There is substantial evidence indicating that enterprises are negatively impacted by climate risk, with the most direct effects typically occurring in financial domains. This study examines A-share listed companies from 2007 to 2023, employing text analysis to develop the firm-level climate risk indicator and investigate the influence on corporate financial risk. The results show a significant positive correlation between climate risk and financial risk at the firm level. Mechanism analysis shows that the negative impact of climate risk on corporate financial condition is mainly achieved through three paths: increasing financial constraints, reducing inventory reserves, and increasing the degree of maturity mismatch. To address potential endogeneity, this study applies instrumental variable tests, propensity score matching, and a quasi-natural experiment based on the Paris Agreement. Additional tests indicate that reducing the degree of information asymmetry and improving corporate ESG performance can alleviate the negative impact of climate risk on corporate financial conditions. This relationship is more pronounced in high-carbon emission industries. In conclusion, this research deepens the understanding of the link between climate risk and corporate financial risk, providing a new micro perspective for risk management, proactive governance transformation, and the mitigation of financial challenges faced by enterprises.

As digital transformation strategies have emerged as a primary approach for enterprises to enhance their Total Factor Productivity (TFP), it is crucial to empirically examine the impact of these strategies on TFP. For this purpose, this study considers these transformation strategies as a quasi-natural experiment and employees a propensity score-weighted difference-indifferences methodology on data from Chinese firms listed on the A-share market between 2007 and 2020. The key findings include: (1) digital transformation has a significant positive influence on TFP; (2) Generalized boosted regression trees analysis reinforces this finding after controlling for other TFP determinants; (3) notably, non-state-owned and technology-intensive enterprises exhibit a more distinct enhancement in TFP following digital transformation. These results underscore the need for firms to increase investment in research and development capabilities and digital competencies.

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.

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.

Why do firms appoint expired independent directors? How do expired independent directors affect corporate governance and thus impact investment decisions? By taking advantage of the sharp increase in expired independent directors’ re-employment in China caused by exogenous regulatory shocks, Rule No. 18 and Regulation 11, this paper adopts a PSM-DID design to test the impact of expired independent directors on CSR performance. We find that firms experience a significant decrease in CSR performance after re-hiring expired independent directors and the effect is stronger for CSR components mostly related to internal governance. The results of robustness tests show that the main results are robust to alternative measures of CSR performance, an extended sample period, alternative control groups, year-by-year PSM method, and a staggered DID model regarding Rule No. 18 as a staggered quasi-natural experiment. We address the endogeneity concern that chance drives our DID results by using exogenous regulatory shock, an instrumental variable (the index of regional guanxi culture), and placebo tests. We also find that the negative relation between the re-employment of expired independent directors and CSR performance is more significant for independent directors who have more relations with CEOs and raise less objection to managers’ decisions, and for firms that rely more on expired independent directors’ monitoring roles (e.g., a lower proportion of independent directors, CEO duality, high growth opportunities, and above-median FCF). The mediating-effect test shows that the re-employment of expired independent directors increases CEOs’ myopia and thus reduces CSR performance. In addition, we exclude the alternative explanation that the negative relation is caused by the protective effect brought by expired independent directors’ political backgrounds. Our study shows that managers may build reciprocal relationships with expired independent directors in the Chinese guanxi culture and gain personal interest.

The reform of the IPO registration system is a crucial step toward the maturity, improvement, and marketization of the securities market. In recent years, the trend of corporate financialization has become increasingly evident. Based on data from firms listed on the ChiNext Market and the Main Board, this paper constructs a Propensity Score Matching-Difference-in-Differences (PSM-DID) model and an RDD-DID model to examine the impact of IPO registration system reform on corporate financialization and analyze its underlying mechanisms from multiple perspectives. The estimation results of both models indicate that the IPO registration system reform has significantly increased firms’ financialization levels. Furthermore, a series of robustness checks confirm the reliability of the findings. The mechanism analysis reveals that the reform has promoted corporate financialization by lowering listing thresholds, alleviating financing constraints, and intensifying market competition. Meanwhile, its information disclosure mechanism has to some extent curbed financialization. Further heterogeneity analysis shows that the reform’s promoting effect is more pronounced in non-state-owned enterprises, firms with lower growth potential, and those with weaker corporate social responsibility (CSR) performance. This study enriches the literature on the policy impact of IPO registration system reform, provides a new perspective on how such reforms influence corporate financialization, and offers important implications for curbing excessive financialization in real-sector enterprises, deepening IPO registration system reform, and further improving capital markets.

