Finance and Financial Management Commons^™

Bank Competition Amid Digital Disruption: Implications For Financial Inclusion, Erica Xuewei Jiang, Gloria Yang Yu, Jinyuan Zhang

Research Collection Lee Kong Chian School Of Business

We examine how digital disruption affects bank competition using the staggered rollout of 3G mobile networks. 3G expansion increased mobile banking adoption among tech-savvy households, reducing branch networks—especially in younger counties. Banks' strategies diverged: Less branch-reliant banks closed branches and competed on price, while more branch-reliant banks maintained branches but raised spreads. A structural model shows that perceived digital service improvements among younger consumers drove these shifts, reducing welfare for older savers. Counterfactuals demonstrate that subsidizing adoption for older savers can cost-effectively reduce these disparities, facilitating a smoother digital transition.

Queuing Uncertainty Of Limit Orders, Bart Yueshen Zhou

Research Collection Lee Kong Chian School Of Business

Limit orders submitted around the same time are subject to random latencies and will be queued accordingly. In equilibrium, end-of-queue limit orders always lose money—the liquidity supply appears excessive. The model generates empirical predictions regarding such “overshooting” liquidity: (i) new limit orders appear fleeting—clustered submissions are followed by immediate cancellations, (ii) the resulting cancel-to-add count ratio reflects adverse selection, and (iii) the cancel-to-add size ratio measures high-frequency market-making activity. Welfare can be hurt by the overshooting liquidity if it induces excessive speculation. Overall, the model contributes to a more comprehensive understanding and better utilization of order book data.

Settlement Manipulation In Prediction Markets, David Dai, Ruizhe Jia, Shihao Yu

Research Collection Lee Kong Chian School Of Business

Prediction markets increasingly list contracts settling on an asset price that holders can move by trading the underlying. We build a model showing that such contracts transfer wealth from prediction-market liquidity traders to manipulators and harm price discovery in the underlying, even as it becomes more liquid. After the launch of Polymarket's five-minute Bitcoin contract, settlement-time spot order flow spikes, causing large price reversals after settlement. Manipulators capture a large amount of profit, mostly from retail. Manipulation is largely absent in the fifteen-minute contracts: lengthening the contract horizon removes it, providing the market-design remedy our model and evidence support.

Bitcoin Options Risk-Reversal Predictability, Meng Hwee Neo

Dissertations and Theses Collection (Open Access)

This dissertation examines whether Bitcoin options risk-reversal (RR) spreads predict future Bitcoin returns, using daily Deribit data from April 2021 to December 2025 (1,723 observations).

In the primary 25-delta, 90-day specification, the RR coefficient is significant at the 1% level in a thirteen-variable baseline regression with Newey–West standard errors. Robustness tests across all available delta–tenor specifications show statistically significant RR coefficients in the majority of configurations, concentrating in the 30–180-day maturity band.

The butterfly spread (BF) also predicts returns. Both remain significant after controls are added: the RR t-statistic increases from 1.91 (univariate) to 3.73 (full baseline), and the BF …

Relationship Between Change In Unrealized Gains Or Losses Of Afs Securities And Credit Spreads Of U.S. Life Insurance Companies, Kwang Liang Yeo

Dissertations and Theses Collection (Open Access)

This study evaluates the transmission of unrealized fair value accounting losses to credit default risk within the United States life insurance sector during a period of unprecedented monetary tightening. Integrating a pre-specified confirmatory econometric framework with a text-based exploratory analysis of regulatory filings, we examine how changes in Other Comprehensive Income (OCI) and benchmark interest rate dynamics shape market perceptions of insurer default probability. Our findings reveal that credit default swap markets do not price OCI variations contemporaneously; instead, they reflect a structural one-quarter pricing lag that aligns with the regulatory timeline of financial disclosures. Furthermore, the relationship between interest …

A Study On The Capital Market Valuation Effects Of Corporate Ai Adoption: An Empirical Analysis Of Manufacturing Firms In China's A-Share Market, Libin Ma

Dissertations and Theses Collection (Open Access)

This dissertation examines whether and how corporate adoption of artificial intelligence (AI) affects capital market valuation in manufacturing firms. As AI is increasingly embedded in R&D design, production organization, supply chain coordination, and operational management, its value implications depend not only on whether firms adopt AI, but also on how AI is deployed within business processes. Existing research has mainly focused on productivity, innovation, labor substitution, and digital transformation, while the enterprise value consequences of differentiated AI application strategies remain insufficiently examined.

