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This paper aims to examine the question, “How do firm-level, home-country and host-country environmental performance (EP) affect the outward foreign direct investment (OFDI) of Chinese multinational enterprises (MNEs)?”

The authors examine the relationships between EP and OFDI propensity and between EP and OFDI intensity using a sample of 359 Chinese firms in industries with a significant environmental footprint between 2009 and 2019 (2,002 firm-year observations) and a Heckman two-stage model.

This study shows that the propensity for OFDI by Chinese MNEs is significantly and positively related to the firm’s prior EP and the country-level EP of China. However, the amount of FDI invested is significantly and positively related to the firm’s prior EP and negatively related to the EP of the host country.

The findings suggest that FDI in a country by an MNE is determined by a combination of firm-level EP, home-country EP and host-country EP. This study finds that the decision to undertake FDI (propensity) and the decision about how much to invest (intensity) are determined by different factors. The propensity for FDI is determined by the home-country EP and firm-level EP. However, the intensity of FDI is determined by a combination of the host country EP and firm-level EP. A limitation is that this study only examines MNEs in China, so the findings may not apply to other countries.

This paper shows that MNEs’ EP is positively related to the propensity and intensity of their OFDI decisions. However, this paper shows that the home-country and host-country EP may also play an important role in determining the propensity or intensity of OFDI.

This study aims to investigate the impact of supply chain concentration (SCC) on corporate research and development (R&D) investment and determine the moderating roles of industry concentration and financing constraints on the relationship between SCC and R&D investment.

The study collected data from Chinese listed companies, used the fixed effects model to test the research hypotheses and further used the two-stage Heckman test and propensity score matching (PSM) to address potential endogeneity issues.

The result reveals a negative impact of SCC on corporate R&D investment. In addition, industry concentration mitigates the negative impact of SCC on corporate R&D investment, but financing constraints strengthen the negative impact.

This study introduces the concept of SCC and empirically tests its effect on R&D investment, further explaining the lack of corporate innovation. This study inspires companies to strengthen SC management and weigh the level of SCC with environmental factors.

Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax authorities can identify this behavior.

Using data on listed companies on the Shanghai and Shenzhen Stock Exchanges from 2008 to 2020, this study applies the Heckman two-stage and cross-section models.

The results show that the higher the degree of CDT, the more aggressive the tax avoidance behavior. The CDT's impact on corporate tax avoidance is more significant under strong government tax efforts.

This study expands research on the economic consequences of CDT and the factors influencing corporate tax avoidance behavior. Moreover, it has important implications for governments to monitor tax avoidance behavior under the CDT, improve digital tax systems, and pay more attention to the tax administration of digital assets.

This paper aims to explore the value of geographic diversification in the context of deglobalization, drawing evidence from a quasi-natural experiment – the Brexit referendum that took place on 23 June 2016 in the UK.

This study applies an event study methodology to estimate the impact of the Brexit vote on a cross-section of firms with varying levels of geographic diversification – undiversified UK firms, UK firms with significant operations in the European Union (EU) and globally diversified UK firms. This study deploys a Heckman two-stage regression approach to address sample selection bias.

This study finds that undiversified UK firms experienced negative cumulative abnormal returns (CARs) around the Brexit referendum. The value of UK firms with majority sales within the UK declined by 0.9 percentage points, on average, in the three days centred on the Brexit referendum. In contrast, UK firms that are globally diversified, with the majority of sales within the EU are unaffected, while diversified firms in the rest of the world generated positive CARs of 1.8 percentage points over the same period. These results are robust to firm characteristics, selection bias and alternative measures of CARs and diversification.

This study is subject to some limitations that open avenues for future work. There are a few available proxies of diversification and further work on developing other proxies is much needed. Further work may also examine the long-term impact of diversification on UK firms. This study considered Brexit as a quasi-natural experiment, and this study could be applied to other deglobalization events like COVID-19 and can enhance the generalizability of diversification strategy in the deglobalized world. Findings may stimulate future work to explore how another form of diversification – product diversification has affected firm returns around Brexit. Finally, this study has focused on the UK as its base case. It may be interesting to corroborate the findings by exploring the impact of Brexit on European firms, who hitherto Brexit, had some operations in the UK.

This work offers some insights for policymakers and regulators around the impact of deglobalization on local firms. Findings suggest that these trends significantly negatively impact the most vulnerable firms (smaller firms with less global reach), while their larger counterparts with significant global reach might be insulated. This finding is important for determining the nature of support needed by different firms in times of deglobalization. The work also offers insights to managers of firms operating in countries where there are real prospects of deglobalization. Specifically, the work highlights the importance of geographic diversification when free movement of goods, services and people is restricted.

This study shows that a certain group of globally diversified firms earned significantly higher returns from the prospect of the UK leaving the EU, thereby highlighting the value of geographic diversification in a time of deglobalization.

The purpose of this study is to explore the economic impact of financial restatements by major customers on the audit opinion of their suppliers, showing that non-financial information disclosure potentially helps auditors make better assessments.

Using a sample of China’s listed firms from 2007 to 2021, the authors aim to find the relationship between customers’ financial restatements and their suppliers’ audit opinions. Heckman selection model, placebo tests and other robustness checks are used as well.

The findings reveal that customers’ financial restatements have a significant effect on the likelihood of suppliers receiving modified audit opinions. This relationship is pronounced when suppliers face a higher level of financial constraints, exhibit poorer accounting conservatism or receive more negative media coverage. Additionally, this effect occurs through increased business risk and information risk, which heightens auditors’ perceived audit risk. Moreover, the study highlights the influence of switching costs, auditor expertise and restatement severity on this relationship.

