Interest rate liberalization in China intensifies the exposure of commercial banks' interest rate risks and further increases the difficulty for commercial banks to effectively control interest rate risks, thus putting forward higher requirements for the normal operation and management of commercial banks. With the development of China's financial derivatives market, banking institutions begin to use basic interest rate derivatives to hedge interest rate risks. It is very important to give full play to the maturity transformation Function of commercial banks to enhance the ability of financial services to the real economy. Based on the semi annual unbalanced panel data of 37 listed banks in A-share stock markets from 2006 to 2020, this paper empirically tests the impact of the use of off balance sheet interest rate derivatives on the Maturity Transformation Function of banks in the case of interest rate fluctuations. The empirical results show that: (1) the use of interest rate derivatives helps to weaken the negative impact of interest rate fluctuations on the Maturity Transformation Function of banks. (2) The analysis of the mechanism shows that the use of interest rate derivatives improves the stability of the bank's asset side term structure and liability side term structure, so as to support the effective play of the bank's financial intermediary role. (3) Further analysis shows that the of interest rate derivatives significantly reduces the volatility of bank earnings. This study makes it clear that the use of interest rate derivatives has a positive impact on the commercial banks, which provides evidence for the further development of interest rate derivatives market in China.

Increasing greenhouse gas emissions, especially CO2, pose a serious challenge worldwide. Digital financial inclusion can help alleviate liquidity constraints and accelerate the green transformation of production, changing how and what households consume. This change can impact households’ indirect CO2 emissions. However, empirical research on the nexus between digital financial inclusion and households’ indirect CO2 emissions, especially from a microscopic perspective, has remained scant. This study investigates the impact of digital financial inclusion on households’ indirect CO2 emissions using a survey panel dataset of 13,624 Chinese households. The results show that digital financial inclusion promotes households’ indirect CO2 emissions.This finding is robust to the alternative model specifications and methods.Further analyses based on the mediation model show that digital financial inclusion increases households’ indirect CO2 emissions by promoting subsistence and development consumption upgrades. In addition, the effects of different services of digital financial inclusion are heterogeneous. Payment, credit, and credit investment services are positively and significantly related to households' indirect CO2 emissions, whereas other services are not. Overall, our findings provide evidence of the social benefits of digital financial inclusion policies and also have several implications for addressing environmental problems.

Using the sample of Chinese A-share listed firms from 2020 to 2021, this study investigates the impact of EPU on corporate ESG performance. We find that EPU improves corporate ESG performance, and the results largely hold after a series of robustness tests. Furthermore, EPU has a significantly positive effect on each dimension of corporate ESG performance (environment, society and governance). In addition, we document that the positive effect of EPU on corporate ESG performance is more pronounced for state-owned firms, and firms with better internal governance, better external governance, and firms that are more financially-constrained. This study provides large-sample empirical evidence for the effect of EPU on corporate ESG performance, which provides implications for management to make use of corporate ESG performance in the face with uncertain economic policy environment.

Taking the Stock Connect scheme as an exogenous shock based on data of China’s Ashare non-financial listed companies from 2009 to 2021, we identify the causal effect of stock market liberalization on green innovation. The baseline result based on a staggered difference-indifferences (DID) model suggests that stock market liberalization promotes corporate green innovation and this effect is similar to the green benefits of China’s mandatory environmental regulations. The results are robust to various checks, including the parallel trend tests, placebo tests, and the heterogenous time-varying treatment test based on Bacon decomposition and the DIDM approach. The enhanced continuity of corporate financing, improved corporate green governance and increased firm external technological collaboration are three plausible channels that allow stock market liberalization to promote corporate green innovation. Moreover, the effect is more significant for clean firms, non-SOEs, and firms in a good institutional environment. Further analysis suggests that the green innovation-enhancing effects of stock market liberalization are more likely to be high-quality innovation. Our paper provides new insights into understanding the green benefits of stock market liberalization and achieving sustainable economic development in developing countries.

