Research

Biodiversity risk and corporate labour adjustments

Abstract: This paper examines the impact of biodiversity transition risk on labor demand and supply. Using the “30 by 30” target of the Kunming Declaration, which aims to expand biodiversity-protected areas to cover 30% of the planet, as an exogenous shock to biodiversity transition risk, we show that firms adjust their workforce and reallocate their resources away from regions affected by these conservation efforts. Our paper contributes to the ongoing debate about the costs and benefits of biodiversity conservation policies and their implication for labor market outcomes.

Speaker biography: Louis Nguyen is Professor in Finance at Durham University Business School. Prior to joining Durham in 2021, he was an Associate Professor of Finance at King’s College London and an Assistant Professor in Banking and Finance at the University of St Andrews.

Louis holds a BSc (Hons) in Computing from the National University of Singapore, an MSc (Distinction) in Accounting, Finance, and Management from the University of Bristol, and a PhD in Finance from the University of Edinburgh. His research has earned several best paper awards, along with the David Hume Publication Prize in 2015. Louis’ research and teaching interests include empirical corporate finance, banking, and climate finance. His research has appeared in Review of Financial Studies, Management Science, Journal of Financial and Quantitative Analysis, Review of Finance, Review of Corporate Finance Studies, Journal of Money, Credit, and Banking, Journal of International Business Studies, and several other journals across disciplines in finance, economics, accounting, and management. His research has been featured in Forbes, Harvard Business Review, the BBC, the Boston Globe; and been funded by the British Academy/Leverhulme Trust and the Carnegie UK Trust. Louis serves as Associate Editor to the European Journal of Finance and the British Accounting Review.

Uncertainty Creates Zombie Firms: Implications for Industry Dynamics and Creative Destruction

Joint with Kevin Aretz (University of Manchester), Murillo Campello (Cornell University and NBER), and Gaurav Kankanhalli (University of Pittsburgh).

Guest speaker: Kevin Schneider (Cambridge).

Abstract: We show how the threat of “uncertainty-induced zombification” — creditors’ willingness to keep their distressed borrowers alive when faced with uncertainty — shapes various industry dynamics. Under areal options framework, we demonstrate that unlevered firms become reluctant to invest and disinvest in anticipation that uncertainty induces creditors to convert defaulting rival firms into zombies. We validate our theory using dynamic, industry-specific estimates of uncertainty-induced zombification together with loan contract-level data. Empirically, higher uncertainty-led rival zombification prompts healthy firms to reduce their costly-to-reverse capital investment and disinvestment, hiring, and establishment-level openings and closures (intensive and extensive margins are affected). We confirm those dynamics using granular, near-universal data on the asset allocation decisions of global shipping firms. Critically, uncertainty-led zombification depresses healthy firms’ long-run sales, profits, and stock returns. Our results reveal nuanced effects on creative destruction — while healthy firms’ asset reallocation slows down, their innovation activity accelerates. Our findings highlight a novel channel through which uncertainty shapes firms’ capital accumulation, distorting their real and financial policies and performance.

Speaker biography: Kevin is Research Associate in Theoretical Finance in Judge Business School, University of Cambridge. He holds a BSc in Mathematics from Saarland University (Germany), MSc in Quantitative Finance from Lancaster University and a 2023 PhD from University of Manchester. His research focuses on how real options shape real and financial corporate policies and expected stock returns.

Temperature Exposure and Green Revenues of Firms Around the World

Guest speaker: Panagiotis Tzouvanas (Portsmouth).

Abstract: This paper examines the temperature anomaly exposure of firms around the world. We construct temperature beta using Asset Pricing Models, incorporating countries’ temperature anomaly as an additional factor. We document that the transmission mechanism by which temperature anomalies affect stock returns is through the channel of cash flows and profitability. Such we find a statistically significant and negative temperature beta. In addition, we explore hedging mechanisms to mitigate temperature risk exposure, and our findings suggest that firms engaged in green activities, as measured by green revenues, demonstrate resilience to temperature risk. Also, low temperature exposure stocks generate around 1% more annualised returns compared to stocks in the highest temperature exposure decile. Finally, there is a significant temperature risk premium associated with buying negative climate beta stocks and shorting positive ones, estimated at a rate of 1.32%.

