This paper investigates how environmental regulation induces firm digitalization. We construct a digital index based on textual analyses and find that after the implementation of the program, pilot firms' digitalization increased relative to that of a group of carefully matched control firms, which is opposite to the findings in the extant literature on technology adoption. This increase cannot be fully explained by regional unobservables, firms' own innovation, firm selection, or other policies. The results are robust when we consider firm subsidiaries. The increase in digitalization is not due to regulatory arbitrage, and the industry-level concentration of digitalization changes little.

Public emergencies reduce social welfare but may paradoxically stimulate corporate innovation through crisis-driven technological adoption. This study establishes a theoretical framework demonstrating that exogenous shocks create asymmetric innovation incentives, with digitally disadvantaged firms exhibiting stronger technological upgrading responses. Empirically, we construct a firm-level digital transformation index through textual analysis using a multi-source media database in China to show that digital transformation can endow firm resilience by boosting capital market performance during public emergencies, especially for those medium-sized enterprises due to the costs and need for digital transformation. This research adds to the evidence that public emergencies can leverage advanced technology adoption.

This paper explores the ethical dimensions of firm-level digitalisation and its impact on ESG metrics during a decade (2010-2020) of rapid technological progress, focusing on Chinese-listed companies. Utilising a text-based index to measure digitalisation, we find that while digitalisation positively influences ESG ratings, supporting resource-based and dynamic capability theories, its relationship with corruption reveals complex dynamics. Surprisingly, corruption strengthens digitalisation’s positive impact on ESG, raising concerns about technology being used to enhance ESG appearances artificially. A distinct difference emerges between state-owned enterprises (SOEs) and non-SOEs; SOEs use digitalisation more ethically and are less influenced by corruption, indicating a more responsible approach to technology adoption. Through examining cash holdings, internal controls, and audit fees, we unpack how corruption influences the digitalisation-ESG nexus. These insights underscore the need for policy that encourages ethical digitalisation and highlight the potential role of SOEs in leading the charge towards sustainable and ethical digitalisation.

This paper studies the impact of AI technology on the mutual fund industry. I develop a new measure of AI adoption based on hiring practices and find that this measure can predict fund performance. The funds with high AI ratio outperform non-AI funds, after I controlling for standard factors and fund characteristics. Further empirical evidence shows that funds with a high AI ratio tilt their portfolios toward high information intensity stocks, indicating that mutual funds benefit from AI technology adoption by improving their information capacity. Consistent with this channel, I find that the outperformance of these mutual funds mainly comes from better stock picking skills. Finally, AI technology adoption has a negligible effect on fund manager turnover.

Rural banking competition may promote or hinder agricultural total factor productivity (TFP). We analyze a novel dataset on all commercial bank branches in rural China, combined with measures of productivity based on stochastic frontier analysis. To identify causality, we use: 1) an instrumental variable approach based on the administrative division of banks, and 2) a propensity score matching difference-in-difference approach exploiting banking de-regulations in 2009. Both methods reveal that competition has a positive impact on TFP. A heterogeneity analysis finds that the effect is primarily significant along the Beijing-Kowloon railway and its East side. Technology adoption is the typical channel through which lending is hypothesized to impact TFP. We find that the positive effect of competition is larger in areas with greater technology use, but we find an insignificant direct impact of concentration on technology adoption, suggesting the channels of effect may be more complex than previously thought.

Using administrative universal business registration data as well as primary offline and online surveys of small businesses (including unregistered self-employments) in China, we examine (i) whether digitization helps small and medium enterprises (SMEs) better cope with the COVID-19 pandemic, and (ii) whether the pandemic has spurred digital technology adoption. We document significant economic benefits of digitization in increasing SMEs' resilience against such a large shock, as seen through mitigated demand decline, sustainable cash flow, ability to quickly reopen, and positive outlook for growth. Post the January 2020 lockdown, firm entries exhibited a V-shaped pattern, with entries of e-commerce firms experiencing a less pronounced immediate drop and a quicker rebound. Moreover, the pandemic has accelerated the digital transformation of existing firms and the industry in multiple dimensions (e.g., altering operation scope to include e-commerce, allowing remote work, and adopting electronic information systems). The effect persists more than one year after reopening, and is more pronounced for certain sectors, firms in industrial clusters, and areas with more digital inclusion but less financial efficiency, constituting initial evidence for the long-term impact of the pandemic and the supposedly transitory mitigation policies.