Using a unique sample constituted A-share listed companies from 2008 to 2022 in China，this study empirically tested the impact of divestitures on corporate risk-taking. Results indicate that divestitures positively impact corporate risk-taking. Specifically, strategic and related-party divestitures both promote corporate risk-taking, further improving information transparency. Furthermore, the effect of divestitures is more pronounced in firms with significant financing constraints.

This paper examines whether a socially embedded soft trait, systematically omitted from AI-automated credit decisions, can predict financial outcomes in fully automated lending environments, and through which economic channel. We develop theoretically and examine empirically a labor-market competitiveness mechanism in which facial trustworthiness can serve as a soft signal under information asymmetry, shaping income growth and repayment capacity. Leveraging a unique proprietary dataset from a nationwide FinTech platform in China with AI-based underwriting that explicitly excludes facial information, we link loan performance to employment histories and construct trustworthiness scores using computer-vision algorithms. We find that borrowers with more trustworthy facial appearances experience greater upward job mobility and significantly lower default risk, conditional on rich hard information. A one-standard-deviation increase in facial trustworthiness is associated with a 4.6 percent reduction in default relative to the sample mean. The effect is strongest among borrowers with limited formal credentials, consistent with facial trustworthiness substituting for hard-to-observe labor-market signals. Our findings identify an economically grounded channel through which biometric appearance predicts financial resilience and highlight limits of algorithmic models that omit socially embedded information.

In view of the divergence of existing research results on the relationship between ESG and investment returns, this paper constructs an S-score metric, which comprehensively measures corporate sustainability performance. It further tests the applicability of a sustainability-based investment strategy using this metric in Chinas A-share market. Using Shanghai and Shenzhen A-shares from May 2016 to April 2024 as the research sample, the S-score is constructed across five dimensions: Profitability, Growth Opportunities, Investment Efficiency, Risk Mitigation, and ESG Performance. The S-score is calculated using Z-score standardization and entropy weighted. Strategy effectiveness was tested through univariate grouping, bivariate grouping, and Fama-Macbeth regression, further examining strategy performance under varying market conditions, holding periods, and information environments. The study finds that the Sscore demonstrates significant discriminative power for cross-sectional stock returns. The hedge portfolio based on this metric achieved an annualized excess return of 7.943% after adjusting for the China three-factor (CH-3) model. Its predictive power remains robust after controlling for variables such as market capitalization and bookto-market ratio, delivering significant positive returns across bull and bear markets, extreme pandemic conditions, and holding periods of up to eight years. From a behavioral finance perspective, this paper reveals that explanations such as the gradual diffusion of information and investors limited attention span help elucidate the profitability of the S-score strategy. The findings demonstrate the effectiveness of Sustainable Investing strategies in Chinas A-share market, indicating that ESGintegrated factor investing can optimize resource allocation. This research contributes empirical evidence on Sustainable Investing in emerging markets, providing insights for policy formulation and practical implementation while supporting the virtuous cycle between Sustainable Investing and long-termism.

Existing literature questions whether mutual fund holdings convey information for predicting stock returns in emerging markets. We argue that this lack of evidence stems from a methodological limitation: conventional value-weighted holding measures are dominated by a few large funds, obscuring the collective signal from numerous smaller, but potentially more informed managers. This scale-induced distortion masks the true breadth of institutional attention. To address this, we propose the Abnormal Fund Holding Count (AFHC), defined as the residual from regressing the log number of funds holding a stock on controls for size, value, and liquidity. Using Chinese mutual fund data from 2005 to 2023, we show that AFHC strongly predicts future returns: a long-short portfolio based on AFHC earns an equal-weighted monthly alpha of 1.13\% (t = 4.21), robust to risk adjustments and controlling related return predictors. Moreover, high-AFHC stocks exhibit subsequent improvements in fundamentals and greater price informativeness, consistent with a price discovery channel. Our findings demonstrate that institutional breadth, rather than aggregate capital weight, better reveals informed trading in developing markets.

This study examines whether equity investors price the long-run fit between firms’ management accounting practices (MAPs) and their organizational lifecycle stages. We conceptualize fit as a slow-moving organizational attribute and decompose annual fit into (i) a persistent component capturing firms’ long-run alignment with lifecycle demands (Alignment), and (ii) transitory within-firm deviations (Deviation). Using Chinese A-share listed firms and implied cost of equity capital (COE) estimates, we find that higher long-run Alignment is associated with a significantly lower COE, whereas Deviation is not priced. Mechanism analyses suggest that Alignment is linked to lower operating risk, which in turn is associated with lower equity financing costs; in contrast, we find no evidence that the information risk mediates the relation. Cross-sectional tests further show that the pricing effect of Alignment is stronger when financing frictions are more severe. Overall, the evidence indicates that capital markets price firms’ long-run alignment of management accounting system design to lifecycle demands.

