The emphasis on environmental sustainability outcomes (ESO) in emerging economies has increased recently, requiring in-depth research to manage the complex interplay between socioeconomic and sociopolitical factors. With a particular focus on China, this study describes this significant relationship using a good technique that comprises standardized questionnaires administered to a large sample of different organizational levels. This research examined several factors and their effects on ESO. First, the results show that the kind of economic system (EST) directly affects ESO; no direct relationship was discovered between ESO and the industrialization level (LI). Furthermore, it was demonstrated that government funding for eco-sustainability projects (GFESP) and community engagement and eco-education initiatives (CEEEI) had a direct impact on ESO. Secondly, the results demonstrated that implementing eco-policies and regulations (IEPR) had a full mediating effect between EST and ESO. Third, political instability (PI) and corruption level (CL), which are essentially the outcome of China's current political and environmental issues, diminish the correlation between EST and ESO. These findings demonstrate that China's environmental sustainability has to be improved using a multimodal approach. The public is encouraged to push legislators to bolster eco-laws and policies in order to emphasize environmental preservation. Initiatives to reduce corruption and maintain political stability may also bolster the beneficial effects of economic frameworks on ESO.

Against the backdrop of systemic financial risk prevention and the pursuit of a virtuous cycle in the real economy, whether Local Government Financing Vehicles (LGFVs) shareholding alleviates maturity mismatch of corporate investment and financing activities is a question of critical importance, not only for the development of individual firms but also for high-quality macroeconomic growth. Using a sample of A-share listed firms in China’s Shanghai and Shenzhen stock exchanges from 2009 to 2021, this paper theoretically analyzes and empirically tests the impact of LGFVs shareholding on corporate maturity mismatch. The empirical results indicate that LGFVs shareholding can significantly alleviate corporate maturity mismatch and the finding is still robust across a series of empirical checks. Mechanism analyses show that LGFVs shareholding improves firms’ long-term financing capacity through a resource provision channel and restrains overinvestment through a governance optimization channel, thereby collectively mitigating corporate maturity mismatch. Further analysis indicates that the mitigating effect of LGFVs shareholding is more pronounced in firms with concentrated LGFVs shareholding, firms controlled by non-state-owned capital and firms under higher economic policy uncertainty. Our findings provide valuable theoretical insights for policy design aimed at optimizing corporate financial behavior and curbing corporate financial risks.

This paper examines the use of finance leases in China’s local government debt. Using a unique dataset of government finance lease transactions, we document that local government financing vehicles (LGFVs) rapidly adopted finance leases, with the outstanding amount growing from virtually nothing in 2013 to a cumulative total of 1.02 trillion RMB by 2018. Our difference-in-differences (DID) analysis reveals that the central government’s restrictive financial policies account for a substantial portion of this surge. Because these restrictive policies confined LGFVs’access to conventional borrowing channels, finance leases emerged as a key alternative, particularly through bank-affiliated leasing firms. While LGFVs' use of finance leases offers low-cost financing for local governments, the low quality of the underlying assets poses significant risks to the leasing firms.

This study examines the economic consequences of China’s Three-Red-Lines policy, introduced in 2021 to cap real estate developers' leverage by imposing strict thresholds on debt ratios and liquidity. Developers breaching these thresholds experienced sharp declines in financing, land acquisitions, and financial performance. Privately owned developers(POE) are hit harder than state-owned firms (SOE), with larger drops in sales and higher default risk. Using granular project-level data, we show that the policy reduces developer sales primarily by curtailing new-project supply: breached developers launch fewer projects. On the demand side, homebuyers reallocate purchases from privately owned developers to SOEs, further widening the POE-SOE gap. The policy also reduced local governments’ land-transfer revenues and increased reliance on local government financing vehicles (LGFVs) for land purchases. These LGFV-acquired parcels exhibit very low subsequent development rates, which may increase local governments’off-balance-sheet debt risks.

This paper examines the impact of Chinese local government hidden debt on corporate ESG greenwashing. Extending fraud theory, we reveal that hidden debt shifts the boundary between government and market that drives the factors behind ESG greenwashing. Using the ESG greenwashing indicator of listed firms in the A-share market and the hidden debt-to-GDP ratio of 31 provinces from 2012 to 2023, we find that local government hidden debt is positively correlated with corporate ESG greenwashing. The impact is more significant for firms that are state-owned, without active primary-level Party organizations, or not on China’s key pollution supervisory list. Mechanism analysis indicates that expansion of local government hidden debt brings firms with higher LGFVs’ share-holding for the SOEs, heavier environmental tax burden, and less social responsibility preference, all of which are related with ESG greenwashing. Reducing local government special debt and improving tax compliance can help alleviate this impact. These findings highlight the necessity of fiscal risk management in achieving genuinely sustainable corporate development.

We construct a new geospatial measure using high-resolution river vector data from National Geomatics Center of China (NGCC) to study how urban riparian exposure shapes local government debt financing costs. Our base-line results show that cities with higher riparian exposures have significantly lower credit spreads, with a one-standard-deviation increase in riparian exposure reducing credit spreads by approximately 12 basis points. By comparing cities crossed by natural rivers with those intersected by artificial canals, we disentangle the dual role of riparian zones as sources of natural capital benefits (e.g., enhanced transportation capacity) versus climate risks (e.g., flood vulnerability). We find that climate change has amplified the impact of natural disasters, such as floods and droughts, particularly in riparian zones, thus weakening the cost-reducing effect of riparian exposure on bond financing. In contrast, improved water infrastructure and flood-control facilities strengthen the cost-reduction effect. Our findings contribute to the literature on natural capital and government financing, offering valuable implications for public finance and risk management.

This study examines the economic consequences of China’s Three-Red-Lines policy—introduced in 2021 to cap real estate developers’ leverage by imposing strict thresholds on debt ratios and liquidity. Developers breaching these thresholds experienced sharp declines in financing, land acquisitions, and financial performance, with privately-owned developers disproportionately affected relative to state-owned firms. Using granular project-level data, we document significant drops in sales and a demand shift from private to state-owned developers. The policy also reduced local governments’ land sale revenues, prompting greater reliance on hidden local government financing vehicles for land purchases. The policy induced broad structural changes in China’s housing and land markets.

Local financial development is crucial for advancing regional financial supply side structural reform, enabling local governments to leverage financial instruments to effectively mobilize land resources and foster competitive growth. The introduction of numerous financial products linked to land-related rights and interests has resulted in a pronounced transmission and interconnection of fiscal and financial risks across regions. This study examines the impact of local financial development on land financialization in China using panel data from prefecture-level cities and detailed information on land mortgages. The findings indicate that the establishment of city commercial banks (CCBs) contributes to the progress of land financialization by incentivizing local government financing vehicles to participate in land mortgage financing, increasing the transfer of debt risks to the financial sector. Notably, the impact of CCBs on land financialization is more pronounced in regions with urban agglomeration, high GDP manipulation, inadequate local financial regulation, and robust implicit government guarantees. Further analysis reveals that CCB establishment has negative spillover effects on land financialization in neighboring areas, while expansion strategies such as establishing intercity branches, engaging in cross-regional mergers, and relaxing regulations have mitigated the rise of land financialization at the regional level. This study provides policy recommendations that focus on reducing local governments’ reliance on land financing and enhancing the prevention and management of financial risks.