Utilizing data from the East Money stock forum, one of China's most influential financial portals, this study examines how online discussions among individual investors influence managerial learning from stock prices to make investment decisions. We find that higher discussion intensity is associated with lower investment-q sensitivity, indicating that investors' online discussions impede managerial learning from prices. This effect operates through a decline in information asymmetry and the probability of informed trading. Furthermore, the negative impact is more pronounced when managers exhibit stronger incentives to learn from market signals. Overall, our findings support a crowding-out mechanism: online discussions crowd out the private information gathering of informed traders, thereby reducing the informativeness of prices for real investment decisions.

This paper investigates the role of information asymmetry in how financial decision-making responsibility is allocated within households. Using data from the China Family Panel Studies (CFPS), we document that when only the wife has access to the Internet, the probability of her taking primary responsibility for household financial decision-making increases significantly. Conversely, when only the husband uses the Internet, this probability decreases. Mechanism analysis shows that Internet access expands individuals’ access to financial information, and spouses with exclusive Internet access leverage this informational advantage to influence their partners’ decisions through strategic partial information disclosure. These findings indicate that such informational advantages translate into a bargaining power premium within households.

Using Chinese A-share listed firms from 2007 to 2024, this study examines whether supply chain shareholding (SCS) affects stock price synchronicity. We find that SCS significantly reduces stock price synchronicity. This finding remains robust to a series of robustness and endogeneity tests. Mechanism tests provide evidence consistent with information asymmetry and agency costs as two channels linking SCS to lower stock price synchronicity. Heterogeneity analyses show that the effect is more pronounced among firms with low supply chain concentration and those operating in unfavorable business environments. Overall, these findings identify SCS as a relationship-based governance arrangement that improves capital market information efficiency, particularly where relational governance and informal institutional substitution are more valuable.

We examine whether and how the cultural background of corporate chairpersons, specifically clan culture, influences firm-to-firm lending decisions. Using hand-collected data on Chinese entrusted loans, a major segment of the country’s shadow banking sector, we find that firms led by chairpersons from prefectures with stronger clan culture are more likely to originate entrusted loans and charge lower spreads. We identify distinct mechanisms governing affiliated versus nonaffiliated transactions. In affiliated lending, our evidence suggests an in-group favoritism channel: culturally embedded chairpersons support affiliated parties despite higher ex-post default risk. Conversely, non-affiliated lending operates via an informational channel, where the positive impact of clan culture is more pronounced when geographic barriers are low, and manifests in larger size dispersion. Overall, our findings highlight the dual role of cultural norms in shadow banking, demonstrating that clan culture facilitates credit allocation while generating sharply different efficiency implications across relationship-based and arm’s-length markets.

Firms frequently overstate digital transformation in public disclosures while committing less in observable investment, a phenomenon known as digital catering. We examine whether digital public financial infrastructure can discipline such symbolic behavior. Using a staggered difference-in-differences design on Chinese A-share listed firms over 2014--2024, we find that exposure to China's e-CNY pilot reduces digital catering by roughly 14% relative to the sample mean. The decline is driven almost entirely by reduced rhetorical digital transformation, while balance-sheet-based digital commitment rises only marginally: the e-CNY pilot is associated with substantially less digital talk, but not with a commensurate increase in digital walk in the short run. The effect operates through lower agency costs and reduced information asymmetry, and follows an amplification--substitution pattern---stronger among digital-sector and accounting-opaque firms, weaker where internal controls and institutional ownership are already strong. The evidence identifies financial-transaction verifiability as a novel source of discipline over corporate cheap talk: CBDC-related infrastructure constrains unsupported symbolic claims without immediately accelerating substantive digital investment.

This paper develops a delegation-based framework to explain how institutional design shapes pricing incentives under risk. Using China’s 2016 IPO reform—which abolished prefunding requirements and transferred payment obligations from investors to underwriters—as a natural experiment, we show that introducing subscription-payment risk (SPR) renders underwriter’s partial residual claimants with respect to unpaid allocations. Building on Baron’s (1982) delegation model, we argue that the reform amplifies information asymmetry and induces underwriters to adopt more conservative pricing strategies to manage perceived payment risk. Empirically, IPOs exposed to SPR exhibit greater underpricing and lower offer prices, particularly when investor bids reflect stronger valuation pessimism. The effect tends to be less pronounced for reputable underwriters and when foreign institutional investors participate. Overall, the evidence demonstrates how risk redistribution and institutional frictions jointly shape underwriter behavior and pricing efficiency in primary equity markets.