Speaker biography: Panagiotis is a Senior Lecturer in Portsmouth Business School. He completed his PhD in Finance from the University of Portsmouth in 2021. He specialises in Climate Finance and has already published more than ten papers in related fields in peer-reviewed academic journals including Energy Economics, Economics Letters, British Accounting Review,  Journal of International Financial Markets, Institutions and Money, Journal of Economics Studies, International Review of Financial Analysis, among others.

The Cost-based Value Chain Analysis (CVCA): A Proposal to Tax Business Profits in the Global Economy

Abstract: Digitalisation in international business value chains has exacerbated the misattribution of taxable profits and base erosion into low-tax jurisdictions. Recent responsive proposals discriminate across types of digital activities and misrepresent synergy within the global business group, thereby worsening misattribution. International business tax literature across economics, law, and policy disciplines neither clarifies profit valuation at source in a synergistic value chain nor provides a practical consensus on profit allocation. We still do not have a baseline to assess the misattribution of multinational taxable profits.

How, then, should host tax jurisdictions share the global business profits tax base? This thesis proposes that the taxable profits of a global business group should be allocated in neutral proportions to business activities across all host tax jurisdictions. Taxable proportions should be neutral across the types of business activity, level of digitalisation, and location. The thesis extends the international business tax literature using an interdisciplinary tax theory and management accounting approach to craft a new definition for misattribution, coined as inter-input equity, and to design the Cost-based Value Chain Analysis (CVCA) to allocate multinational taxable profits. Inter-input equity requires that business activities of the same type receive similar proportional allocations of taxable profits across the multinational business group, regardless of geographic value chain position or extent of digitalisation. This baseline establishes a midpoint between ad hoc origin-based valuation of business activity and cumulative division of the profits tax base between host tax jurisdictions.

The inter-input equitable CVCA measures business activities using costs, derives a consolidated markup of profit by cost per business group taxpayer, and delivers relative and substantive equality of jurisdictional tax rights with minimal distortion to business decisions. Finally, the thesis develops an interdisciplinary evaluation framework to compare the CVCA against the market-based and formulary apportionment proposals by integrating tax rights fairness, efficiency, neutrality, and administrability criteria.

Speaker biography: Benita Matthews is a lecturer at the Surrey Business School. She is an ACCA and ACGP Affiliate from PwC Academy. She holds an MSc in Accounting and Taxation from the University of Exeter and a BSc in Applied Accounting from Oxford Brookes University. Her research interests lie at the intersection of  AI, digital business models, tax policy, e-administration and compliance.

Fintech and green finance in banking: the interplay of geographic dispersion and bank governance

Abstract: Both fintech and green finance are central themes in the ongoing international discourse on banking sector development, yet they are generally treated as separate in academic research. This study connects fintech and green finance by exploring the potential of fintech in facilitating banks’ engagement in green finance. We introduce a novel measure for assessing geographic dispersion of bank branches and investigate how the impact of fintech on green finance activities is related to geographic dispersion and its interplay with bank governance. Drawing upon a sample of all listed banks in China over the 2010-2022 period, we find that fintech negatively affect green lending participation of geographically more dispersed banks. However, when accompanied by effective bank governance, even highly dispersed banks can unlock the supporting effect of fintech on green lending. Our results are robust after employing alternative measures for fintech and green finance engagement, a subsample, and an instrumental variable approach. This study represents the pioneering attempt to link geographic dispersion and bank governance with banks’ dynamic capabilities. The findings hold important implications for banks aimed at implementing a green and responsible strategy: to leverage fintech-enabled green finance, banks particularly those with a wider geographical presence should further enhance their corporate governance practices to cultivate stronger dynamic capabilities that facilitate effective deployment of fintech.

Speaker biography: Maggie Fu (Macau) is an Associate Professor of Finance and Business Economics at the University of Macau. She is the Director of the Asia-Pacific Academy of Economics and Management, University of Macau, Research Fellow, Institute of Advanced Studies in Humanities and Social Sciences, University of Macau. Among others, her research focuses on sustainable finance and responsible innovation. She has published widely including Journal of Corporate Finance, Journal of Banking and Finance, Journal of World Business, Journal of Product Innovation Management, British Accounting Review, Economic Enquiry.

