The scale expansion of low-carbon industries and the green transformation of carbon-intensive industries are two sides of the same coin in achieving the “dual carbon” goals. However, research on transition finance supporting the upgrading of traditional existing carbon-intensive industries remains insufficient. The key to examining the effectiveness of transition finance lies in distinguishing whether the supported enterprises are engaging in greenwashing or green evolution. Based on data of Chinese A-share listed companies in the carbon-intensive industries, an empirical study is conducted and offers the following findings: (1) Transition finance not only does not increase greenwashing but also promotes comprehensive green innovation in carbon-intensive enterprises. (2) In terms of the influencing mechanism, transition finance exerts “resource effects” and “signaling effects,” promoting green innovation by improving debt maturity mismatch and attracting green institutional investors. (3) Heterogeneity analysis shows that the positive impact of transition finance on green innovation is particularly pronounced among enterprises in the eastern region, state-owned enterprises, and those with lower levels of managerial myopia. (4) Further industry spillover effects analysis reveals that transition finance empowers green innovation within industries though peer effects and competitive effects. The findings are essential for understanding the effectiveness of transition finance and offer valuable insights for policymakers.

How much value has been lost in the Chinese bankruptcy system due to excessive liquidation of companies whose going concern value is greater than the liquidation value? I compile new judiciary bankruptcy auction data covering all bankruptcy asset sales from 2017 to 2022 in China. I estimate the valuation of the asset for both the final buyer and creditor through the revealed preference method using an auction model. On average, excessive liquidation results in a 13.5% welfare loss. However, solely considering the liquidation process, an 8% welfare gain is derived from selling the asset without transferring it to the creditors. Firms that are (1) larger in total asset size, (2) have less information disclosure, (3) have less access to the financial market, and (4) possess a higher fraction of intangible assets are more vulnerable to such welfare loss. Overall, this paper suggests that policies promoting bankruptcy reorganization by introducing distressed investors who target larger bankruptcy firms suffering more from information asymmetry will significantly enhance welfare in the Chinese bankruptcy market.

The relationship between corporate Environmental, Social, and Governance (ESG) performance and its value has garnered increasing attention in recent times. However, the utilization of ESG scores by rating agencies, a critical intermediary in the linkage between ESG performance and value, presents challenges to ESG research and investment as a result of inherent subjectivity, hysteresis, and discrepant coverage. Fortunately, news can provide an objective, timely, and socially relevant perspective to augment prevailing rating frameworks and alleviate their shortcomings. This study endeavors to scrutinize the influence of ESG-related news on the Chinese stock market, to showcase its efficacy in supplementing the appraisal of ESG performance. The study's findings demonstrate that (1) the stock market is significantly impacted by ESGrelated news; (2) ESG-related news with different attributes (sentiments and sources) have notably diverse effects on the stock market; and (3) the heterogeneity among enterprises (industries and ownership structures) affects their ability to withstand ESGrelated news shocks. This study contributes novel insights to the comprehensive and objective assessment of corporate ESG performance and the management of its media image by providing a vantage point on ESG-related news.

Using China's Strategic Emerging Industries Classification (CSEIC), which is enacted in 2018, as a quasi-natural experiment, this study investigates its impact on corporate innovation behaviors. In basic research, we find that: (1) The CSEIC significantly enhances both substantive and strategic innovation; (2) The effect of CSEIC is influenced by the characteristics of the enterprise. Specifically, in state-owned enterprises (SOEs), the CSEIC significantly enhances substantive innovation and strategic innovation, while in non-SOEs, the CSEIC only significantly enhances substantive innovation. In further research based on entrepreneurial spirit, we find that: (1) The effect of CSEIC on strategic innovation is suppressed if entrepreneurial patriotism is higher, no matter whether the enterprise is SOEs or non-SOEs; (2) The effect of CSEIC on substantive innovation is enhanced, if and only if entrepreneurial integrity is higher in SOEs or International Vision is higher in non-SOEs. These findings offer valuable insights for policymakers aiming to foster innovation through targeted support for enterprise leaders, highlighting the need for tailored approaches considering the distinct characteristics of SOEs and non-SOEs.

This paper, based on data from Chinese A-share listed companies between 2009 and 2019, employs the implementation of the "Shanghai-Hong Kong Stock Connect" as a landmark event of capital market liberalization, utilizing a difference-in-differences model to empirically examine the impact of market openness on firms' cross-region investment behavior and its underlying mechanisms. The findings indicate that: (1) the launch of the "Shanghai-Hong Kong Stock Connect" has significantly promoted the establishment of cross-provincial and cross-border subsidiaries by the companies involved; (2) capital market liberalization influences firms' cross-region investment through three dimensions: finance, governance, and stakeholders. In terms of finance, the openness alleviated financing constraints and improved stock liquidity; in governance, it pressured companies to adopt more digitalized and transparent governance structures to accommodate cross-regional expansion; in the stakeholder dimension, it attracted the attention of external investors, accelerating their understanding of firms and alleviating the trust issues associated with cross-region expansion. (3) The effect of capital market liberalization on promoting cross-border investments by private enterprises is particularly pronounced, and this effect is further strengthened as the quality of corporate information disclosure improves. Firms with higher levels of product diversification benefit more from market liberalization, accelerating their overseas expansion. (4) Capital market liberalization has elevated the level of cross-region investment, thereby significantly fostering innovation and improving investment efficiency. The conclusions of this study provide fresh empirical evidence for understanding the microeconomic effects of China's capital market liberalization, the intrinsic mechanisms of corporate cross-region investments, and their economic consequences.

