Informal institutions can play a crucial role in fostering corporate and policy innovation, especially when formal institutions are weak. However, their intangible nature makes them difficult to quantify. In this paper, we proxy the strength of kinship-based informal institutions using surname homogeneity among business owners, specifically, the extent to which they share a limited number of surnames within the same county. Our analysis reveals that a one-standard-deviation increase in the strength of informal institutions leads to a 21.1% increase in patent filings and an 18.9% increase in policy innovation. We find that kinship-related informal institutions foster corporate innovation by compensating for weak formal institutions, enhancing protection for intellectual property rights, facilitating access to finance, improving public service delivery, and promoting supply chain cooperation. We also suggest that kinship-related informal institutions encourage local governments to engage in policy experimentation, which relies on the collaboration of business owners. This experimentation process is easier to coordinate and monitor in counties dominated by a few kinship networks. Both informal institutions and policy innovation contribute to economic development and foster entrepreneurial market entries. However, the positive impact of informal institutions declines over time as formal institutions strengthen in China.

Under the guidance of the dual-carbon target, the development of the carbon financial system is of great significance to compensate for the gap between green and low-carbon investment. Considering the current state of the development of carbon financial system, China has initially formed a carbon financial system, including participants, carbon financial products and macro and micro operation structures, but the system is still in the initial development stage. Given the current restrictions on the development of carbon finance, it can be seen that there are still problems such as unreasonable economic structure, insufficient market construction, single product category, low utilization rate and urgent construction of relevant judicial guarantee system. Therefore, the system should be improved at the economic level and the legal level. The economic level includes adjusting the layout of economic development structure, strengthening the construction of market infrastructure, encouraging the diversification of carbon financial products and strengthening publicity and education promotion strategies. The legal level includes improving the top-level design, formulating judicial interpretation to promote carbon financial trading, promoting commercial law amendment, and promoting the linkage mechanism between specialized environmental justice and carbon finance and other safeguard measures. Finally, improving the carbon finance system is required to promote and protect the orderly development of carbon finance. To promote the reform of the pattern of economic development, the concept of ecological and environmental protection in the financial sector needs to be implemented to form an overall pattern of pollution reduction, carbon reduction and synergistic efficiency improvement.

Enterprise innovation is a hot topic in current academic research. Taking the demonstration city of social credit system construction implemented in China as a quasi-natural experiment, this paper investigates whether the construction of social credit system can improve enterprise innovation. The study finds that the construction of social credit system effectively enhances enterprise innovation. Mechanism test shows that the construction of social credit system escalates the scale and duration of enterprise loans, thereby fostering enterprise innovation. These findings present insights that the pivotal role of informal institutions, such as the social credit system, in facilitating the upgrading of industrial structures and augmenting the quality of economic development.

In the face of severe climate change, researchers have looked for assistance from financial instruments. They have examined how to hedge the risks of these instruments created by market fluctuations through various green financial derivatives, including green bonds (i.e., fixed-income financial instruments designed to support an environmental goal). In this study, we designed a green bond index option contract. First, we combined an autoregressive moving-average model (AMRA) with a generalized autoregressive conditional heteroskedasticity model (GARCH) to predict the green bond index. Next, we established a fractional Brownian motion option pricing model with temporally variable volatility. We used this approach to predict the closing price of the China Bond–Green Bond Index from 3 January 2017 to 30 December 2021 as an empirical analysis. The trend of the index predicted by the ARMA–GARCH model was consistent with the actual trend and predictions of actual prices were highly accurate. The modified fractional Brownian motion option pricing model improved the pricing accuracy. Our results provide a policy reference for the development of a green financial derivatives market, and can accelerate the transformation of markets towards a more sustainable economic development model.

The use of green finance to slow down global warming in support of sustainable development remains widely discussed. This study examines whether investment structure moderates the impact of green finance on the environment in China, one of the top carbon-emitting nations and the second-largest economy in the world. We primarily used the moments-quantile regression approach with fixed-effect models on panel data from 1992Q1 to 2020Q4. First, the results confirmed that green finance and public and private investments worked synergistically to lower CO2 emissions, especially in Central and Western China. However, there was no proof that green finance and foreign direct investment were complementary in reducing CO2 emissions in China, unlike the Central region. Second, green finance marginally lowered CO2 emissions in all provinces, mainly in Eastern and Western China; this reduction was largely dependent on private investment in the Western region’s most polluting areas and foreign direct investment in Eastern and Western China’s least polluting provinces. Third, the beneficial effect of green finance occurred at varying optimal thresholds and investment-related conditions across Chinese regions at different quantiles. Lastly, we showed that in contrast to the variable impacts of urbanization, oil prices, and economic growth across Chinese regions at different quantiles, renewable energy, and trade openness reduced CO2 emissions. In conclusion, the study makes some policy recommendations for China’s sustainable economic development, an important model from which other countries can tailor their investment strategies and environmentally friendly policies.

