Rural banking competition may promote or hinder agricultural total factor productivity (TFP). We analyze a novel dataset on all commercial bank branches in rural China, combined with measures of productivity based on stochastic frontier analysis. To identify causality, we use: 1) an instrumental variable approach based on the administrative division of banks, and 2) a propensity score matching difference-in-difference approach exploiting banking de-regulations in 2009. Both methods reveal that competition has a positive impact on TFP. A heterogeneity analysis finds that the effect is primarily significant along the Beijing-Kowloon railway and its East side. Technology adoption is the typical channel through which lending is hypothesized to impact TFP. We find that the positive effect of competition is larger in areas with greater technology use, but we find an insignificant direct impact of concentration on technology adoption, suggesting the channels of effect may be more complex than previously thought.

This paper investigates the impact of two global crises, the global financial crisis and the COVID-19 crisis, on herding behavior in the Chinese and U.S. stock markets. We find no evidence of herding behavior during these two global crises in the U.S. stock market, yet significant herding emerges under the COVID-19 crisis in Chinese mainland stock market. Additionally, the observed herding behavior in mainland China is primarily driven by sentiment. Our results reveal and explain the differences in the effects of financial crisis and public health crisis on herding behavior, as well as variations between emerging and developed stock markets.

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The study finds that analyst skill plays a key factor to explain the complicated and chaotic relation between analyst coverage and external governance. We divide analysts into multiple skill groups by GMM (Gaussian mixture model) method, and explore the effect of the coverage by skilled analysts on earnings management in Chinese listed companies. The results indicate that only the coverage of skilled analysts shows a significant negative correlation with earnings management. Heterogeneity analysis reveals that the negative relationship between the coverage of skilled analysts and earnings management is primarily observed in non-state-owned companies, those with weaker external audits, and smaller-scale firms. The conclusion remains robust after considering endogeneity issues. The findings of this study suggest that incorporating analyst skill contributes to a better understanding of the mechanisms through which analysts influence corporate governance. It also highlights that the role of analysts in corporate governance cannot be generalized.

In reality, we find assets traded in the transparent centralized market and opaque decentralized market. To explain the traders' choices of venues, we develop a model of dynamic learning and dynamic market choice between the centralized market and decentralized markets. With heterogeneous trader value correlation, we find that when asset sensitivity or volatility is sufficiently low, traders prefer the decentralized market; when asset sensitivity or volatility is intermediate, switching between centralized and decentralized markets can be the optimal market choice; when asset values are sensitive to volatile fundamentals, assets are traded only in the centralized market. We provide empirical evidence in support of the model predictions. We discussed the welfare implications of various market designs under endogenous market choices. We find that introducing post-trade transparency in the decentralized market improves welfare. Surprisingly, introducing pre-trade transparency in the decentralized market may decrease welfare as it increases traders' incentives to choose a decentralized market earlier and hurts future traders in the centralized market.

Taking China Pilot Free Trade Zone (PFTZ) as a new perspective of institutional environment optimization, this paper investigates its impact on corporate ESG performance. We find that the PFTZ positively enhances corporate ESG performance, which remains robust after various checks. The mechanism analysis shows that improving corporate environmental protection capacity and management efficiency are the main channels while strengthening labor protection and easing financial constraints can enhance the positive effect. Moreover, the positive effect of the PFTZ on corporate ESG performance is more pronounced in coastal regions, the service sector, and state-owned enterprises (SOEs).

In this study, we investigate the relationship between news media sentiment and management earnings forecasts. Using Ashare listed companies in China from 2007 to 2022, we find a negative relationship between media sentiment and the propensity of firms to issue management earnings forecasts. We also find that media sentiment is associated with the precision and accuracy of these forecasts. Overall, our study offers new insights into the underlying motivations and the quality of management earnings forecasts.

This study investigates the impact of investor attention on stock market reactions to ChatGPT using dialogues on the Chinese interactive investor platforms (IIPs). We measure investor attention by the number of investors’ questions toward ChatGPT on the IIPs and categorize the firms’ answers as Investing, Speculative, and Absent. The research reveals positive and statistically significant market reactions surrounding the initial questions that occur before firm responses. Positive abnormal returns are also observed around the initial answer dates, with Investing firms evoking the highest market response, followed by Speculative firms, and Absent firms exhibiting the lowest reactions. Furthermore, positive market reactions persist even as firms modify their ChatGPT involvement statements or face stock exchanges inquiries, suggesting that the stock price upswing may primarily be fueled by ChatGPT-related mania. Our findings imply the potential of ChatGPT fervor: collusion caused by investor attention to ChatGPT and firm’s responses catering to investors.

The impact of corporate environment, society, and governance (ESG) disclosure on the online market remains uncertain. To address this ambiguity, this study utilizes text analysis to thematically classify research samples to examine the positive influence of corporate ESG disclosure on stock liquidity from a reputational perspective. Interestingly, the reputational effect of ESG disclosure shows asymmetry within the online market, particularly in its highly information-sensitive environment. Notably, negative media reputation insignificantly diminishes the positive impact of ESG disclosure on stock liquidity. A series of robustness tests confirm the reliability of the sample screening method and findings.

Motivated by the growing importance of the Chinese domestic economy for the global economic condition, we test whether the consumption risk of China matters for the cross-section of U.S. equity returns. We find that the two-factor international assetpricing model with both U.S. and Chinese consumption risk explains 40% of the crosssectional variation in U.S. equity returns. We also find a sizable risk premium of 7.08% per annum. This finding is robust to different estimation approaches, portfolio groups, controlling for other equity factors, and using individual equities. For economic mechanism, we find that it is the discount rate channel that is related to investors’ risk aversion, sentiment, and economic uncertainty through which Chinese consumption matters for the U.S. equity returns. Also, the result is not entirely driven by Chinese investors participating in the U.S. Overall, we present equity market-based novel evidence of the importance of Chinese macro fundamentals for the U.S.