Opening the Brown Box: Production Responses to Environmental Regulation

Abstract: We study production responses to an emission capping regulation on manufacturing firms. Firms reduce pollution by electrifying their production, producing less coal-intensive products, and increasing their abatement expenditures. Firms preserve profitability by increasing their production of higher-margin products. However, firms in highly polluting industries produce fewer products. In the aggregate, we document lower product variety, an altered firm-size distribution, and lower business formation. Our findings highlight the mechanisms behind how mandated pollution reduction can be effective and its costs, suggesting a loss in agglomeration externalities.

Speaker biography: Lakshmi Naraayanan (LBS). After completing a PhD in Finance at the Hong Kong University of Science and Technology in 2020, Lakshmi joined London Business School as an Assistant Professor in Finance. His research interests lie in the area of empirical corporate finance – including corporate governance, entrepreneurship, financial intermediation, and law and finance. His research has been published in Review of Financial Studies and Journal of Financial Economics.  His research has won several awards including the USC Marshall School of Business Trefftzs Award at the Western Finance Association Meetings. His work has been featuring in numerous publications such as the Financial Express, Forbes, Oxford Business and Law, and the World Bank.

Can Markets Save Nature?

Abstract: In recent years, the need for the private sector to step up has become the dominant narrative in the increasingly desperate calls for more investments into nature. A range of financial instruments are available, but financial flows remain stubbornly low. This leads us to ask if private investments in nature are possible or a chimera? We create a simple architecture to probe this question and argue that in the absence of strong supportive policy signals private investors are likely to be a better fit for projects on the demand side of natural capital where nature investments can be tagged onto other activities. These represent 60% of nature investment needs thus highlighting a significant potential, but also compellingly show the need for governments– both to supply the remaining funding and to provide the required conditions to attract private investors. 

Speaker biography: Pernille Holtedahl is a Research Fellow at the Centre for Climate Finance and Investment at the Imperial College Business School. Her area of expertise is green finance, including fixed income instruments (green and sustainable bonds), investor trends and public-private financing of nature-based solutions. In addition to her research activities at CCFI, Pernille is an adviser to private sector clients on nature and climate finance instruments and programmes. She is the founder of Blue Maia Ltd., an advisory firm, and has a long-standing collaboration with the Centre for International Climate and Environmental Research (now part of S&P Global). Pernille holds a PhD in environmental economics from George Washington University and a BA in economics and political science from the University of Oslo.

Does the level of managerial competence lead to higher CEO over-payment?

Abstract: It is not uncommon to confuse top management’s, like CEO’s, performance with managerial compensation. CEO compensation is a complex function of many covariates. We model CEO compensation to include a comprehensive list of rewards and employ a novel model that nests a plethora of CEO- and firm-specific characteristics. Our model reveals for the first time CEO competence and it relates it with the probability of a CEO being overpaid or otherwise underpaid. Indeed, we provide exact figures of CEO’s over- and under-payment. The parameter estimates of our model is by no means an easy task and employ Bayesian estimation techniques to gain in accuracy and efficiency. There is variation in our results when we control for offering as part of CEO’s compensation ownership incentives such as stock options. We, also, reveal thresholds on both CEO competence and over-payment. Our model and results could inform regulators, shareholders, investors as well as CEOs on setting executives’ packages that reward talent, viz. competence in our model. 

Speaker biography: Emmanuel Mamatzakis (Birkbeck) is a Professor of Finance at Birkbeck Business School, University of London. He holds a DPhil in Economics from the University of London, Queen Mary College, an MSc in Economics from the University of Warwick, and a BSc in Economics from the Department of Economics of the National and Kapodistrian University of Athens. His research is primarily driven by its impact on the real economy. He has published widely including Journal of International Money and Finance, Journal of Banking and Finance, European Journal of Operation Research, Journal of International Financial Markets, Institutions and Money, Review of Financial Economics, Manchester School, Bulletin of Economic Research among others.