This study examines the role of artificial intelligence (AI) adoption in the market for corporate control using a sample of Chinese listed firms from 2011 to 2021. We construct a novel firm-level AI Index through textual analysis of annual reports and find that AI adoption significantly enhances both the likelihood of becoming an acquisition target and the valuation premiums commanded in M&A transactions. Specifically, a one-standard-deviation increase in the AI Index is associated with a significant increase in the probability of being acquired and higher deal premiums measured by price-to-earnings multiples. We identify two channels through which AI adoption creates value recognized by the M&A market: an efficiency channel, whereby AI reduces agency costs and improves profitability, and an innovation channel, evidenced by increased high-quality patent output. The persistence of these effects over time further suggests that AI adoption generates substantive improvements in firm fundamentals rather than serving as a transitory informational signal. Importantly, we document significant heterogeneity across ownership structures: the positive effects of AI adoption are substantially weaker for State-Owned Enterprises (SOEs) than for non-SOEs. Our findings contribute to the literature on digital transformation and corporate finance by demonstrating that AI adoption serves as a value-relevant firm attribute that shapes outcomes in the market for corporate control.

A central premise of mandatory disclosure regulation is that greater transparency reduces information asymmetry and lowers borrowing costs. We challenge this premise by examining industry-level operational disclosure - a regulatory form that reveals horizontally comparable information across peer firms rather than refining individual firm fundamentals. Exploiting the staggered introduction of mandatory industry-specific disclosure guidelines by Chinese stock exchanges between 2013 and 2019, we find that enhanced industry disclosure significantly widens bond credit spreads by approximately 54 basis points - the opposite of what standard disclosure theory predicts. This counterintuitive effect is more pronounced in non-homogeneous industries, among smaller firms, and for bonds restricted to institutional investors. Mechanism tests confirm two opposing channels: disclosure reduces information asymmetry while simultaneously intensifying product market competition by exposing strategically sensitive operational metrics. Our evidence challenges the one-size-fits-all approach to disclosure regulation and highlights that the competitive implications of disclosed information - not merely its quantity - shape credit risk pricing.

This study investigates the impact of employee ownership on firms’ investment responsiveness to stock market feedback. Using data from Chinese listed firms, we find that employee ownership significantly enhances the sensitivity of corporate investment to Tobin’s q. This effect is more pronounced in firms with higher information asymmetry, greater labor intensity, weaker corporate governance, and higher financial distress risk. While employee ownership is linked to increased subsequent profitability volatility, it also mitigates financial mismatch and downside operating risk. Our findings also suggest that employee ownership drives a shift in corporate strategy, leading to more aggressive approaches and improved risk preferences. These results highlight the role of employee ownership in mitigating agency problems and enhancing firms’ ability to incorporate market information into investment decisions.

We examine whether firms with high organization capital (OC) are more likely to purchase Directors’ and Officers’ (D&O) liability insurance, using a panel of Chinese A-share listed companies from 2009 to 2021. We document a robust positive association between OC and the propensity to carry D&O insurance. The effect remains statistically and economically significant after controlling for firm characteristics and employing multiple identification strategies to address endogeneity. We propose two economic channels through which OC affects D&O insurance demand, namely, agency and information asymmetry. Consistent with these mechanisms, we find that the positive OC–D&O relationship is significantly stronger in firms with weaker internal governance and those facing opaquer information environments. Additional cross-sectional analyses show that this effect is concentrated in privately-owned firms and in regions with more developed market institutions, suggesting that external pressures accentuate the value of insuring key decision-makers. Our results are robust to alternative model specifications and remain stable after using propensity score matching, instrumental variable approaches, and the Heckman two-stage model. Overall, the findings highlight OC as a critical internal driver of corporate insurance decisions. Firms with substantial intangible assets strategically obtain D&O coverage to strengthen governance and reduce information frictions, especially in emerging markets like China where formal investor protections are still evolving.