This paper, based on data from Chinese A-share listed companies between 2009 and 2019, employs the implementation of the "Shanghai-Hong Kong Stock Connect" as a landmark event of capital market liberalization, utilizing a difference-in-differences model to empirically examine the impact of market openness on firms' cross-region investment behavior and its underlying mechanisms. The findings indicate that: (1) the launch of the "Shanghai-Hong Kong Stock Connect" has significantly promoted the establishment of cross-provincial and cross-border subsidiaries by the companies involved; (2) capital market liberalization influences firms' cross-region investment through three dimensions: finance, governance, and stakeholders. In terms of finance, the openness alleviated financing constraints and improved stock liquidity; in governance, it pressured companies to adopt more digitalized and transparent governance structures to accommodate cross-regional expansion; in the stakeholder dimension, it attracted the attention of external investors, accelerating their understanding of firms and alleviating the trust issues associated with cross-region expansion. (3) The effect of capital market liberalization on promoting cross-border investments by private enterprises is particularly pronounced, and this effect is further strengthened as the quality of corporate information disclosure improves. Firms with higher levels of product diversification benefit more from market liberalization, accelerating their overseas expansion. (4) Capital market liberalization has elevated the level of cross-region investment, thereby significantly fostering innovation and improving investment efficiency. The conclusions of this study provide fresh empirical evidence for understanding the microeconomic effects of China's capital market liberalization, the intrinsic mechanisms of corporate cross-region investments, and their economic consequences.

The healthy operation of the stock market relies on sound liquidity. We utilize the semantic information from disclosure texts of listed companies on the China Science and Technology Innovation Board (STAR Market) to construct a daily corporate network. Through empirical tests and performance analyses of machine learning models, we elucidate the relationship between the similarity of company disclosure text contents and the temporal and spatial correlations of stock liquidity. Our liquidity indicators encompass trading costs, market depth, trading speed, and price impact, recognized across four dimensions. Furthermore, we reveal that the information loss caused by employing Minimum Spanning Tree (MST) topology significantly affects the explanatory power of network topology indicators for stock liquidity, with a more pronounced impact observed at the document level. Subsequently, by establishing a neural network model to predict next-day liquidity indicators, we demonstrate the temporal relationship of stock liquidity. We model a liquidity predicting task and train a daily liquidity prediction model incorporating Graph Convolutional Network (GCN) modules to solve it. Compared to models with the same parameter structure containing only fully connected layers, the GCN prediction model, which leverages company network structure information, exhibits stronger performance and faster convergence. We provide new insights for research on company disclosure and capital market liquidity.

This paper utilizes the COVID-19 pandemic as an exogenous shock to investor uncertainty and examines the effect of uncertainty on stock liquidity. Analyzing data from Chinese listed firms, we find that stock liquidity dries up significantly in response to an increase in uncertainty resulting from regional pandemic exposure. The underlying reason for the decline in stock liquidity during the pandemic is a combination of earnings and information uncertainty. Funding constraints, market panic, risk aversion, inattention rationales, and macroeconomics factors are considered in our study. Our findings corroborate the substantial impact of uncertainty on market efficiency, and also add to the discussions on the pandemic effect on financial markets.

The level of corporate risk-taking impacts debt default as a crucial investment decision. Hence, this must be examined considering resource allocation. This study uses A-share listed companies from 2007 to 2021 as samples to empirically explore the impact and mechanism of corporate risk-taking level on debt default risk. The results show that corporate risk-taking can significantly inhibit debt default and the risk of debt default by promoting total factor productivity. Further, the higher the level of enterprise financialization of the firm, the higher the stock liquidity, and the higher the level of managerial confidence, the stronger the inhibitory effect of corporate risktaking on debt default. The heterogeneity analysis reveals that the inhibitory effect of corporate risk-taking on debt default is more significant in large-scale enterprises, enterprises with lower regulatory shareholdings, and enterprises with standard unqualified audit opinions. The study provides guidance for enterprises to improve the level of risk-taking and resource allocation efficiency effectively. Moreover, it provides empirical support for regulators to effectively prevent "waves of defaults" and even "waves of bankruptcies" in the real economy.

