ABSTRACT This study investigates how green finance responds to extreme geopolitical turbulence, revealing when sustainable investments collapse or unexpectedly flourish amid global instability. Specifically, we examine the time-varying causal relationship between green finance and geopolitical risk, together with eight other financial market indices: carbon allowances, bitcoin electricity consumption, clean energy, renewable energy, world equity, climate change, volatility, and oil price. Our dataset spans 12 years of weekly data from January 2012 to December 2024. Using a recursive evolving time-varying Granger causality estimation, we find that green finance and geopolitical risk strongly influenced the world equity market index in 2015 and 2024, respectively. Geopolitical risk exerted a strong causal influence on the volatility index in 2024. We document moderate bidirectional causality between green finance and clean energy, between green finance and renewable energy, and between geopolitical risk and clean energy. Interestingly, the Bitcoin Electricity Consumption index strongly influenced both green finance and geopolitical risk from 2020 to 2022. This finding reveals that the energy consumption of bitcoin mining carries significant environmental and geopolitical consequences, with direct effects on green finance and geopolitical risk.

ABSTRACT In dynamic markets, strategic aggressiveness affects firm survival. Reverse mixed-ownership reform helps private firms adjust governance and build advantages. Based on this premise, this study utilises a sample of Chinese A-share non-financial private listed firms from 2007 to 2024 to empirically examine the relationship between reverse mixed-ownership reform and strategic aggressiveness in private enterprises. The results indicate that state-owned capital equity participation significantly reduces the strategic aggressiveness of private firms. Channel tests reveal that the governance effect lowers corporate risk-taking, curbs managerial overconfidence, and decreases the frequency of strategic committee meetings; the resource effect alleviates corporate financing constraints and reduces inefficient investment. Further analysis shows that this impact is moderated by the heterogeneity of state-owned capital, the level of regional private economic development, and industry competition intensity. This study offers new insights for optimising strategic decisions and fresh evidence on how reverse mixed-ownership reform promotes private sector development.

ABSTRACT This study proposes a hybrid financial forecasting framework, GA-Contemplation (GAC), which integrates Large Language Models (LLMs) with Genetic Algorithms (GAs) to analyse short-horizon stock price movements in the Taiwan equity market. Using structured prompt-engineering techniques – Skeleton-of-Thought, Take-a-Step-Back, and Chain-of-Thought – LLMs extract semantically informed predictive factors from financial news through structured and stepwise prompt-guided reasoning, while GAs optimise factor selection and decision thresholds. Empirical results indicate favourable relative performance of GAC compared with a buy-and-hold benchmark. Additional analyses indicate that structured prompting is more beneficial in low-dimensional and interpretable factor configurations, with diminishing marginal effects as factor dimensionality increases. Overall, the findings provide methodological insights and exploratory empirical evidence on combining LLM-based reasoning with evolutionary optimisation for short-horizon financial analysis.

ABSTRACT This paper examines how firms’ payout and investment policies respond to exogenous cash windfalls from litigation settlements, focusing on the moderating role of corporate governance. We compare the behaviour of windfall firms – those receiving large litigation settlements – to matched control firms, accounting for cross-sectional heterogeneity in board independence, CEO duality, CEO equity ownership, and blockholder ownership. Our findings indicate that windfall firms with strong governance are more likely to increase shareholder distributions and research and development (R&D) investments. In contrast, firms with weaker governance exhibit signs of the free cash flow problem, allocating windfalls to potentially inefficient capital investments. Market valuation analyses reveal that increases in payouts and R&D by windfall firms enhance future shareholder value, while increases in capital expenditures are penalized by the market. This study provides new evidence on the real effects of legal outcomes on corporate policies, highlighting the role of corporate governance in shaping post-litigation corporate behaviour and ensuring that windfalls are used to enhance shareholder value.

