This paper examines whether cooperative banks have different loan terms from commercial banks for corporate loans. Our analysis is based on a unique dataset of around 233,000 corporate loans granted by all French private banks. We find that cooperative banks charge higher rates and require less collateral than commercial banks. However, we show that relationship lending has opposite effects on loan terms depending on the type of bank. Longer relationships reduce interest rates and collateral requirements for cooperative banks, but increase these lending conditions for commercial banks. Furthermore, we find that the beneficial effects of relationship lending for cooperative banks are amplified for financially fragile firms. We therefore support the view that cooperative banks are initially more expensive, but that relationship lending allows them to overcome this over time and ultimately pass on information gains to borrowers through better lending terms.

This paper examines the portfolio choices of ambiguity-seeking investors, a group often overlooked in previous studies, and their impact on market equilibrium. We develop a one-period model in which investors observe an ambiguous public signal but are uncertain about the variance of its noise. Unlike ambiguity-averse investors, who exhibit trading inertia in response to greater ambiguity, ambiguity-seeking investors tend to overreact. Their optimal demand for the risky asset is characterized by a set-valued function, where they randomize between overreaction and underreaction in certain scenarios. The equilibrium price responds nonlinearly to the public signal across different signal magnitudes, providing new insights into empirical debates on whether investors overreact or underreact to information under high uncertainty. Furthermore, we analyze investor welfare in a market with heterogeneous investors. The welfare analysis suggests that, under our calibrated parameterization, a larger share of ambiguity-seeking investors or a sufficiently high level of signal ambiguity tends to reduce their ex-ante expected utility, whereas a moderate degree of signal ambiguity may benefit both investor types.

This study analyzes the impact of Fintech on corporate mergers and acquisitions (M&A) using data from Chinese A-share listed firms between 2011 and 2020. The findings indicate that firms located in cities with higher levels of Fintech adoption are more inclined to undertake more M&A activity, particularly among non-state-owned enterprises, smaller-sized firms, high-tech (technology-intensive) firms, non-heavy-polluting firms, and firms in the growth and maturity stages. Mechanism analysis reveals that Fintech promotes corporate M&A by alleviating financial pressure, reducing information asymmetry, and strengthening supply chain stability. Furthermore, we find that Fintech promotes firms’ green M&A, M&A deal size, and long-term M&A performance, but has no significant effect on short-term M&A performance. We also find that acquirer AI adoption amplifies, whereas acquirer managerial myopia and government economic policy uncertainty weaken, the impact of Fintech on corporate M&A. Ultimately, we find that M&A increases firms’ idiosyncratic risk, while Fintech mitigates this adverse effect. Overall, this study not only deepens the understanding of the economic consequences of Fintech but also provides important practical implications for how firms can leverage digital transformation to support strategic expansion and how regulators can assess the systemic impact of Fintech.

This study treats the incorporation of green credit into China’s macroprudential assessment (MPA) system as a quasi-natural experiment and employs a difference-in-differences approach to investigate its impact on corporate energy efficiency. Using panel data of listed firms from 2013 to 2023, we find that the reform significantly improves the energy efficiency of heavily polluting firms by approximately 6.4% on average, and this effect holds consistently across various robustness checks. The positive effect is more pronounced for firms facing tighter financing constraints, with stronger environmental governance, and operating in regions with stricter environmental regulations. Mechanism tests indicate that the improvement in energy efficiency operates through heightened financing constraints, increased green investment efficiency, and strengthened green innovation. Further analyses reveal that incorporating green credit into the MPA framework also raises corporate marginal labor productivity, marginal capital productivity, and total factor productivity. Overall, our findings provide empirical support for the MPA framework in promoting corporate energy efficiency in China.

This paper introduces the Special Issue of The European Journal of Finance that seeks to honor the seminal contributions of Harry Markowitz to modern portfolio theory. Reflecting the fact that Markowitz’s work is particularly influential, the articles in this special issue tackle a wide range of research questions. In summarizing these articles, we group them into three broad topics: (1) estimation of optimal portfolios; (2) portfolio selection beyond the mean–variance model; and (3) asset pricing implications of equilibrium models of portfolio selection. We also provide a brief discussion of possible directions for future research.

