This study examines how housing purchase restrictions (HPRs) affect firms' robotics adoption through labor cost increases. Exploiting policy-driven housing price shocks across Chinese cities, we find firms significantly accelerate robot adoption in response to higher labor costs. Effects are pronounced among financially unconstrained firms, state-owned enterprises, and firms with skilled or educated workforces. Automation investments subsequently improve firm productivity, profitability, and market positions. Our findings highlight unintended spillovers from housing regulations to firm-level technological decisions and suggest policymakers consider these indirect effects when designing local market interventions.

This paper investigates whether and how managers of highly polluting firms adjust their earnings forecast behaviors in response to the introduction of environmental legal institutions. Using the establishment of environmental courts in China as a quasi-natural experiment, our triple difference-in-differences (DID) estimation shows that environmental courts significantly increase the likelihood of management earnings forecasts for highly polluting firms compared to non-highly polluting firms. This association becomes more pronounced for firms with stronger monitoring power, higher environmental litigation risk, and greater earnings uncertainty. Additionally, we show that highly polluting firms improve the precision and accuracy of earnings forecasts following the establishment of environmental courts. Furthermore, we provide evidence that our results do not support the opportunistic perspective that managers strategically issue more positive earnings forecasts to inflate stakeholders‘ expectations subsequent to the implementation of environmental courts. Overall, our research indicates that environmental legal institutions make firms with greater environmental concerns to provide more forward-looking information, thereby alleviating stakeholders’ apprehensions regarding future profitability prospects.

We study how politicians' activities affect the stock market and firm performance. Using hand-collected data on China's national leaders' corporate visits, we investigate the industry-wide implications of these visits. We find that over the six days surrounding a visit, an average industry peer's value increases by 2\% of its total assets. This result reflects investors' favourable interpretation of leaders' visits as a signal of more government support for the entire industry. However, the industry peer's profitability plummets by more than 15\% in the next three years. Further analysis reveals that after the visits, industry peers increase their investments, presumably in anticipation of additional government subsidies and credits. However, these resources are insufficient, and the profitability of these firms suffers. Our findings suggest that national leaders' visits do not help boost the targeted industries, and firms should carefully interpret the politicians' activities.

To specify the peer effects that affect influencers’ sponsored content strategies, the current research addresses three questions: how influencers respond to peers, what mechanisms drive these effects, and the implications for social media platforms. By using a linear-in-means model and data from a leading Chinese social media platform, the authors address the issues of endogenous peer group formation, correlated unobservables, and simultaneity in decision-making and thereby offer evidence of strong peer effects on the quantity of sponsored content but not its quality. These effects are driven by two mechanisms: a social learning motive, such that following influencers emulate leading influencers, and a competition motive among following influencers within peer groups. No evidence of competition motive among leading influencers or defensive strategies by leading influencers arises. Moreover, peer effects increase influencers’ spending on in-feed advertising services, leading to greater platform revenues, without affecting the pricing of sponsored content. This dynamic may reduce influencers’ profitability, because their rising costs are not offset by higher prices. These findings emphasize the need for balanced strategies that prioritize both platform growth and influencer sustainability. By revealing how peer effects influence competition and revenue generation, this study provides valuable insights for optimizing content volume, quality, and financial outcomes for social media platforms and influencers.

Despite nearly twenty years of privatization, mixed-ownership reform has been the mainstay of SOE reform in China in recent years. This raises the question of whether the financial performance of mixed-ownership firms (Mixed firms) is better than private-owned enterprises (POEs). Although Mixed firms suffer more from government intervention, unclear property rights, and interest conflicts between state shareholders and private shareholders, they can also benefit from the external resources controlled by the state. Therefore, the performance of Mixed firms is still unclear. Collecting data from the Chinese A-share listed market, we divide the firms into POEs, Mixed firms controlled by the state (MixedSOEs), and Mixed firms controlled by the private sectors (MixedPOEs). Measuring profitability using ROA and ROE, we find that on average, POEs perform better than Mixed firms, and MixedPOEs have a higher profitability than MixedSOEs. Within Mixed firms, more state shares are related to lower profitability, and more private shares are related to higher profitability. Using the NBS survey data, we further find that on average, SOEs exhibit the lowest profitability, with MixedSOEs and MixedPOEs in the middle, and POEs have the highest profitability. We try to address the endogeneity challenge in several ways and get similar results. Overall, our analysis provides new evidence on the financial performance of mixed-ownership firms.

This paper employs a proprietary data set on commodity producers’ profit margins (PPMG) and establishes a robust positive relationship between commodity producers’ profitability growth and future returns of commodity futures. The spread portfolio that longs top-PPMG futures contracts and shorts bottom-PPMG futures contracts delivers a statistically significant average weekly return of 36 basis points. We further demonstrate that profitability is a strong SDF factor in commodity futures market. We theoretically justify our empirical findings by developing an investment-based pricing model, in which producers optimally adjust their production process by maximizing profits subject to aggregate profitability shocks. The model reproduces key empirical results through calibration and simulation.

Based on the sample data of Chinese listed companies, this paper finds that the increase in customer concentration significantly reduces the level of enterprise employment. The research results are robust to a series of tests. Further analysis shows that the increase of financing constraints, the increase of enterprise risk and the decrease of profitability are the mechanism of customer concentration affecting enterprise employment. In addition, the negative correlation between customer concentration and enterprise employment is stronger for enterprises with small size, fierce industry competition, and increasing economic policy uncertainty.

This article presents a comprehensive examination of technical trading rules in the Chinese yuan-based foreign exchange market. The investigation employs daily data spanning seven years for 14 developed and 10 emerging market currencies. The analysis encompasses a vast universe of 41,660 trading rules, representing a significant expansion over the previous studies. The stepwise tests, which was employed to address the data-snooping bias, discover excess profitability in at least half of the developed and emerging currencies, implying the heterogeneous market efficiency across currencies. Our results are robust to sub-sample analysis and different parameter values of the stepwise tests.

We demonstrate that personal political preferences of corporate managers influence cor- porate policies. Specifically, Republican managers who are likely to have conservative personal ideologies adopt and maintain more conservative corporate policies. Those firms have lower levels of corporate debt, lower capital and research and development (R&D) expenditures, less risky investments, but higher profitability. Using the 9/11 terrorist attacks and Sept. 2008 Lehman Brothers bankruptcy as natural experiments, we demonstrate that investment policies of Republican managers became more conservative following these ex- ogenous uncertainty-increasing events. Furthermore, around chief executive officer (CEO) turnovers, including CEO deaths, firm leverage policy becomes more conservative when managerial conservatism increases.

Exploiting the unexpected Central Environmental Inspections (CEI) in China as a quasinaturalexperiment, we find that public firms in polluting industries experience significant gains in both profitability and market valuation after the regulatory shock, relative to firms in nonpolluting industries. The outperformance of public firms can be explained by the retreat of their private competitors, many shut down due to poor environmental performance. Because firms seeking public listing are required to meet high environmental standards, CEI significantly strengthen public firms’ competitive position, leading to increased sales growth and market share. Moreover, the outperformance is more pronounced for firms with more eco-friendly technologies, consistent with strict environmental regulations increasing the marginal benefit of these technologies. We provide novel evidence of the bright side of environmental regulation by highlighting the importance of industry dynamics.