Trust and corporate debt maturity mismatch: Evidence from China

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Abstract

This study explores the relationship between social trust and firm debt maturity mismatch in the Chinese context. Additionally, we investigate the economic mechanisms through which social trust affects debt maturity mismatch, and the differential roles played by social trust among firms with different characteristics. We employ enterprise trustworthiness scores and provincial blood donation rates as our measures of regional social trust level and find a negative relationship between local trust and firm debt maturity mismatch, suggesting that social trust which promotes ethical norms acts as a restraint on firms' propensity for excessive risk. An alternative but consistent explanation is higher social trust increases debtors' willingness to lend, hence it reduces firms' funding costs and consequently the potential cost-saving motivation behind such a mismatch. We further document evidence that social trust improves the firm information environment and consequently risk-taking and/or the ability to reduce funding costs. The study also reveals variations in the role of social trust based on firm characteristics, such as leverage and profitability, and the ownership structure (state-owned enterprises vs. non-state-owned enterprises). The findings contribute to the literature by highlighting the increasing importance of social capital for policy and governance.

Managerial coaching and employees’ innovative work behavior: The mediating effect of work engagement

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The International Journal of Entrepreneurship and Innovation, Ahead of Print.
Small- and medium-sized enterprises (SMEs) rely on each employee to be innovative, and understanding how employees can be supported in their innovative behavior is a crucial factor. This study draws on managerial coaching (MC) literature to examine the dynamics of how leadership behaviors impact employees’ innovative work behavior (IWB). In an attempt to disclose the mechanism through which MC can impact the IWB of employees, we particularly expected work engagement to mediate the relationship. Accordingly, we operationalized IWB as a four-dimensional construct to show whether MC and work engagement equally affect all of the dimensions of IWB. We collected survey data (N = 4418) from 88 Finnish SMEs and found that MC was positively related to each dimension of IWB, and that work engagement mediated the linkages. Interestingly, the importance of MC (both directly and when mediated by work engagement) grows as the employee moves from idea exploration to implementation. This study sheds light on the mechanism through which leadership behavior can impact the IWB of employees in SMEs.

How Systemic Crises Uproot and Re‐establish Investors’ Acquisition ‘Recipes’: A Temporally Bracketed Qualitative Comparative Analysis

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Abstract

We contribute to the literature on acquisitions by examining how investors’ cognitive schemata codifying their beliefs concerning the attributes of deal success (‘recipes’) are impacted by systemic crises. Specifically, we examine how and why configurations of attributes signalling deal attractiveness, acquirer competence, and acquirer corporate governance shape investors’ reactions to acquisition announcements before, during, and after the Great Financial Crisis of 2008–9. We apply temporally bracketed fuzzy sets qualitative comparative analysis (fsQCA) on a sample of 1867 acquisition announcements. Our results show that investors not only assess acquisition signals holistically, but also that their preferences change when a crisis uproots orthodox deal ‘recipes’ that were once believed to produce successful outcomes. We show that the explorative nature of investor behaviour changes when systemic crises strike, with investors becoming more explorative – as evidenced by a greater number of ‘recipes’ eliciting positive reactions – during crises than before or after. Second, we find that investors do not simply favour deals with a maximum number of safeguards, but rather employ a compensatory logic that matches attributes signalling deal risk with specific assurances. The importance of offering assurances increases following crises, suggesting that investors progressively prefer acquirers to protect their interests.

Heterogeneity in needs and purchases in Australian retirees

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Abstract

To plan for retirement, it is important to understand how needs and purchases may change. We use data from a survey of elderly Australians to see how needs and purchases changed in different categories of goods and services. We looked especially at those who had experienced financial or health shocks. Our analysis shows variation in people's experiences, particularly for health costs, which increase with age. Having private health insurance appears to increase the level and volatility of health costs – presumably as a result of out-of-pocket costs. This information can be useful for financial advisors and superannuation trustees.

Emotions and inventor productivity: Evidence from terrorist attacks

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Abstract

We examine whether the emotional shocks associated with terrorist attacks affect local inventors' productivity. We find that high-fatality attacks make inventors less innovative, and low-fatality attacks make them more innovative. Inventors living in high risk-taking environments have greater increase in productivity following low-fatality attacks, while less decrease in productivity following high-fatality attacks. Further, the effect of terrorist attacks on inventor productivity comes mainly from exploratory innovation which involves more risks. Inventors affected by high-fatality attacks are also more likely to move to places without any significant terrorist attack history, but there is no such effect for low-fatality attacks.

On the state of financial research: Is it in a silo?

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Abstract

This study on the state of financial research analysed the citations made in leading business and economics journals in the period 1997–2020. It found that, contrary to other business fields, and despite citing more references, finance researchers overlooked the fruitful mode of knowledge creation by integrating advances from disciplines other than economics. Additionally, citations in economics became disproportionate to older papers. Furthermore, intradisciplinary citations remained predominantly in the same four journals, although others became prominent. These findings on the state of financial research supplement other issues inhibiting finance knowledge progression and have inferences regarding the training of future scholars.