Editorial

What the paper says

It is my pleasure to present the second issue of Volume 9 of the Journal of Capital Markets Studies (JCMS). This issue features six original articles addressing strategic behavior, sustainable finance and global market dynamics. The first paper examines the development of game theory in finance and its role in decision-making under uncertainty. The second explores the evolution of asset allocation models from classical portfolio theory to sustainable approaches. The third analyzes the effects of greenwashing and climate risk on stock price crash risk in Indonesia. The fourth evaluates the signaling role of Environmental, Social and Governance (ESG) disclosures on firm performance and capital flow across BRICS countries. The fifth investigates the interconnectedness between Indian ESG and sectoral indices, providing insights into risk management. The sixth paper, “Dissecting the Tail: Assessing Global Drivers of French Sustainable Markets,” analyzes the impact of financial volatility, oil prices and climate risks on France's sustainable stock performance, showing that while green bonds enhance returns, climate risks continue to suppress valuations. Collectively, these studies deepen the understanding of sustainable finance and the evolving resilience of global capital markets.The first article, “Game theory applications in finance: a review of literature,” written by Paseda (2025), reviews the evolution and applications of game theory across key areas of finance. Using a systematic literature review (SLR) under the PRISMA framework and bibliometric mapping through VOSviewer, the study analyzes 78 peer-reviewed papers published between 2000 and 2025. It categorizes applications in asset pricing, corporate finance, investment strategies and behavioral finance, showing how classical models such as Nash equilibrium and signaling games have expanded to include behavioral, sustainable and technological dimensions. The paper highlights that game theory remains a powerful framework for analyzing strategic interactions under asymmetric information and market complexity. It identifies research gaps in behavioral integration and decentralized ecosystems, suggesting future directions such as multi-agent learning and adaptive mechanism design. The findings provide meaningful insights for academics, policymakers and investors interested in how strategic behavior shapes modern financial systems.The second article, “Asset allocation models: evolution and diversity — a systematic literature review,” written by Oliveira Filho and Poker (2025), reviews the development of asset allocation research from classical portfolio theories to modern multifactor and behavioral models. Using the PRISMA method and bibliometric analysis, the author examines 81 studies from Scopus and Web of Science. The findings show a strong rise in asset allocation research after 2013, driven by advances in modeling and risk metrics. The paper identifies growing interest in behavioral finance, alternative assets and sustainable investing. By combining bibliometric mapping with a systematic review, it highlights key research gaps in applying advanced models, especially for ESG and sustainable portfolios. This study provides useful insights for academics and practitioners aiming to link innovation, risk management and investor welfare in today's evolving financial landscape.The third article, “From green claims to market crashes: the moderating forces of climate risk,” written by Agustin et al. (2025), explores the relationship between greenwashing practices and stock price crash risk, with a specific focus on the moderating role of climate risk. Using data from 247 firm-year observations of public companies listed on the Indonesia Stock Exchange (IDX) between 2019 and 2023, the study applies OLS, Coarsened Exact Matching and generalized least squares methods for robustness. The results show that companies engaging in exaggerated environmental claims are more prone to stock price crashes, especially under high climate risk conditions. These findings support the view that misleading ESG disclosures erode investor confidence and intensify market volatility. By bridging agency, stakeholder and signaling theories, the paper highlights how greenwashing distorts sustainability reporting and increases systemic vulnerability. The study offers timely insights for policymakers and investors, emphasizing the need for stronger ESG reporting standards and credible sustainability practices to ensure financial market stability.The fourth article, “Green signaling or greenwashing? ESG disclosure, firm performance, and capital allocation in BRICS equity markets,” written by David et al. (2025), examines whether ESG disclosures genuinely affect firm value and attract institutional investment in BRICS markets. Using data from 900 firms (2015–2023), the study finds that ESG reporting improves valuation and capital inflows mainly in countries with stronger governance. Among ESG dimensions, environmental scores have the most consistent impact, underscoring the importance of credible climate reporting. The paper highlights that ESG's financial influence depends on institutional quality, offering practical implications for investors and regulators seeking reliable sustainability disclosure in emerging markets.The fifth article, “Environmental, social and governance (ESG) investing and Indian capital market indices: dynamic connectedness and risk management strategies,” authored by Malhotra (2025), investigates the volatility and return spillovers between India's ESG indices, clean energy benchmarks and sectoral indices using a TVP-VAR and DCC-GARCH framework. The findings show that ESG and green indices act as persistent net transmitters of volatility, especially during crises such as COVID-19 and the Russia–Ukraine conflict, while sectors like FMCG and DIGITAL provide diversification benefits. The study highlights that the Minimum Connectedness Portfolio (MCoP) outperforms traditional strategies by minimizing systemic risk. By integrating connectedness analysis with portfolio optimization, the paper offers practical insights for investors and regulators on managing ESG-related risks in emerging markets.The final paper, “Dissecting the tail: assessing global drivers of French sustainable markets,” authored by Essayem (2025), explores how financial volatility, oil price fluctuations, geopolitical uncertainty and climate-related risks influence France's sustainable stock performance through a quantile regression approach. The results indicate that green bonds strengthen sustainable returns but reduce diversification opportunities, while market stress indicators such as VIX and OVX have nonlinear, state-dependent effects. Geopolitical risks appear insignificant, whereas both physical and transition climate risks negatively affect green asset performance under all market conditions. The study provides valuable insights for policymakers and investors seeking to enhance the resilience of France's green financial markets and support the country's transition toward a low-carbon economy.We hope you enjoy this issue of JCMS. Should you have any specific suggestions for future releases, we warmly welcome your feedback. Your input is invaluable to the continued growth and relevance of JCMS.JCMS's website is available at: https://www.emeraldgrouppublishing.com/journal/jcmsBest Regards,Professor Guler ArasEditor-in-Chief, Journal of CapitalMarkets StudiesProfessor Guler Aras is an academic, civil society leader and researcher who leads key studies on finance, corporate governance, corporate sustainability and integrated reporting. She is Professor of Finance and Accounting at Yildiz Technical University in Istanbul, where she served as the Dean of the Faculty of Business and Dean of the Graduate School for many years. She spent a year as a visiting professor at the Georgetown University McDonough School of Business in Washington, DC. Founded by the Center for Finance Governance and Sustainability (CFGS), she is known as the ambassador of governance and sustainability. Professor Aras, who is a member of the Integrated Reporting and Connectivity Council (-IRCC), the advisory body to the IFRS Foundation Trustees, the IASB and the ISSB, pioneered a global initiative with the Integrated Reporting Association Turkey (ERTA), of which she is the founding chair.Professor Aras is the author of more than 25 international books. She contributed to more than 300 articles in international journals and conferences and carried out numerous granted international projects. She is also the founding Editor-in-Chief of the Journal of Capital Market Studies and Editor of Routledge's Finance, Governance and Sustainability Book Series. Professor Aras is the founder and board member of numerous national and international professional and academic organizations and a member of the Accountancy Europe Corporate Governance Task Force. She has spoken extensively at professional and academic conferences and has served as a consultant to several governmental and commercial organizations, such as the Minister of Development, Minister of Finance, Undersecretary of Treasury, and Minister of Labor and Social Security Employment in Turkey. She also serves as a board member of the Turkish Capital Markets Association. Professor Aras writes a newspaper column. She focuses on the education of the next generation of academics and business leaders who could promote sustainable solutions for societal and corporate challenges. She has been crowned one of the most inspirational women in Turkey for 2020.