Comprehensive evaluation and identification of the critical regulatory determinants of carbon emission efficiency (CEE) are very important for China’s low-carbon transition. Accordingly, this paper first employs an undesirable global super-hybrid measure approach to calculate the CEE of China’s iron and steel industry (ISI). We then further use spatial error and threshold regression models to examine the spatial and non-linear effects of heterogeneous environmental regulations on CEE, respectively. Our empirical results show that (1) CEE varies significantly across China’s regions, with the eastern region having the highest CEE score, followed by the western and central regions, with the northeast region ranking the lowest; (2) command-and-control and market-incentive regulations both promote CEE, whereas the public participation approach does not significantly contribute to performance gains; (3) all three types of environmental regulations exhibit a non-linear threshold effect on CEE; (4) openness level, technological progress, and industrial concentration enhance efficiency gains, while urbanization level exerts a negative impact on CEE. Our findings have important implications for the design of environmental regulations.

This research study primarily examines the digital transformation’s internal mechanism promoting enterprises’ total factor productivity (TFP) based on the matching and learning mechanism. Afterward, this research article empirically examines the digital transformation’s influential mechanism on enterprises’ TFP, using the Chinese listed companies’ data on the “A” stock market for the time period ranging from 2007 to 2019. The major study findings are as follows: (1) the improvement of the digital transformation significantly increases enterprises’ TFP. The proposed conclusion remains robust after a series of robustness- and the endogeneity test. (2) Furthermore, mechanism analysis reveals that digital transformation effectively enhances enterprises’ TFP by eliminating resource misallocation in the industry. In addition to this, digital transformation relies on the mechanism of “learning by doing” to promote the technological innovation’s spillover effect; hence, effectively enhancing enterprises’ TFP. (3) Heterogeneity analysis demonstrates that the digital transformation’s impact on enterprises’ TFP is heterogeneous in the context of enterprise size, enterprise type, and enterprise ownership. Lastly, this study puts forward that government bodies should intensify the construction and investment in digital infrastructure, promote a series of institutional reforms, and support digital technological R&D practices.

Based on the expected utility under uncertain probability distribution, we explore whether the ambiguity of individual stocks is priced in China’s A-share market and the mechanism behind the ambiguity premium phenomenon. Theoretically, when the asset price is in a specific price range, investors with ambiguity aversion do not participate in the transaction of the asset. As the ambiguity of assets increases, investors with high ambiguity aversion withdraw from the market, and investors with low ambiguity aversion remain in the market (the limited market participation phenomenon); investors who remain in the market due to lower ambiguity aversion are also willing to accept a low ambiguity premium. Empirically, we use "the volatility of the distributions of daily stock returns within a month" to measure monthly ambiguity; and find that (1) the equal-weighted average returns of the most ambiguous portfolios (top 20%) are significantly lower 1.38% than those of the least ambiguous portfolios (bottom 20%); (2) ambiguity still significantly negatively affects the cross-sectional stock return after controlling for common firm characteristics; (3) the higher the ambiguity, the lower the future trading activity, the empirical results are consistent to the theoretical predictions. Those findings reveal the mechanism of the negative ambiguity premium in the A-share market, provide new ideas for further building a factor pricing model suitable for the A-share market, and provide a fresh perspective for preventing systemic financial risk.

This study explores the relationship between board chairs' early-life experience in the Great Chinese Famine and the debt maturity choices made by Chinese listed firms between 2000 and 2017. Our findings indicate that board chairs with famine experience exhibit a propensity towards long-term debt usage. We argue that this finding can be attributed to a risk-averse rather than altruistic orientation among board chairs who have experienced famine. Our results are particularly salient for firms with lower asset redeployability, higher distress risk, no political affiliations, and those that are not stateowned enterprises. Furthermore, this study provides three analyses to support the risk aversion traits: (1) board chairs with disaster experience underestimate their company's profit potential, (2) board chairs located in areas with higher mortality rates exhibit more obvious risk aversion behavior, and (3) extending the debt maturity date, board chairs can effectively increase company investment and mitigate the underinvestment problem.

As the world’s two largest economies, China and the US are currently experiencing political and economic friction. This conflict brings high uncertainty to financial markets. Assessing risk spillover effects in a sector level will help us to characterize international risk contagions. We construct a multilayer network to examine tail risk spillovers between China and the US and find that (1) the value of total connectedness rises amidst tensions but declines during reconciliations; (2) interlayer spillovers mainly manifest as extreme pulses instead of steady outflows, which implies a significant increase in the frequency and magnitude of interlayer spillovers requires vigilant monitoring; and (3) compared with the in-strength, the out-strength is more concentrated, which represents that some sectors may play the role of major interlayer transmitter in tail risk spillovers. Monitoring interlayer spillovers helps policymakers and investors respond to emerging systemic threats.