Financial technology, also known as Fintech, is transforming our daily life and revolutionizing the financial industry. Yet at present, consensus regarding the effect of Fintech on green bonds market is lacking. With novel data from China, this study documents robust evidence showing that Fintech development can significantly boost green bonds issuance. Further analysis suggests that this promotion effect occurs by empowering intermediary institutions and increasing social environmental awareness. Additionally, we investigate the heterogeneous effect and find that the positive relation is more pronounced for bonds without high ratings and in cities connected with High-Speed Railways network. The results call for the attention from policymakers and security managers to take further notice of Fintech utilization in green finance products.

We study the effects of a direct high-speed rail (HSR) service between two cities on investors and firms in China’s A-share markets. After an HSR introduction, retail investors make more cross-city web searches and block stock purchases of firms in connected cities. An HSR introduction also leads to less comovement among local stocks and more comovement between stocks in connected cities. Firms located in more central cities in the HSR network enjoy higher firm valuation, lower cost of equity, higher turnover, and better liquidity, in part through the channel of increased investor recognition. The HSR effects on capital market outcomes are more pronounced among small firms and when the connected city-pair distance is below 1,500 km, for which HSR is faster than flying. The findings highlight the importance of in-person interactions in financial markets.

The opening of high-speed rail (HSR) has significantly boosted business development in China. This study constructs a credit rationing model based on the theory of information asymmetry, and takes the opening of HSR as a quasi-natural experiment to empirically examine its impact on the investment and financing decisions among firms with different risk profiles using data from A-share listed companies from 2005 to 2019. The findings reveal that HSR opening significantly reduces corporate short-term loans while increasing long-term loans, without affecting loan costs. Lowriskfirms, as opposed to high-risk ones, experience notable reductions in short-term loan amounts and extended loan terms post-HSR opening. This is attributed to HSR mitigating information asymmetry between banks and firms. Additionally, HSR opening suppresses "short-term debt for long-term use" behaviors, thereby enhancing investment efficiency and quality. The study empirically supports the idea of leveraging HSR's economic stimulus in terms of firm investment and financing.

This study investigates the association between the expansion of formal finance through the opening of high-speed railway (HSR) and the risk of private lending in China, using data from China Judgments Online. The study employs a difference-in-differences approach and reveals that the cities connected by HSR have a greater risk of private lending and that the formal finance expansion leads to a cream-skimming effect on private lending. The HSR enhances the efficiency of product supply and pricing of formal financial institutions, which results in the expansion of banks. However, private lending relies heavily on social networks, which limits the direct effect of HSR on it. Consequently, the formal finance expansion facilitated by HSR has a significant cream-skimming effect on private lending, which increases the risk of private lending. These results make a significant contribution to the existing literature on the economic implications of formal financial expansion for private lending.

This paper investigates whether and how high-speed rail (HSR) construction affects local bank performance. Using the difference-in-difference method, we find that the city commercial banks (CCBs) significantly experience an overall decrease in ROA after HSR is introduced in the headquarters city. Mechanism analysis suggests that the HSR-driven city connectivity imposes the local CCBs on the intensified banking competition related to capital flows, and governance improvements associated with information flows. HSR exerts more pronounced impacts under higher financial liberalization. The findings are robust to the endogeneity concerns. We highlight the indispensable role of transport infrastructure in banking development.

This paper examines the effects of Chinese venture capital (VC)’s final exit on their portfolio companies. We find that, compared to other early investors, VCs achieve significantly higher returns from their exit of the portfolio companies. We use the presence of VC directors and the introduction of high-speed rail to address identification concerns. Announcements manipulation and earnings management are plausible channels through which VCs achieve higher returns when they exit from the companies. VCs’ exit negatively influences their portfolio companies’ long-term performance. Our paper sheds new light on the value creation role played by VCs and discovers a previously ignored adverse effect of VCs – the exploitation of their portfolio companies.