Digital Frontiers: Balancing Cybersecurity Risks in the Age of Digital Transformation

Abstract: This study examines the relationship between digital transformation and exposure to cybersecurity risks at the firm level. The integration of advanced digital technologies can strengthen a firm’s cybersecurity capabilities, but it may also increase entry points for cyberattacks, potentially raising the firm’s overall cyber vulnerability. We empirically test this conjecture utilizing a matched sample of 9,606 U.S. firm-years spanning 2006–2023, including 543 documented cyber breaches, and find that greater digital transformation—as reflected in 10-K business descriptions—is positively associated with experiencing future cybersecurity breaches. Our empirical analyses reveal that a one standard deviation increase in digital transformation corresponds to a rise in future breach likelihood of up to 10 percentage points. We find that the exposure primarily stems from organizational, not technological, dimensions of digital transformation. Technologically competent auditors, boards, and operational officers mitigate cyber risk, but primarily for less digitalized firms. This study underscores the paradox of digital transformation, where technological innovation enhances business operations but simultaneously increases vulnerability to cyber threats, especially for highly digitalized firms. Our findings point towards adaptive and resilience-based cybersecurity approaches in highly digitalized organizations.

Speaker biography: Jukka Sihvonen (Aalto) holds a PhD in Finance from the University of Vaasa. He is an assistant professor of financial accounting at Aalto University School of Business and specializes in digital transformation in accounting and finance, particularly in the utilization of data and artificial intelligence. He has published in British Accounting Review, European Accounting Review, Journal of Financial Stability, Artificial Intelligence in Accounting, among others.

Research and publications - editors' perspectives

Professor Nandini Gupta, Kelley School of Business, Indiana University

Professor Sumon Bhowmick, Sheffield Business School

Uncertainty Creates Zombie Firms: Implications for Industry Dynamics and Creative Destruction

Abstract: We show how the threat of “uncertainty-induced zombification” — creditors’ willingness to keep their distressed borrowers alive when faced with uncertainty — shapes various industry dynamics. Under a real options framework, we demonstrate that unlevered firms become reluctant to invest and disinvest in anticipation that uncertainty induces creditors to convert defaulting rival firms into zombies. We validate our theory using dynamic, industry-specific estimates of expected uncertainty induced zombification together with loan contract-level data. Empirically, higher uncertainty-led rival zombification expectations prompt healthy firms to reduce their costly-to-reverse capital investment and disinvestment, hiring, and establishment-level openings and closures (intensive and extensive margins are affected). We confirm those dynamics using granular, near-universal data on the asset allocation decisions of global shipping firms. Critically, uncertainty-led zombification expectations depress healthy firms’ productivity and market valuations. Our results reveal nuanced effects on creative destruction — while healthy firms’ asset allocation slows down, their innovation activity accelerates. Our findings highlight a novel channel through which uncertainty shapes firms’ capital accumulation, distorting their real and financial policies and performance.

Speaker biography: Kevin Aretz is a Professor of Finance at Alliance Manchester Business School. His research leverages real options asset pricing models to explore stock return anomalies and uses shock-based inference methods to investigate corporate finance topics, including debt access. Recently, he has begun analyzing the cross-section of returns in non-equity asset classes, such as single-stock options and corporate bonds. He has an extensive publication record in leading finance journals, including the Journal of Finance, Journal of Financial & Quantitative Analysis, Management Science, Review of Finance, Journal of Corporate Finance, Journal of Banking and Finance, and the International Journal of Forecasting.

Guardians at the Gates: Home CEOs and Antitakeover Provisions

Abstract: We examine the impact of CEOs’ home bias on antitakeover provisions driven by agency motivations. Firms led by home CEOs, implying heightened incentives to manage firms in their birthplace, are more likely to adopt ATPs. This effect is exacerbated in weak governance firms and high takeover threat environments. The adoption of state-level poison pill laws alleviates the impact of home CEOs on ATPs, suggesting that they serve as substitutes. These firms are associated with a lower likelihood of receiving bids and completing deals, a higher likelihood of withdrawn or completed in-state deals, reduced takeover premiums, and lower announcement returns.

Speaker biography: Zicheng Lei is a Senior Lecturer in Finance (Associate Professor) at King’s Business School. He holds a PhD in Finance from the University of Warwick, an MSc in Finance from the University of Manchester, and a BSc in Accounting from Jiangxi University of Finance and Economics. He is also a Fellow of the Higher Education Academy. His research interests lie in corporate finance, focusing on corporate payout policy, corporate political activism, mergers and acquisitions, green finance, climate finance, earnings management, corporate social responsibility, and empirical behavioural finance. He has published articles in esteemed international journals such as the Journal of Financial and Quantitative Analysis, the Journal of Corporate Finance, and the British Journal of Management. His research has made a significant impact beyond academia, with papers publicized by the Harvard Law School Forum on Corporate Governance, The FinReg Blog, and Hedge Fund Alpha

Understanding Decision-Making Through Kahneman’s Lens: Insights from Thinking, Fast and Slow

Speaker: Hirindu Bulathsinhala (Surrey).