Using Chinese A-share listed manufacturing firms from 2015 to 2024 as the sample, this study identifies firm-level AI …

Research On The Impact Of Industrial-Financial Cooperation On Corporate R&D Investment, Jiayin Yin

Dissertations and Theses Collection (Open Access)

The national industrial-financial cooperation pilot policy represents a key strategic initiative to implement China's strategy of building a "financial powerhouse" and guide financial resources toward empowering high-quality development in the real economy. In December 2016, four central government departments in China jointly announced the first batch of national industrial-financial cooperation pilot cities. Leveraging this quasi-natural experiment, this study comprehensively evaluates the impact of the pilot policy on corporate R&D investment activities using a sample of Chinese A-share listed companies from 2014 to 2019.

Research findings indicate: (1) The industrial-financial cooperation pilot policy significantly increases enterprises' R&D investment levels. Specifically, compared …

Valuing Biodiversity Impact, Han Wei Koh

Dissertations and Theses Collection (Open Access)

Biodiversity loss has emerged as a systemic challenge with far-reaching implications for ecological stability, economic activity, and long-term financial resilience. Despite growing recognition of nature-related risks in finance, biodiversity remains far less developed than climate within investment analysis, particularly at the portfolio level. This dissertation addresses that gap by examining how biodiversity impacts can be measured, valued, and interpreted within an investment portfolio concentrated in resilient and essential sectors of the economy.

The study constructs a Global Essential Economic Systems Portfolio comprising 16 publicly traded companies operating across non-discretionary sectors, including agriculture, energy, materials, pharmaceuticals, utilities, infrastructure, telecommunications, and financial …

The Determinants And Consequences Of Green Credit In Commercial Banks: A Dual-Pillar Perspective Of Asset Quality And Esg, Jianmei Xia

Dissertations and Theses Collection (Open Access)

As China’s “dual carbon” strategy advances, green credit has increasinglybecome a crucial financial instrument driving the green transition of China’s industrial structure. From a dual perspective of asset quality and ESGperformance, this paper systematically examines the determinants andconsequences of green credit practices among commercial banks. Employing a multiple-method approach that combines comparative case study, in-depthinterview, and large-sample empirical analysis, this study aims to address twocore questions: First, what are the key factors driving commercial banks toprovide green credit, and what is the logic behind their differentiated decision- making? Second, how does green credit affect banks’ financial and non-financial performance? This …

From Ancient Harmony To Modern Sustainability: Assessing The Coupling Of Taoist “Harmony Between Humanity And Nature” With Esg And Its Impact On Firm Innovation And Performance, Biyi Wang

Dissertations and Theses Collection (Open Access)

Against the backdrop of intensifying global ecological crises, the ESG evaluation system has become a core metric for corporate sustainable development worldwide. However, the Western-dominated ESG system lacks crucial cultural dimensions in its application within Chinese corporate practices. The ecological wisdom embedded in the Taoist concept of “Harmony between Humanity and Nature” offers a significant philosophical foundation for the ESG localization. Extant research has focused on the influence of Confucian culture on ESG, with insufficient exploration of the modern managerial value of “Harmony between Humanity and Nature”. A scientific coupling framework linking this concept with ESG indicators has yet to …

Price Discovery On Decentralized Exchanges, Agostino Capponi, Ruizhe Jia, Shihao Yu

Research Collection Lee Kong Chian School Of Business

Decentralized exchanges (DEXs) allow traders to express their willingness to pay for quick execution through a public priority fee bidding mechanism. We provide evidence that high-fee DEX trades are more informative and contribute more to price discovery. Using address-level blockchain transaction data, we show that informed traders persistently bid higher fees to secure early execution, revealing a strong willingness to pay for execution priority. Further, analysis of Ethereum mempool data demonstrates that informed traders employ a “jump bidding” strategy, placing high initial bids to deter potential competitors.

Nominal Prices, Retail Investor Participation, And Return Momentum, Jun Du, Dashan Huang, Yu-Jane Liu, Yushui Shi, Avanidhar Subrahmanyam, Huacheng Zhang

Research Collection Lee Kong Chian School Of Business

We employ an identification strategy for retail participation to explore the link between return momentum and investing clientele. This scheme relies on strictly enforced round-lot rules in China, which financially constrain retail investors from participating in stocks with high nominal prices. We find that there is strong momentum in high-priced stocks, but no momentum on aggregate. This result supports the idea that noise trades of retail investors mask momentum, while other, more sophisticated investors contribute to momentum. We validate this notion by showing that retail investors with small (large) portfolios are less (more) prone to participating in stocks with high …

