Technology firms are often financed on narratives about products, contracts, customers, and technological progress well before these developments appear in accounting statements. We ask when such narratives become economically informative. Our central idea is that narratives should matter more once they can be linked to later verifiable outcomes rather than treated as stand-alone text.Using listed Chinese technology firms, we develop a validated corporate narrative framework for bank-affiliated investment, a setting in which investors must screen with soft information ex ante and then monitor hard realization and downside risk ex post. We use GPT-5.1 to extract business claims from management discussion, investor-relations records, exchange Q&A, and earnings-roadshow materials, and to label later claim–evidence pairs as support, partial support, conflict, duplicate, or irrelevant. We then connect these labels to official announcements, procurement awards, permits, project updates, and negative-event disclosures to construct a validated firm-month signal. The broad merged panel contains 592 firms and 30,169 firm-month observations; the main return tests use 576 firms and 18,230 firm-month observations over 2022–2024. A simple production rule that combines a low-narrative-premium component with hard-narrative and hard-event anchors, together with a separate downside-risk gate, delivers an implementable annualized long-short return of 8.93% in bank-invested firms after trading costs. The signal is much weaker in non-bank firms, predicts future gross-margin improvement more strongly than future ROE, and improves downside screening.

Bankruptcy abuse prevention has been criticized for increasing foreclosure rates, imposing negative impacts on housing markets, and aggravating the financial crisis. By contrast, this paper documents that bankruptcy abuse prevention reduces household debt overhang, a phenomenon harmful to home values and housing markets. Using a difference-in-differences analysis, we find that households in recourse states increased their home improvement and maintenance expenditures after the Bankruptcy Abuse Prevention and Consumer Protection Act, a period during which the households paid considerable attention to the downside risk of the housing market, and that the effects vary by home equity level. The results remain unchanged with alternative specifications and cannot be explained by credit changes, judicial and nonjudicial foreclosures, homestead exemption, house sales, or heterogeneous expectations. Last but not least, we use entropy balancing to eliminate the differences between the treatment and control groups and get similar results. 预防破产滥用的政策被认为推高止赎率、对住房市场造成负面影响以及加剧金融危机而饱受批评。与之相反，本文证明破产滥用预防能够缓解家庭债务积压（debt overhang）—— 而债务积压恰恰是一种损害房屋价值与住房市场的现象。采用双重差分（DID）分析，我们发现：在《破产滥用预防与消费者保护法案》（BAPCPA）实施后，**追索权州（recourse states）**的家庭增加了住房改善与维护支出；该时期家庭对住房市场的下行风险高度关注，且上述效应因房屋净值水平的不同而存在异质性。在多种替代设定下结果依然稳健，且不能被信贷变化、司法与非司法止赎、宅基地豁免、房屋销售或异质性预期所解释。最后，我们使用熵平衡（entropy balancing）方法消除处理组与控制组之间的差异，同样得到了一致的结果。

We propose a novel dual-screening classification framework for fund selection designed to align statistical objectives with investor goals. Testing on the Chinese mutual funds market, a Gradient Boosting model implementing our framework generates a statistically and economically significant 14.65% annual risk-adjusted alpha, substantially outperforming identical models trained under a standard regression framework. Feature importance analysis confirms that fund-level momentum and flows are the most significant predictors of performance in this market. Our findings provide a robust and practical framework for active management, demonstrating that modelling both upside potential and downside risk is critical for superior performance.

This paper studies the economic impact of introducing a personal bankruptcy regime, using China’s recent pilot reforms as a natural experiment. We exploit the staggered rollout of personal bankruptcy frameworks across Chinese cities and construct a novel dataset of bankruptcy case filings, combined with survey-based measures of credit access and official firm registration records. Our difference-in-differences estimates show that the reforms significantly improve small business credit access - business loan take-up increases by 1.3 % (21% relative to pre-reform mean), with no offsetting rise in interest rates. Effects are concentrated among non-corporate firms, firms with less employees and female entrepreneurs. Moreover, the reform is also associated with a 9.7% increase in new firm registrations. To interpret these findings, we develop a simple but novel theoretical model in which personal bankruptcy reduces the downside risk of entrepreneurial failure while preserving creditor recoveries. These findings underscore how debtor protection policies, when designed to reduce enforcement costs without expanding exemption rights, can enhance credit supply and entrepreneurial activity.

