Review of Pacific Basin Financial Markets and Policies

This study explored the impact of CEO overconfidence on corporate social responsibility (CSR). We found that overconfident CEOs do not like to engage in CSR actives. Moreover, a firm with better CSR performance and overconfident CEOs could increase the probability of agency problems. This implied that overconfident CEO is engaged in CSR based on self-interest motivation to reduce operating performance of the firm.

Demographic transition has already become a major issue in the recent decades. Lower fertility rate and higher expected life length result in population aging. Most developed countries face social problems due to demographic transitions, especially in the economic and financial field. To take a closer look at this phenomenon, this paper screened 99 stocks provided by Taiwan Stock Exchange (TSE) to explore the impact of population aging on the stock market in Taiwan. Population aging indirectly takes up a larger portion of elder investors in the stock market, compared to the past. This paper employed risk and return variables to analyze the investors’ behaviors in Taiwan stock market. We divided our samples into whole industry, financial industry, technology industry, and traditional industry groups to find the impact of investors aging among different industries. The results showed that there is no significant evidence to prove that the elder investors pursue lower risk stocks in Taiwan stock market, which is inconsistent with the results of the past research. On the other hand, the findings from the whole industry, technology industry, and traditional industry groups are different from the past research results, showing that Taiwan’s elderly investors prefer stocks with higher return in those industries.

This study investigates the relationship between inward foreign direct investment inflows and governance of the United States, China, and Singapore. The study employs governance indicators including control of corruption, government effectiveness, regulatory quality, political stability and the absence of violence, rule of law, voice, and accountability to examine the relationship between inward foreign direct investment flows and governance for the period 2002–2019. The baseline regression results are based on bivariate and multivariate regressions with fixed effects. The results confirm a direct and significant relationship between governance and foreign direct investment. The results are robust while applying other regression techniques such as Prais–Winsten regression, Driscoll–Kraay regression, and a two-step system generalized method of moments’ estimation. More specifically, all six governance indicators including control of corruption, government effectiveness, regulatory quality, political stability and the absence of violence, rule of law, voice, and accountability exhibit the same i.e., direct and significant relationship. The paper also suggests various recommendations for investors at the individual and country levels.

We study volatility spillovers from the Chinese A-share market to four Asia-Pacific (APAC) markets and three global markets during the Chinese stock market crisis. We make use of a nonlinear model and determine that volatility spillovers tend to be regional, posing greater risks to the region than elsewhere. We show that, during the crisis, the Chinese stock market is more integrated in the APAC region. We find no evidence of asymmetric effects and exclude short-run effects of the national team established by the Chinese authorities. We construct a volatility spillover balance and find that, during the financial turbulence, mainland China changes its status from being volatility spillover receiver to volatility generator.

This paper investigates the relationship among liquidity risk, cash-holdings, financial constraints, and capital-raising costs. Our results show that cash preservation has different impacts on the liquidity risk explained by different aspects. The liquidity risk is negatively related with cash holdings. More financial constraints increase the liquidity risk. The firms with low capital-raising costs hold more cash because of liquidity needs.

This study investigates whether supplier firms’ managerial ability affects their strategic decisions in supply chain management. Previous research documents that suppliers could collaborate with or be exploited by powerful major customers. I expect that suppliers with high-ability managers are perceived to be with more favorable future prospects to fulfill contractual obligations and thus possess stronger bargaining power. As a result, these suppliers could resist rent extraction from major customers and achieve supply chain collaboration, making it beneficial for them to operate with a concentrated customer base. Using a comprehensive sample of supply chain links, I hypothesize and find a positive association between managerial ability and customer concentration. I also find that suppliers with more able managers are more likely to continue their existing supply chain relationships. This paper extends the implications of managerial ability to the supply chain setting and adds to the understanding of collaboration/competition between suppliers and customers.

The extant literature has provided a lot of evidence that supports positive associations between participation in activities and health. However, the health effects of high or low risk financial activities (FAs) are presently ambiguous, especially across age groups. With a sample of 313 subjects in Taiwan, this study examines whether participation in high or low risk FAs (savings, stocks, mutual funds, and real estate) benefits self-rated health (SRH) in middle-aged and older adults. We find that (1) savings rates are consistently high for both middle-aged and older cohorts. However, middle-aged adult participation rate in FAs, in terms of stocks, mutual funds and real estate, is higher than that for older adults. (2) High risk FAs, especially stock investments, have a positive effect on SRH in middle-aged adults.

The 30th Annual Conference on Pacific Basin Finance, Economics, Accounting, and Management was held at National Chung Cheng University, Taiwan on May 13 and 14, 2022. The first conference was held at Rutgers University in 1993. Since then, the conference has been held in Hong Kong (1994, 1998), Taipei (1995, 1999, 2003, 2006, 2011, 2016, 2019, 2020), Bangkok (2000, 2004, 2009), Rutgers (1996, 2001, 2005, 2012, 2018, 2021), Singapore (1997, 2002, 2017), Vietnam (2007, 2015), Australia (2008, 2013), China (2010), and Japan (2014). The program directors of the conference were Cheng-Few Lee, Rutgers University, USA.