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The purpose of this paper is to investigate whether air pollution has significant impact on corporate cash holdings and financial leverage.

The data of 199 firms listed on Istanbul Stock Exchange during the period 2009–2020 is analyzed by using pooled ordinary least squares and two-step system generalized method of moments models.

The results indicate that firms in regions with high air pollution tend to increase cash level. In addition, the positive effect of air pollution on cash level is stronger and more significant for environmentally sensitive firms and firms with low operational and distress risk. The results also show insignificant effect of air pollution on financial leverage.

Firms in regions with high air pollution should conduct proactive environmental protection procedures and enhance their eco-efficiency instead of holding excess cash that could negatively affect financial performance. In this context, policymakers should provide financial facilities to firms located in regions with high air pollution and that have low ability to finance environmental investments. On the other hand, the environmental laws and regulations introduced by regulatory authorities can enhance the economic development and firm performance by decreasing the adverse influences of air pollution on corporate financial policies.

To the best of the author’s knowledge, this research is one of few that examines the impact of air pollution on corporate cash holdings and financial leverage in emerging markets.

Intangible capital (IC) is an important factor for economic growth and firm performance. The role IC has played has become even more crucial in recent decades, possibly influencing debt capacity and default risk assessment. This paper studies how entrepreneurial and employee-based IC affects financial leverage.

Employer–employee unbalanced panel data provided by Statistics Finland that refer to Finnish small and medium-sized enterprises (SMEs) are used. Intangibles are measured with an expenditure-based method. Employee-based IC and entrepreneurial knowledge are used to explain debt financing in SMEs.

The findings imply that IC-intensive firms have less debt capacity due to weak pledgeability and asymmetric information between borrower and lender. Entrepreneurs with managerial or financial knowledge increase the firm's debt capacity compared to other entrepreneurs, especially in knowledge-intensive services (KIS). One explanation is that the entrepreneurs are more competent in negotiating with lenders as the entrepreneurs possess better financial skills. Entrepreneurs with technical knowledge decrease the firm's debt capacity in all industries.

While some earlier research focused on the IC–financial leverage relationship, hardly any study has looked at entrepreneurial IC. This paper provides new insights by including entrepreneurial IC alongside employee-based IC.

This study aims to empirically examine the influence of financial constraints on firm carbon emissions. In addition to the role of financial constraints in firm-level carbon emissions, this study also examines this influence in the presence of governance, environmental orientation and firm-level attributes.

Using pooled ordinary least square, this study examines the impact of financial constraints on firm-level carbon emissions using a panel of 1,536 US firm-year observations from 2008 to 2019. This study also used two-step generalized method of moment–based dynamic panel data and two-stage least square approaches to address potential endogeneity. The results are robust to endogeneity and collinearity issues.

The results suggest that financial constraints enhance the carbon emissions of the firms. The economic significance of financial constraints on carbon emissions is more pronounced for the firms that do not report environment-related expenditure investment and those that are highly leveraged. The authors further document that firms with a nondiverse gender board signify a statistically significant impact of financial constraints on carbon emissions. These results are also economically significant, as one standard deviation increase in financial constraints is associated with a 3.340% increase in carbon emissions at the firm level.

Some implicit and explicit factors like corporate emissions policy and culture may condition the relationship of financial constraints with carbon emissions. Therefore, it would be worthwhile to consider these factors for future research. In addition, it is beneficial to identify the thresholds and/or quantiles at which financial constraints may significantly make a difference in enhancing carbon emissions.

The findings offer policy implications for investment in stakeholder engagement for capital acquisitions, thereby effectively enforcing environmental innovation and leading to a reduction in carbon emissions.

This study integrated governance and environment-oriented variables in the model to empirically examine the role of financial constraints on the carbon emissions of the firms in the USA over and above what has already been documented in the earlier literature.

This study compares the motives of holding cash between developed (Australian) and developing (Malaysian) financial markets.

For the period 2006–2020, the t-test, fixed-effect and generalised method of moment (GMM) model have been applied to a sample of 1878 (1,165 Australian and 713 Malaysian) firms.

The empirical results reveal that firms in developed financial markets hold higher cash compared to the developing financial markets. The findings confirm that motives to hold cash differ between developed and developing financial markets. The GMM findings further show that cash holdings (CH) in Australia are higher due to higher ratios of cash flow, research and development (R&D) and return on assets (ROA), and lower due to larger dividend payments. In the Malaysian market, however, cash flows and R&D are ineffectual, ROA falls and dividend payments rise CH.

The study helps managers, practitioners and investors understand that firms' distinct economic, institutional, accounting and financial environments are important. To attain the desired outcomes, they must thus comprehend and consider these considerations while developing suitable liquidity strategies.

To the authors' best knowledge, this is the initial research demonstrating how varied cash motives and their ramifications are in developed and developing financial markets. Therefore, this study identifies the importance that CH motives varied among financial markets and that findings from a particular market cannot be generalised to other markets because of the market and financial structural variations.

