This article investigates the gender effect on asymmetric cost behavior. We find that firms with female chief executive officers (CEOs) exhibit less cost asymmetry than firms with male CEOs. This finding holds in a range of robustness tests including those that address omitted variable bias and self-selection bias. Cross-sectional tests show that this gender effect is concentrated in the economic downturn period, firms with higher business risk, CEOs with higher personal career concerns, and firms in more competitive product markets, corroborating that females’ risk aversion and competitive preference are underlying mechanisms through which female CEOs manage costs differently compared to male CEOs. We also find supportive evidence of pessimism as an underlying mechanism. Further analysis shows that female CEOs tend to use more flexible costs to adjust resources in response to sales change.

Understanding the factors influencing sustainable investment decision-making (SIDM) is important for promoting environmentally and socially responsible investment. This study examines the effect of recognition-based heuristics—specifically alphabetical order (ALPBORD), name fluency (NAMFLN), and name memorability (NAMMEM)—on the sustainable investment decision-making (SIDM) of individual investors trading on the Hong Kong Stock Exchange. Data were obtained through a survey of 369 individual investors using a combination of convenience purposive and snowball sampling approaches. A dual-stage methodological approach combining structural equation modeling (SEM) and an artificial neural network (ANN) was used to capture both linear connections and complex hidden nonlinear patterns in the relationship between variables. The SEM results indicate that the heuristics NAMFLN, ALPBORD, and NAMMEM all have a significant negative impact on SIDM, suggesting that reliance on these heuristics can distort investor judgment and lead to suboptimal investment decisions in environmental, social, and governance terms. ANN analysis further demonstrates the relative contribution of each heuristic to undermining sustainable investment behavior. Specifically, NAMFLN has the highest predictive power, followed ALPBORD and NAMMEM. These findings suggest that investors tend to favor firms with names that are easily recognized or memorable, or those appearing early in alphabetical listings, which may divert capital away from genuinely sustainable firms and result in less optimal ESG-aligned portfolios. Overall, this study advances the literature by demonstrating the vital role of recognition-based heuristics in shaping SIDM, providing empirical evidence of the behavioral mechanisms affecting sustainability-aligned investment, and pioneering the application of a hybrid SEM–ANN approach in this context.

In the context of the digital economy and sustainable development, this paper focuses on the relationship between corporate data assetization and green innovation, aiming to reveal the mechanisms and heterogeneous effects through which data assetization empowers green technology innovation. It provides theoretical references for enterprises to leverage data assetization to drive green technology innovation and achieve high-quality development. This study takes A-share listed companies in Shanghai and Shenzhen from 2007 to 2023 as the research sample. By quantifying the degree of corporate data assetization and green innovation capability, it explores the mechanisms and heterogeneous characteristics of the impact of data assetization on green technology innovation.The study finds that the degree of corporate data assetization is significantly positively correlated with green innovation capability. From the perspective of mechanisms, data assetization enhances corporate green innovation traits primarily by optimizing the information environment, reducing information asymmetry, improving resource allocation efficiency, and strengthening the stability of upstream and downstream supply chains. Further research reveals that data assetization significantly promotes green technology innovation in technology-intensive enterprises, and this effect is more pronounced in companies with lower analyst forecast accuracy and those located in cities with higher levels of digital financial development. This paper provides theoretical and empirical support for enterprises to leverage data assetization to empower independent green technology innovation and promote high-quality development of the digital economy.

Over the past two decades, the demographic composition of business leadership has changed significantly. As women increasingly occupy senior executive positions, a fundamental question has moved from sociology to the core of financial economics: Does the gender of top executives systematically influence business behavior and capital market outcomes? This chapter reviews emerging literature that extends the traditional “glass ceiling” discussion to the measurable economic effects of women executives, including Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), and Chief Technology Officers (CTOs). The evidence, drawing on Upper Echelons Theory and research in behavioral accounting and finance, indicates that executives are not the same; instead, their demographic characteristics, including gender, shape their cognitive frameworks, risk preferences, and leadership styles. Empirical research in general finds that women CEOs tend to be more risk-averse, less overconfident, and more transformational leaders. These traits systematically influence business policies such as more conservative accounting, less aggressive tax strategies, lower loan costs, higher-quality innovation, and a reduced risk of stock price collapse, although the board-level evidence is more mixed and context-dependent. The chapter also considers capital market responses to women’s leadership. Institutional investors typically have a positive view of women in leadership roles, but employees and financial advisors still harbor systemic biases. This chapter provides a detailed analysis of the “women’s style” of corporate leadership and its broad economic implications.

