investigate the relationship among ultimate ownership, corporate social responsibility (CSR) and firm value using firm-level data from Chinese listed companies. Design/methodology/approach Using a panel data of Chinese listed firms during 2010–2018, this paper estimates with correlation analysis and multiple regression analysis. Findings The larger the divergence between ultimate owner’s control rights and cash flow rights, the stronger motivation is to infringe corporate interests and cover up misconduct through CSR. While the larger the cash flow rights, the more conducive to restrain the ultimate owner from CSR investment. The state-owned enterprises have a higher CSR. Furthermore, the separation of control rights and cash flow rights is significantly negatively related to firm value, whereas cash flow rights positively affect it. State-owned ultimate owner has a negative impact on firm value. CSR plays a significant mediating effect between ultimate ownership and firm value. Originality/value This paper reveals the tunneling and disguising effect of CSR and provides a new approach for the affecting mechanisms between ultimate ownership and firm value.

Grounded in agency theory and behavioral finance theory, this study investigates the impact of air pollution on stock price crash risk using a sample of Chinese A-share listed companies from 2014 to 2021. Our empirical analysis demonstrates a significant positive association between air pollution and stock price crash risk. Specifically, the detrimental effects of regional air pollution on the physical and mental health of individuals, as well as on corporate operations, are reflected in stock prices, ultimately increasing crash risk. Mediation analysis indicates that air pollution influences stock price crash risk by aggravating agency problems, reducing investors’ attention and strengthening government regulation. Moreover, our study highlights the moderating role of external governance mechanisms, demonstrating that superior audit quality, more analyst following and more media reports can effectively mitigate the impact of air pollution on stock price crash risk. These findings underscore the importance of external governance in addressing agency problems and alleviating the negative economic externalities associated with air pollution. This research contributes to the understanding of the adverse economic effects of air pollution at the micro-enterprise level and offers valuable insights for promoting coordinated economic and environmental development.

This paper reviews key trends in gender diversity and firm performance scholarship using a bibliometric analysis approach. Using a sample of 1317 articles from the business, management, and business finance domains of the Web of Science (WoS) database, visualizations are generated from CiteSpace and R Studio's Biblioshiny software. The findings highlight a shift in contemporary research, moving beyond the direct impact of diversity on performance to exploring how gender diversity influences other critical aspects of business operations. Moreover, the results show limited regional contributions and collaborations among developing countries. Thematic analysis reveals motor, niche, basic, and emerging/declining themes that require scholarly attention. Our research not only shows the unique intellectual, conceptual, and social structure of the research domain but also highlights mainstream theories. It suggests the need for continuous research and more collaborations across diverse geographic backgrounds to achieve a more holistic research outcome.

Emerging literature shows that returnee directors have a positive effect on firm outcomes. However, this positive outcome is likely to come at a cost to the firm in the form of increased audit fees. Therefore, in this paper, we examine the relationship between returnee directors and audit fees. We use a large sample of 42,406 firm-year observations of Chinese firms between 2006 and 2022. We find that the presence of returnee directors on corporate boards is related to higher audit fees. The effect is more pronounced in non-state-owned firms than in state-owned firms and when the returnee directors are nonexecutives. The results imply that there is an unintended price to be paid by firms for appointing returnee directors. The results are not sensitive to different firm characteristics and potential endogeneity problems.

This study introduces attention centrality, a measure based on corporate site visits, to capture a firm’s central role in its industry’s information network. We find that attention centrality is persistent, and influenced by fundamental characteristics and information uncertainty. High-attention firms predict stock and industry returns, attract more analyst forecasts, and exhibit higher idiosyncratic volatility, emphasizing their role in market efficiency.

Using a comprehensive dataset of Chinese listed companies ranging from 2011 to 2020, this study examines the impact of firms' participation in targeted poverty alleviation on firm resilience. Based on the Difference in Difference (DiD) model, this study provides empirical evidence that targeted poverty alleviation initiatives significantly enhance firm resilience. Specifically, the mechanisms driving these effects include lowering financial constraints, increasing employee productivity, and enhancing corporate reputation. Robustness checks, including parallel trend analysis and placebo trials, confirmed the reliability of these results. This study contributes to the growing CSR literature by highlighting the strategic value of CSR activities in building resilience and provides important practical implications for policymakers and business practitioners aiming to promote stable and sustainable economic growth.

Using a sample of Chinese non-financial listed firms from 2009 to 2022, this paper shows that corporate financialization has a supply chain contagion effect, i.e., the higher the financialization of customers, the higher the level of financialization of suppliers. The effect is stronger when firms have bad operational efficiency, have close geographical distance to customers, and when their customer relationship is benign. In addition, customer stability can reduce this effect, while customer market value can enhance it.

This paper examines the association between government subsidies and firm-level managerial slack for a sample of Chinese listed firms over the period 2005-2018. Managerial slack is the excess spending, compensation, and perquisites consumed by managers at the expense of shareholders' wealth. Measuring managerial slack as the abnormal administrative expenses following Fang, He, and Conyon (2018) and Fang, He, and Shaw (2018), we find that government subsidies are positively associated with firms' managerial slack. This positive association, however, is attenuated for firms with strong internal control and firms headquartered in regions with a high level of social trust. Further analysis demonstrates that the positive association is driven by firms receiving non-tax-related government subsidies. Our main result remains robust after addressing endogeneity concerns. Finally, we show that the stock market penalizes subsidy-receiving firms with high managerial slack.

This paper aims to clarify the relationship between key audit matters (KAMs) disclosure and corporate financialization. The findings reveal that key audit matters (KAMs) disclosure can provide incremental information value, thereby impeding corporate financialization in China. Moreover, this effect is more pronounced in the samples with low media attention, low institutional investor holdings, and non-state-owned enterprises. Further research indicates that reducing managerial myopia and easing financing constraints serve as key channels through which key audit matters (KAMs) disclosure affects corporate financialization. In addition, the future financialization analysis suggests that key audit matters (KAMs) disclosure has a sustained deterrent effect on financialization rather than just a short-term signaling mechanism. This study provides empirical evidence on efficiently preventing excessive financialization of enterprises, as well as some insights for mitigating systemic financial risks from the key audit matters (KAMs) disclosure perspective.

This paper examines the relationship between environmental, social, and governance (ESG) practices and firm value in South Africa. Drawing on the upper echelons theory, the study further highlights how CEO traits influence the ESG-firm value relationship and explores the moderating role of CEO narcissism. Utilizing a balanced panel dataset of listed firms on the Johannesburg Stock Exchange from 2014 to 2022, findings reveal that effective investment in ESG practices enhances firm value. However, CEO narcissism weakens the positive relationship between ESG performance and firm value. Robustness analyses using the two-stage least squares, the Heckman two-stage model, and entropy balancing validate our findings. By focusing on an emerging market that places value on responsible investing, the study offers insights for firms seeking to maximize ESG returns while mitigating potential leadership risks.