Abstract: This presentation delves into Daniel Kahneman's seminal work, Thinking, Fast and Slow, which explores the dual-system model of thinking: System 1 (fast, intuitive) and System 2 (slow, deliberate). The discussion will highlight key behavioural insights, such as cognitive biases, loss aversion and the impact of framing on decision-making. The discussion will examine how these modes influence everyday choices and behaviours, often leading to biases and errors. Examples will illustrate key concepts, such as the tendency to avoid losses, the influence of context on decision-making and the challenges of overconfidence. Practical insights will highlight ways to improve judgment and decision quality in complex scenarios. 

Speaker biography: Hirindu is a final year PhD student in Finance at Surrey Business School. She holds an MSc in Management from the University of Sri Jayawardenepura, Sri Lanka (2017–2020) and a Bachelor of Commerce (Special) in Business Technology from the University of Kelaniya, Sri Lanka (2011-2015), both with first-class honours. She is also a Certified Business Accountant (ICASL) and an Associate of the Higher Education Academy (AHEA). She worked as a Senior Lecturer (2016–2022) at the University of Kelaniya, Sri Lanka, with experience in teaching and research in behavioral finance and management. Her PhD research focuses on Behavioural Finance, Investor Sentiment, Firm Complexity and Textual Analysis using Python.

Are better ESG companies involved in more controversies?

Speaker: Markku Kaustia (Aalto).

Abstract: This paper is the first to examine how corporate environmental, societal and governance (ESG) measures are related to corporate controversies. To investigate this, we use Refinitiv data for 3,700 companies from Europe and the United States during the period of 2004 to 2021. We find that higher ESG ratings actually predict having more controversies in the future, up to two years ahead. The relationship is robust in US as well as Europe, and, in most specifications, it applies separately to each of the individual E, S, and G components. The results hold in several robustness checks such as splitting the dataset across time and by company type. We put forth the ESG salience hypothesis working through media attention as a plausible channel to account for these results.

Speaker biography: Markku Kaustia holds the Hannes Gebhard Professorship in Finance and Insurance at Aalto University, Finland. His research covers a broad spectrum of topics, including financial markets, investment strategies, behavioral finance, investor activity, household financial decisions, and investment behavior. He frequently publishes in leading finance journals such as the Journal of Finance, Journal of Financial Economics, Journal of Financial and Quantitative Analysis, and Management Science.

Predatory Advertising, Financial Fraud, and Leverage

(This is a joint work with S Dasgupta, R Shi and J Yan).

Abstract: We examine how an industry leader’s competitors respond when financial fraud by the leader is publicly revealed. We document evidence of predatory advertising and pricing. Close competitors of the leader step up advertisement spending relative to control firms. Although we do not directly observe product prices, we find that even though advertisement increases, competitors’ profit margins drop, consistent with predatory pricing. Evidence of predation is stronger when rival firms have larger market share, the fraud firm has higher leverage, and when the average leverage of rival firms is lower. The effects appear mainly in industries that produce customized products and where consumer switching costs are high. Increasing advertising expenditure appears to be a more potent predatory strategy in industries that experience new customer growth, whereas cutting prices appears more potent in industries with stagnant customer base. We present a switching cost model similar to Klemperer (1995) that generates implications broadly consistent with these observations.

Speaker biography: Shantanu Banerjee is a Professor in the Accounting and Finance department of the University of Liverpool. His research interests encompass Corporate Finance issues and their interaction with Accounting regulations and practices. His work has contributed to the debates on the investment decision of firms, financing choice, financial misconduct, product market strategy, IPO, bankruptcy, executive compensation, sustainability in business and corporate social responsibility. His work has been published in journals such as the Journal of Finance, Journal of Accounting Research, Review of Finance, Journal of Corporate Finance, European Journal of Operational Research and Journal of Business Ethics. He is an editor of the Journal of Business Finance and Accounting. Shantanu holds a PhD in Finance from Hong Kong University of Science and Technology.

