This paper investigates whether firms’ overtime intensity affects the cost of debt financing. Using satellite-based night-time light data for Chinese listed firms between 2013 and 2022, we construct an objective measure of weekday overtime that captures firms’ operational effort and capacity utilization. We find that higher overtime intensity is associated with significantly lower bond offering yield spreads. The effect is stronger among smaller, less-followed, less-profitable, and non-AAA-rated issuers, consistent with an information-asymmetry channel where investors rely more on observable operational behavior when hard information is weaker. The findings suggest that overtime functions as a priced form of soft information in debt markets, offering new evidence that real-time operational signals influence credit risk assessment.

This study examines the role of negative peer events, specifically initial bond defaults, in driving leverage manipulation of non-defaulting firms within the same region. Controlling for firm-specific time-varying characteristics, we find that initial bond defaults within a province are associated with an increase in leverage manipulation among non-defaulting firms. Two potential mechanisms underlying this relationship include increased financial constraints for these firms and elevated investor risk perception of the local bond market. The positive impact of bond defaults on leverage manipulation is more pronounced for financially constrained firms, firms with severe information asymmetry, and those affected by high-rated bond and principal defaults. We further show that companies that manipulate their debt ratios experience higher default risk. Our findings have important implications for transparent disclosure and highlight the negative effect of regional bond defaults on corporate financial reporting practices.

We compile a Chinese counterpart to the TRACE dataset and provide the first trade-level analysis of China’s wholesale corporate bond market—the second largest in the world. In contrast to the dealer-dominated, core–periphery networks typical of over-the-counter markets in developed economies, China’s corporate bond market shows limited dealer intermediation. Designated dealers are reluctant to intermediate trades,and non-dealers supply the majority of liquidity, leading to wide price dispersion and low trading activity. This weak dealer participation is not driven by information asymmetry but stems from balance sheet constraints among smaller dealers and large state-owned banks’ privileged access to profitable lending opportunities.

This study investigates the impact of RegTech adoption in the M&A regulatory review process on deal performance. Leveraging the staggered implementation of the SOEs Online Supervision System (SOSS) by China’s State-Owned Assets Supervision and Administration Commission (SASAC) across its central and 31 provincial offices from 2018 to 2021, we find that SOSS directly enhances SASAC’s decision-making efficiency and improves its capacity to screen and approve higher-quality M&A deals. More importantly, SOE-led M&A transactions exhibit higher announcement returns as well as improved long-run stock and operating performance following the system’s implementation. The positive impact of SOSS is more pronounced for acquirers with stronger technological infrastructure, in transactions characterized by low transparency and weak governance, and in provinces with more stringent external scrutiny. Overall, by addressing regulator-firm information asymmetry and reinforcing managerial accountability, SOSS improves regulatory effectiveness in overseeing major investment activities among SOEs.

This study examines how firm-specific characteristics and monetary tightening influence the composition and dynamics of trade credit received by Chinese listed firms. Using panel data, the analysis distinguishes among three sources of trade credit: related parties, non-related parties, and controlling shareholders. The findings reveal a clear asymmetry in firms’ financing responses to monetary tightening: while trade credit from non-related parties declines, credit from related parties—especially controlling shareholders—increases. This underscores the strategic role of intra-group financing in buffering firms against external financial shocks during periods of constrained liquidity. Moreover, firm-specific factors such as size, profitability, market power, and ownership have differing effects depending on the source of trade credit. These effects are most pronounced when the credit is extended from controlling shareholders, reflecting the influence of intra-group trust and reduced information asymmetries. The results also highlight a substitute relationship between bank credit and trade credit, which weakens when trade credit is sourced from related parties and disappears entirely in the case of controlling shareholders. By shedding light on the distinct mechanisms of intra-group trade credit in China’s underdeveloped financial system, this study contributes to a deeper understanding of corporate financing strategies of Chinese firms.

