Jul 2026· Advances in Economics and Management Research· Vol 17, pp. 540· 0 citations· 19 references
Abstract
With exchange rate volatility becoming increasingly pronounced, managing currency exposure has become a central component of corporate decision-making. This paper investigates the link between foreign exchange (FX) uncertainty and technological advancement, using data from Chinese A-share listed firms (2013–2023). We find that higher FX exposure is associated with significantly lower patent output. This negative relationship remains robust to alternative variable definitions, alternative rolling-window lengths and lag specifications, and instrumental variable (IV) approaches. Mechanism tests reveal that financial constraints serve as an important transmission channel: FX volatility elevates the external finance premium and reduces internal liquidity, thereby crowding out R&D investments. Cross-sectional analyses indicate that this crowding-out effect is more pronounced among non-state-owned enterprises (non-SOEs) and firms with foreign revenue exposure. Our findings provide empirical evidence on the real effects of macroeconomic FX shocks and offer implications for FX expectation management and structural monetary policies.
Against the backdrop of escalating financial regulation in China, this study examines how regulatory enforcement intensity affects corporate liquidity risk among A-share listed non-financial firms over 2015–2024. We construct a composite regional regulatory intensity index (Enforce) integrating the frequency and monetary magnitude of administrative penalties issued by local securities regulators and employ firm- and year-fixed-effects panel regressions with the current ratio (CR) as the primary liquidity measure. We find that tighter regulatory enforcement significantly depresses the current ratio, consistent with a compliance-cost channel that constrains short-term debt-servicing capacity. Mediation analysis—conducted separately for each ESG sub-dimension and verified via bootstrap tests—reveals that the corporate governance dimension (G) generates a significant positive indirect effect (consistent partial mediation), the social responsibility dimension (S) generates a significant negative indirect effect (competing partial mediation), and the environmental dimension (E) yields no statistically significant indirect effect. Ownership-type heterogeneity tests confirm that non-state-owned enterprises (non-SOEs) are substantially more sensitive to regulatory tightening than state-owned enterprises (SOEs). Moderation analysis further shows that financial leverage plays a non-monotonic role: the regulation–liquidity effect is negative at low leverage levels and reverses to positive above an estimated threshold (Lev ≈ 0.56). Robustness is established through subsample regressions and a lagged-variable endogeneity test. These findings enrich the institutional finance literature and provide evidence-based guidance for differentiated regulatory policymaking.
Guofeng Luo, Jiaze Liu· International Journal of Fin...· 0 citations
This paper examines how monetary policy surprises (MPS) affect investment–cash flow sensitivity (ICF) among Vietnamese listed firms during 2010–2023, with a particular focus on ownership-based heterogeneity in monetary policy transmission. Vietnam provides a unique setting due to its bank-based financial system, dominant state ownership, and transitional market structure, which together generate heterogeneous financing responses to MPS.
We employ firm-level panel regressions with multiple fixed effects and interaction terms to examine how MPS affect ICF across ownership structures. To address endogeneity concerns, the study applies instrumental-variable techniques to identify exogenous MPS.
The results suggest that increases in MPS weaken, and in some specifications eliminate, ICF at the aggregate level. However, state-owned enterprises (SOEs) remain dependent on internal funds, indicating persistent financing rigidities and the continued presence of ICF, consistent with the pecking order theory. In contrast, foreign-owned firms exhibit no significant ICF, suggesting that non-state and foreign firms are better able to leverage lower interest rates to obtain external capital. Additional analysis shows that firms increase cash holdings and reduce financial investments following MPS, reflecting a short-term “wait-and-see” response, whereas SOEs and foreign firms do not.
The findings suggest that policymakers should maintain a balanced and transparent monetary policy stance to improve the effectiveness of liquidity transmission and reduce financing frictions among non-state firms. For corporate managers, the results highlight the importance of liquidity management and flexible financing strategies when responding to unexpected monetary shocks.
This study extends the traditional investment–cash flow sensitivity (ICF) framework by treating monetary policy surprises as exogenous liquidity shocks and provides new firm-level evidence on how ownership structure shapes monetary policy transmission in an emerging market context.