Environmental Penalties and Green Talk: evidence from conference calls

Speaker: C. De Amicis -Skema Business School.

Abstract: This paper investigates how firms adjust their environmental disclosure strategies in response to environmental sanctions. Using natural language processing (NLP) techniques, we analyze the environmental content of earnings conference calls held by U.S.-listed firms from 2012 to 2022, focusing on changes around the announcement of environmental violations.

Our findings document a “Green Evasion Effect”, where CEOs talk less about environmental topics in calls immediately preceding the announcement of environmental penalties. This effect is stronger for firms that are  expected to uphold high environmental standards. Conversely, analysts increase their focus on environmental topics after the announcement, particularly for firms with higher environmental reputations. We further document that investors also respond negatively to environmental sanctions, with more pronounced market reactions for firms perceived as environmentally responsible.

Speaker biography: Sonia Falconieri is a Professor and the Head of Department of Finance and Accounting at the Bayes Business School, City University. Her research interests are in Corporate Finance and Corporate Governance. Specifically, she has been working on the optimal design of Initial Public Offerings and, more recently, on gender diversity in Corporate Finance. Her articles have been published in some major journals such as the JEEA, the Review of Finance, and the Journal of Corporate Finance. Her recent work on gender quotas has been featured in numerous media outlets including People Management and Forbes. Dr Falconieri was also one of the contributors to the 2019 Hampton-Alexander review. Sonia received her Bachelor and Master degree in Economics from Bocconi University, Milan (Italy) and holds a PhD in Economics from the University of Toulouse (France).

Contagion vs Competition: Evidence from Crypto Exchange flows

Speaker: Gueswith D. Bianchi.

Abstract: The paper conducts an in-depth investigation into systemic risk within the cryptocurrency ecosystem by analysing inter-exchange flows before and after major disruptions, with a particular focus on the FTX bankruptcy. By disentangling the interplay between competition and contagion among cryptocurrency exchanges, we assess how such shocks propagate through the network, reshaping liquidity conditions and influencing the mechanisms of price discovery. Our analysis sheds light on the resilience of the crypto market, revealing the extent to which disruptions trigger liquidity fragmentation, price inefficiencies, and shifts in trader behaviour across interconnected exchanges.

Speaker biography: Kirill completed his PhD in economics at the European University Institute (Florence, Italy). He is a Senior Lecturer in the School of Economics at the University of Surrey. He was previously a Foscolo Europe Fellow at EIEF. His research interests lie in International Macro/Finance, Asset Pricing, Cryptocurrencies, Sovereign Bonds. Kirill has published in Management Science, Journal of International Money and Finance, Review of Economic Dynamics, Journal of International Financial Markets, Institutions and Money, among others.

Heterogeneity in Investor Reaction to MNE’s ESG Incidents

Speaker: Onur Tosun (Cardiff Business School).

Abstract: We study whether investors react differently to multinational enterprises’ (MNEs) ESG incidents across countries. We use a novel “Perception Index” to measure how domestic investors view other countries, based on their economic strength and legal power. Examining firms in 30 countries with the most ESG incidents for 2007-2022, we reveal heterogeneity in traders’ reaction to such incidents through cumulative abnormal returns (CAR). Guided by the Institutional Theory, we show MNEs face up to 0.9% greater negative daily CAR when investors perceive the incident country as legally and economically superior to others, including their home country. These findings document limits to “home bias”. Granular analyses indicate that neither severity and reach of incidents nor cultural aspects e.g., egalitarianism and trust, change investors’ trading behavior while religion seems to be a significant factor, and such heterogenous reaction is particularly evident for recurring cases and human rights incidents.

Speaker biography: Onur Tosun is a Reader (Associate Professor) in Finance and a Senior Fellow of the UK Higher Education Academy. He leads the Cardiff Sustainable Finance Research Group and the Sustainable Society Research Alliance. He earned his PhD in Finance and Economics from the University of Maryland and holds an MBA from Boğaziçi University in Turkey. His research spans empirical corporate finance, executive compensation, capital structure, corporate governance, corporate social responsibility, and institutional investors. His work has been published in journals such as the British Journal of Management, Financial Management, European Financial Management, Journal of International Financial Markets, Institutions and Money, European Journal of Finance, and Journal of International Money and Finance, Economics Letters, among others. His research has also been featured in media outlets including the Financial Times, Business Review Europe, Business Standard, South China Morning Post, Money Radio, Heart Wales Radio, Global Radio, LBC News, Capital FM, Asharq News TV - Bloomberg, and academic platforms such as the NYU School of Law Blog, Harvard Law School Forum, and Columbia Law School Blog. He currently serves as an Associate Editor for Finance Research Letters, International Review of Economics and Finance, and the Journal of Sustainable Finance & Investment.