Financial inclusion is considered one of the strategic tools for sustainable development and one of the types of corporate social responsibility disclosures. This study aims to focus on the association between the disclosure of financial inclusion activities and Syrian banking companies’ performance.

Different regression models were suggested to examine the hypotheses leading to a better understanding of the relationship between financial inclusion and Syrian banking performance for the period 2005 to 2020 using the STATA 17.

The results showed a positive association between financial inclusion disclosure and Syrian bank performance, with low participation in financial inclusion activities (8%).

The study recommends that the Central Bank of Syria work on developing an index of financial inclusion for the Syrian environment, with the issuance of legislation and laws that obligate all listed banks to disclose their financial inclusion activities as a part of their social responsibility.

This study incorporates the relationship between the disclosure of financial inclusion activities and the performance of Syrian banking companies, which has been neglected by most studies on financial inclusion. Therefore, this study sheds light on this positive relationship, which could have important repercussions in reviving the deteriorating Syrian economy following the crisis it went through, which, in turn, led to Syria’s high inflation affecting the poor and vulnerable disproportionately.

This study empirically investigates the relationship between goodwill assets and capital structure (i.e. debt ratio) of firms and the moderating effect of financial market development on the relationship between goodwill assets and capital structure.

This research applied a quantitative method. The article collects large samples of listed firms from 23 developing and nine developed countries and applied the panel data techniques. This research used firm-level data from the DataStream database for both developed and developing countries. The study uses 4,912 firm-level data from 23 developing countries and 4,303 firm-level data from nine developed countries.

The findings reveal a significant positive relationship between goodwill assets and capital structure in developing countries, but goodwill assets have a significant negative relationship with capital structure in developed countries. Moreover, financial market development positively moderates the relationship between goodwill assets and the capital structure of firms in developing countries. The results inform firm managers that goodwill assets serve as additional collateral to secure debt financing. Moreover, policymakers should formulate a debt market policy that recognizes goodwill assets as additional collateral for the purpose of obtaining debt capital.

The study has several implications. First, goodwill assets are identified as a factor of capital structure in this study. Fixed assets have been identified as one of the drivers of capital structure in previous research, although goodwill assets are seldom included. Second, this article shows that along with demand-side determinants, supply-side determinants also play an important role in terms of the firms' choice about the capital structure. Therefore, firms should take both the demand-side and supply-side factors into consideration when sourcing for external financing (i.e. debt capital).

The study considered goodwill as a component of capital structure. The study analysis includes a large sample of enterprises, including 4,912 big firms from 23 developing countries and 4,303 large firms from nine industrialized or developed countries, which adds to the current capital structure information. Furthermore, a large sample size increases the results' robustness and generalizability.

This study aims to examine the mediating effects of corporate governance mechanisms like the board of directors on the association between disruptive technology adoption by audit clients and the risk of material misstatements, including inherent risk and control risk. In particular, the authors study the mediating effects of board characteristics such as board size, independence and gender diversity.

Based on a sample of 100 audit clients listed on the FTSE 100 from 2015 to 2021, this study uses structural equation modelling to test the research objectives.

The findings indicate a significant and negative association between disruptive technology adoption by audit clients and inherent risk. However, there is no significant evidence observed for control risk. The utilisation of disruptive technology by the audit client has a significant impact on the board characteristics, resulting in an increase in board size, greater independence and gender diversity. The authors also find strong evidence that board independence mediates the association between disruptive technology usage and both inherent risk and control risk. In addition, board size and gender exhibit distinct and differential mediating effects on the association and across the two types of risks.

The study reveals that the significant role of using disruptive technology by audit clients in reducing the risk of material misstatements is closely associated with the board of directors, which makes audit clients place greater emphasis on the construction of effective corporate governance.

This study offers essential primary evidence that can assist policymakers and standard setters in formulating guidance and recommendations for board size, independence and gender quotas, ensuring the enhancement of effective governance and supporting the future of audit within the next generation of digital services.

With respect to relevant stakeholders, it is imperative for audit clients to recognise that corporate governance represents a fundamental means of addressing the ramifications of applying disruptive technology, particularly as they pertain to inherent and control risks within the audit client.

This study contributes to the existing literature by investigating the joint impact of corporate governance and the utilisation of disruptive technology by audit clients on inherent risk and control risk, which has not been investigated by previous research.

This study aims to examine the relationship between carbon reduction initiatives and financial performance. Additionally, it explores potential moderating variables, such as corporate social responsible (CSR) strategy and corporate governance practices, that may strengthen the link between carbon reduction initiatives and financial performance.

The empirical analysis is conducted using 1,740 firm-year observations from UK firms listed on the FTSE 350. Data on carbon emissions and firm-specific characteristics are obtained from the Refinitiv Eikon database for the period 2011–2020. Various econometric techniques, including ordinary least squares and system generalized method of moments, are used to examine the relationship between carbon reduction initiatives and financial performance. Additionally, alternative samples are used to further explore this relationship.