In the context of promoting high-quality economic development, using digital technology to empower industrial transformation and upgrading, thus driving consumption growth has become a key problem that needs to be solved urgently. By using data at the prefecture-level cities in China from 2011 to 2020, the paper has discussed the influence of the digital economy on residents' consumption and its internal mechanism. Theoretical analysis and empirical test results have shown that first of all, the digital economy has significantly improved residents' consumption, and this conclusion is still valid after the endogenous test and robustness test. Secondly, mechanism analysis has shown that the digital economy can increase residents' consumption by promoting the upgrading of the industrial structure. Thirdly, the promotion effect of the digital economy on residents' consumption is heterogeneous between urban and rural areas and between different regions. Compared with urban, and eastern and central regions, the digital economy has a more significant incentive for residents' consumption in rural areas and western regions, indicating that its development is beneficial to narrowing the gap of consumption between urban and rural areas and between regions. Finally, the improvement effect of the digital economy on residents' consumption has marginal increment nonlinear characteristics, which is continuously strengthened with the upgrading of industrial structure. The above research conclusions can provide a theoretical basis for further improving the infrastructure of the digital economy, accelerating the integration of the digital economy with traditional industries, and building a consumer Internet.

This study documents how the political hierarchy plays a significant role in determining corporate environmental governance. By conducting difference-in-differences analysis to investigate listed firms in China, this study demonstrates that local and central SOEs headquartered in jurisdictions far removed from central government supervision have worse environmental governance than POEs. Verticalization reforms implemented in 2016 enable provincial environmental protection bureaus to direct lower-level bureaus. Local governments cannot control environmental protection bureau leaders for economic development. This study finds that the corporate environmental governance of local SOEs has significantly improved following the reform, as local environmental protection bureaus no longer have conflicts of interest with local governments. However, the reform has not resulted in improvements to corporate environmental governance in central SOEs, whose executives occupy higher status than provincial Environmental Protection Bureau leaders, nor in POEs, which were already managed before the reform. Further evidence indicates that local SOEs experience an increase in abatement investments and relationship building expenses following the reform. Lastly, our study reveals that verticalization reform costs are negligible. Local SOEs have not experienced a decline in financial performance or corporate valuation. This study suggests that policymakers should consider the political ranking of government agencies and enterprises to improve environmental governance.

In this study, we empirically analyze the impact of the effects of digital inclusive finance (DIF) on high-quality economic development in Chinese prefecture-level cities. We find the following conclusions: first, the total index and sub-index of DIF can promote high-quality economic development. Second, DIF significantly promotes high-quality economic development by narrowing the urban-rural income gap and alleviating financing constraints. Third, DIF is conducive to the improvement of economic quality in neighboring regions.

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.

This paper empirically evaluates the impact of a Government-Initiated Non-Profit Ecommerce Platform (GNEP) on specialty agricultural sales, focusing specifically on Pu’er tea in China. Using a difference-in-differences methodology and a comprehensive panel dataset that covers over 90% of local tea farmers, we uncover a marked substitution effect. The implementation of GNEP leads to an average decline of 11.22% in offline household sales, while online sales see an uptick of 16.88%. Further analysis confirms a universal channel shift from offline to online sales, irrespective of both production levels and tea quality. Contrary to expectations, the overall tea sales volume remains largely stable post-launch. Additionally, premium-quality teas experience a 2.42% price boost online, while regular teas show a 0.40% decrease compared to offline prices. Mechanism analyses further indicate that the increase in online sales is driven primarily by the intensive margin instead of the extensive margin. Although the platform does not significantly expand the number of farmers engaging in online sales, it succeeds in offering a cost-effective avenue for diversifying product offerings and achieving higher prices for premium-quality products. Our study illuminates the transformative role of e-commerce platforms in rural economic development and provides essential insights for policymakers and practitioners.