The side effect of automation on the economy has been discussed frequently, but little is known regarding its political consequences. This paper examines the causal effect that automation induces political costs for the local government. By combining the national individual-level panel data of political trust with the prefecture-level robot exposure rate in China biennially during the period 2012– 2018, we find that the development of automation would incur lower political trust in the Chinese local government. Furthermore, the impact may result from the risk of unemployment, intensified pessimism about local government, higher downside risk, and declining group participation, providing a few channels for the automation process to affect citizens’political trust. This paper provides empirical evidence for the impact of automation and the source of political legitimacy, contributing to the literature about automation by emphasizing the crucial role of government in coping with the technological progress and making good use of endogenous creative destruction.

Whether responsible investing reduces portfolio risk remains open to discussion. We study the relationship between ESG performance and downside risk at fund level in the Chinese equity mutual fund market. We find that fund ESG performance is positively associated with fund downside risk during the period between July 2018 and March 2021, and that the positive relationship weakens during the COVID-19 pandemic. We propose three channels through which fund ESG performance could affect fund downside risk: (i) the firm channel in which the risk-mitigation effect of portfolio firms’ good ESG practices could be manifested at fund level, (ii) the diversification channel in which the portfolio concentration of high ESG-rated funds could amplify fund downside risk, and (iii) the flow channel in which fund ESG performance may attract greater investor flows that could reduce fund downside risk. We show evidence that the observed time-varying relationship between fund ESG performance and downside risk is driven by the relative force of the three channels.

This paper investigates the impact of the COVID-19 pandemic on the volatility spillover and dependence structure among the major developed and emerging stock markets. The TVP-VAR connectedness decomposition approach and R-vine copula are implemented in this research. The results of the TVP-VAR connectedness decomposition approach reveal that the volatility spillover among the major developed and emerging stock markets has been significantly strengthened by the outbreak of the COVID-19 pandemic, although it has gradually faded over time. In addition, during the pandemic, the UK, German, French and Canadian stock markets are the spillover transmitters, while the Japanese, Chinese Hong Kong, Chinese and Indian stock markets are the receivers. It is also found that the US and Brazilian stock markets have undergone role shifts after the outbreak of the COVID-19 pandemic. The results of the R-vine copula model indicate that during the pandemic, the Canadian, French, and Chinese Hong Kong stock markets are the most important financial centre in the American, European, and Asian stock markets, respectively. Furthermore, the effect of the extreme risk contagion has been strengthened by the pandemic, particularly the downside risk contagion.

The existing literature mainly documents the relationship between international and domestic fossil energy markets; however, empirical evidence of the dynamic relationships between fossil energy market and new energy market is lacking. This paper combines TGARCH model and copula model to explore the dynamic linkages and spillover effects between international fossil energy (crude oil, coal and natural gas) markets and China's new energy market using daily data from 4 January 2012 to 3 September 2018. The empirical results indicate that fossil energy returns and new energy returns are positive related over time. And the crude oil returns and new energy returns, as well as the coal returns and new energy returns have lower tail dependence, while there is upper tail dependence structure between natural gas returns and new energy returns. Furthermore, the extreme upside and downside risk spillover from international fossil energy markets to China's new energy market is asymmetric. Among the spillover effects, the downward risk spillover of crude oil market exerts the most significant impact on China's new energy market.

In this paper, we introduce a general downside risk measure based on high frequency downward moves below minimum acceptable target in asset prices. Our contribution to the existing literatures is threefold. Firstly, we construct a general downside risk measure, realized semivariance and downward absolute power variation are all special cases of our realized downside risk measure. Secondly, we derive the central limit theorem of this measure. Thirdly, we investigate the distributional properties of this measure in China’s stock market and show the potential of this measure in modeling downside risk.

We examine the impact of cross-border mergers and acquisitions on a target firm’s risk and return based on a sample of partially acquired target firms in 18 emerging countries between 1990 and 2007. We find that cross-border acquisitions significantly reduce both the total and downside risk of the target firms and that this reduction is more significant in acquisitions undertaken by bidders from countries that have better protection of investor rights. We also show that this risk reduction improves the risk adjusted performance of these firms. Thus, we conclude that cross-border partial acquisitions benefit an emerging market investors’ risk-return trade off by reducing investment risk and increasing investment returns; policy makers in emerging markets may be well advised to open their markets for partial cross-border acquisitions.