Risks originating from customers can spread along the supply chain, emphasizing the necessity for auditors to give heightened attention to both the audited firms and their customer information. Moreover, regulators should carefully consider the important impact of customer information disclosures to maximize the protection of the interests of external information users.

This study not only confirms the crucial role of customer information disclosures in annual reports for stakeholders and auditors but also contributes to the existing literature on customer–supplier relationships.

Digital transformation misalignment refers to disparities in digital transformation levels between suppliers and buyers across the production and operation process. It has negatively affected supply chain stability. However, the existing research concerning the economic consequences has not been adequately addressed. Therefore, this paper aims to investigate whether such digital transformation misalignment increases supplier financial risk and to identify the factors influencing this relationship.

This paper examines binary combinations of suppliers and buyers listed on China’s A-share market between 2011 and 2021. This group constitutes a sample to empirically test the influence of digital transformation misalignment on the supplier’s financial risk, as well as the moderating effect of the geographical and organizational distances.

The paper’s findings demonstrate that digital transformation misalignment has indeed a significant increase in the supplier’s financial risk. Moreover, the impact is more intense when the geographical or organizational distance between the supplier and the buyer is relatively large.

The existing literature rarely explores the potential risks arising from digital transformation misalignment between supply chain partners. Therefore, this paper fills a notable gap as it is the first to study the impact of digital transformation misalignment on the supplier’s financial risk and the specific applied mechanisms. The contribution significantly improves the field of corporate digital transformation, particularly, within the context of supply chain management.

This study aims to examine the relationship of Indonesia’s Sharia Stock Index (ISSI) firms on environmental, social and governance (ESG) disclosure. This study is interesting because ISSI firms are supposed to comply with Islamic values as this has been reflected in good corporate governance activities, demonstrating responsibility to others and participating in preserving nature/environmental activities.

The authors use sample firms that are listed on the Indonesia Shariah-compliant Stock Index (ISSI) from 2011 to 2020, which also published sustainability reports.

The study found that sharia firms are positively related to ESG disclosure. The authors also found that ESG disclosure of sharia firms is more pronounced in the reporting section of general, economic, environmental and social. Other findings suggest differences in the segments reported in the COVID and pre-COVID periods. This result is also robust by conducting a self-selection bias test with Heckman’s two-stage regression and Coarsened Exact Matching regression.

For policymakers, these results indicate that different characteristics of firms can affect ESG disclosure, and economic conditions will determine which sectors are disclosed the most.

This study provides empirical evidence that Indonesian Shariah-compliant stock index firms carried out their mission to disclose more information about their environmental and social responsibilities and governance issues.

Employees play a vital role in the success of a corporation. While boards of directors are created to protect shareholders’ interests, it is unclear if these directors also ensure employee welfare. In this vein, our paper examines the relationship between board leadership structure and employee well-being.

The authors employ several analysis techniques, including univariate analysis, ordinary least squares (OLS) regressions, two-stage least squares (2SLS) regressions, propensity score matching methodology, the Heckman Selection model and difference-in-differences analysis. The sample comprises USA public firms for the period 1998–2018.

Our findings indicate that having an independent chairperson can significantly benefit the welfare of employees, especially for firms with overly powerful chief executive officers (CEOs) and during times of financial distress.

Independent leadership structure is one of the crucial board characteristics that have not been examined to explain employee welfare at firms. We find that an independent chairperson can mitigate the negative effect of overly powerful CEOs on employee benefits. Importantly, independent chairpersons are beneficial for employees in difficult times and when CEOs are busy with daily activities.

This study aims to examine the joint effect of accounting background and cross-membership of Islamic Supervisory Board (ISB) members on bank investment efficiency.

This study uses data collected from 36 Islamic banks across 15 countries globally, spanning the period from 2012 to 2021. This research uses an ordinary least squares regression and a comprehensive set of endogeneity and robustness tests.

The findings show a negative relationship between the accounting background of ISB members and investment efficiency. However, when ISB members with accounting backgrounds also have ISB cross-memberships, the banks exhibit high investment efficiency. These results suggest that ISB cross-membership plays a crucial role in facilitating Islamic banks’ access to timely information on investment opportunities. This enables ISB members with accounting expertise to thoroughly assess the benefits and risks associated with their investment prospects. These findings imply that ISB members with accounting backgrounds and cross-memberships have greater motivation and thoughtful considerations for making better investment decisions. Consequently, Islamic banks are better positioned to undertake high profitable investment projects, which enhance their investment efficiency.

The current study holds immense value for Islamic bank management in their selection of ISB members who possess an accounting background and cross-membership.

This study delves into a comprehensive investigation of the proficiency, underlying principles and unique characteristics exhibited by ISB members with an accounting background. Moreover, this study acknowledges the burgeoning global prominence of Islamic banks.

This study aims to examine whether the presence of advisory directors affects firm discretionary accruals (DACC), a widely used proxy for financial reporting quality. The authors argue that the advisory director weakens the board monitoring role and impairs the firm financial reporting quality by increasing DACC.

The sample consists of listed firms on the Australian Stock Exchange from 2001 to 2015 using 7,649 firm-year observations. The authors perform descriptive statistics, regression and propensity score matching analyses to examine the research hypothesis.

The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.

The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.

The research contributes valuable insights for regulators and policymakers seeking to comprehend the implications of firms using more advisory directors. Additionally, the authors recognize the potential significance of the findings for the institution of directors, as they can provide a nuanced understanding of the specific roles played by advisory directors in organizational dynamics.

While the extensive body of literature on corporate governance and financial reporting quality has been well-established, a noticeable void exists in academic research delving into the relationship between advisory directors and DACC management. This study seeks to fill this gap, making a distinctive and original contribution to the existing literature on corporate governance.