Antecedents And Consequences Of Cognitive And Affective Trust In Wealth Management: Impacts On Wealth Manager Selection And Asset Under Management (Aum) Growth, Ting Hsi Chen

Dissertations and Theses Collection (Open Access)

Trust is key to wealth management decision-making; there is little empirical clarity on the relationships between different dimensions of trust and client behavior at each stage of the relationship. Previous works differentiated Cognitive trust, based on perceived competence, and Affective trust, based on relational and emotional connections. Nevertheless, the mechanisms under which these trust dimensions act during the pre- and post-account-opening phases have not yet been thoroughly studied. This research addresses this gap by exploring the stage-dependent influence of Cognitive and Affective trust on the central behavioral outcomes in wealth management.

The approach is a quantitative research based on a …

Deep Learning Approaches For Anti-Money Laundering On Mobile Transactions: Review, Framework, And Directions, Jiani Fan, Lwin Khin Shar, Ruichen Zhang, Ziyao Liu, Wenzhuo Yang, Dusit Niyato, Kwok-Yan Lam

Research Collection School Of Computing and Information Systems

Money laundering is a financial crime that obscures the origin of illicit funds, necessitating the development and enforcement of anti-money laundering (AML) policies by governments and organizations. The proliferation of mobile payment platforms and smart IoT devices has significantly complicated AML investigations. As payment networks become more interconnected, there is an increasing need for efficient real-time detection to process large volumes of transaction data on heterogeneous payment systems by different operators such as digital currencies, cryptocurrencies, and account-based payments. Most of these mobile payment networks are supported by connected devices, many of which are considered loT devices in the FinTech …

Old Signals, New Era: Reconsidering How Customer Satisfaction And Employee Satisfaction Impact Shareholder Wealth, Cesar Zamudio, Suyun Mah, Vanitha Swaminathan

Research Collection Lee Kong Chian School Of Business

Extant research suggests that higher levels of customer and employee satisfaction signal a firm’s competitive advantage, resulting in greater firm value. This article advances the understanding of how firms can manage customer satisfaction and employee satisfaction to increase shareholder wealth in a new environment due to the emergence of social media and a new class of retail investors. Drawing from stakeholder theory and signaling theory, we argue that inconsistency in customer satisfaction and employee satisfaction can be informative to investors and lead to greater shareholder wealth in such a new environment. Our findings demonstrate that there is a negative joint …

A Social Norm Perspective On Distorted Information In China, Zhe Li, Massimo Massa, Nianhang Xu, Hong Zhang

Research Collection Lee Kong Chian School Of Business

Can social norms give rise to distorted information in China? We observe that China’s leading social norm related to alcohol consumption and social drinking enhance earnings management. An analysis of toxic alcohol scandals supports a causal interpretation. Further evidence suggests that the influence of alcohol may come from the negative externality that it creates, which is propagated by corporate leaders and cannot be attenuated by market-oriented institutions. Our results reveal a social norm externality that may have important normative implications.

There Is No One-Size-Fits-All Approach To Sovereign Finance, Guan Seng Khoo, Annie Koh

Research Collection Lee Kong Chian School Of Business

In a commentary, SMU Professor Emeritus of Finance (Practice) Annie Koh and Khoo Guan Seng, Asia-Pacific advisory council member of the SWF Academy and EU-Asean Centre, opined that in a volatile world, the strength of a sovereign wealth fund lies in its ability to fulfil its specific, sovereign purpose. Prof Koh and Mr Khoo said that sovereign wealth funds are bespoke instruments of national policy, and in the world of sovereign capital, one size does not, and cannot, fit all. They noted that each fund is a reflection of a country’s unique ambitions, its resource endowments and its specific fears …

Agency Mbs As Safe Assets, Zhiguo He, Zhaogang Song

Research Collection Lee Kong Chian School Of Business

Measured as yield spreads against Treasury securities and AAA corporate bonds, the convenience premium of newly issued agency MBS averages more than half of the long-term Treasury convenience premium. The agency MBS convenience premium and issuance amount vary negatively with mortgage rate, consistent with a prepayment-driven channel. Placing agencies into conservatorship in 2008 and introducing liquidity regulations in 2013 significantly affected MBS convenience premium, consistent with government guarantee and regulatory treatment channels. Analyses of dispersion of dealers’ prepayment forecasts, seasoned MBS, and investors’ MBS holdings deliver further economic implications for agency MBS as safe assets.

