This study applies large language models (LLMs) to measure technological links and examines its predictive power in the Chinese stock market. Using the BAAI General Embedding (BGE) model, we extract semantic information from patent textual data to construct the technological momentum measure. As a comparison, the measure based on traditional International Patent Classification (IPC) is also considered. Empirical analysis shows that both measures significantly predict stock returns and they capture complementary dimensions of technological links. Further investigation through stratified analysis reveals the critical role of investor inattention in explaining their differential performance: in stocks with low investor inattention, IPC-based measure loses its predictive power while BGE-based measure remains significant, indicating that straightforward information is fully priced in while complex semantic relationships require greater cognitive processing; in stocks with high investor inattention, both measures exhibit predictability, with BGE-based measure showing stronger effects. These findings support behavioral finance theories suggesting that complex information diffuses more slowly in markets, especially under significant cognitive constraints, and demonstrate LLMs’ advantage in uncovering subtle technological connections that traditional methods overlook.

Innovation is crucial for long-term corporate value and competitive advantage; however, it can misalign the interests of managers and investors. Balancing managers’ short- and long-term goals is a pivotal challenge in promoting innovation incentives. Therefore, this study examines innovative incentives for managers of publicly traded firms to address the issue of agency problems. The study focuses on economic value-added (EVA) reform implemented by China’s State-Owned Assets Supervision and Administration Commission (SASAC), which encourages EVA-driven R&D investments as the primary management metric. The policy effectively motivates key corporate managers by reducing capital costs and stimulating increased innovation. Following this policy’s implementation, notable innovation disparities exist between state-owned enterprises and firms not subject to the reform. Furthermore, innovation incentives significantly affect overconfident company managers, yielding positive effects on innovation.

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The 16th annual China International Conference on Insurance and Risk Management (CICIRM 2026) will be held on July 8-11, 2026 at the Yunnan Lianyun Hotel in Kunming, Yunnan, China. The conference is organized by the China Center for Insurance and Risk Management, School of Economics and Management, Tsinghua University, and co-organized by the School of Finance, Yunnan University of Finance and Economics.

We construct a new geospatial measure using high-resolution river vector data from National Geomatics Center of China (NGCC) to study how urban riparian exposure shapes local government debt financing costs. Our base-line results show that cities with higher riparian exposures have significantly lower credit spreads, with a one-standard-deviation increase in riparian exposure reducing credit spreads by approximately 12 basis points. By comparing cities crossed by natural rivers with those intersected by artificial canals, we disentangle the dual role of riparian zones as sources of natural capital benefits (e.g., enhanced transportation capacity) versus climate risks (e.g., flood vulnerability). We find that climate change has amplified the impact of natural disasters, such as floods and droughts, particularly in riparian zones, thus weakening the cost-reducing effect of riparian exposure on bond financing. In contrast, improved water infrastructure and flood-control facilities strengthen the cost-reduction effect. Our findings contribute to the literature on natural capital and government financing, offering valuable implications for public finance and risk management.

The growing emphasis on Environmental, Social, and Governance (ESG) principles, particularly in corporate sectors, shapes investment trends and operational strategies, whose shift is supported by the increasing role of media in monitoring and influencing corporate ESG performance, thereby driving the energy innovation. Therefore, based on reported events from Baidu News and patent text information of Chinese A-share listed companies from 2012 to 2022, this study innovatively applied machine learning and text analysis to measure ESG news sentiment and corporate energy innovation indicators. Combing with reputation, stakeholder, and agency theories, we find that a good reputation conveyed by positive ESG textual sentiments in the media significantly promotes corporate energy innovation, and the effect is mainly realized through alleviating financing constraints and agency problems and promoting green investment. Further analysis shows that ESG news sentiment promotes corporate energy innovation mainly among private firms, non-growth-stage firms, high-energy-consuming firms, and regions with better green finance development and higher ESG governance intensity. From the perspective of ESG news content and information content, greater ESG news attention can also exert an energy innovation incentive effect, in which the incentive effect exerted by positive media sentiment in the environmental (E) and social (S) dimensions, as well as excellent attention, is more robust. This study provides new insights for promoting green and low-carbon development and understanding the external governance role of media in corporate ESG development.

Green bonds, pivotal to green finance, draw growing attention from scholars and investors. Social media’s proliferation has amplified the influence of investor sentiment, necessitating robust analysis of its market impact. However, general sentiment lexicons often fail to capture domain-specific slang and nuanced expressions unique to China’s bond market, leading to inaccuracies in sentiment analysis. Thus, this study constructs a specialized sentiment lexicon for the green bond market, namely the COBC (Chinese online bond comments sentiment lexicon), to dissect bond market slang and investor remarks. Compared to three general lexicons (Textbook, SnowNLP, and VADER), it improves the average prediction accuracy by approximately 87.2% in sentiment analysis of Chinese online language within the green bond domain. Sentiment scores derived from COBC-based dictionary analysis are systematically integrated as predictive features into a two-stage hybrid predictive model is proposed integrating Support Vector Machine (SVM), Auto-Regressive Moving Average (ARMA), Bidirectional Long Short-Term Memory Networks (BiLSTM), and Attention Mechanisms to forecast China's green bond market, represented by the China Bond 45 Green Bond Index. First, ARMA-SVR is employed to extract residuals and statistical features from the green bond index. Then, the BiLSTM-Attention model is applied to assess the impact of investor sentiment on the index. Empirical results show that incorporating investor sentiment significantly enhances the predictive accuracy of the green bond index, achieving an average of 67.5% reduction in Mean Squared Error (MSE), and providing valuable insights for market participants and policymakers.

The study examines the impact of Government-Backed Financing Guarantee (GFG) programs on employment in small and medium-sized enterprises (SMEs) using data from the Zhejiang Guarantee Group and non-listed SMEs in China. The findings demonstrate that these programs have a significant positive effect on employment in SMEs, particularly in private firms, and non-ZhuanJingTeXin firms. Furthermore, the study demonstrates that GFGs can enhance firm employment rates by mitigating financing constraints. It also contributing to firm revenue growth.

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.

Developing countries are taking advantage of FinTech tools to provide more people with convenient access to financial market investment through digital wealth management. Using COVID-19 as an uncertainty shock, we examine whether and how digital wealth management affects the resilience of consumption to shocks based on a unique micro dataset provided by a leading Big Tech platform, Alipay in China. We find that digital wealth management mitigates the response of consumption to uncertainty shocks: residents who participate in digital wealth management, especially in risky asset investments, have a lower reduction in consumption. Importantly, digital wealth management helps improve financial inclusion, with a more pronounced mitigation effect among residents with lower-level wealth, living in less developed areas, and those with lower-level conventional finance accessibility. The mitigation effect works through the wealth channel: those who allocate a larger proportion of risky assets in their portfolio and obtain a higher realized return show more resilience of consumption to negative shocks. We also find that digital wealth management substitutes for conventional bank credit but serves as a complement to FinTech credit in smoothing consumption during uncertainty shocks. Digital wealth management provides a crucial way to improve financial inclusion and the resilience of consumption to shocks.