Recently, the Chinese Government has strengthened the enforcement of bankruptcy laws to protect creditors’ rights. This study shed light on the effect of creditor protection on asset-debt maturity mismatch by employing a quasi-natural experiment in China. The results show that creditor protection mitigates maturity mismatch, and the effect is more pronounced among financially constrained firms. Results remain robust after the dynamic effects test, placebo test, propensity score matching approach, entropy balancing method, and controlling for COVID-19 shocks. Mechanism tests show that creditor protection decreases the cost of debt and reduces over-investment. The effect of creditor protection is pronounced in private companies, financially independent companies, and companies with secured loans. Creditor rights can alleviate maturity mismatch in firms with medium ownership concentration and managerial ownership levels. Economic consequences studies suggest that creditor protection reduces corporate default risk. This study reveals the mechanism and effect of creditor protection on asset-debt maturity mismatch in emerging markets, providing recommendations to policymakers for assessing and improving bankruptcy law regimes.

This paper investigates the supervisory incentive effects of employee stock ownership plans based on a corporate risk-taking perspective using data from a sample of Chinese A-share listed companies from 2006-2021. The results show that employee stock ownership plans significantly enhance corporate risk-taking. The specific mechanism is that employee stock ownership plans reduce the two-tier agency costs between shareholders and managers and managers and employees, alleviate corporate financing constraints, and thus enhance the level of corporate risk-taking. It is also found that employee stock ownership plan enhances the level of corporate risktaking with high quality, because employee stock ownership plan not only promotes R&D investment which is beneficial to corporate value growth, but also reduces excessive investment and high debt which are detrimental to corporate value, and the corporate risk-taking is of higher quality and more substantial value effect. In addition, differences in the institutional design of employee stock ownership plans have different effects on corporate risk-taking: employee stock ownership plans that are leveraged, highly discounted, with longer lock-up periods and duration, and entrusted to third-party institutions have a stronger effect on corporate risk-taking; employee subscriptions can promote corporate risk-taking more than executive subscriptions; employee stock ownership plans in China do not have the problem of "free-riding There is no "free-rider" problem in China's employee stock ownership plan. The larger the issuance ratio of the employee stock ownership plan, the greater the number of participants, and the larger the scale of capital, the better the implementation effect.

We find a negative relation between share repurchase and corporate risk-taking using a sample of Chinese listed companies covering the period of 2014–2021. Our analysis yields consistent evidence even after consideration of endogeneity issues and the conducting of other robustness tests. We find that the impeded effect of share repurchase on corporate risk-taking is more pronounced for Chinese non-state-owned enterprises, firms with high competition in the product market, and firms located in low marketization regions. The possible mechanisms underlying these dynamics include share repurchase increasing the restrictions on low-cost financing and reducing over-investment. Our findings provide important implications for policyand low-making and are generalizable to other emerging markets.

This paper studies the impact of political dynamics on corporate environmental investments. Employing data collected manually on the turnover of municipal government officials in China as a proxy for political dynamics from 2007 to 2020, we find that these dynamics drive an uptick in corporate green investments, aligning with the principles of resource dependency theory. The influence of political dynamics on green investments becomes more pronounced when companies grapple with external economic and political uncertainties. Additionally, this effect is most pronounced among energy sector companies and non-state-owned enterprises (SOEs). Despite the observed surge in green investment activity due to political dynamics, we reveal a tendency towards over-investment in green initiatives, subsequently diminishing overall firm investment efficiency under current political conditions. This study advances knowledge regarding how political dynamics influence enterprises' sustainability practices and provides valuable insights for businesses navigating the implications of their pursuit of environmentally responsible development.

This paper studies the impact of political dynamics on corporate environmental investments. Employing data collected manually on the turnover of municipal government officials in China as a proxy for political dynamics from 2007 to 2020, we find that these dynamics drive an uptick in corporate green investments, aligning with the principles of resource dependency theory. The influence of political dynamics on green investments becomes more pronounced when companies grapple with external economic and political uncertainties. Additionally, this effect is most pronounced among energy sector companies and non-state-owned enterprises (SOEs). Despite the observed surge in green investment activity due to political dynamics, we reveal a tendency towards over-investment in green initiatives, subsequently diminishing overall firm investment efficiency under current political conditions. This study advances knowledge regarding how political dynamics influence enterprises' sustainability practices and provides valuable insights for businesses navigating the implications of their pursuit of environmentally responsible development.

This paper investigates the value effect of large investors through their impact on corporate investment policy using a sample of listed firms in the Chinese stock market where large shareholdings and concentrated ownership are a norm. We find that the impact of capital expenditures on firm value is closely related to the level of large shareholdings (non-tradable or state shareholdings). Capital expenditures are negatively associated with firm value if firms are controlled by entrenched large shareholders. Although there is a general tendency of over-investment, the negative impact of over-investment is cancelled out if firms are controlled by incentive-aligned large shareholders. We also find that, the incentive-alignment effect of large investors is stronger in scenarios where agency conflicts are more intensified. Our findings suggest that capital investment is an important channel through which the value effect of large investors is achieved.

This study examines the relation between political connections and investment efficiency in China. For listed state-owned enterprises (SOEs), we find that the sensitivity of investment expenditure to investment opportunities is significantly weaker for those with than without political connections. Politically connected SOEs over-invest significantly more than non-connected SOEs. This negative impact of political connections is primarily observed in SOEs controlled by local governments and/or in SOEs without sufficient investment opportunities. However, for private enterprises, investment expenditure is significantly more sensitive to investment opportunities and over-investment is significantly less in politically connected firms than in those without such connections. We further show that over-investment reduces firm value across the board for both SOEs and private enterprises. Taken together, our findings suggest that political connections distort investment behavior, reduce investment efficiency, and damage firm value in listed SOEs in China, but for listed private enterprises, political connections improve investment efficiency, reduce over-investment, and consequently enhance firm value.

This study examines the relations between leverage and investment in China’s listed firms, where corporate debt is principally provided by stateowned banks. We obtain three major findings. First, there is a negative relation between leverage and investment. Second, the negative relation between leverage and investment is weaker in firms with low growth opportunities and poor operating performance than in firms with high growth opportunities and good operating performance. Third, the negative relation between leverage and investment is weaker in firms with a higher level of state shareholding than in firms with a lower level of state shareholding. Overall, our results are consistent with the hypothesis that the state-owned banks in China impose fewer restrictions on the capital expenditures of low growth and poorly performing firms and also firms with greater state ownership. This creates an over-investment bias in these firms.