This research study primarily examines the digital transformation’s internal mechanism promoting enterprises’ total factor productivity (TFP) based on the matching and learning mechanism. Afterward, this research article empirically examines the digital transformation’s influential mechanism on enterprises’ TFP, using the Chinese listed companies’ data on the “A” stock market for the time period ranging from 2007 to 2019. The major study findings are as follows: (1) the improvement of the digital transformation significantly increases enterprises’ TFP. The proposed conclusion remains robust after a series of robustness- and the endogeneity test. (2) Furthermore, mechanism analysis reveals that digital transformation effectively enhances enterprises’ TFP by eliminating resource misallocation in the industry. In addition to this, digital transformation relies on the mechanism of “learning by doing” to promote the technological innovation’s spillover effect; hence, effectively enhancing enterprises’ TFP. (3) Heterogeneity analysis demonstrates that the digital transformation’s impact on enterprises’ TFP is heterogeneous in the context of enterprise size, enterprise type, and enterprise ownership. Lastly, this study puts forward that government bodies should intensify the construction and investment in digital infrastructure, promote a series of institutional reforms, and support digital technological R&D practices.

This paper studies the impact of AI technology on the mutual fund industry. I develop a new measure of AI adoption based on hiring practices and find that this measure can predict fund performance. The funds with high AI ratio outperform non-AI funds, after I controlling for standard factors and fund characteristics. Further empirical evidence shows that funds with a high AI ratio tilt their portfolios toward high information intensity stocks, indicating that mutual funds benefit from AI technology adoption by improving their information capacity. Consistent with this channel, I find that the outperformance of these mutual funds mainly comes from better stock picking skills. Finally, AI technology adoption has a negligible effect on fund manager turnover.

This study investigates whether corruption differentially affects contracting through auctions and negotiations. Using data on Chinese land-market transactions, where corruption is known to be present, we first show that, on average, it exerts similar effects on transactions carried out via auctions and negotiation. However, this finding masks important heterogeneity – auctions featuring healthy competition are less affected by corruption, and significantly less so than negotiation. We then develop a simple model of bidding under the possibility of corruption that rationalizes our findings.

Compared to previous literature on external FinTech, this paper is more interested in the role played by bank FinTech. Based on panel data from Chinese commercial banks spanning 2010 to 2021, this paper investigates the impact of digital transformation on bank soundness and its potential mechanisms. The empirical findings demonstrate a positive association between digital transformation and bank soundness, driven primarily by strategic and management digitization. Mechanistic analysis indicates that digital transformation improves bank soundness by mitigating risk-taking behavior and promoting diversification. The positive effect of digital transformation is more pronounced in state-owned and joint-stock banks, banks with higher liquidity mismatch as well as in sub-samples with greater levels in external FinTech development and economic policies uncertainty. Additional analysis suggests that digital transformation can still enhance bank soundness even in the presence of relatively easy monetary and macroprudential policies, highlighting the harmonization and complementarity between internal innovation from digital transformation and external regulatory policies in maintaining banking stability. Overall, this paper contributes to the literature on bank FinTech, factors influencing bank stability. And it also provides a novel explanation for the relationship between financial innovation and financial stability.

Biodiversity conservation incurs substantial economic costs. We investigate how financial markets price the risks such costs induce, exploiting the “Green Shield Action,” a major regulatory initiative launched in China in 2017 to enforce biodiversity preservation rules in national nature reserves. While improving biodiversity, the initiative led to significant increases in bond yields for municipalities with these reserves. The effects are driven by increases in local governments’ fiscal risk due to expected increases in transition costs resulting from shutting down illegal economic activities within reserves and additional public spending on biodiversity. Investors show little non-financial consideration towards endeavors counteracting biodiversity loss.

This paper analyzes the amplification characteristics of risk propagation in multi-layer financial networks from the perspective of network topologies. The research finds that, even without feedback pathways, cross-layer links alone can lead to more severe risk contagion than in single-layer networks. More importantly, with increasing connectivity, the formation of cyclic structures in multi-layer networks will significantly exacerbate the systemic risk.

In the pursuit of knowledge, research philosophy serves as the uncharted compass guiding scholars through intellectual terrain. This meticulously crafted review paper embarks on an enthralling odyssey through the annals of history and the corridors of thought. We trace the origins of research philosophy in ancient civilizations, witness the dynamic interplay of faith and reason during the medieval and Renaissance periods, and explore the Enlightenment era's embrace of reason and empiricism. The ascent of positivism in the 19th and 20th centuries reshapes the landscape, followed by the seismic shifts of postmodern critiques and paradigm shifts. As we journey through time, we also embrace the contemporary and cross-disciplinary influences that enrich the philosophical fabric of modern research. This narrative underscores the profound impact of philosophy on research practices, offering readers a captivating tapestry interwoven with intellectual discoveries. Join us on this voyage through the epochs and ideologies that have shaped the pursuit of knowledge.

This paper develops an SOE (small open economy) dynamic general equilibrium model to study the impact of climate change on the current account. By calibrating the model to Chinese economy, we find the following results. First, the current account-output ratio improves in the first decade following an increase in global temperature caused by climate change. It then deteriorates in the following next three decades. Second, the overall current account-output ratio dynamics in response to climate change is neither affected by the types and stringency of climate policies, nor by the levels and growth rates of temperature increases. Third, the impact of an increase in temperature from 1.28 ℃ to 1.5 ℃ relative to the pre-industrial periods (1850-1900) on the current account-output ratio is equivalent to that of an approximate 0.14% permanent decline in TFP. Finally, although the current account-output ratio is likely to deteriorate in the first year when temperature increases instantly, it might not be true if the coefficient of relative risk aversion, or interest rate premium is larger, or debt sensitivity to interest rate is smaller.

We examine how Federal Open Market Committee (FOMC) meetings influence international stock returns, highlighting that the standard Fed news channel creates an even-week pattern in the United States and other highly integrated developed markets. By analyzing the Chinese market, we demonstrate that the news channel contributes to higher returns, operating in non-US countries even without international equity flows. Additionally, we identify an uncertainty channel that produces a contrasting odd-week pattern. Placebo tests indicate that the effectiveness of the uncertainty channel may depend on the financial market’s openness. Overall, our research enriches and extends the existing view on how the Federal Reserve, as the leader of central banks, shapes international stock market returns throughout the entire FOMC cycle.

We examined reference point adaptation following gains or losses in security trading using participants from China, Korea, and the US. In both questionnaire studies and trading experiments with real money incentives, reference point adaptation was larger for Asians than for Americans. Subjects in all countries adapted their reference points more after a gain than after an equal-sized loss. When we introduced a forced sale intervention that is designed to close the mental account for a prior outcome, Americans showed greater adaptation toward the new price than their Asian counterparts. We offer possible explanations both for the cross-cultural similarities and the cross-cultural differences.