This paper studies the unintended spillover effects of China's 2020 "Three Red Lines" policy – a macroprudential intervention aimed at deleveraging real estate developers – on employment in the upstream manufacturing firms. Exploiting variation in industries' exposure to the real estate sector via input-output linkages and employing a generalized difference-in-differences (DID) design on panel data of listed manufacturing firms (2017-2022), we find a significant decline in employment among upstream suppliers, while there is no substantial effect on downstream firms. We identify two transmission channels: a demand propagation channel, evidenced by falling sales and inventory overhang, and a balance sheet contagion channel, where liquidity strain is passed upstream via extended payables and a shift to riskier short-term debt. Furthermore, we show that downward nominal wage rigidity shaped the adjustment, as firms resorted to layoffs rather than wage cuts for ordinary workers. From a regional labor market perspective, the employment losses represent a net reduction at the aggregate level, as displaced workers are not absorbed by other local firms in the same city or province. Our study reveals a significant real economic cost of sectoral macroprudential regulation and clarifies how such shocks propagate through production networks and interact with labor market frictions.

This paper explores the impact of the Integrated Government Service Platform (IGSP) reform, a large-scale digital regulatory initiative in China, on firms’ investment efficiency. Using a firm-level panel dataset of Chinese listed firms, we find that the IGSP reform significantly enhances firms’ investment efficiency. Mechanism analyses indicate that the IGSP enhances firms’ investment efficiency by improving governance service quality and convergence of governance services across cities within a province, thereby reducing economic policy uncertainty and reinforcing market expectations. The heterogeneity analyses reveal that the effect is more pronounced for firms without political connections, those operating in high business volatility and high-tech industries, and regions with stronger informal institutions. Finally, the IGSP encourages firms to expand their investment activities to other cities within the same province. This finding is fully consistent with the underlying mechanisms identified in this study. Our findings provide novel evidence on the economic consequences of digital regulatory integration and offer policy implications for advancing service-oriented and efficiency-driven governance in developing economies.

Enhancing the performance of corporate green supply chain management (GSCM) represents a critical enabler for delivering on the central imperatives of the global low-carbon transition. Using panel data of Chinese listed companies from 2003 to 2022, this study employs a staggered difference-in-differences (DID) approach to examine the impact of the Low-Carbon City Pilot (LCCP) policy on firms' GSCM performance. The results show that the LCCP policy significantly improves firms' GSCM performance, and this effect remains robust across a range of sensitivity tests. Mechanism analyses reveal that the policy operates primarily by stimulating green innovation and increasing investment in environmental protection equipment. Furthermore, financial constraints play a significant moderating role: the positive effect of the policy on GSCM performance is stronger when firms face fewer financing constraints. Heterogeneity analysis indicates that the policy effects are more pronounced among non-heavy-polluting enterprises, those located in resource-dependent cities, and ISO 14001-certified enterprises. This study provides novel micro-level evidence on the environmental governance effects of place-based climate policies, and offers key policy implications for scaling up low-carbon city pilots and promoting corporate supply chain decarbonization.

This paper exploits China’s culture-oriented institutional reform as a quasinatural experiment to examine the impact of cultural policies on water pollution. Using a difference-in-differences approach with city-level panel data from 2003 to 2020, we find that the reform leads to a significant reduction in water pollution in pilot cities. Heterogeneity analysis indicates that the effect is more pronounced in cities with better economic performance, higher administrative status, richer tourism resources, and more abundant human capital. The reform prompts a shift in local industrial structure toward less-polluting sectors, with a marked contraction in pollution-intensive activities. It also strengthens local environmental regulation and enhances green innovation, thereby contributing to pollution reduction. Our findings highlight the spillover environmental effects of policies not explicitly designed for environmental purposes.

This study examines how emerging market multinational enterprises (EMNEs) respond to cross-national diversity in environmental regulation. Prior research suggests that internationalization exposes EMNEs to diverse environmental standards and may facilitate regulatory learning, yet offers a limited understanding of the mechanisms through which such exposure translates into green innovation. Drawing on institutional theory, we argue that green innovation is particularly fostered when EMNEs operate across host countries whose environmental regulatory regimes are more stringent than those in the home country, and when such exposure varies across multiple host locations. We theorize that this form of environmental regulatory diversity creates learning pressures and legitimacy incentives that motivate EMNEs to upgrade their environmental capabilities through green innovation. Using panel data comprising 9,362 firm-year observations from 1,088 Chinese MNEs over the period 2008–2021, we find support for our arguments. We further show that these effects are contingent on organizational and institutional conditions, specifically top management teams’ technological expertise and the strength of intellectual property enforcement in home-country locations. These findings advance research on EMNE learning and sustainable innovation under complex global environmental governance.

