Conference Agenda

This paper examines the impact of rising biodiversity risk on corporate customers’ exposure to this risk in supply chains following the California Biodiversity Initiative (CBI). The CBI announcement heightened awareness of biodiversity issues and triggered a negative stock market reaction in California. As a result, after the CBI, affected firms headquartered in California shifted their global supplier portfolios toward those with lower biodiversity risk exposure. Exploring firm-level heterogeneity, we find that this effect is more pronounced among firms facing higher biodiversity risk, those with less integrated supply chains, and those with lower reliance on suppliers. Our channel tests further suggest that customer firms adjust their supply chains by factoring in the biodiversity risk exposure of supplier industries when initiating or terminating supplier relationships. Additionally, we find that firms making larger adjustments experience increased production costs, inventory levels, and research and development (R&D) expenses. Overall, our research highlights the growing importance of biodiversity risk in supply chain management, underscoring its implications for firms’ operational strategies and decision-making.

The FinTech credit market has witnessed rapid growth over the past decade due to significant digital advancements and the increasing demand for alternative lending options. This paper uses cross-country data from 49 countries to investigate the impact of secrecy culture on Fintech financing. Our findings suggest that countries that score high on secrecy culture tend to have lower levels of Fintech credit compared to those with lower secrecy culture scores. These findings are consistent with the argument that secrecy cultures reduce Fintech credit lending due to the lack of trust and the heightened information asymmetries prevailing in these cultures, which are critical challenges for AI-driven credit evaluation systems. We also show that secrecy culture influences Fintech credit primarily through uncertainty avoidance and power distance cultural dimensions. Our results are robust across different estimation procedures, definitions of main variables, and sub-samples. Furthermore, we show that secrecy becomes a more pronounced determinant of Fintech credit when the size of Fintech credit is large.

This paper investigates the impact of macroeconomic uncertainty and firm specific uncertainty, as measured by unexpected inflation and idiosyncratic volatility (IVOL) respectively on the weighted average cost of capital (WACC), and firm investment decisions. Both inflation uncertainty and IVOL are shown to have positive and significant impacts on WACC. IVOL is also positively related to capital expenditures, and R&D expenditures, consistent with the strategic growth options model. In contrast with some of the recent literature that does not consider these uncertainty effects, we find support for the classical q theory showing a negative and significant relationship between WACC and capital expenditures.

This work put forward a determination of a firm optimal financial leverage and its impact on the stock market value. This determination is carried out in the traditional framework of corporate micro-economics and without using the optional analysis of a firm balance sheet. The optimal leverage is fixed both in terms of market value and book value which makes it possible to calculate the Price to Book Ratio (PBR) and the Tobin’s Q. The sensitivity of the PBR and the Tobin’s Q to changes in the tax rate, the risk premium of assets and the bankruptcy costs is specified.