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.

Salience theory has been proposed as a new stock trading strategy. Therefore, to assess the validity of this proposal, a complex decision trading system was constructed based on salience theory, a variational mode decomposition (VMD) model, a bidirectional gated recurrent unit (BiGRU) model, and high-frequency trading. The system selected 30 Chinese new energy concept stocks, ranked the stocks using salience theory, and selected the top and bottom three stocks for two portfolios. Twelve stages were established, after which the VMD and BiGRU models were applied to the predictions. The final predicted returns for the high ST group A (GA) were 194.06% and for the low ST group B (GB) were 165.88%. This paper validated the powerful utility of salience theory and deep learning to analyze Chinas new energy market. And it explains the issues and questions raised by previous researchers.

Utilizing the removal of the bank lending interest rate floor (IRFD) in China as an exogenous shock of banking liberalization, we find that IRFD leads to a significant rise in firms’ cost of equity capital, which is consistent with the prediction from the MM theory. The identified effects are more pronounced among firms with weaker ex-ante corporate governance and more severe ex-ante agency problems. We also find that IRFD witnesses an increase in the amount of acquired bank loans, a decrease in the average interest rate, and an increase in free cash flow. Further evidence also suggests IRFD provokes a drop in firms’ investment quality. Overall, our findings highlight an unexplored role of banking sector deregulation on firms’ cost of equity capital.

China historically paid more attention to improving patent quantities because policymakers wished to improve the patent qualities by stimulating patent quantities, and it focused on developing invention patents but paid little attention to utility model patents because many people believe that the quality of utility model patents is lower than that of invention patents. Varies studies discussed the issues of patent qualities, but little empirical evidence was developed to show the relationship between patent quantities and patent qualities or prove that the utility model patents’ quality is lower than the invention patents’ quality. An empirical analysis is helpful to find the impact of patent quantities on patent qualities, and comparing it with the impact of R&D investments on patent qualities will show which has a greater impact. By comparing them with invention patents’ quality, the statistical examination on the quality of utility model patents is also meaningful.