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Machine learning (ML), and deep learning in particular, is gaining traction across a myriad of real-life applications. Portfolio management is no exception. This paper provides a systematic literature review of deep learning applications for portfolio management. The findings are likely to be valuable for industry practitioners and researchers alike, experimenting with novel portfolio management approaches and furthering investment management practice.

This review follows the guidance and methodology of Linnenluecke et al. (2020), Massaro et al. (2016) and Fisch and Block (2018) to first identify relevant literature based on an appropriately developed search phrase, filter the resultant set of publications and present descriptive and analytical findings of the research itself and its metadata.

The authors find a strong dominance of reinforcement learning algorithms applied to the field, given their through-time portfolio management capabilities. Other well-known deep learning models, such as convolutional neural network (CNN) and recurrent neural network (RNN) and its derivatives, have shown to be well-suited for time-series forecasting. Most recently, the number of papers published in the field has been increasing, potentially driven by computational advances, hardware accessibility and data availability. The review shows several promising applications and identifies future research opportunities, including better balance on the risk-reward spectrum, novel ways to reduce data dimensionality and pre-process the inputs, stronger focus on direct weights generation, novel deep learning architectures and consistent data choices.

Several systematic reviews have been conducted with a broader focus of ML applications in finance. However, to the best of the authors’ knowledge, this is the first review to focus on deep learning architectures and their applications in the investment portfolio management problem. The review also presents a novel universal taxonomy of models used.

This paper examines the moderating effect of good corporate governance on the association between internal information quality and tax savings.

This study uses a quantitative approach. It employs an Australian sample of analysis composed of 1,295 firm-year observations from the period 2017 to 2021. Data relating to corporate governance are hand-collected from the annual reports.

Based on the result of the analysis, this study demonstrates that the interaction between corporate governance and quality of internal information is positively associated with tax savings. Superior corporate governance is critical in activating the effect of internal information quality on tax savings. This finding is robust to a battery of robustness checks and additional tests.

This examination utilizes only publicly traded companies from one developed country.

For the company management, an effective governance structure must be at the top because it will determine the development of all other areas. This study emphasizes the need to continuously improve the effectiveness of corporate governance practices. For long-term investors, an important indicator that can be considered in assessing the “safety” of a company’s tax strategy is its corporate governance aspects. For regulators, this study is expected to assist regulators in creating a more adequate corporate governance implementation and disclosure package to be implemented by corporations in the future.

This study provides new evidence on a crucial construct that can strengthen the relationship between internal information quality and tax savings.

This research investigates the impact of corporate donations on the cost of equity capital. We argue that corporate donations reduce firm risk and improve reputation, affecting the cost of equity.

We employ a large international sample of 44 countries from 2002 to 2019. We use several econometric methods and conduct a range of sensitivity tests to examine the robustness of findings.

We find that corporate donations reduce the cost of equity capital. In terms of economic significance, the study shows that one standard deviation increase in corporate donations leads to a 12.9 to 14.9 basis point decrease in the cost of equity capital. The additional analyses reveal that donation patterns, country-specific attributes and macroeconomic characteristics likely influence the findings. Our results are robust to a batch of sensitivity tests, including GMM regression analysis and tests with alternative measures for corporate donations and the cost of equity capital.

Our research findings have practical implications. Policymakers can encourage firms to undertake philanthropic activities to reduce business risk, which benefits both firms and investors.

We contribute to the theoretical discussion about the role of corporate philanthropy. We argue that firm risk is reduced due to philanthropic activities such as corporate donations. Overall, our results suggest that corporate donations affect worldwide external financing costs.

This study explores the association between institutional investors’ stewardship activity, disclosed under Japan’s Stewardship Code, and the R&D investments of their investee companies.

Recognizing the pivotal role of R&D investment in long-term value creation, this study uses comprehensive data from institutional investor disclosures to assess the impact of stewardship activity on their investee companies.

The findings show that investor stewardship activity is a factor that influences strategic R&D investment. Specifically, a positive association is found between code-compliant institutional investor shareholding and R&D investment, contingent on high levels of stewardship activity.

By using stewardship disclosures to measure stewardship activity, this study sheds new light on institutional investors’ role in promoting R&D investment. The findings suggest that stewardship regulation is a valid governance policy mechanism to the extent that it promotes stewardship activity. Moreover, the findings show that stewardship disclosures provide valuable information about the potential value enhancement associated with institutional shareholding.