Existing literature has demonstrated the aggregation and allocation effects of the corporate holding financial institutions on financial resources, but there is little literature to discuss whether it will further affect corporate employment. Therefore, this paper uses data from China's A-share listed companies from 2010 to 2021 to examine whether holding financial institutions can affect corporate employment, thus serving the real economy. Empirical results show that holding financial institutions significantly expands corporate employment, which is pronounced in periods of tight monetary policy, in financially underdeveloped areas, and for enterprises with high financing constraints, weak external supervision, and high labor intensity. The conclusion still holds after conducting a series of robustness tests. Mechanism tests show that holding financial institutions can expand corporate employment by alleviating liquidity constraints and inhibiting the dissipation of internal funds caused by agency problems. Further discussion also shows that holding financial institutions has significantly improved corporate operating performance and increased the salary levels of executives and ordinary employees, which means that there is no “executive plunder” after profit increases; Meanwhile, holding financial institutions generates spillover effects along the supply chain, expanding corporate employment among major suppliers and customers. This paper has important implications for taking measures related to “finance serves for the real economy” to achieve high-quality economic development.

This paper develops a network to analyze inter-industry risk spillovers during high and low volatility periods. Our findings indicate that China's Industrials and Consumer Discretionary exhibit the greatest levels of spillovers in both high and low volatility states. Notably, our results demonstrate the "event-driven" character of structural changes to the network during periods of pronounced risk events. At the same time, the economic and financial network exhibits clear "small world" characteristics. Additionally, in the high volatility stage, the inter-industry risk contagion network becomes more complex, featuring greater connectivity and direct contagion paths. Furthermore, concerning the spillover connection between finance and the real sector, the real economy serves as a net exporter of risk. The study's findings can assist government agencies in preventing risk contagion between the financial market and the real economy. The empirical evidence and policy lessons provide valuable insights for effective risk management.

The level of corporate risk-taking impacts debt default as a crucial investment decision. Hence, this must be examined considering resource allocation. This study uses A-share listed companies from 2007 to 2021 as samples to empirically explore the impact and mechanism of corporate risk-taking level on debt default risk. The results show that corporate risk-taking can significantly inhibit debt default and the risk of debt default by promoting total factor productivity. Further, the higher the level of enterprise financialization of the firm, the higher the stock liquidity, and the higher the level of managerial confidence, the stronger the inhibitory effect of corporate risktaking on debt default. The heterogeneity analysis reveals that the inhibitory effect of corporate risk-taking on debt default is more significant in large-scale enterprises, enterprises with lower regulatory shareholdings, and enterprises with standard unqualified audit opinions. The study provides guidance for enterprises to improve the level of risk-taking and resource allocation efficiency effectively. Moreover, it provides empirical support for regulators to effectively prevent "waves of defaults" and even "waves of bankruptcies" in the real economy.

As China’s shadow banking sector expands, the impact of listed companies’ involvement in financial stability and the real economy accumulates increasing attention. Despite being a crucial channel for non-financial firms to participate in shadow banking, the literature has given limited consideration to the acquisition of wealth management products (WMPs). Using data from Chinese listed firms between 2007 and 2020, we analyze how excessive equity financing affects companies’ WMP acquisitions. Our findings indicate that over-financing significantly boosts WMP purchases among these firms, particularly in cases of private ownership, raised environmental uncertainty, and strict financing constraints.

Interest rate liberalization in China intensifies the exposure of commercial banks' interest rate risks and further increases the difficulty for commercial banks to effectively control interest rate risks, thus putting forward higher requirements for the normal operation and management of commercial banks. With the development of China's financial derivatives market, banking institutions begin to use basic interest rate derivatives to hedge interest rate risks. It is very important to give full play to the maturity transformation Function of commercial banks to enhance the ability of financial services to the real economy. Based on the semi annual unbalanced panel data of 37 listed banks in A-share stock markets from 2006 to 2020, this paper empirically tests the impact of the use of off balance sheet interest rate derivatives on the Maturity Transformation Function of banks in the case of interest rate fluctuations. The empirical results show that: (1) the use of interest rate derivatives helps to weaken the negative impact of interest rate fluctuations on the Maturity Transformation Function of banks. (2) The analysis of the mechanism shows that the use of interest rate derivatives improves the stability of the bank's asset side term structure and liability side term structure, so as to support the effective play of the bank's financial intermediary role. (3) Further analysis shows that the of interest rate derivatives significantly reduces the volatility of bank earnings. This study makes it clear that the use of interest rate derivatives has a positive impact on the commercial banks, which provides evidence for the further development of interest rate derivatives market in China.