ABSTRACT This paper explores the predictability of monthly US stock returns using adaptive LASSO on firm-specific characteristics from June 1990 to December 2022. By efficiently selecting relevant features, such as lagged returns, mean log-volumes, market values, dividend yields, and R&D expenses, the study develops threshold-based portfolios incorporating transaction costs and no-trade zones. Empirical results show that portfolios based on expected Sharpe ratios outperform benchmarks such as the S&P 500, with the adaptive LASSO portfolio achieving a 337.20% cumulative return and a 76.74% annualised Sharpe ratio. Compared with machine learning methods such as random forests and XGBoost, adaptive LASSO offers superior interpretability and robustness, highlighting its effectiveness for dynamic, cost-aware portfolio management while mitigating overfitting.

ABSTRACT This study examines the impact of the June 2025 Israel–Iran conflict on global stock markets. Country-wise results indicate the vulnerability of several Eurozone nations to this event, attributable to their heavy reliance on oil imports. Panel market results show the severity of this geopolitical shock for all the panels examined, underscoring the critical role of geopolitical events in shaping investor sentiment and stock market performance. Cross-sectional analysis reveals that stock markets in happier nations and in countries that have progressed toward achieving the 17 Sustainable Development Goals have greater resilience to the negative impact of conflict events.

ABSTRACT This study investigates the volatility spillover between tourism tokens and travel and tourism (T&T) subsector indices, using Diebold and Yilmaz (2012) approach in both the static and dynamic time domains. The study’s sample period is the daily data from December 2021 to September 2024 for three major tourism tokens and six T&T subsector indices. The empirical findings suggest a weak and time-varying interdependency between tourism tokens and T&T subsectors. The results also reveal that tourism tokens offer portfolio diversification and enhance hedging performance. This study thus provides useful insights for individual investors, portfolio managers and policymakers.

ABSTRACT This study uses daily data from February 1, 2020, to July 6, 2024, to analyse the dynamic connectedness of equities, bonds, energy, precious and base metals, cryptocurrencies, and agricultural and food commodities. We use the time-varying parameter vector autoregression (TVP-VAR) framework to assess aggregate and bilateral connectedness measures (TCI, NET, NPDC, PCI) and apply these findings to portfolio allocation using minimum variance (MVP), minimum correlation (MCP), and minimum connectedness (MCoP) techniques. The results show an average Total Connectedness Index of 42.54%, with sharp spikes during the COVID-19 crisis and the Russia–Ukraine war, underscoring the sensitivity of cross-asset spillovers to systemic shocks. Equities, notably the S&P 500 and QGREEN, perpetually act as net transmitters, whereas gold, BTC, and agricultural commodities predominantly behave as receivers. PCI analysis reveals stable clusters of strongly connected pairs – equities (S&P500–QGREEN), bonds (S500B–S500GB), and industrial commodities (copper–oil) – while agricultural assets (LC and SB) remain weakly connected in daily frequency, they become more integrated weekly, implying weaker diversification at medium horizons. Portfolio analysis demonstrates that MCP delivers the highest Sharpe ratio, with MCoP close behind, while MVP underperforms in periods of high equity–bond co-movement. Bilateral hedge ratios confirm that bonds are the most effective variance absorbers, but risk-adjusted outcomes improve when allocations also minimise connectedness.

ABSTRACT We examine the momentum effect in the Canadian residential property market across 11 metropolitan areas from 1990 to 2019. Consistent with prior research on the US housing market, we find strong evidence that Canadian metropolitan areas tend to continue their historical trajectories in housing market performance, demonstrating a strong momentum effect. Using zero-cost long-short portfolios formed based on lagged metropolitan-level housing market performance, we document average returns of up to 0.45% per month, which annualizes to approximately 5.54% per year using monthly compounding. These returns are both statistically and economically significant and remain robust across various formation and holding periods. The momentum effect is most pronounced during the 2000s and becomes stronger during housing market booms. Finally, we analyse the drivers of residential property appreciation in each metropolitan area, providing robust evidence on potential channels through which the momentum effect manifests in Canadian real estate markets.