Digital transformation empowers enterprises with new kinetic energy for high-quality development, can digital transformation enhance the transparency of capital market? This study constructs a corporate digital transformation index, and examines its impact on Chinese capital market transparency from the perspective of information senders. We find that corporate digital transformation significantly improves transparency, and this finding is more pronounced in non-SOEs, firms with low political connection, high industry environment uncertainty, and low regional marketization level. Channel tests show that lowering management myopia and increasing analyst attention are possible mechanisms. Furthermore, digital transformation improves stock liquidity by enhancing enterprises’ information transparency. Overall, our findings provide critical insights for improving transparency in China’s capital market.

We examine the impact of firm-investor communication on ESG issues through investor interactive platforms in Chinese stock exchanges from 2010 to 2022. Our regression analysis finds that increased ESG-based questions from investors and firms’ responses lead to increased stock liquidity, suggesting that investor-firm dialogues beyond financial aspects to include ESG-related themes contribute to greater information transparency. We posit that investors use such communication as a “voice” strategy, advocating firms for enhanced ESG disclosures and performance. This strategy yields a two-fold benefit: it aligns with investors’ ESG objectives and, alternatively, facilitates their exit through improved stock liquidity. Our robustness tests suggest a probable causal relationship between investor engagement on ESG issues and stock liquidity. Moreover, we find that a positive tone in ESG-based communications strengthens this relationship, prompting managers to enhance ESG disclosure transparency in response to investor pressure.

Analyzing data from Chinese online interactive investor platforms, our study reveals that Minority Shareholder Activism (MSA) effectively curtails informed insider trading by voting with their hands or feet, particularly in firms with weaker external monitoring. MSA not only reduces the profitability of insider trading but also encourages firms and regulators to implement stricter ex-post disciplinary measures. Moreover, MSA alleviates the negative impact of insider trading on the stock market by enhancing stock liquidity, increasing stock price informativeness, and reducing crash risk.

The impact of corporate environment, society, and governance (ESG) disclosure on the online market remains uncertain. To address this ambiguity, this study utilizes text analysis to thematically classify research samples to examine the positive influence of corporate ESG disclosure on stock liquidity from a reputational perspective. Interestingly, the reputational effect of ESG disclosure shows asymmetry within the online market, particularly in its highly information-sensitive environment. Notably, negative media reputation insignificantly diminishes the positive impact of ESG disclosure on stock liquidity. A series of robustness tests confirm the reliability of the sample screening method and findings.

This paper aims to investigate the transmission mechanism through which trade policy uncertainty (TPU) impacts bank risk-taking via firms’ capital market performance. The research reveals that TPU significantly affects firms’ capital market performance, leading to reduced stock liquidity, increased stock price crash risk, decreased stock price synchronicity, and lower stock returns. These effects are transmitted to bank risk-taking, resulting in an overall increase in banks’ passive risk-taking and a decrease in their willingness to undertake active risk-taking. Furthermore, we discover that the impact of TPU on bank risk-taking varies across different categories of firms, revealing heterogeneity in this transmission process. This study uncovers the critical mechanism through which TPU propagates in financial markets, offering important theoretical insights and policy implications for understanding and managing financial risk.

This study investigates whether and how corporate social responsibility (CSR) affects stock liquidity. Utilizing panel data from 3,366 Chinese enterprises spanning 2010 to 2021, empirical findings suggest that CSR endeavors facilitate an uplift in stock liquidity. Specifically, a 1% increase in CSR score will improve stock liquidity by 0.128%. The research further reveals that media coverage and corporate operations are crucial channels for CSR to affect stock liquidity, with the former playing a more dominant role. Notably, the bolstering effect of CSR on stock liquidity is amplified during periods of increasing economic policy uncertainty. Heterogeneity analysis reveals that the influence of CSR on stock liquidity is particularly salient in state-owned enterprises. Additionally, different CSR subcategories (shareholder responsibility, employee responsibility, and social responsibility) vary in their effect on stock liquidity. Shareholder and employee responsibilities both enhance stock liquidity, with the impact of shareholder liability being particularly pronounced.