This study shows that investment decisions drive tail risks (i.e., systemic risk and stand-alone tail risk) of TBTF (Too-Big-to-Fail) banks, while financing decisions determine tail risks of non-TBTF banks. After the Dodd-Frank Act, undercapitalized non-TBTF banks continue to gamble for resurrection, and their stand-alone tail risk become more sensitive to funding availability and net-stable-funding-ratio than TBTF banks. We show that implementing a slimmed-down version of TBTF regulations on non-TBTF banks cannot efficiently contain the stand-alone risk of non-TBTF banks and cannot eliminate TBTF privilege. Moreover, non-TBTF banks together generate larger pressure of contagion on the real economy, and they herd more when making financing decisions after the Act. Our findings highlight the need for enhanced regulations on the liability-side of non-TBTF banks.

We provide firm-level evidence on the real effects of shadow banking in terms of technological innovation. Firm-to-firm entrusted loans, the largest part of the shadow banking sector in China, enhance the borrowers’ innovation output. The effects are more prominent when the borrowers are subject to severer financial constraints, information asymmetry, and takeover exposures. A plausible underlying channel is capital reallocations from less productive but easy-financed lender firms to more innovative but financially less-privileged borrower firms. Our paper suggests that shadow banking helps correct bank credit misallocations and thus serves as a second-best market design in financing the real economy.

In the process of green transformation of China's economy, it is of great practical significance to study the impact of green finance in supporting the development of the real economy, especially the impact of green credit on enterprise innovation, in order to promote the green transformation of enterprises, industrial structure upgrading and sustainable economic development. This paper takes green credit as a perspective and introduces it into the analytical framework of the impact of environmental regulation on corporate green innovation, through theoretical mechanism analysis and empirical testing, in order to reveal the impact and mechanism of green credit on corporate green innovation. It is found that green credit can effectively promote green innovation in heavy polluting enterprises, and it is mainly reflected in the increase of green utility model patent applications with a low degree of inventiveness. The promotion effect of green credit on green innovation is more obvious in regions with lower levels of economic development. Further mechanism analysis shows that green credit policy promotes green innovation of heavy polluting enterprises mainly through the incentive effect brought by changing financing environment and the pressure effect brought by increasing market competition. The findings of this paper can provide references for policy-making departments, banks and enterprises.

We construct a text-based indicator of US-China tension and examine its economic transmission. Our index closely tracks the share of related discussions in US firms’ earnings conference calls and that it correlates with firm actions in ways that are highly indicative of firm concerns about bilateral tensions. Elevated US-China tension is associated with protracted declines in US corporate investment, especially among firms that are expected to be exposed to the bilateral tensions. We also ffnd adverse effects of US-China tension in the aggregate, even after accounting for a large number of factors traditionally used to explain such effects. Impulse responses from medium-sized VARs show that positive shocks to the US-China tension index lead to protracted output declines, increased credit spreads, and reduced bilateral trade. These effects are milder and less persistent in the Chinese aggregates than those of the US. To examine how USChina tension propagates through the real economy, we isolate a component of our index reflecting the realizations of barriers that disrupt bilateral transactions from the component driven by uncertainty of increased barriers without their materialization. We find data patterns suggesting that the economic transmission of US-China tension primarily operates through uncertainty effects.

The improvement of production efficiency and the change of business model brought about by the deep integration of the digital economy and the real economy have become an important driving force for industrial transformation and upgrading. This paper explains the necessity of digital transformation of manufacturing, the trends, paths and six technologies of financial digital transformation. In the digital era, relying on data, scenarios, and algorithms to explore the essential logic of business, make predictions and decisions based on business insights, and put forward higher requirements for financial empowerment business. As an important way for enterprise management transformation and upgrading, the core goal of financial digital transformation is to take "data-driven" as the main line, promote transformation based on the two principles of industry-finance integration and in-depth scenarios, and build "value-creating" finance, that is, based on the integrated application of digital technology, so that finance can expand the functions of supporting strategy, assisting decision-making, empowering business, preventing and controlling risks, lean management, operational excellence, quality and efficiency, compliance supervision and other functions on the basis of basic transaction accounting functions, and promote and even lead the value creation functions of enterprises. The article points out that the manufacturing industry should take enhancing competitiveness as the direction, financial management as the center, and improving quality and efficiency as the goal to accelerate digital transformation. Introduced Midea Group's financial digital transformation practices and results. It is proposed that enterprises should vigorously promote the deep integration of big data, Internet, cloud computing, Internet of Things, artificial intelligence, blockchain and the real economy, accelerate the digital transformation of finance, and inject new impetus into the high-quality development of enterprises.