The Effects Of Financing Green And Brown Sectors: What Do Theories And Evidence Say?, Hao Liang, Maria Teresa Punzi

Research Collection Lee Kong Chian School Of Business

This paper critically examines the economic and welfare implications of financing green and brown sectors. Drawing on a comprehensive review of recent theoretical and empirical literature, we highlight that while conventional green finance—allocating capital toward environmentally friendly (“green”) sectors and away from carbon-intensive (“brown”) sectors—can promote decarbonization, it may also produce unintended externalities. In particular, it can inadvertently incentivize higher emissions from brown firms and contribute to economic disruption. Using a dynamic stochastic general equilibrium (DSGE) model, we demonstrate that lowering the cost of capital for green sectors leads to only modest reductions in emissions, whereas raising it for brown …

Policy Uncertainty Reduces Green Innovation, Mengyu Wang, Jeffrey Wurgler, Hong Zhang

Research Collection Lee Kong Chian School Of Business

Policy uncertainty can undermine the power of government subsidies to stimulate environmentally friendly research and development. We show that Chinese firms’ green R&D falls as the uncertainty of environmental subsidies rises: Exogenous, weather-driven air pollution variability induces subsidies to fluctuate, and firms in areas with high weather-driven subsidy variability undertake less green R&D and hire fewer technical employees, controlling for the average level of subsidies. Heavy emitters and environmental technology firms are more affected. The results also illustrate how policy uncertainty can arise when policymakers are influenced by conditions that are salient but with causes that are difficult to disentangle.

Large Owner Expropriation Threat And Stock Option Pay's Effect On Firm Risk-­Taking Behaviors In Weak Institutions, Cuili Qian, Lipeng (Gary) Ge, Xuesong Geng, Jiatao Li, Maria Hasenhuttl

Research Collection Lee Kong Chian School Of Business

Research Question/Issue: This study investigates the impact of managerial stock option pay on firm risk-­ taking behaviors in aweak institutional context, a critical question that has been overlooked by the literature. Specifically, we build on the comparative corporate governance perspective that emphasizes the implications of large shareholders' expropriation threat in weak institutions to develop predictions about their impact on the stock option's incentive alignment effect. We further explore the boundary conditions of such a relationship.Research Findings/Insights: Based on a sample of Chinese listed firms between 2006 and 2016, we find that a high level of large shareholders' expropriation threat weakens …

Grand Theft Identity: The Privacy Costs Of Digitalization, Kenny Phua, Chishen Wei, Gloria Yang Yu

Sim Kee Boon Institute for Financial Economics

We study whether greater digital engagement increases the risk of identity theft by exploiting bank branch closures as a shock that shifts economic activity online. Using a quasi-natural experiment, we find causal evidence that branch closures increase identity theft, particularly in more vulnerable communities. Exposed consumers spend more time on mobile apps and shift their expenditures from offline to online channels. Adversarial activities associated with identity theft, such as unwanted calls and phishing attempts, increase after branch closures. Overall, our evidence suggests that digitalization offers consumer benefits, but also imposes hidden privacy costs.

A Transaction Cost Perspective On Option Anomalies, James O'Donovan, Gloria Yang Yu

Research Collection Lee Kong Chian School Of Business

We examine the impact of transaction costs on the profitability of long-short portfolios of delta-hedged option returns. Of the 24 portfolio sort variables studied, 17 generate positive and significant gross returns, but none remain profitable after accounting for trading costs. We propose a cost-mitigation approach that restores profitability to 7 key portfolios. Furthermore, we demonstrate that the choice of delta-hedging frequency has a first-order impact on transaction costs. Our findings underscore the central role of implementation costs in shaping the investment opportunity set in equity–option markets, highlighting the need to account for transaction costs when evaluating option-based strategies.

A Study On The Impact Of Ceos’ Financial And Technical Backgrounds On The Innovation Strategy Of The Enterprise, Jianyu Cheng

Dissertations and Theses Collection (Open Access)

Amid regional economic integration and market competition, innovation has become a key driver for enterprises to gain competitive advantages and ensure sustainable development. As primary decision-makers in corporate strategy and resource allocation, chief executive officers (CEOs) impact the selection and implementation of innovation strategies through their financial and technical backgrounds, which influence their strategic cognition and risk preferences, leading to heterogeneous innovation behaviors. While existing research has examined the relationship between CEOs and corporate innovation, studies have inadequately explored CEOs’ diverse background characteristics, particularly the interaction between financial and technical backgrounds. Given the rising trend of CFOs and CTOs advancing …