We examine whether regulatory information acquisition through randomized pre-IPO on-site inspections improve broader IPO market oversight. Despite their limited scale, inspections generate significant spillover effects on concurrent, non-inspected IPOs advised by the same underwriter. These IPOs exhibit lower earnings management, fewer misstatements, more informative prospectuses, lower underpricing, reduced volatility, better liquidity, and superior long-run returns. Mechanism analyses support both regulatory learning and deterrence channels. Spillover effects are stronger for same-industry IPOs, firms with greater information asymmetry, and underwriters without political connections. Overall, direct information acquisition enhances regulators’ supervisory capacity beyond targeted inspections and improves broader IPO market oversight and outcomes.

Purpose-This study empirically examines the relationship between the blockholder exit threats (ETs) and management tone manipulation, based on two competing hypotheses: the "governance hypothesis" and the "market pressure hypothesis." The study aims to explore the impact and mechanisms of ETs on the quality of textual information disclosure. Design/methodology/approach-This study uses ordinary least squares multivariate regressions on panel data from Chinese A-share listed companies spanning 2007 to 2022. Building on Huang et al. (2014), we construct a benchmark model of managerial tone and use its residuals to measure abnormal positive tone. Blockholder exit threat (ET), following Dou et al. (2018), is proxied by the interaction between stock liquidity and blockholder competition. To address endogeneity, we employ propensity score matching, the Heckman two-stage method and lagged models. Robustness checks include alternative variable definitions and different textual dictionaries. Findings-The results show that external blockholder ETs significantly increase the degree of abnormal positive managerial tone, thereby supporting the market pressure hypothesis. Further analyses reveal that the positive association between ETs and abnormal positive tone is stronger in subsamples where managerial market pressure is higher, the level of blockholder expropriation is greater and insider trading is more prevalentindicating a stronger collusion motive between external blockholders and management. Mechanism tests show that ETs manipulate managerial tone by increasing the sensitivity of managerial wealth to share price fluctuations. Research limitations/implications-This study is limited to Chinese A-share listed companies, whose unique institutional and regulatory environment may restrict the generalizability of the findings to other markets. Differences in disclosure rules, legal enforcement and investor protection between China and developed economies suggest that the identified mechanisms may not apply universally. Additionally, our reliance on annual report narratives for measuring managerial tone may overlook other communication channels. Future research could extend the analysis to other market segments or countries and incorporate additional data sources to test the robustness and broader applicability of our conclusions. Practical implications-The results highlight the need for enhanced regulatory oversight of narrative disclosures to prevent managerial “window dressing” and mitigate information asymmetry. Regulators should strengthen cross-validation between financial and non-financial information and promote mechanisms that increase the cost and risk of blockholder–management collusion. Investors are advised to critically assess managerial tone and remain alert to overly optimistic language. Additionally, increased supervision of tunneling and insider trading, along with stronger legal protections for minority shareholders, is essential for fostering transparency and integrity in China’s capital markets and improving overall market quality. Originality/value-This paper contributes to understanding the impact of external blockholder ETs on managerial tone manipulation in narrative disclosures from the perspective of ownership structure in China’s unique institutional environment. The findings of the study provide new insights into the governance role of blockholders and offer policy implications for improving information transparency and the healthy development of emerging capital markets.

This paper investigates how arbitrage frictions shape ETF return dynamics in China, providing a clean setting to abstract from firm-specific private information. Using a panel of 316 equity ETFs in China's markets, we document that retail-driven order imbalances generate immediate price pressure, which is rapidly reversed in large-cap ETFs but persists in small-cap ETFs due to severe inventory and execution constraints. During the 2015 market crash, systemic price limits blocked creation-redemption channels, causing the usual mean-reversion to collapse into sustained positive continuations. Our findings highlight that, absent information asymmetry, post-shock ETF returns are governed primarily by the structural resilience of the arbitrage mechanism rather than behavioral overreaction.

This study examines whether stock price fragility—the risk of price volatility arising from non-fundamental demand shifts, such as investor liquidity shocks—affects investment efficiency in real-economy firms. Our research indicates that firms facing higher price fragility exhibit significantly weaker investment performance. Price fragility amplifies noise trading and worsens information asymmetry, undermining the capacity of prices to convey reliable signals for managerial decisions. Further analysis reveals that financing constraints exacerbate the impact of stock price fragility on under-investment, whereas managerial overconfidence plays an asymmetric moderating role, mitigating under-investment while amplifying over-investment. Evidence from a natural experiment–based identification strategy supports a causal interpretation of our results and alleviates endogeneity concerns.

This study utilizes the broadcast of the popular television series Game of Hunting in mainland China as a quasi-natural experiment to examine how investor attention impacts stock price volatility. The empirical findings reveal that the broadcast of Game of Hunting increased stock price volatility for headhunting companies. Notably, headhunting companies that attracted lower levels of investor attention before the broadcast exhibited greater stock price volatility. Conversely, headhunting companies with more complex business operations, which posed greater challenges for investors in processing information, experienced smaller fluctuations in stock prices. The broadcast of Game of Hunting drew retail investors’ attention to headhunting stocks, prompting them to purchase these stocks. This attention-driven buying then triggered arbitrage behavior by other retail investors, who sold the stocks, ultimately causing fluctuations in the share prices of headhunting companies. In contrast, institutional investors’ trading of these stocks was neither affected by the popularity of Game of Hunting nor influenced by the trading behavior of retail investors.