When examining corporate governance in China, it is crucial to recognize the unique socio-economic structures and legal systems at play. The mechanisms of corporate governance theorized in the West might not necessarily have the same impact in China. In particular, given China’s distinct feature of the domestic economy and its socio-political structure, the results of introducing a hostile takeover system might not align with common anticipations that scholars and policymakers in China and elsewhere broadly share. In greater detail, this paper highlights the significant market imperfections in the Chinese economy, stemming from information asymmetry, imperfect product markets, and capital-market inefficiency. These market imperfections suggest that an active hostile takeover regime might not function effectively in China, as its disciplinary mechanism operates successfully in other advanced countries. Additionally, this paper underscores that due to China’s distinctive features—including its state-owned corporate landscape, the dominance of controlling shareholders in private corporations’ ownership structures, and its unique brand of socialism—the introduction of an active takeover regime could produce unintended consequences in the Chinese economy. Overall, challenging the prevailing perspective, I posit that within the Chinese hostile takeover framework, corporate governance is not as influential as one might assume.

We examine whether and how mandatory corporate social responsibility (CSR) disclosures affect corporate tax avoidance. Using a CSR disclosure mandate in China that requires a subset of firms to disclose their CSR activities as an exogenous shock to CSR disclosures, our difference-in-differences analyses show that firms affected by the disclosure mandate engage in less tax avoidance relative to control firms. Additional analyses indicate that increased public scrutiny following the disclosure mandate is the likely channel through which mandatory CSR disclosures constrain tax avoidance. Cross-sectional analyses suggest that the effect of the disclosure mandate varies with institutional environments. Overall, our results indicate that the CSR disclosure mandate constrains corporate tax avoidance, which is consistent with mandatory CSR disclosures nudging firms toward more socially desirable behavior.

We examine the risk-return trade-off in market anomalies within the A-share market, showing that even decaying anomalies may proxy for latent risk factors. To balance forecast bias and variance, we integrate the 1/N and mean-variance frameworks, minimizing out-of-sample forecast error. Treating anomalies as tradable assets, we construct optimized long-short portfolios with strong performance: an average annualized Sharpe ratio of 1.56 and a certainty-equivalent return of 29.4% for a mean-variance investor. These premiums persist post-publication and are largely driven by liquidity risk exposures. Our results remain robust to market frictions, including short-sale constraints and transaction costs. We conclude that even decaying market anomalies may reflect priced risk premia rather than mere mispricing. This research provides practical guidance for academics and investors in return predictability and asset allocation, especially in the unique context of the Chinese A-share market.

The discussion on the innovative effects of intellectual property pledge financing is a mainstream trend. In this context, this study has improved the existing research from several aspects, such as broadening the dimensions of innovation, adding dynamic analysis, refining multidimensional mediation mechanisms, and employing unique samples. Ultimately, we come to the following conclusions: (1) Intellectual property pledge financing suppresses enterprise innovation, especially innovation quality, but this pattern will be broken by raising the threshold of innovation conditions. The reason is that strict innovation conditions can lead to a poor innovation foundation for enterprises, which are rarely affected by the fluctuation of funds obtained from intellectual property pledge financing. (2) Intellectual property pledge financing has a non-linear effect on firm innovation, characterized by an increase followed by a decrease, suggesting that intellectual property pledge financing in current China can only provide a temporary stimulus for firm innovation. (3) The relationship between intellectual property pledge financing and enterprise innovation is strongly moderated by the ownership, type, and size of the enterprise, with the inhibitory effect of intellectual property pledge financing on enterprise innovation occurring mainly in state-owned enterprises, high-tech enterprises, and small enterprises, while its positive effects are more pronounced in private enterprises, non-high-tech enterprises, and medium-sized enterprises. (4) Financing constraints, internal incentives, external supervision, and signaling mechanisms are indeed key pathways through which intellectual property pledge financing affects firm innovation, especially when we analyse these mechanisms using dynamic models.