Bao Cong Nguyen To, B. Q. Nguyen, Khanh Hoang· International Journal of Man...· 0 citations
This study explores whether institutional investors' ESG preferences affect firms' real investment decisions in China. Using quarterly panel data from Q1 2009 to Q4 2023, we construct a measure of ESG‐oriented institutional ownership (
ESGIO
) and find that firms with higher ESGIO exhibit significantly greater capital expenditures, and this remains robust after distinguishing from the effect of general institutional ownership. This relation is also robust to various specifications and endogeneity concerns. Mechanism tests show that the relation between ESGIO and investment is stronger when stock prices are more informative and trading liquidity is higher. The effect is stronger among non‐state‐owned enterprises, highly leveraged firms, firms with lower internal cash flow, lower ESG rating divergence, externally assured ESG disclosures and during periods of elevated investor sentiment. This paper highlights the role of capital markets in promoting sustainable corporate investment and offers policy insights, suggesting that an enhanced ESG disclosure framework can facilitate the allocation of ESG‐aligned patient capital.
T. Tang, Jiahui Guo, Rosie Parker et al.· Accounting & Finance· 0 citations
Amid the profound restructuring of global value chains, supply chain risk has mainly been linked to visible shocks such as pandemics, wars, and geopolitical conflict. Much less is known, however, about whether exchange rate volatility can become a source of operational instability within firms. We examine this question using Chinese A-share listed firms from 2007 to 2021. We construct an industry-level exchange rate volatility measure by combining ADB input–output tables with bilateral real exchange rate volatility, and measure firms’ perceived and disclosed supply chain disruption risk from the MD&A sections of annual reports using a word-embedding approach. We find that higher industry-level exchange rate volatility is associated with a significant increase in firms’ perceived and disclosed supply chain disruption risk. The mechanism evidence indicates that this effect operates through both supply-side operating frictions and demand-side pressure: higher industry-level exchange rate volatility reduces inventory turnover and weakens overseas revenue realization. The effect is weaker in industries with longer backward production length but stronger among firms facing tighter financing constraints. It is also stronger among firms located in more open regions, firms with overseas-experienced executives, and firms with greater export intensity, but weaker among manufacturing firms. These findings extend research on the real effects of exchange rate volatility by showing how industry-level exchange rate uncertainty can materialize as firm-level perceived and disclosed supply chain disruption risk and undermine the operational continuity and long-term economic sustainability of internationally connected supply chains.
Xinjian Chen, Linna Zhang, Ye-Ying Wu· Sustainability· 0 citations
Corporate tone manipulation – the strategic inflation of positive sentiment in narrative disclosures above what underlying financial fundamentals would predict – is a pervasive but under-regulated form of soft information distortion that can mislead investors and distort capital allocation. We examine whether liberalisation of capital markets, proxied by inclusion in China’s Shanghai-Hong Kong Stock Connect programme, disciplines corporate tone manipulation in listed enterprises. We employ a difference-in-differences design exploiting the staggered inclusion of A-share firms in Stock Connect as a quasi-natural experiment. We argue that capital market opening reduces tone manipulation through two main channels: increased analyst coverage that improves information intermediation and reduced information asymmetry, proxied by narrowing bid-ask spreads. We additionally hypothesise that the disciplinary effect is stronger for privately owned firms than for state-owned enterprises, suggesting fewer pre-existing governance limitations. Our study contributes to the literature on capital market liberalisation and to the growing literature on the quality of soft information in corporate disclosures. Our study has implications for regulators who may be interested in using market opening as a tool to improve the quality of narrative reporting.
Anqi Xue· Highlights in Business, Econ...· 0 citations
This study investigates the impact of real effective exchange rate (REER) volatility on foreign direct investment (FDI) inflows in three major Central and Eastern European (CEE) economies—Hungary, Poland, and Romania—using quarterly data spanning from 2007-Q1 to 2024-Q4. The exchange rate volatility is modeled using a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) framework, and country-specific relationships are estimated through Autoregressive Distributed Lag (ARDL) bounds testing and Toda–Yamamoto causality analysis. Our research indicates that a uniform relationship does not exist across the region. In Hungary, the utilization of directional FDI data excluding Special Purpose Entities (SPEs), in conjunction with structural breaks and quarterly seasonal controls, reveals a statistically significant nonlinear (inverted U-shaped) relationship between long-run exchange rate volatility and FDI inflows. In addition, domestic financial development exerts a substantial buffering effect on the transmission of volatility in Hungary by bypassing SPE flows that previously obscured this effect. In Poland and Romania, a stronger currency consistently discourages investment by reducing cost competitiveness. Romania shows a distinct pattern: volatility initially attracts FDI, and while deeper financial markets meaningfully dampen this effect, the net relationship remains positive, unlike Hungary, where sufficiently deep credit markets fully reverse it. These results suggest that policymakers should look beyond short-term exchange rate stabilization and instead prioritize structural reforms, competitive exchange rate levels, transparent FDI reporting standards, and deeper domestic financial markets to sustain FDI inflows.
Fatima Kobeissy, Sandor J. Kovacs, L. Nádasi· Economies· 0 citations
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