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The purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability.

A simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation.

Unlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique.

Taking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms.

In addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.

This study investigates the impact of CEO narcissism on eco-innovation. Moreover, we explore the moderating influence of CEO ancestor origins and CEO tenure on this relationship.

Based on a comprehensive dataset comprising 198 non-financial U.S. firms spanning the years 2010–2021, we apply OLS regression.

Our research findings are as follows: (1) CEO narcissism negatively affects eco-innovation. (2) CEO ancestor origins play a moderating role, with this effect being attenuated for CEOs with ancestral origins from highly sustainable backgrounds. (3) CEO tenure strengthens the relationship between CEO narcissism and eco-innovation. This study sheds light on the significance of CEO personality traits in influencing eco-innovation decision-making. The results offer valuable insights for stakeholders, boards of directors and investors.

To the best of our knowledge, none of the studies on sustainable tools have examined the moderating effect of CEO demographics characteristics on the CEO personality traits –eco-innovation nexus, and this offers a great opportunity to make new contributions to the extant literature.

This study examines the effects of corporate governance on market returns during the first four waves of the COVID-19 crisis.

Event study and linear regression methods were applied on a sample of 293 US firms.

The results show that differences in abnormal returns are more significant during the second wave of COVID-19 and the two following waves. Moreover, estimations show that good corporate governance alleviated the effect of COVID-19 during the second wave and the two following waves. However, corporate governance did not affect abnormal returns during the first wave. Furthermore, evidence highlights that the effect of corporate governance is more observed in the industries most affected by COVID-19 than in the least affected industries.

Many studies have attempted to investigate the effect of corporate governance on stock returns during the first wave of the pandemic. However, to the authors' knowledge, this is the first study that focuses on different waves that occurred during 2020 and 2021.

This paper aims to contribute to the literature on the earnings management (EM)–corporate social responsibility (CSR) relationship as most of the previous studies have been carried out in non-turbulent periods. This study investigates whether CSR affects EM during the pandemic period by testing two hypotheses: the cognitive biases hypothesis and the resilience hypothesis

The difference-in-difference and triple difference approaches are used for a sample of 536 US firms (268 socially responsible firms and 268 matched non-socially responsible counterparts) during the 2017–2021 period. Socially responsible firms are selected from the MSCI KLD 400 Social Index, and matched firms are identified through the propensity score matching method.

The authors find an income-increasing practice for both socially responsible firms and control firms for the whole period and each sub-period. Moreover, socially responsible firms are more likely to manage their earnings (income increasing) than their counterpart. Furthermore, the authors show that CSR commitment exacerbated EM in line with the cognitive biases hypothesis.

This study is the first shed light on the dark side of CSR during pandemic periods.

The purpose of this paper is to examine whether capital structure matters for earnings management of microfinance institutions.

The empirical study is conducted using a sample of 575 MFIs over 2007 to 2015, we determined in the first step the discretionary part of provision for loan impairment. In the second step, we examine the effect of debt and donated equity on discretionary provision for loan impairment.

We found robust evidence that MFIs manage their earnings for external finance purposes. Debt exhibits a negative effect on earnings management for both profit and nonprofit MFIs. However, donated equity incites managers of MFIs to engage this practice in nonprofit MFIs.

Findings could be valuable to fund providers and investors who should consider accounting information quality in order to reach a better investment decision.

This paper is among the few to explore earnings management motivation of MFIs and to determine the role of external financing on earnings management practice.

This study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms.

This empirical study analyzes a data set comprising 215 US energy firms observed from 2011 to 2021, using the ordinary least square regression with standard errors adjusted for firm-level clustering.

The study reveals a negative relationship between PCBs and overinvestment, indicating that PCBs are an effective tool in curbing excessive investment. Additionally, it demonstrates that chief executive officer (CEO) overconfidence diminishes the influence of PCBs on overinvestment. These findings remain robust across various metrics for measuring overinvestment and CEO overconfidence, as well as when alternative estimation methods are used. These results align with insights derived from agency theory and upper echelon theories.

Regulators are encouraged to actively promote the use of PCBs as a financing tool for environmentally focused initiatives. To achieve this, regulatory bodies should enhance their presence within the utility sector, particularly in regions grappling with higher pollution levels. This requires the implementation of strategic policies and regulatory frameworks aimed at mitigating excessive investments. Simultaneously, policymakers should take proactive measures to introduce financial instruments designed to optimize investment efficiency, thus facilitating eco-friendly projects.