Opportunistic Borrowing Before Default? A New Test Using Multiple Delinquent Credit Cards

Speaker: Constantinos Antoniou (Warwick Business School).

Abstract: We investigate whether credit card holders borrow opportunistically prior to defaulting on their credit card debt. Our analysis focuses on borrowers who go delinquent on multiple credit cards simultaneously, with some of them eventually being charged off. To control for all unobserved time-variant borrower-specific factors that influence delinquency and default, we then use borrower-by-billing-cycle (year-month) fixed effects. Under strategic default, we expect borrowers to opportunistically utilize available credit on the cards that are eventually charged off, relative to those that are not. Contrary to this expectation, we find that, if anything, users borrow less and repay more on the delinquent cards that are ultimately charged off. These findings suggest that either non-economic factors play a significant role in mitigating opportunistic borrowing in the credit card market or that people are seriously mistaken about the likelihood of their cards being charged off after delinquencies.

Speaker biography: Constantinos is an Associate Professor of Finance at Warwick Business School (WBS), where he began his tenure in 2013 as an Assistant Professor of Finance and Behavioural Science. He earned his PhD from the University of Durham. His research interests lie in behavioural finance, particularly in understanding how learning and expectation formation influence portfolio selection, corporate decision-making, and empirical asset pricing. His work has been featured in leading academic journals including the Review of Financial Studies, Management Science, Journal of Financial and Quantitative Analysis, Journal of Corporate Finance, and Journal of Banking and Finance, among others.

Chasing Subsidies, Missing Effort: Disclosure Quality and Resource Misallocation in Chinese Firms

Speaker: Si Zhou (University of Science & Technology Beijing)

Abstract: Can increased competition for public resources deteriorate firms’ disclosure quality, thereby leading to the allocation of resources to undeserving firms? Using the departure of top provincial officials during China’s anti-corruption campaign as a shock to the competitive allocation of government subsidies, we find that firms are more inclined to excessively emphasize their investment in digitalization without making corresponding practical efforts (a phenomenon we term “Digitalwashing”). This effect is more pronounced among financially constrained firms, with weaker monitoring mechanisms and less political connection. Digital-washing enables firms to acquire additional government resources and attract more government customers despite showing no better performance than their peers. Our evidence supports legitimacy theory, indicating that firms enhance their public image through digitalization disclosures without substantively changing their underlying activities. This behaviour distorts the allocation of public resources, leading to no corresponding improvement in firm performance.

Speaker biography: Si Zhou is an Associate Professor of Finance at the University of Science and Technology Beijing. He earned his PhD from Durham University and previously held a teaching position at Shanghai University before relocating to Beijing. His research focuses on empirical corporate finance, mutual fund performance and managerial structures, as well as banking and financial institutions. He has published in leading journals such as the Journal of Corporate Finance, Journal of Banking and Finance, and Journal of Empirical Finance, among others.

Dr. Si Zhou is an Associate Professor of Finance at the School of Economics and Management, University of Science and Technology Beijing. Prior to joining USTB, he served as Associate Dean and Associate Professor at the School of Economics, Shanghai University. He has also held positions as Assistant Professor of Finance at the University of Aberdeen and the University of Southampton in the UK. Dr. Zhou received his PhD from Durham University, UK. His research interests include empirical corporate finance, mutual fund performance evaluation, managerial structure, and banking. His work has been published in international research journals such as the Journal of Corporate Finance, Journal of Banking & Finance, Journal of Financial Stability, Journal of Empirical Finance, and Journal of Financial Research. Dr. Zhou is a fellow of the Shanghai Young Eastern Scholar Program. He also holds visiting positions at the University of Milan, the University of Macau, and the International Business School Suzhou.