In this paper, we investigate whether those enterprises adopting digital finance exhibit higher values. On the basis of the constructed fintech-related lexicon developed by the machine learning-based Word2Vec model, we employ the frequency of fintech-related words (phrases) in the management discussion sections of annual reports as a proxy variable for the degree to which enterprises apply digital finance. We utilize panel data regression and mediation models based on data of Chinese A-share listed companies from 2016 to 2022 and explore the impact of this degree of digital finance application on enterprise value. We find that the degree to which enterprises apply digital finance elevates their values. The in-depth integration of digital technology and finance directly enhances enterprise value by reducing financing costs. Additionally, the effects are more evident among small-scale firms and enterprises located in regions with lower marketization levels. However, in the face of the impact of the COVID-19 pandemic, the positive effects on enterprises are relatively low.

Digital economy promotes the modernization of industrial structure by influencing the rationalization and upgrading of industrial structure through technical level and factor level; while excessive credit expansion hinders the modernization of industrial structure. This paper uses panel data from 31 jurisdictions in China to conduct empirical analysis, and finds that digital economy development shows a year-on-year rising trend, and there is a large gap between different regions. The conclusion still holds after the robustness test and regional heterogeneity analysis, thus enriching the understanding of mechanisms and regional differentiation of digital economy, credit expansion on industrial structure modernization.

Purpose – Using a sample of 9,898 firm-year observations from 1,821 unique Chinese listed firms over the period from 2004 to 2019, this study aims to investigate whetherthe marketrewards meeting or beating analyst earnings expectations (MBE). Design/methodology/approach –The authors use an event study methodology to capture marketreactions to MBE. Findings – The authors document a stock return premium for beating analyst forecasts by a wide margin. However,there is no stock return premium forfirms that meet orjust beat analystforecasts, suggesting that the market is skeptical of earnings management by these firms. This market underreaction is more pronounced for firms with weak external monitoring. Further analysis shows that meeting or just beating analyst forecasts is indicative of superior future financial performance. The authors do not find firms using earnings management to meet or just beat analyst forecasts. Research limitations/implications – The authors provide evidence of market underreaction to meeting or just beating analyst forecasts, with the market’s over-skepticism of earnings management being a plausible mechanism for this phenomenon. Practical implications – The findings of this study are informative to researchers, market participants and regulators concerned about the impact of analysts and earnings management and interested in detecting and constraining managers’ earnings management. Originality/value – The authors provide new insights into how the market reacts to MBE by showing that the market appears to focus on using meeting or just beating analyst forecasts as an indicator of earnings management, while it does not detect managed MBE. Meeting or just beating analyst forecasts is commonly used as a proxy for earnings management in the literature. However, the findings suggest that it is a noisy proxy for earnings management.

Purpose – This study aims to examine whether and how gender diversity on corporate boards is associated with voluntary nonfinancial disclosures, particularly water disclosures. Design/methodology/approach – This study uses corporate water information disclosure data from Chinese listed firms between 2010 and 2018 to conductregression analyses to examine the association between female directors and water information disclosure. Findings – Empirical results show that female directors have a significantly positive association with corporate water information disclosure. Additionally, internal industry water sensitivity of firms moderates this significant relationship. Originality/value – This study determined that female directors can promote not only water disclosure but also positive corporate water performance, reflecting the consistency of words and deeds of female directors in voluntary nonfinancial disclosures.

This study examines the impact of quantitative investment on stock price crash risk from the perspective of quantitative mutual funds holdings. The results show that quantitative mutual funds holdings can significantly reduce stock price crash risk, and this effect is more pronounced in subsamples characterized by executives with overseas backgrounds, higher internal governance efficiency, greater analyst attention, and higher profit volatility. Further research finds that quantitative mutual funds holdings can suppress the risk of stock price crash by smoothing the volatility of stock returns and optimizing the valuation of firms. This study sheds light on the effects of quantitative investment on stock price crash risk.

Dynamic efficiency is an essential issue in macroeconomics and finance, central to the analyses of economic growth, asset pricing, and fiscal policies for both academia and policymakers. We offer an integrated analysis of metrics from the perspective of interest rates and capital returns, examining the relationship between varying rates of return r and growthg in China. We compare the risk-free rate rf, the returns on assets re, and the returns on capital rk with the growth rate g. Our findings indicate that, in general, rf < g, g < re, and g < rk. As the economy slows, the gap between rf and g continues to shrink, while the signs suggest that returns to capital are falling slightly slower than the rate of economic growth. Furthermore, we use a state-space model to estimate China’s natural rate of interest r∗ and potential output growth rate g∗. We find that r∗ < g∗ and the gap between themhas gradually narrowed over the past two decades.