The healthy operation of the stock market relies on sound liquidity. We utilize the semantic information from disclosure texts of listed companies on the China Science and Technology Innovation Board (STAR Market) to construct a daily corporate network. Through empirical tests and performance analyses of machine learning models, we elucidate the relationship between the similarity of company disclosure text contents and the temporal and spatial correlations of stock liquidity. Our liquidity indicators encompass trading costs, market depth, trading speed, and price impact, recognized across four dimensions. Furthermore, we reveal that the information loss caused by employing Minimum Spanning Tree (MST) topology significantly affects the explanatory power of network topology indicators for stock liquidity, with a more pronounced impact observed at the document level. Subsequently, by establishing a neural network model to predict next-day liquidity indicators, we demonstrate the temporal relationship of stock liquidity. We model a liquidity predicting task and train a daily liquidity prediction model incorporating Graph Convolutional Network (GCN) modules to solve it. Compared to models with the same parameter structure containing only fully connected layers, the GCN prediction model, which leverages company network structure information, exhibits stronger performance and faster convergence. We provide new insights for research on company disclosure and capital market liquidity.

We examine the impact of state-owned shareholders on fraud within private firms. Utilizing a sample of A-share private listed firms in China observed from 2008 to 2021. We discover a significant negative association between state-owned shareholders and the likelihood of fraud in private firms. State-owned shareholders primarily act as inhibitors of fraud, and their effect on the probability of fraud being detected is not statistically significant. This finding remains robust even after conducting a series of sensitivity tests to mitigate potential selectivity bias and reverse causality endogeneity issues. In the analysis of heterogeneity, we found that state-owned shareholders play a more active role under conditions of imperfect external institutional development, and they also exert a more significant inhibitory effect on enterprises with lower governance levels and higher business risks. Our mechanism test demonstrates that the inhibitory effect of state-owned shareholders on corporate fraud is achieved by improving corporate governance and alleviating financial distress. This study also examines the impact of state-owned shareholders' local characteristics, external supervision mechanisms, and internal governance mechanisms in unique Chinese enterprises on fraudulent behaviour by private enterprises. Overall, our study provides empirical evidence that state-owned shareholder ownership is associated with reducing fraudulent behaviour within private firms.

The economic institutionalist literature often suggests that sub-optimal institutional arrangements impart unique distortions in China, and excessive corporate debt is a symptom of this condition. However, lax monetary policies after the global financial crisis, and specifically, quantitative easing have led to concerns about debt bubbles under a wide range of institutional regimes. This study draws on data from Chinese listed firms, supplemented by numerous macroeconomic control variables, to isolate the effect of international capital flows from other drivers of firm leverage. We conclude that the rise in, and distribution of, Chinese corporate debt can partly be as-cribed to the effects of monetary policy outside of China and that Chinese institutional features amplify these effects. Whilst Chinese firms are affected by developments in the global financial ecosystem, domestic institutional realities and distortions may unevenly add their own particular effects, providing further support for and extending the variegated capitalism literature.

A unique natural experiment in China – the city-level staggered introduction of admin-istrative approval centers (AAC) – reduces bank loan processing times by substantially speeding up the process of registering collateral without affecting credit decisions. Fol-lowing the establishment of an AAC, firms significantly reduce their cash holdings. State-owned enterprises are less affected. Cash flow sensitivity of cash holdings de-creases, as does the cash flow sensitivity of investment. The share of short-term debt increases, while inventory holdings and reliance on trade credit decrease. Defaults also decrease. These results suggest that timely access to credit has important implications on firms’ financial management.

This paper examines the influence of gambling culture on household investment decisions concerning risky financial assets. To estimate these effects, the study utilizes data from the 2019 China Household Finance Survey. The empirical findings reveal that gambling culture significantly enhances household preferences for risky financial assets and raises the proportion of household allocations to these assets. Furthermore, both subjective financial literacy and objective financial literacy amplify these positive effects. The heterogeneity analysis revealed that the effects of gambling culture on household preference for and allocation of risky financial assets varied across regions, income levels, and household types.

The aging population is expanding globally, and addressing the challenges of elderly care is urgent. Using the 2019 China Household Finance Survey data, this study finds that commercial pension insurance significantly promotes households’ allocation of risky financial assets. We test the mechanisms using household risk perception and investment risk preference as mediating variables. Heterogeneity analysis reveals that the positive effect of commercial pension insurance on risky financial asset allocation is more significant in rural households with household registration, those with two sets of housing, and households in the northeast. The research findings of this article aim to promote the continuous improvement of China’s elderly care system and provide important empirical evidence for the formulation of relevant policies.