The author observes a significantly positive association between carbon reduction initiatives and financial performance in this study. Additionally, the significance of this relationship is found to be present specifically after the announcement of the Paris Agreement. Furthermore, a channel analysis reveals that moderating factors like CSR strategy and corporate governance quality influence this relationship.

The study underscores the importance of carbon reduction initiatives for sustainable business growth and financial performance. Managers can use these insights to prioritize investments in sustainable practices. Policymakers should consider implementing supportive regulations to incentivize companies to adopt carbon reduction strategies.

This study adds value to the existing body of literature by empirically examining the moderating role of CSR strategy and best corporate governance practices in the relationship between carbon reduction initiatives and financial performance. The findings contribute to a deeper understanding of how these factors interact and influence the outcomes.

The authors examine the role of CEO political ideology in the credit rating process.

This study adopts a quantitative method with panel data regressions using a sample of 5,211 observations from S&P 500 firms from 2001 to 2012.

The authors find that firms run by Republican-leaning CEOs, who tend to have conservative political ideologies, enjoy more favorable credit ratings than firms run by Democratic-leaning CEOs. In addition, the association between CEO political ideology and credit ratings is more pronounced for firms with high operating uncertainty, low capital intensity, high growth potential, weak corporate governance and low financial reporting quality. Finally, the authors find that CEO political ideology affects a firm's cost of debt incremental to credit ratings, consistent with debt investors incorporating CEO political ideology in their pricing decisions.

Leveraging CEO political ideology, the authors document that credit rating agencies incorporate managerial conservatism in their credit rating decisions. This finding suggests that CEO political ideology serves as a meaningful signal for managerial conservatism.

The study suggests that credit rating agencies incorporate CEO political ideology in their credit rating process. Other capital market participants such as auditors and retail investors can also use CEO political ideology as a proxy for managerial conservatism when evaluating firms.

The paper carries practical implications for practitioners, firm executives and regulators. The results on the association between CEO political ideology and credit ratings suggest that other financial institutions could also incorporate CEO political ideology in their evaluation in their evaluation of firms. For example, when evaluating audit risk and determining audit pricing, auditors may add CEO political ideology as a risk factor. For firms, especially those that have Democratic-leaning CEOs, the authors suggest that they could reduce the unfavorable effect of CEO political ideology on credit ratings by improving their corporate governance and financial reporting quality, as demonstrated in the cross-sectional analyses. Finally, this study shows that CEO political ideology, as measured by CEOs' political contributions, is closely related to a firm's credit ratings. This finding may inform regulators that greater transparency for CEOs' political contributions is needed as information on contributions could help capital market participants perform risk analyses for firms.

Credit rating agencies release their research methodologies for determining corporate credit ratings and identify managerial conservatism as an important factor that affects their risk assessments. The extant literature, however, has not empirically investigated the relation between credit ratings and managerial conservatism, which, according to behavioral consistency theory, can be proxied by CEO political ideology. This study provides novel empirical evidence that identifies CEO political ideology as an important input factor in the credit rating process.

Bank creditworthiness refers to the evaluation of a bank’s ability to meet its financial obligations. It is an assessment of the bank’s financial health, stability and capacity to manage risks. This paper aims to investigate the credit rating patterns that are crucial for assessing creditworthiness of the Islamic banks, thereby evaluating the stability of their industry.

Three distinct machine learning algorithms are exploited and evaluated for the desired objective. This research initially uses the decision tree machine learning algorithm as a base learner conducting an in-depth comparison with the ensemble decision tree and Random Forest. Subsequently, the Apriori algorithm is deployed to uncover the most significant attributes impacting a bank’s credit rating. To appraise the previously elucidated models, a ten-fold cross-validation method is applied. This method involves segmenting the data sets into ten folds, with nine used for training and one for testing alternatively ten times changeable. This approach aims to mitigate any potential biases that could arise during the learning and training phases. Following this process, the accuracy is assessed and depicted in a confusion matrix as outlined in the methodology section.

The findings of this investigation reveal that the Random Forest machine learning algorithm superperforms others, achieving an impressive 90.5% accuracy in predicting credit ratings. Notably, our research sheds light on the significance of the loan-to-deposit ratio as a primary attribute affecting credit rating predictions. Moreover, this study uncovers additional pivotal banking features that intensely impact the measurements under study. This paper’s findings provide evidence that the loan-to-deposit ratio looks to be the purest bank attribute that affects credit rating prediction. In addition, deposit-to-assets ratio and profit sharing investment account ratio criteria are found to be effective in credit rating prediction and the ownership structure criterion came to be viewed as one of the essential bank attributes in credit rating prediction.

These findings contribute significant evidence to the understanding of attributes that strongly influence credit rating predictions within the banking sector. This study uniquely contributes by uncovering patterns that have not been previously documented in the literature, broadening our understanding in this field.