To better understand the government’s role in corporate social responsibility (CSR), we use the relocation of local governments in China as an exogenous shock to examine how geographic distance from the government affects corporate charitable donations. The Difference-in-Differences (DiD) analysis indicates that firms reduce charitable donations when local governments move closer. This effect is more pronounced for non-state-owned enterprises and for firms located in cities with lower fiscal pressure. The results remain consistent to a series of robustness tests, including alternative sample specifications, different measures of donations, and various estimation methods. We do not observe a corresponding increase in donations when governments move farther away. Additional analysis indicates that when the government relocates closer, firms may reallocate resources away from traditional charitable donations toward CSR activities that involve more active engagement.

We investigate the impact of financial geographic density on corporate financial asset holdings in emerging market. We proxy for financial geographic density by calculating the number of financial institutions around a firm within a certain radius based on the geographic distance between the firm and financial institutions. Using data on publicly listed A-share firms in China from 2011 to 2021, we find that financial geographic density has a positive impact on nonfinancial firms’ financial asset investments, especially for the firms located in regions with a larger number of banking depository financial institutions or facing greater market competition. An increase in the number of financial institutions surrounding firms increases corporate financial asset holdings by alleviating information asymmetry. Moreover, we document that Fintech has little impact on the relationship between financial geographic density and corporate financial asset holdings. As the rise of financial geographic density, firms hold more financial assets for precautionary motives, which contribute to corporate innovation.

Coordination costs among a firm’s shareholders have an important impact on the market for corporate control. I use two measures, one based on the geographic distance among institutional shareholders and the other based on the correlation in their portfolio allocation decisions, to proxy for coordination costs. I find that target firms with low shareholder coordination costs experience significantly higher abnormal returns around the takeover announcement. In a similar vein, acquirer firms with low shareholder coordination costs are associated with higher acquisition announcement returns. These effects are particularly pronounced after the 1992 proxy reform that relaxes the restrictions on communication and coordination among shareholders. These findings suggest that the ease of coordination among shareholders plays an important role in the market for corporate control by raising the bargaining power of target shareholders and enhancing the monitoring role of both target and acquirer shareholders.