We investigate the causal impact of a company's environmental and social (ES) risk on the borrowing costs of its peer firms (that share lending banks). Using a regression discontinuity design based on the voting outcomes of ES-related shareholder proposals in US public companies' annual meetings from 2005 to 2021, we find that the passage of ES-related proposals leads to an average increase of 38 basis points in the loan costs for peer firms in the subsequent year. The negative spillover is more pronounced for peers with lower bargaining power in their banking relations or having lower ex-ante ES scores, on credit lines rather than term loans, and during the earlier years, validating that banks indeed channel the spillover. Notably, the spillover is particularly significant if the peer firms locate in the same states as the focal firm, or when the proposals reflect a higher degree of disagreement between the proposing shareholders and the managers, or for loans issued by banks lacking prior incentives or expertise in pricing ES risks (``non-ES banks''). We interpret these findings as evidence that the passage of ES-related shareholder proposals releases new information related to peers' ES risks and especially raises the awareness of ES risks among non-ES banks, prompting them to adjust loan rates for their portfolio companies accordingly.

Using the regression discontinuity design, a quasi-experiment approach, this paper establishes a causal relationship between the down payment requirement and house prices by exploiting a unique institutional background in Shanghai. In the unique setting, the required minimal down payment ratio jumps at the Inner Ring, a circular elevated highway, from 50% to 70% for a large group of buyers. With transaction level data from the largest real estate broker in Shanghai, we find that a lower required down payment ratio increases the apartment price by 138.8 thousand RMB, around 3.71% of the average transaction price.

From 2013 to 2015, China lifted the ban on margin trading for designated stocks based on apublic ranking index. Using a regression discontinuity design that exploits the threshold rules, I find that margin trading eligibility causes the stock share turnover and prices to increase. Moreover, firms react to this speculative pressure by manipulating earnings and reducing long-term investment. These effects are stronger for firms that are more prone to investor short-termism ex-ante. Consistent with managerial myopia, marginable firms later experience a decline in operating performance. My results suggest that margin traders, as short-term speculators, pressure the manager to focus on current earnings and take myopic actions.

This paper studies how centralizing environmental administration affected air pollution in China. China launched a vertical administration reform in 2016 to empower upper-level Environmental Protection Bureaus to administer lower-level bureaus vertically through personnel control. Exploiting a stacked difference-in-differences strategy and a regression discontinuity design, we find that the verticalization reform significantly reduced air pollution. The effect was stronger in places where air pollution is less likely to be affected by spillovers from other provinces or where local governments paid less attention to environmental protection before the reform. Additionally, we find that the reform significantly increased the intensity of inspection by local agencies and environmental investments by heavily polluting firms.

Using hand-collected data on siblings of chairpersons in Chinese family firms, we examine the impact of the chairperson having siblings on the corporate social responsibility (CSR) of their firm. The findings suggest that when a firm has a siblings-chairperson, the firm has a better CSR rating than firms with a chairperson without siblings. Specifically, a firm with a siblings- chairperson, on average, has a CSR rating approximately 7.96% higher than a median firm’s rating. The conclusions are robust to a battery of robustness checks including a regression discontinuity research design, alternative measures of CSR, a propensity score matching sample, placebo tests, and different estimation methods. Additional analysis suggests that the mechanisms behind siblings and CSR are consistent with both competition and altruistic effects among siblings. Further analysis suggests that the positive impact of a siblings-chairperson on the CSR rating of firms is more salient when the local familism culture is stronger, when government official career advancement incentives are lower, or when the siblings are directors or CEOs of other firms. Finally, firms with a siblings-chairperson are also pro-shareholder because they consume less perquisites than firms without a siblings-chairperson. Collectively, the findings are consistent with the notion that, by having at least one sibling, a chairperson is more competitive and altruistic than a chairperson without siblings, and such behavior enhances CSR. Family structure matters in corporate practices.