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.

This study investigates the link between market arbitrage risk and liquidity risk pricing in a conditional asset pricing framework. We estimate comparative models both at the portfolio and firm level in the Chinese A- and B-shares to test behavioral hypotheses with respect to foreign ownership restrictions and market segmentation. Results show that conditional liquidity premium and risk betas exhibit pronounced asymmetry across share classes which could be attributed to differentiated levels of market mispricing. Specifically, stocks with a greater degree of information asymmetry and retail ownership are more sensitive to liquidity risks when the market arbitrage risk increase. Further policy impact analysis shows that China’s market liberalization efforts, contingent upon its recent stock connect programs, conditionally reduce the price of liquidity risk for connected stocks.

Facing external shocks, maintaining and stabilizing imports is a major practical issue for many developing countries. We first document that sourcing market switching (SMS) is widespread for Chinese firms (For 2000-2016, SMS firms account for 76.29% of all import firms and 96.30% of total import value). Then we use Chinese firm-level data to show that SMS can significantly mitigate the negative impacts of international uncertainty on imports, which further stabilizes firm employment and innovation, leading to increases in national and even world welfare. Possible motivations for SMS include stabilizing import supply, lowering import tariffs, raising the real exchange rate, and increasing product switching. We also find that the effects of SMS vary by the type of uncertainty, firm ownership, productivity, credit constraints, trade mode, and product features.

Using firm-customer matched data from 2005 to 2020 in China, we examined the spillover effects and mechanisms of green innovation (GI) among supply chain partners. Results show a positive association between customers' GI and their supply firms' GI, indicating spillover effects in the supply chain. Customers' GI increase from the 25th to the 75th percentile leads to a significant 19% increase in supply firms' GI. Certain conditions amplify the spillover effect, including customers with higher bargaining power, operating in less competitive industries, and supply firms making relationship-specific investments or experiencing greater customer stability. Geographic proximity and shared ownership further enhance the spillover effect. Information-based and competition-based channels drive the spillover effect, while customers with higher GI encourage genuine GI activities by supply firms. External environmental regulations, such as the Chinese Green Credit Policy and Environmental Protection Law, strengthen the spillover effect, supporting the Porter hypothesis. This research expands understanding of spillover effects in the supply chain and contributes to the literature on GI determinants.

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.

Based on the sample of Chinese A-listed firms from 2003 to 2020, this paper investigates the effect of common institutional ownership on labor income share. The result shows that common institutional ownership can significantly increase firms’ labor income share. Mechanism tests indicate that common ownership can: 1) alleviate financial constraints by reducing the debt financing costs and increasing the trade credit financing, thus increasing the labor income share; 2) improve corporate innovation and therefore enhances the demand for highly-skilled labor, which eventually boost labor income share. Competitive hypothesis test represents that common institutional ownership can reduce the monopoly power of enterprises and decrease monopoly rent, so as to increase the proportion of labor in the distribution. Further analyses present that the network formed by the common ownership can effectively exert the financing support role of SOEs and the knowledge spillover effect of innovative-advantage firms, which contributes to the labor income share increasing of other related firms in the network connection. This study not only enriches the economic consequences of common institutional ownership, but also provides policy guidance for the government to further optimize the income-distribution pattern by deepening the reform of the financial market.

We examine whether large language models (LLMs) can extract contextualized representation of Chinese news articles and predict stock returns. The LLMs we examine include BERT, RoBERTa, FinBERT, Baichuan, ChatGLM and their ensemble model. We find that tones and return forecasts extracted by LLMs from news significantly predict future returns. The equal- and value-weighted long minus short portfolios yield annualized returns of 90% and 69% on average for the ensemble model. Given that these news articles are public information, the predictive power lasts about two days. More interestingly, the signals extracted by LLMs contain information about firm fundamentals, and can predict the aggressiveness of future trades. The predictive power is noticeably stronger for firms with less efficient information environment, such as firms with lower market cap, shorting volume, institutional and state ownership. These results suggest that LLMs are helpful in capturing under-processed information in public news, for firms with less efficient information environment, and thus contribute to overall market efficiency.

Purpose – This paper takes the Shanghai-Shenzhen-Hong Kong Stock Connect as a quasi-natural experimentand investigates the impact of capital market liberalization on the corporate debt maturity structure. It also aimsto provide some policy implications for corporate debt financing and further liberalization of the capital marketin China. Design/methodology/approach – Employing the exogenous event of Shanghai-Shenzhen-Hong Kong StockConnect and using the data of Chinese A-share firms from 2010 to 2020, this study constructs a difference-in-differences model to examine the relationship between capital market liberalization and corporate debt maturitystructure. To validate the results, this study performed several robustness tests, including the parallel test, theplacebo test, the Heckman two-stage regression and the propensity score matching. Findings – This paper finds that capital market liberalization has significantly increased the proportion of long-term debt of target firms. Further analyses suggest that the impact of capital market liberalization on thedebt maturity structure is more pronounced for firms with lower management ownership and non-Big 4 audit.Channel tests show that capital market liberalization improves firms’ information environment and curbsself-interested management behavior. Originality/value – This research provides empirical evidence for the consequences of capital marketliberalization and enriches the literature on the determinants of corporate debt maturity structure. Further thisstudy makes a reference for regulators and financial institutions to improve corporate financing through thegovernance role of capital market liberalization.

This paper investigates whether Environmental, Social, and Governance (ESG) performance influences the stock idiosyncratic risk and extreme risk. We find that the ESG performance of listed companies significantly reduces the stock idiosyncratic risk and extreme risk. Furthermore, we identify that this mitigating effect is shaped by the nature of enterprise ownership and the firm life cycle. Through additional mechanistic analysis, we confirm that ESG performance affects the stock price volatility risk of listed companies by reducing levels of corporate earnings management and bolstering corporate reputation, thereby alleviating both idiosyncratic risk and extreme risk in stock prices.

Despite nearly twenty years of privatization, mixed-ownership reform has been the mainstay of SOE reform in China in recent years. This raises the question of whether the financial performance of mixed-ownership firms (Mixed firms) is better than private-owned enterprises (POEs). Although Mixed firms suffer more from government intervention, unclear property rights, and interest conflicts between state shareholders and private shareholders, they can also benefit from the external resources controlled by the state. Therefore, the performance of Mixed firms is still unclear. Collecting data from the Chinese A-share listed market, we divide the firms into POEs, Mixed firms controlled by the state (MixedSOEs), and Mixed firms controlled by the private sectors (MixedPOEs). Measuring profitability using ROA and ROE, we find that on average, POEs perform better than Mixed firms, and MixedPOEs have a higher profitability than MixedSOEs. Within Mixed firms, more state shares are related to lower profitability, and more private shares are related to higher profitability. Using the NBS survey data, we further find that on average, SOEs exhibit the lowest profitability, with MixedSOEs and MixedPOEs in the middle, and POEs have the highest profitability. We try to address the endogeneity challenge in several ways and get similar results. Overall, our analysis provides new evidence on the financial performance of mixed-ownership firms.