Purpose The aim of this study is to conduct a bibliometric analysis of the relationship between government incentives and corporate social responsibility (CSR). Design/methodology/approach The authors use a bibliometric approach, using co-citation, bibliographic coupling and co-occurrence analysis, to a data set of 154 documents published (2004–2023) in Web of Science on the relationship between government incentives and CSR. Findings Firstly, based on the co-citation analysis, the authors identify three historical research areas: the resource-based view theory, green innovation and research and development (R&D) policy. Based on the bibliographic approach, the authors recognize five current research streams: government regulation and policy; green innovation; sustainable performance of small- and medium-sized enterprises; sustainability; and R&D investment. The co-occurrence analysis reveals four emerging research areas: management and governance policy; sustainable development and firm performance; green innovation strategies; and sustainability. Practical implications Grounded in these insights, the authors suggest several future research directions and policy implications in the field of government incentives and CSR. Originality/value Research into the relationship between government incentives and CSR has increased over the past two decades. The field is widely researched around the world, yet this research remains unstructured and is in need of a systematic approach such as meta-analyses or bibliometric studies. To address this gap, the authors use a bibliometric analysis to study the relationship between government incentives and CSR.

PurposeThis study investigates the impact of green intellectual capital (IC) on the economic, social, and environmental sustainability performance of manufacturing small- and medium-sized enterprises (SMEs) in Pakistan-an emerging Asian economy-and the mediating effect of sustainable business model innovation (SBMI). It also examines the moderating effect of green dynamic capability (GDC) on the relationship between green IC and SBMI.Design/methodology/approachData were collected through a survey completed by 324 owners and top managers of manufacturing SMEs in four Pakistani cities. A purposive and snowball sampling approach was used to gather the data. A dual-stage methodological approach (a combination of PLS-SEM and artificial neural networks) was applied to capture both linear connections and complex, hidden, nonlinear patterns between variables. Regression analysis was used to verify the results.FindingsThe findings indicate that green IC positively contributes to manufacturing SMEs' economic sustainability performance (ECSP), social sustainability performance (SSP), and environmental sustainability performance (ESP) in an emerging Asian economy. SBMI appears to mediate these relationships. Furthermore, GDC strengthens green IC's positive effect on SBMI adoption. The artificial neural network results indicate that green human capital has the highest positive influence on ECSP and SSP, suggesting its pivotal role in achieving SMEs' economic and social sustainability goals. However, green relational capital was identified as having the strongest effect on ESP, indicating its crucial role in driving environmental sustainability in SMEs.Originality/valueThe present study is a pioneering effort because, to the best of our knowledge, green IC, SBMI, and GDC have never been systematically tested with the ECSP, SSP and ESP of manufacturing SMEs, nor has their predictive ability been analyzed in an emerging Asian economy. Second, this study divulges the mediating role of SBMI in the relationship between green IC and sustainability performance in an emerging market. Third, it adds to the literature by examining the moderating role of GDC in the link between green IC and SBMI and provides valuable insights into how green IC and GDC interact to foster SBMI adoption. Fourth, the study enriches the resource-based view literature by integrating green IC, SBMI, GDC and sustainability performance. Finally, the study is unique in its use of a dual-stage methodological approach consisting of structural equation modeling and artificial neural networks to capture both linear connections and complicated, hidden, nonlinear patterns that conventional statistical approaches might overlook. No study had analytically assessed how the dimensions of green IC affect the ECSP, SSP and ESP of SMEs by employing this hybrid approach so far.