This study examines the impact of Economic Policy Uncertainty (EPU) on the stock price crash risk of Chinese commercial banks. In addition, it explores how Governance and Digital Transparency curtail the effect of EPU on stock price crash risk. Using a sample of 50 Chinese A-share-listed banks from 2012 to 2024, the study reveals that EPU significantly increased the banks’ stock price crash risk. The findings are robust to alternative measures of EPU and stock price crash risk. Further, governance and FinTech adoption mitigate the positive effect. The mitigating effect persists across high- and low-risk bank subsamples. In addition, we perform a battery of analyses to support our main findings. These findings have important theoretical and practical implications.

Against the backdrop of global green development and China’s sustainable economic transition, many firms exaggerate green-transition disclosures to cater to national strategies and capital market preferences, leading to a severe "Say–Do Gap". Based on signaling theory, this study uses the phased establishment of environmental courts in 208 prefecture-level cities as a quasi-natural experiment, adopting a staggered DID design with 2007–2023 panel data of Chinese A-share listed firms for empirical tests. Results show widespread corporate green pandering, with improved disclosure not translating into actual carbon reduction. Environmental courts effectively curb this behavior, with environmental litigation risk as the core mediating channel. Heterogeneity tests reveal stronger deterrence in regions with weaker regulation/heavier pollution and polluting firms with stronger environmental technology. This study enriches literature from a judicial deterrence perspective and provides implications for substantive corporate green transition.

Understanding the impact of local government debt on economic development has emerged as a focal issue for both academic research and policymakers. This study adopts a financing structure perspective and utilizes panel data from 214 cities and 3,228 A-share listed companies in China (2017–2023) to empirically investigate the impact of local government debt on corporate “shift from virtual to real economy” and its underlying mechanisms. The expansion of local government debt significantly promotes enterprises “shift from virtual to real economy”. The positive impact of local government debt on enterprises” transition from financialization to the real economy is more pronounced among firms in first tier and new first-tier cities, non-state-owned enterprises, and labor-intensive industries. Further analysis indicates that local government debt drives capital reallocation from financial investments to real investments by alleviating corporate financing constraints. This study proposes policy recommendations including optimizing debt fund allocation, further optimizing the financing environment, implementing differentiated regulatory measures. These suggestions provide both a theoretical foundation and practical references for synergistically advancing debt governance and real economy revitalization.

The endurance of empire in China over much of the past two millennia contrasts starkly with the political fragmentation in Europe since the fall of Rome. To explain the persistence of China’s empire, we analyze the role of keju, the imperial civil service examination system. We argue that the systematic implementation of keju from the Song dynasty onward tied local elites to the imperial state, sustaining political integration and reducing secessionist conflicts. Exploiting panel data covering 4,243 grid cells and 22 centuries, we find robust evidence that areas producing more jinshi – the top exam passers – experienced significantly fewer secessionist wars. Our study shows how the examination system created the political incentives for imperial durability.

The relationship between economic decentralization and regional economic growth has attracted wide academic attention. However, existing literature rarely explores the validity and applicability of decentralization theory from the perspective of location endowments. This study takes China’s county-to-city reform - a decentralization policy - as a point of entry to construct a decentralization model incorporating location endowments. Using county-level panel data from 1992 to 2009 and employing a difference-in-differences (DID) approach, the study evaluates the impact of county-to-city reform under the constraint of location endowments on county-level economic development. The findings reveal that the policy effects of local decentralization are constrained by location endowments. Specifically, in regions with poorer location endowments, county-to-city reform significantly inhibits local economic development. Indeed, mechanism analysis further indicates that in such disadvantaged regions, local decentralization under the county-to-city reform generates a “political resource curse” effect, which hinders economic growth through three channels such as distorted fiscal expenditure structures, corruption, and misallocation of land resources. The conclusions of this study provide a valuable perspective for understanding the conditions under which decentralization theory holds, while also offering rigorous empirical evidence for government agencies to design more targeted decentralization policies.