To the best of the authors’ knowledge, this paper holds the distinction of being the first to examine the impact of a specific type of green bond, namely, PCBs, on overinvestment. Furthermore, it contributes to the literature on personality traits, particularly within the context of the upper echelon theory, by investigating the moderating influence of CEO overconfidence.

This study examines the effect of political connections on the performance of banks in the MENA region separately and then moderated by family, institutional and state ownership.

A hierarchical regression method was used for a sample of 111 banks operating in 10 MENA countries observed from 2009 to 2019.

The results indicate significant negative relationships between political connections and bank performance. Furthermore, institutional and family ownership moderates this relationship; institutional investors and family shareholders attenuate separately the negative impact of political connections on bank performance. Moreover, state ownership positively moderates this relationship; states as shareholders accentuate the negative relationship between political connections and bank performance. Splitting our sample according to bank-specific features (banks in authoritarian regimes versus hybrid regimes, Islamic banks versus conventional banks) confirms our findings. Our results are robust to an alternative measure of bank performance.

Banks operating in the MENA region have to be aware of the consequence of political connections. In addition, they have to take into account the role of ownership structure when they seek to attenuate the harmful effect of political connections.

This paper offers an in-depth understanding of the impact of political connections on bank performance by drawing from two institutional logics: resource dependence logic and agency logic. Some recommendations on the importance of changing the existing ownership structure are highlighted, encouraging some investors to take part in the capital of banks in this region.

This paper aims to determine whether financial performance is affected in firms adopting separately or jointly two sustainability tools (green innovation and environmental, social and governance reporting (ESG)).

The empirical study examines a sample of 211 S&P 500 firms over the 2011 to 2019 period and uses the quantile estimation method.

The results show that two dimensions of ESG disclosure (the social and governance dimensions) and green innovation positively affect financial performance. This result suggests that sustainability tools have a strong financial impact. The positive relationship between green innovation and financial performance is detected at the 10th quantile up to the 70th quantile. This finding suggests that financial performance needs a moderate investment in green innovation. When considering the joint effect of ESG disclosure and green innovation, our findings show that the positive impact of some ESG disclosure dimensions (social and governance) on financial performance is more observable with a moderate investment in green innovation.

This study highlights the prominent role of sustainability tools in financial performance. Despite the contributions of the literature, to our knowledge, the relationship between these tools and financial performance is not yet comprehensively investigated. Sustainability is less studied from the social movement perspective. This paper is among the few to study the effect of ESG reporting on financial performance in a world of green innovation.

This paper aims to investigate the impact of board gender diversity (BGD) on firm financial stability during the COVID-19 pandemic compared to the pre-pandemic period.

Difference-in-differences method was used for a sample of 891 US companies observed from 2018 to 2021.

The results indicate significant negative relationships between BGD and financial stability. The authors put in evidence a nonlinear relationship between BGD and financial stability. Also, the authors found that internal women directors as well as external ones decrease financial stability.

The results emphasize the beneficial effect of having more women on corporate boards during health crises and suggest that policymakers should take measures to promote BGD.

This paper highlights the impact of BGD on financial stability and provides additional evidence on the usefulness of BGD as an effective tool for crisis management.

The purpose of this paper is to shed light on the factors that affect microfinance institutions’ (MFI) credit risk. These factors include MFIs’ characteristics and country-level indicators.

This empirical study uses an unbalanced panel data of 638 MFIs from 87 countries observed over a period ranging from 2005 to 2015. Random-effects models are used to estimate the models.

The results reveal that group-lending methodology, percent of loan granted to women and diversification activities reduce credit risk; credit quality is enhanced by the relevance of the information published by public or private bureaus and law enforcement cost increases credit risk. Finally, credit risk tends to be limited in a good institutional environment.

Several implications can be drawn in light of these findings. For MFIs’ managers, using group lending or granting more credit to women and diversifying their activities enhance their credit quality. Furthermore, authorities need to strength debt repayment institutions and reinforce institutional environment to help MFIs to limit their credit risk.

Previous studies focus on specific MFIs’ practices that enhance repayment rate or on country-level indicators. One of the contributions of this paper is the use of both types of indicators.