This paper investigates how country-level Employment Protection Legislation (EPL) affects auditors' pricing decisions. Using a sample of 22 OECD countries over the 1996-2011 period, we find that auditors charge lower fees for firms whose employees have greater collective bargaining power as a result of country-level employee protection legislation reforms. We further explore the potential channels and find that a firm's labor power is negatively associated with its earnings management, but positively associated with the value of employee stock options plans and staff wages. In addition, we find that the negative relationship between employee power and audit fees is more profound for firms headquartered in countries with weak corporate governance (i.e., common law countries, non-EU countries, worse governmental effectiveness), and for firms in less labor-intensive industries. Our main findings are also robust to a variety of sensitivity checks.

How would employers treat their employees if terminating employment became more difficult? To investigate this question, we exploit changes in employment protection laws (EPLs) across 37 countries and examine the impact of these laws on employee welfare. We find that employee welfare improves following the implementation of more stringent EPLs, suggesting that enhanced stringency of employment protection incentivizes employers to pay closer attention to the welfare of their incumbent employees to elicit greater employee effort and commitment. Further tests show that EPLs improve employee compensation, provide high-quality employment benefits, and reduce employee turnover. The positive effects of EPLs on employee welfare are more pronounced in labor-intensive and competitive industries, countries characterized by lower levels of unionization, and developing economies. Finally, we show that improvements in employee welfare enhance both firm value and productivity.

In this study, we examine the impact of rank-and-file employee stock options on audit fees. We document compelling evidence that option grants to rank-and-file employees are positively related to audit fees. Further analyses show that this positive relation is more pronounced when a firm’s real earnings manipulation risk is higher and when rank-and-file employees are more sensitive to monetary incentives. We also find that options granted to rank-and-file employees are positively related to audit efforts. The evidence suggests that auditors perceive options to rank-and-file employees to be associated with increased audit risk.

Despite the significance of social networks in influencing firm behavior, research on their impact on corporate tax behavior is limited. In this paper, we construct social networks of CFOs from U.S. companies based on their employment history, education, and non-professional activities. We find that firms with more socially connected CFOs have lower effective tax rates (ETR) compared to firms with less socially connected CFOs. This effect is more pronounced when corporate governance is weaker and managers have higher incentives. Furthermore, a firm's ETR decreases as CFO centrality increases. We do not observe similar results regarding the connectedness of boards of directors. Additionally, firm pairs exhibit similar ETRs when their CFOs are socially connected, suggesting an exchange of tax-related information among CFOs through their social networks. We also find that the past ETRs of firms with central CFOs predict the ETRs of firms with non-central CFOs. This indicates that less socially connected CFOs tend to follow the tax planning strategies of their more socially connected counterparts. Overall, our findings indicate that more socially connected CFOs possess more relevant information and resources regarding tax planning, leading to the adoption of more aggressive tax strategies compared to their less socially connected counterparts.

In transforming emerging economies, many state-owned enterprises (SOEs) underwent privatization, transferring property rights from the state to private entities. This transition not only facilitated the establishment of entrepreneurial family firms but also encouraged the emergence of privatized family firms as property rights were transferred to individuals and families. Consequently, the roots of property rights in these settings can be traced back to either direct establishment or privatization. In this study, we examine how these origin imprints influence corporate innovation. By analyzing a dataset of A-share Chinese listed non-financial family firms spanning from 2005 to 2021, we find that pre-privatization organizational imprints which primarily focus on societal well-being, tend to persist within these privatized family firms, resulting in a lower degree of corporate innovation compared to their entrepreneurial counterparts. Moreover, additional subsample analysis indicates that the adverse impact of privatized family firms on corporate innovation is intensified by strong political connections while mitigated by a well-developed institutional environment in the region. Our results are robust to various econometric methods, alternative explanations, and approaches to address endogeneity concerns such as the two-stage least squares (2SLS), Generalized Method of Moments (GMM), and propensity score matching (PSM) techniques. Overall, this study highlights a source of heterogeneity within the family firms and reveals how organizational imprints inherited from a pre-privatization economic regime can diminish the positive effects usually associated with family ownership.