Recently, the Chinese Government has strengthened the enforcement of bankruptcy laws to protect creditors’ rights. This study shed light on the effect of creditor protection on asset-debt maturity mismatch by employing a quasi-natural experiment in China. The results show that creditor protection mitigates maturity mismatch, and the effect is more pronounced among financially constrained firms. Results remain robust after the dynamic effects test, placebo test, propensity score matching approach, entropy balancing method, and controlling for COVID-19 shocks. Mechanism tests show that creditor protection decreases the cost of debt and reduces over-investment. The effect of creditor protection is pronounced in private companies, financially independent companies, and companies with secured loans. Creditor rights can alleviate maturity mismatch in firms with medium ownership concentration and managerial ownership levels. Economic consequences studies suggest that creditor protection reduces corporate default risk. This study reveals the mechanism and effect of creditor protection on asset-debt maturity mismatch in emerging markets, providing recommendations to policymakers for assessing and improving bankruptcy law regimes.

We examine a unique phenomenon among exchange traded funds (ETFs) in the Chinese stock market, finding that ETFs pervasively participate in initial public offerings (IPOs) to profit from underpricing. The ETF IPO participation passes primary market benefits to retail investors, providing benefits from hard-to-reach investment opportunities. These active moves showing ETFs are not entirely passive highlight the gains of the active management. However, we observe that this activity leads to increased non-fundamental volatility and short-term return reversals, as well as decreased investment-q sensitivity among ETF member stocks, presenting a negative externality. Using a policy shock as the quasi-natural experiment, we establish the causality of these effects, underscoring the dual nature of ETFs active management.

We study how bank liberalization affects analyst forecast accuracy using two interest rate deregulations in China—the removal of the cap on bank lending rates in 2004 and the removal of the floor in 2013—as quasi-natural experiments. Our results show that the analyst forecast accuracy for high-risk firms decreases significantly after the removal of the lending rate cap, whereas analyst forecast accuracy for low-risk firms increases significantly after the removal of the lending rate floor. Moreover, interest rate liberalization affects forecast accuracy through operational risk and information asymmetry channels. Furthermore, the impact was concentrated on firms whose actual performance fell short of performance expectations and those that received more bank loans. Our findings imply that interest rate liberalization policies may have unintended consequences for analyst forecasts.

Green finance has drawn increased worldwide attention from policymakers as a financial mechanism that could potentially encourage corporations to actively engage in sustainable activities. However, despite a growing body of studies investigating the economic outcomes of green financial policies, there is still a lack of research that systematically quantifies the social welfare implications of green finance. Hence, this study aims to fill this research gap by establishing the causal effect of green finance on corporate environmental responsibility. Exploiting the "bottom-up" enforcement of the green finance pilots in 2017 in China as a quasi-natural experiment and the difference-in-difference-in-difference identification strategy, we find that green finance significantly enhances corporate environmental responsibility performance in high-polluting industries relative to their counterparts, and this evidence continues to survive a battery of robustness checks. Moreover, we explore three underlying mechanisms that possibly explain this beneficial effect: risk-taking, external governance and financing channels. Furthermore, we uncover that corporate environmental responsibility serves as a plausible non-economic channel that combines green finance with economic benefits by stimulating green innovation, promoting total factor productivity and expanding market share. Overall, our study offers new insights on both the economic and non-economic consequences of green finance on business performance.