This paper analyses the effect of financial literacy and risk propensity on cryptocurrency investment decisions. We use probit regression models on a cross-sectional sample of 4924 Italian respondents from the 2023 Bank of Italy survey on financial literacy among young people. We find that both literacy and risk propensity are strongly and positively associated with crypto ownership. Crucially, high risk propensity emerges as a key driver of crypto ownership even among individuals with low financial literacy, who are also more susceptible to behavioural biases. To address potential selection bias and endogeneity in our cross-sectional data, we validate our findings using a Propensity Score Matching (PSM) approach, comparing highly similar investors and non-investors. Our results are further confirmed using a set of Linear Probability Models (LPM), alternative measures of our interest variables, and a sample inclusive of all age groups. This study highlights the critical role of financial literacy in fostering conscious risk-taking and avoiding behavioral traps, with significant implications for regulatory and policy interventions, particularly for young investors.

Following the global financial crisis, many developing countries adopted a range of inclusive financial policies (IFPs). We develop a hand-collected index of IFPs for a sample of 46 countries to examine their impact on bank lending using a difference-in-differences (DiD) approach. We find a positive impact of IFPs on bank loan supply. Specifically, increased adoption of IFPs is shown to reduce the gender credit gap, thereby enhancing women's access to bank loans. Moreover, a mediation analysis indicates that IFPs expand bank lending both directly and indirectly through deposit mobilisation and the reduction of information asymmetry. These findings are robust to a variety of checks, including a Bartik-type shift–share instrument. The findings underscore the role of IFPs as a policy lever for expanding financial inclusion and promoting sustainable economic growth.

In the standard dual-class equity structure, the founder retains control via a blocking minority, typically achieved via multiple-vote share ownership. This strengthens the founder's position in takeover fights or talks and thus stimulates entrepreneurship but, in The Economist's wording, such companies are ‘shunned’ by many investors. To stimulate entrepreneurship with full respect of One-Share/One-Vote and without any blocking toehold, one can, instead, stipulate that a takeover requires the votes of both equity classes. Acquisitions happen after an open fight, where the incumbent's only advantage is that they can block the attempt by counterbidding for just one class. The incumbent's option to block the takeover by buying just one class of shares, we show, generates better terms if and when the firm is taken over, which translates in a higher IPO or PE value and, thus, stronger entrepreneurial incentives. The cost of the proposed charter is, inevitably, some degree of managerial entrenchment, but by our reckoning the benefits exceed the cost. The value-boosting effect is quite powerful when the potential for value-improving takeovers is high, notably for entrepreneurs who do have bright ideas but are not good at organization, or for incumbents facing rivals with big toeholds.

This work focuses on a self-exciting point process defined by a Hawkes-like intensity and a switching mechanism based on a hidden Markov chain. Previous works in such a setting assume constant intensities between consecutive events. We extend the model to general Hawkes excitation kernels that are piecewise constant between events. We develop an expectation-maximization algorithm for the statistical inference of the Hawkes intensities parameters as well as the state transition probabilities. The numerical convergence of the estimators is extensively tested on simulated data. Using high-frequency cryptocurrency data on a top centralized exchange, we apply the model to the detection of anomalous bursts of trades. We benchmark the goodness-of-fit of the model with the Markov-modulated Poisson process and demonstrate the relevance of the model in detecting suspicious activities.

This study investigates the differential benefits accruing to firms that issue global bonds relative to those issuing domestic bonds. Employing a comprehensive international dataset comprising 11,852 public corporate fixed-rate global bonds and 107,877 domestic bonds denominated in global currencies issued by publicly listed firms over the period 2000–2023, we document that global bond issuance is associated with significantly lower financing costs, enhanced stock market liquidity, increased participation by foreign and long-term institutional investors, and short-term valuation gains. The empirical findings lend support to the investor recognition hypothesis, demonstrating that global bond issuance confers benefits beyond immediate capital-raising objectives by influencing ownership composition and stock market dynamics.