When considering the influence of recognition-based heuristics on entrepreneurs’ strategic decision-making (ESDM), especially in emerging markets, conventional theories and literature on entrepreneurs’ management approach are notably sparse. This study investigates how recognition-based heuristics influence ESDM, particularly in an emerging Asian economy. Data was collected through a survey completed by 237 owners and senior managers of small and medium-sized enterprises (SMEs) in the service, trade, and manufacturing sectors located in the Pakistani cities of Rawalpindi and Islamabad (twin cities). Data was collected using a convenient purposive sampling technique and snowball sampling method. A structural equation modeling-artificial neural network (SEM-ANN) based approach was applied to evaluate the role of recognition-based heuristic predictors. The results were authenticated using regression analysis. The results indicate that recognition-based heuristics—such as alphabetical order, name fluency, and name memorability—have a positive impact on ESDM. This means that recognition-based heuristics are useful tools for entrepreneurs in strategic decision-making. Entrepreneurs who use recognition-based heuristics are more likely to make effective strategic decisions. The ANN results reveal that name memorability has the highest predictive power in positively influencing ESDM, suggesting that memorability plays a crucial role in facilitating more efficient and informed strategic choices. This study pioneers research examining the connection between recognition-based heuristics—alphabetical order, name fluency and name memorability—and ESDM in an emerging Asian market. This study contributes to the entrepreneurial management field, particularly regarding the role of recognition-based heuristics in strategic decision-making. This research area is still in its early stages, even in developed economies, and very little work has been conducted in emerging economies. This study makes a significant contribution to the literature in this field. We employed a novel SEM-ANN based evaluation approach that combines the strengths of SEM and ANN. This integration allows for a comprehensive analysis of both linear and nonlinear relationships between variables, providing a nuanced understanding of the complex dynamics involved in ESDM, and differentiating this study from other studies in the field.

Family business leaders often grapple with paradoxical tensions between digitalizing their companies and preserving their social-emotional wealth (SEW). This study focuses on the influence of chief executive officers’ (CEOs) passion for inventing (PFI) on the performance of family firms. It further examines how digitalization capacity mediates this relationship and how the commitment to preserving SEW may moderate it. For methodological rigor, we employed a dual data approach, using primary and secondary data from 100 family firms. We found no significant direct effect of CEOs’ PFI on the performance of family firms. However, this impact is indirect, primarily affecting digitalization capacity. Additionally, a strong commitment to preserving SEW can shift the influence of CEOs’ passion on digitalization capacity from positive to negative. Our findings suggest that family firms should not exclusively focus on non-economic goals because this could hinder CEOs’ efforts toward digitalization. Instead, family CEOs should create a balance between the preservation of SEW and digitalization capacity, which contributes to increased performance. This study adds to the knowledge of upper echelons theory and SEW theory by examining the nuances of the interactions between CEOs’ PFI, digitalization capacity, and performance in family business.

PurposeThis study examines the impact of debt maturity structure on stock price crash risk (SPCR) in Asian economies and the moderating effect of firm age on this relationship.Design/methodology/approachThe study utilized annual data from 432 nonfinancial firms publicly listed in six Asian countries: China, Hong Kong, Japan, Singapore, Pakistan and India. The observation period covers 14 years, from 2007 to 2020. The sample was categorized into three groups: the entire sample and one group each for developing and developed Asian economies. A generalized least squares panel regression method was employed to test the research hypotheses.FindingsThe results suggest that long-term debt has a significant negative influence on SPCR in Asian economies, indicating that firms with high long-term debt experience lower future SPCR. Moreover, firm age negatively moderates this relationship, implying that older firms may experience a more pronounced reduction in SPCR due to high long-term debt. Finally, firms in developed Asian economies with high long-term debt are more effective in mitigating the risk of a significant drop in their stock prices than firms in developing Asian economies.Originality/valueThis study contributes to the literature in several ways. To the best of the researcher’s knowledge, this is the first of such efforts to investigate the relationship between debt maturity structure and crash risk in Asia. Additionally, it reveals that long-term debt influences SPCR directly and indirectly in Asia through the moderating role of firm age. Lastly, it is likely one of the first studies by a research team in Asia to compare the nonfinancial markets of developed and developing Asian countries.