The Impact Of Value Co-Creation On Organizational Resilience In Small And Medium-Sized Traditional Foreign Trade Enterprises, Dan Yan

Dissertations and Theses Collection (Open Access)

Against the backdrop of increasing uncertainty in the global business environment, international scholarly attention to individual, group, and organizational resilience has risen significantly. Chinese export trading enterprises—especially small and medium-sized export trading enterprises(SMETEs)—face disadvantages such as small scale, weak financing capacity, limited access to information, and low brand strength. After experiencing shocks from digital transformation, the COVID-19 pandemic, the Russia–Ukraine war, and the European energy crisis, these firms have been compelled to reconsider how to enhance their organizational resilience in order to adapt to an increasingly turbulent external environment.

First, this study selects Company H as a representative case of …

From Discrete Manufacturing To Continuous Manufacturing: Examining The Relationship Among Digital Capability, Organizational Learning, And Enterprise Performance, Demu Chen

Dissertations and Theses Collection (Open Access)

In 2018, Company J launched its intelligent drive digital transformation project, which was completed and entered operation in 2021. That December, the project obtained certification under Zhejiang Province's "1353" system for the future factory enterprises, marking a successful transition from discrete to continuous manufacturing. To address the asynchronous flows of logistics, information, personnel, capital, and value indiscrete manufacturing enterprises, as well as pain points such as lowper capita output, long product delivery cycles, and low annual inventory turnover rates, this study, based on organizational learning theory, constructs ananalytical model encompassing digital capability (independent variable X), organizational learning (mediating variable Z), …

Riding Attention Spikes: How Analysts Respond To Advertising, Minjae Koo, Annika Yu Wang, Yin Wang, Liandong Zhang

Research Collection School Of Accountancy

Product market advertising, while containing little new information, triggers spikes in investor attention. Using weekly advertising data, we find that sell-side analysts issue optimistic earnings forecasts in response to heavier advertising in the prior week. This effect is not driven by confounding earnings or product news. It is more pronounced for experienced analysts and analysts affiliated with brokerages relying solely on trading revenues. The optimistic forecast bias intensifies the impact of advertising on investor trades, especially on retail buying, of the underlying stock during the following week. Overall, analysts appear to issue optimistic forecasts to exploit retail investor attention spikes …

One Size Does Not Fit All: Contract Design In Fintech Lending, Jianfeng Hu, Changcheng Song, Gloria Yang Yu

Research Collection Lee Kong Chian School Of Business

Many fintech lenders rely on standardized contract terms to support scale and operational speed. This paper examines whether modest tailoring of loan contracts can improve credit market outcomes. We conduct a randomized field experiment with a large fintech lender that varies loan due dates relative to borrowers' salary paydays. Synchronizing repayment schedules with income cycles reduces delinquency by 29.1% in the experiment and 15.7% in the administrative data. Effects concentrate among liquidity-constrained borrowers: young, low-income, and low-creditlimit individuals. Tailored repayment timing generates substantial economic benefits: borrowers save on overdue penalties, lenders accelerate cash flows, and improved repayment increases future credit …

Incident-Driven Esg Engagements, Hao Liang, Yongheng Sun, T. Mandy Tham

Research Collection Lee Kong Chian School Of Business

We examine when and why institutional investors engage portfolio firms on ESG issues using proprietary engagement records from a European asset manager. Salient negative incidents emerge as a powerful trigger—second only to firm size—because they heighten reputational accountability for investors and reveal new information about hidden ESG weaknesses, particularly at firms perceived as ESG leaders. Monitoring also extends along the supply chain: incidents at key suppliers prompt investor engagement with focal firms. Finally, engagement is associated with higher firm value, stronger ESG performance, and increased cash flows. Together, the findings illuminate the drivers and mechanisms of ESG engagement and underscore …

Exploratory Innovation: A New Perspective On Family Firms' Under-Diversification Puzzle, Po-Hsuan Hsu, Sterling Huang, Massimo Massa, Yaru Qian, Hong Zhang

Research Collection Lee Kong Chian School Of Business

We propose a new perspective on family firms’ puzzling under-diversification in product spaces: these firms first need to succeed in exploratory innovation so they may diversify into new product markets. We construct a large database of family ownership and patent records of U.S. public firms, and show that family firms produce more exploratory patents than others, a relation that is stronger among under-diversified family firms. In addition, we find that such innovation indeed helps family firms diversify business risks. A causal interpretation of our result is supported by (i) using the property division standard in state-level divorce laws as an …