International Journal of Monetary Economics and Finance (5 papers in press)

Regular Issues

• Does liquidity creation matter for bank ESG performance? Evidence from ASEAN 5 plus Vietnam  
  by Fadli Septianto, Eka Dyah Pramusinta, Siti Aisyah Tri Rahayu, Putra Pamungkas 
  Abstract: This study examines the relationship between bank liquidity creation and environmental, social, and governance (ESG) performance within the ASEAN 5 plus Vietnam, using unbalanced panel data from 50 banks over the period 2012-2023. Using fixed-effect regression models and the system generalised method of moments (SYS-GMM) two-step estimator for robustness checks, we find a significant positive relationship between liquidity creation and overall ESG performance, particularly in the social and governance pillars. Our findings underscore the importance of liquidity creation in fostering strong social and governance practices, but highlight the need for targeted policies to enhance environmental performance.
  Keywords: bank liquidity creation; ESG performance; environmental performance; social performance; corporate governance; ASEAN; panel data regression.
  DOI: 10.1504/IJMEF.2026.10079050
   
  
• The impact of ESG performance on firm value under information asymmetry: evidence from China  
  by Jing Mou, Wei-Theng Lau, Lee Chin 
  Abstract: As sustainable finance becomes increasingly embedded in global capital markets, environmental, social, and governance (ESG) performance has become an important factor in firm valuation. This study examines the relationship between ESG performance and firm value by focusing on analyst coverage and media attention as information channels. Using panel data for 3891 A-share listed firms on the Shanghai and Shenzhen stock exchanges from 2013 to 2023, this study employs a two-way fixed effects model to estimate the baseline relationship and test the proposed mediation mechanisms. The results show that ESG performance is positively associated with firm value, with the positive effect mainly driven by the social and governance pillars. The mediation tests further indicate that ESG performance enhances firm value indirectly by increasing analyst coverage and media attention. This study contributes to the ESG literature by identifying market attention as an important channel through which ESG performance is incorporated into firm valuation in an emerging market characterised by information asymmetry.
  Keywords: ESG performance; firm value; analyst coverage; media attention; information asymmetry; emerging markets.
  DOI: 10.1504/IJMEF.2026.10080374
   
  
• Influence of environmental, social, and governance (ESG) performance on corporate financial outcomes in Indian companies  
  by Ravichandran Karuppan Kaluvan, Sharon Sophia 
  Abstract: The study examines the impact of environmental, social, and governance (ESG) performance on the sustainability of cash flows of Nifty50 firms in terms of high-value financial ratios such as return on equity (ROE), return on assets (ROA), and Tobins Q. The firms are segregated according to beta values, which measure stock price volatility. Based on panel data analysis of the secondary data of 20172022, ESG performance is weakly negatively correlated with cash flow sustainability. Contrary to intuition, companies with beta measures below one are negatively correlated, while those with beta measures above one are positively correlated. The influence of ESG on cash flow sustainability varies across industries, firm sizes, and market conditions. Operating intensity and capital expenditure are two key drivers of cash flow sustainability, while stock performance, ROE, and market cap are more closely linked to ESG. In such highly capital-intensive sectors, fewer short-term returns from ESG are available, and with long-run investment, only long-run returns are observed. Investor sentiment, as well as rules governing activities, also exclude the financial impact of ESG. Though with temporary confusion, companies that legitimately adopt ESG techniques will achieve long-term financial sustainability.
  Keywords: financial performance; ESG; environmental; social; and governance; volatility; sustainability; CFP; corporate financial performance; CSR; corporate social responsibility; Nifty50.
  DOI: 10.1504/IJMEF.2026.10080574
   
  
• Dynamic co-movements between green bonds, environmental indicators, investor sentiment, and financial stress: a Bayesian time-varying approach  
  by Souha Boutouria, Balkiss Ben Omrane 
  Abstract: This study analyses the time-varying relationships between green bonds and environmental, behavioural, and financial variables using daily data from March 2015 to April 2025. We employ quantile regression and a Bayesian time-varying parameter vector autoregressive (TVP-VAR) model to capture asymmetric dynamics and evolving interactions across market regimes. Empirical results reveal a unidirectional and negative causal effect of CO2 emission allowance prices on green bond prices, while clean energy equities exhibit a positive influence, confirming their shared environmental focus. Investor sentiment, proxied by the Google Trends Index (GTI), shows no significant impact, suggesting that green bond investors may be driven more by fundamentals than short-term attention shifts. Financial stress, measured by the Office of Financial Research Financial Stress Index (FSI), exerts a persistent and negative effect, particularly during periods of heightened uncertainty. Robustness tests confirm the reliability of the findings.
  Keywords: green finance; green bonds; behavioural finance; investor sentiment; financial stress; TVP-VAR; Bayesian time-varying parameter vector autoregressive; quantile regression.
  DOI: 10.1504/IJMEF.2026.10081125
   
  
• Islamic bank performance based on maqashid sharia: evidence from Islamic banks in Southeast Asia  
  by Dedi Fernanda, Sumiati, Siti Aisjah, Nur Khusniyah Indrawati 
  Abstract: This study aims to determine the direct impact of Islamic social responsibility (ISR) and Islamic corporate governance (ICG) on the performance of Islamic banks, using the maqashid sharia approach. It also explores the intermediary role of earnings management. The research utilises secondary data from 15 Islamic banks in Southeast Asia, covering the years 2019 to 2023 with 75 observations. Data panel regression analysis was conducted using Eviews 13 software. The findings reveal that ISR mechanisms have a negative impact on financial performance. In contrast, ICG and earnings management do not significantly affect the performance of Islamic banks. Furthermore, the study shows that earnings management does not mediate the relationship between ICG and ISR mechanisms and financial performance.do not affect the performance of Islamic banks. In addition, the findings show that earnings management does not mediate the influence of ICG and ISR mechanisms on financial performance.
  Keywords: ICG; Islamic corporate governance; ISR; Islamic social responsibility; earning management; Islamic bank performance; maqashid sharia.
  DOI: 10.1504/IJMEF.2026.10081126