This study examines how housing purchase restrictions (HPRs) affect firms' robotics adoption through labor cost increases. Exploiting policy-driven housing price shocks across Chinese cities, we find firms significantly accelerate robot adoption in response to higher labor costs. Effects are pronounced among financially unconstrained firms, state-owned enterprises, and firms with skilled or educated workforces. Automation investments subsequently improve firm productivity, profitability, and market positions. Our findings highlight unintended spillovers from housing regulations to firm-level technological decisions and suggest policymakers consider these indirect effects when designing local market interventions.

This paper investigates how the geographical distribution of shareholders in Chinese mutual fund management companies influences investment decisions. We show that mutual funds are more inclined to hold and overweight stocks from regions where their shareholders are located, thus capitalizing on a local information advantage. By examining changes in fund holdings in response to shifts in the shareholder base, we rule out the possibility that these effects are driven by fund managers’ local biases. Our findings reveal that stocks from the same region as the fund’s shareholders tend to outperform and significantly contribute to the fund’s overall performance.

In the late 1980s, Mexico opened itself to international trade and foreign investment, followed in the early 1990s by China. China and Mexico are still the two countries characterized as middle-income by the World Bank with the highest levels of merchandise exports. Although their measures of openness have been comparable, these two countries have had sharply different economic performances: China has achieved spectacular growth, whereas Mexico’s growth has been disappointingly modest. In this article, we extend the analysis of Kehoe and Ruhl (2010) to account for the differences in these experiences. We show that China opened its economy while it was still achieving rapid growth from shifting employment out of agriculture and into manufacturing while Mexico opened long after its comparable phase of structural transformation. China is only now catching up with Mexico in terms of GDP per working-age person, and it still lags behind in terms of the fraction of its population engaged in agriculture. Furthermore, we argue that China has been able to move up a ladder of quality and technological sophistication in the composition of its exports and production, while Mexico seems to be stuck exporting a fixed set of products to its North American neighbors.

Suzhou and Shenzhen are among the top cities in China by GDP, and both have performed exceedingly well in terms of cultivating technological industries and attracting foreign investment. This is in spite of the fact that neither city is a provincial capital nor a centrally administered city like Shanghai and Beijing. Yet, the two cities embody very different administrative models with respect to their relationship with the provincial and central governments. Shenzhen, in particular, has a closer relationship with the central government than almost any non-centrally administered city in China, whereas Suzhou is a city that remains closely in coordination with the provincial government even as its economy has grown by leaps and bounds. This begs the question of which city's model will prevail moving forward: the Shenzhen model, typified by "re-centralization" of power, or the Suzhou model, which represents more of the conventional regional decentralization model that has been prevalent in China since the 1980s. The article attempts to argue that even though Shenzhen is of pivotal importance to the central government's policies, it will remain an outlier for the time being so as to avoid disturbing the delicate balance between the central and provincial governments, barring an unforeseen economic or political crisis.

This study analyzes the network structures of institutional shareholders and examines the influence of institutional investor cliques on corporate innovation. Our empirical results reveal that institutional investor cliques significantly enhance both innovation input and output. To mitigate endogeneity concerns and establish causality, we adopt multiple empirical strategies. Further evidence suggests that the beneficial impact of institutional investor cliques on firm innovation can be attributed to increased innovation investment efficiency, enhanced employee productivity, reduced information asymmetry, and decreased managerial myopia. Additionally, we find that the positive effect of institutional investor cliques on firm innovation is more pronounced in non-state-owned enterprises and is particularly evident in firms with severe agency conflicts, CEO duality issues, highly competitive product markets, and for firms that have low stock liquidity.

Fintech has significantly influenced the traditional financial industry by introducing advanced technologies and innovative business models with profound impacts. We aim to study the effect of Fintech development on labor allocation efficiency, and to explore its underlying mechanisms. Using a set of companies on Chinese A-share market over the years of 2011- 2020, we find that Fintech development plays a positive role in labor allocation efficiency, mainly through suppressing labor overinvestment. This positive effect is further reinforced by market competition. In addition, our investigation reveals that the primary pathways through which Fintech enhances labor allocation efficiency are lowering information asymmetry, mitigating agency issues and substituting low-skilled labor. Moreover, we show that the dimensions of depth and digitalization are particularly important in improving labor allocation efficiency among the three dimensions of Fintech development. Lastly, we find that Fintech development enhances total factor productivity by improving labor allocation efficiency.

We study how politicians' activities affect the stock market and firm performance. Using hand-collected data on China's national leaders' corporate visits, we investigate the industry-wide implications of these visits. We find that over the six days surrounding a visit, an average industry peer's value increases by 2\% of its total assets. This result reflects investors' favourable interpretation of leaders' visits as a signal of more government support for the entire industry. However, the industry peer's profitability plummets by more than 15\% in the next three years. Further analysis reveals that after the visits, industry peers increase their investments, presumably in anticipation of additional government subsidies and credits. However, these resources are insufficient, and the profitability of these firms suffers. Our findings suggest that national leaders' visits do not help boost the targeted industries, and firms should carefully interpret the politicians' activities.

The stock price of a firm is dynamically influenced by its own factors as well as those of its peers. In this study, we introduce a Graph Attention Network (GAT) integrated with WaveNet architecture—termed the GAT-WaveNet model—to capture both time-series and spatial dependencies for forecasting the stock price crash risk of Chinese listed firms from 2012 to 2021. Utilizing node-rolling techniques to prevent overfitting, our results show that the GAT-WaveNet model significantly outperforms traditional machine learning models in prediction accuracy. Moreover, investment portfolios leveraging the GAT-WaveNet model substantially exceed the cumulative returns of those based on other models.

Using firm-customer matched data from 2005 to 2020 in China, we examined the spillover effects and mechanisms of green innovation (GI) among supply chain partners. Results show a positive association between customers' GI and their supply firms' GI, indicating spillover effects in the supply chain. Customers' GI increase from the 25th to the 75th percentile leads to a significant 19% increase in supply firms' GI. Certain conditions amplify the spillover effect, including customers with higher bargaining power, operating in less competitive industries, and supply firms making relationship-specific investments or experiencing greater customer stability. Geographic proximity and shared ownership further enhance the spillover effect. Information-based and competition-based channels drive the spillover effect, while customers with higher GI encourage genuine GI activities by supply firms. External environmental regulations, such as the Chinese Green Credit Policy and Environmental Protection Law, strengthen the spillover effect, supporting the Porter hypothesis. This research expands understanding of spillover effects in the supply chain and contributes to the literature on GI determinants.

Amid growing global interest in state interventions, this paper examines the impact of Chinese government infrastructure investments on improving firm productivity. It centers on a policy aimed at directing regional governments to foster a more conducive market environment for private enterprises. Our analysis reveals that the positive effect of infrastructure investment on firm productivity is increased by 42.5% for private firms in industries that benefitted from improved market entry opportunities and an even more striking 97.9% in provinces where arbitrary fines were curtailed. These findings underscore the complementary roles of state interventions and the development of market mechanisms in boosting firm productivity.