The Central Environmental Protection Inspector (CEPI) is a critical regulatory measure in China aimed at improving ecological quality. From a compliance cost perspective, we examine the impact of the CEPI on corporate environmental governance. The findings reveal an asymmetry in the CEPI's influence: it significantly promotes environmental governance efforts on the non-production side of enterprises, while having no substantial effect on the production side. Additionally, government environmental subsidies do not provide a resource incentive in the process of the CEPI influencing corporate environmental governance. However, local environmental governance pressure mitigates this asymmetry, leading the CEPI to significantly enhance environmental governance on both the production and non-production sides. Further analysis shows that under the synergistic effect of local environmental governance pressure, the CEPI encourages state-owned enterprises to focus on environmental governance on the production side, while non-state-owned enterprises tend to focus on the non-production side. Moreover, political connections reduce the positive impact of the CEPI on production costs under local environmental governance pressure. Finally, the CEPI also significantly encourages enterprises to expand their production scale. These findings offer valuable insights for refining the CEPI system to better promote corporate environmental governance.

Contrary to the US, Chinese stock markets exhibit negative overnight returns that appear to be highly affected by the extent of information asymmetry. China's "T+1" trading rule, which prohibits same-day selling, exacerbates adverse selection for uninformed buyers by limiting them to react to post-trade information. An information asymmetry-driven price discount thus emerges at market open, generating negative overnight returns, which further decrease with information asymmetry. Consistent with adverse selection, empirical evidence reveals lower overnight returns during market declines and high-volatility periods, with robust negative relationship between overnight returns and information asymmetry proxied by firm size, analyst coverage, and earnings announcement proximity. A model is introduced to rationalize our findings. This framework also sheds light on China's "opening return puzzle", the phenomenon that prices rise rapidly in the initial 30 minutes of trading, by showing how reduced adverse selection enables rapid price recovery during opening session.

We conducted a nationwide field experiment with 4,800+ Chinese-listed companies, randomly raising ESG concerns to their management teams via high-visibility and high-stakes online platforms. Tracking the full impact-generating process, we find that companies respond to our concerns by providing high-quality answers, publishing ESG reports, and making commitments to investors. Over time, Environmental (E) inquiries boost stock valuations, while Governance (G) concerns prompt skepticism. Productive and opaque firms are more likely to respond, consistent with a signaling model where costly ESG actions signal firm quality under information asymmetry. Overall, ESG actions are likely driven by profit-oriented signaling rather than values-based motives.

Utilizing data from Chinese A-share listed companies, this study investigates the effects of digital transformation (DT) on total factor productivity (TFP) and the moderating function of ESG performance. The results indicate that DT boosts TFP, but ESG performance negatively moderates this effect, revealing the green paradox. A dynamic model of factor allocation efficiency shows that DT improves capital allocation by reducing financing constraints, information asymmetry, and enhancing operational capacity. However, ESG weakens the positive link between DT and operational capacity, thus diminishing its impact on TFP. Similarly, DT increases labor productivity, but ESG undermines this effect by weakening the link between DT and labor efficiency. The positive impact of DT is stronger when firms focus on ‘Practical Application Technologies’ rather than ‘Underlying Technologies’. This effect is especially evident in smaller, asset-intensive, non-state-owned firms, and those located in the Beijing-Tianjin-Hebei region. Additionally, ESG’s negative moderation is more pronounced where DT exerts a stronger positive influence. A notable distinction emerges: asset-intensive firms gain more from DT in terms of TFP, whereas ESG’s adverse effect is stronger in labour-intensive firms. This study offers a novel perspective on the interplay between DT, ESG performance, and productivity. It provides valuable insights for firms seeking to align digital strategies with ESG goals, thereby fostering technological innovation alongside sustainable development.

This paper investigates how institutional investors’ site visits affect firm productivity by using a dataset of China’s A-share listed firms. The findings reveal that site visits have a constructive effect on firm productivity. Moreover, mechanism analysis indicates that reducing information asymmetry and improving stock price informativeness are two channels through which site visits influence firm productivity. Heterogeneity analysis demonstrates that the nexus between site visits and firm productivity is more pronounced for non-state-owned firms and firms with intenser product market competition. Overall, this study brings new insights into the benefits of site visits and highlights the importance of investor activism.