We examine the effect of bank interventions on corporate tax aggressiveness via the lens of debt covenant violations. Using three identification strategies, we find that bank interventions have a negative effect on corporate tax aggressiveness. This effect is less pronounced for more financially constrained firms, firms with higher shareholder power and firms facing less powerful banks. Covenant-violating firms compensate their reduced tax aggressiveness by reducing other expenditures, including capital expenditures and cash acquisitions. Our results suggest that creditors perceive aggressive tax activities as risky investment opportunities.

The new lease standard (Accounting Standards Codification [ASC] 842), which is expected to alleviate the reporting issues associated with operating leases, requires formal recognition of related assets and liabilities on the balance sheet. Disregarding the considerable controversy surrounding this standard, we find that ASC 842 has led to a significant increase in loan spread for treatment firms with heavier reliance on operating leases before the implementation of the standard. The increase is more pronounced for firms with higher default risk and noisier operating lease estimation before ASC 842 but is mitigated for firms that have closer relationships with banks. Our study thus provides insights into the real effects of ASC 842 through the lens of debt market participants.

We show how external credit market development can affect corporate social responsibility. Using a sample of US public firms over the period 1991–2010, we find that bank deregulation negatively affects CSR performance. We argue that deregulation-induced banking competition enhances credit accessibility, thereby reducing firms’ incentives to pursue CSR as a means of securing stakeholder rewards. Empirical evidence shows that firms increase their use of debt financing in response to the intensified banking competition, and these firms experience a more pronounced decline in CSR performance. We alleviate the potential concern that the observed decline in CSR could be attributed to changes in bank monitoring following deregulation. Further analyses find that firms reduce CSR regardless of their material nature, suggesting that the primary driver of CSR could be the trade-off between costs and returns. Overall, our findings shed light on the strategic motives of CSR, which exhibits adaptability in response to business dynamism.

Purpose This study explores the mechanism by which intellectual capital (IC) [i.e. human capital (HC), structural capital (SC) and relational capital (RC)] influences small and medium-sized enterprise (SME) efficiency in the presence of business model innovation (BMI) as a mediator. Design/methodology/approach Data collection is conducted through a survey completed by 319 owners and top managers of SMEs operating in the manufacturing sector in three cities in Pakistan. A simple random sampling method is used. A structural equation modeling artificial neural network (SEM-ANN)-based approach is applied to evaluate the role of IC predictors. The mediation results are authenticated using PROCESS. Findings The results indicate that HC, SC and RC significantly influence SME efficiency and BMI. Furthermore, BMI fully mediates the relationship between human capital and SME efficiency, while partially mediating the relationship between structural capital and SME efficiency, as well as between SC and SME efficiency. Originality/value This study pioneers research into the link between IC and SME efficiency. It contributes to the literature by defining IC as an antecedent of SME efficiency. It further contributes to the literature by defining IC as an antecedent and BMI as an intervening variable of SME efficiency.

PurposeThis study examines the influence of investor protection on stock price crash risk (SPCR) in Asian economies.Design/methodology/approachThis study used yearly data from 432 nonfinancial companies publicly listed firms in six countries (i.e., China, India, Pakistan, Hong Kong, Japan and Singapore) from 2007 to 2020 to investigate the relationship between investor protection and the risk of stock price crashes. The hypothesis was tested using a generalized least square panel regression.FindingsThe results suggest that investor protection significantly affects SPCR in Asian economies. Furthermore, the findings show that the stocks of firms whose investors received the best protection were less prone to crash in developed Asian economies. However, in developing Asian economies, the stocks of firms whose investors received the best protection were more prone to crashes.Practical implicationsIt provides awareness and understanding of how the level of investor protection affects SPCR, which could be useful for decision-makers and professionals across a spectrum of financial and non-financial institutions, such as portfolio managers and traders in commercial banks, investment banks and mutual funds. This knowledge enables informed decision-making and the formulation of effective policies to manage stock market volatility.Originality/valueThis study appears to be the first of its kind to focus on the link between investor protection and SPCR within the specific context of developed and developing Asian economies.