Cultivating Innovation: The Role of Outdoor Green Space in Corporate Green Innovation

Speaker: Yeqin Zeng (Durham Business School)

Abstract: Using a unique dataset on land use in China, we find that the presence of parks and green areas within a 1-kilometer radius of firms’ geographic locations is positively associated with the number of green patents filed and their future citations. To address identification concerns, we employ matching approaches, two-stage least squares regression, high dimensional fixed effects, and placebo tests. Our path analysis shows that firms surrounded by green spaces are more likely to appoint CEOs and directors with environmental expertise and exhibit a greater strategic emphasis on innovation in corporate disclosures, both of which contribute to enhanced green innovation. The relation between green space coverage and green innovation is stronger for firms operating in highly competitive markets, with weaker pioneering innovation capabilities, higher business diversification, greater media coverage, and lower corporate social responsibility performance. These findings highlight the importance of urban green spaces in fostering corporate sustainability and innovation.

Speaker biography: Yeqin Zeng is currently an Associate Professor of Finance at Durham Business School. He earned his Ph.D. in Finance in 2013 from the Foster School of Business at the University of Washington. Prior to joining Durham University Business School in 2018, he served as an Assistant Professor of Finance at the ICMA Centre, Henley Business School. His primary research focuses on empirical corporate finance and asset pricing, particularly the role of financial institutions and their interactions with both markets and firms. Beyond these areas, his work has also explored topics such as corporate hedging, executive gender and pay disparities, stock price crash risk, mergers and acquisitions, cash valuation, investment efficiency, cost behaviour, trade credit, empirical tests of asset bubbles, and the interplay between bank loans and firm leverage. His research has been published in journals including the Journal of Corporate Finance, European Financial Management, International Review of Financial Analysis, Asia-Pacific Journal of Accounting & Economics, and the International Review of Economics and Finance.

FinTech and Unemployment: New Evidence on the Role of Labor Market Regulation

Speaker: Irwan Trinugroho (Universitas Sebelas Maret (FEB UNS), Indonesia)

Abstract: FinTech has changed the financial market landscape, where product and process innovation has taken place to improve productivity and efficiency. However, concerns over technology replacing human roles have led to discussions in finding tolerance and formulating effective policy responses, particularly regarding labor market regulations. This article investigates the impact of FinTech and labor market regulation on unemployment across 65 countries from 2008 to 2020. To construct the FinTech indicator, this paper employs an innovative web browsing technology method that covers four dimensions: artificial intelligence, blockchain-related, cloud technology, and data technology. The system GMM (Generalized Method of Moments) estimation method was employed to examine the impact of FinTech and labor market regulation on unemployment, which accounts for endogeneity. The evidence indicates that FinTech has contributed to labor-creating effects, implying that FinTech creates employment opportunities. While labor market regulation shapes employment dynamics with certain aspects requiring stringent regulation; others may benefit from deregulation. Our results are robust to alternative estimation methods, proxies, and sub-sample approaches. Our results highlight the importance of a regulatory framework that combines flexibility in specific sectors with some regulations focused on safeguarding consumers and ensuring systemic stability. This balanced approach would foster innovation and skill development within the FinTech sector. Moreover, it will enable the harnessing of FinTech's potential to create employment opportunities while effectively managing risks and facilitating a fair and inclusive transition for workers in the digital economy.

Speaker biography: Prof. Dr Irwan Trinugroho is a Full Professor of Finance at the Faculty of Economics and Business, Universitas Sebelas Maret (FEB UNS), Indonesia. Currently, he is also the Director of Partnership, Development and International of UNS and the Chairman of the Center of Fintech and Banking UNS. Irwan graduated with a PhD degree in banking and finance from the University of Limoges, France. He has done some research projects and consulting to the Indonesia Financial Services Authority (OJK), the Indonesia Deposit Insurance Corporation (IDIC), World Bank, USAID and Bank Indonesia. Irwan has published a number of papers in reputed journals including Journal of Financial Stability, Economic Modelling, Finance Research Letters, Global Finance Journal, British Accounting Review, Economic Systems, Research in International Business and Finance, Journal of Behavioral and Experimental Finance, Borsa Istanbul Review, International Economics, Economics Bulletin, Emerging Markets Finance and Trade, Singapore Economic Review, International Journal of Emerging Markets and Journal of Asia Business Studies. He also serves as managing editor and associate editor to some reputable journals, including International Review of Economics and Finance (Elsevier).