Wali Ullah

This study examines the impact of geopolitical risk on firm-level climate change risk. Using a dataset of 56,601 firm-year observations from 40 countries over the period 2004 to 2022, we document that increased geopolitical risk increases firms’ climate change risk. Our results remain consistent across alternative proxies and after addressing endogeneity concerns through 2-stage least squares and entropy balancing. We find the effect to be more pronounced for firms facing higher cash flow volatility, financial constraints and leverage. Our findings provide valuable insights for policymakers and corporate managers in formulating resilient strategies during times of geopolitical conflict.

We examine how corporate culture affects a customer firm’s ability to secure trade credit. Using a large US firm-level dataset of 46,020 firm-year observations spanning from 2002 to 2021, we document a positive and statistically significant association between strong corporate culture and the amount of trade credit received. Our results are robust to alternative specifications and endogeneity concerns, mitigated through two-stage least squares (2SLS) regressions using instrumental variables, entropy balancing, Heckman (1979) two-step correction and Oster (2019) test for omitted variable bias. The positive linkage is higher for companies with highly competent managers and those located in regions with high social capital. Our findings have implications for fostering trust and cooperation in business relationships.

FinTech credit has grown significantly in recent years and can have important economic and financial outcomes. Social capital can provide societal benefits which impact FinTech lending. There are three factors that influence this connection: the inequality of income, the prevalence of digital technology, and the quality of institutions. This paper examines the relationship between social capital and FinTech lending for a panel of 56 countries for 2013–19, focusing on these important conditioning factors. We find that that greater social capital results in higher levels of FinTech lending. These results are robust to different model specifications, after correcting for possible endogeneity issues, and over different indicators of social capital. This effect is more pronounced for countries with better institutions, higher internet penetration, and lower income inequality – highlighting the need for authorities to consider their impact when formulating policy.

This study inspects the asymmetric tail risk dynamics, efficiency, and interconnectedness among FinTech stocks, cryptocurrencies, and traditional assets. Firstly, we employ the Multifractal-Asymmetric Detrended Cross-Correlation Analysis to examine the cross-correlation patterns and efficiency dynamics of the analyzed assets. The findings reveal asymmetries in cross-correlations and the presence of multifractality, highlighting the nonlinear relationships among these assets and find FinTech assets are the most efficient. Secondly, we utilize the time domain quantile connectedness method to investigate tail risk connectedness, offering insights into the network’s shock transmission and spillover effects. Our analysis identifies the major risk transmitters (FinTech stocks) and receivers (bond), emphasizing the interconnectedness of the assets. Additionally, the study conducts bivariate portfolio analysis, considering short and long investment horizons, to guide asset allocation and hedging strategies. Our findings have significant implications for facilitating informed investment strategies and improving the stability and resilience of financial markets.

Purpose: This study investigates the influence of geopolitical risk on firm investment inefficiency and explore the moderating role of corporate governance on the above relationship using a dataset of 43,182 observations from Indian-listed firms between 2002 and 2023.
Design/methodology/approach: The study employs pooled ordinary least squares regression models with firm and year fixed effects. Robustness tests include entropy balancing and alternative proxies, quantile regression and endogeneity checks via two-stage least squares and Oster (2019) omitted variables test.
Findings: The results shows that heightened geopolitical risk significantly worsens investment inefficiency, increasing both overinvestment and underinvestment, while strong corporate governance mitigates these effects. Cross-sectional analysis shows the impact is more pronounced in firms with lower cash holdings, more irreversible investments, fewer financial constraints, those operating in industries with higher exposure to geopolitical risk and those in competitive industries.
Practical implications: The study highlights the positive impact of geopolitical risk on investment inefficiency, emphasizing the need for financial support mechanisms such as subsidies and credit facilities. Firms should adopt proactive investment strategies while strengthening corporate governance, disclosure and transparency to reduce information asymmetry. Investors should prioritize firms with strong governance, and regulators must promote competition-friendly policies to ensure efficient capital allocation under high geopolitical risk.
Originality/value: This study advances corporate finance literature by providing new evidence regarding the impact of geopolitical risk on investment inefficiency. It is among the first studies to show that strong corporate governance mitigates adverse effects of geopolitical risk. Additionally, it examines how cash holdings, irreversible investments, financial constraints and market competition shape the geopolitical risk–investment inefficiency relationship.

This study investigates the relationship between CEO narcissism and corporate greenwashing practices. Given the increasing scrutiny on corporate sustainability, understanding this relationship is crucial to promote genuine environmental practices. Utilising a comprehensive dataset for non-financial S&P 1500 firms from 2007 through to 2018, we find that firms led by narcissistic CEOs are more likely to engage in greenwashing. We further find this relationship to be more pronounced when narcissistic CEOs increasingly engage in CSR initiatives, employ greater financial leverage and face more financial constraints. Our findings suggest that narcissistic traits in CEOs can undermine genuine corporate sustainability efforts, highlighting the need for stronger governance and transparency measures. Our results remain robust to alternative specifications, endogeneity tests and promotes the significance of balanced financial decision-making and enhanced board oversight.

This paper investigates how major customer firms, managed by highly capable managers, can gain bargaining power over their suppliers. Our results document a positive association between managerial ability and the supply chain power a major customer firm holds over its suppliers.

This study aims to investigate how a firm’s management team’s capacity to efficiently use its resources affects the firm’s exposure to climate change. Specifically, the authors investigate the intriguing question – does managerial ability affect a firm’s climate change exposure? The analysis shows a negative, statistically significant impact of managerial ability on climate change exposure.

We investigate the impact of regional social capital on firms’ ability to attain bargaining power over their supply chain partners. Using ordinary least squares and instrumental variables estimations, we find a positive relationship between firm-level supply chain power and US county-level social capital.