Pub Date : 2025-03-06DOI: 10.1016/j.frl.2025.107147
Jing Zeng , Gaoling Luo , Jun Wu
We use a difference-in-differences research design to study the impact of accelerated depreciation tax policy (ADTP) for fixed assets on IPO underpricing using a sample of China's A-share IPO firms from 2010 to 2019. The findings suggest that ADTP significantly reduces IPO underpricing. The channel tests show that ADTP reduces IPO underpricing by alleviating financial constraints and reducing a firm's risk level. The moderating analysis shows that the effect of ADTP on lowering IPO underpricing is more salient for firms with lower capital intensity, higher R&D investment, or non-state-owned. Overall, ADTP is helpful in capital formation.
{"title":"Accelerated depreciation tax policy for fixed assets and IPO underpricing: Evidence from China","authors":"Jing Zeng , Gaoling Luo , Jun Wu","doi":"10.1016/j.frl.2025.107147","DOIUrl":"10.1016/j.frl.2025.107147","url":null,"abstract":"<div><div>We use a difference-in-differences research design to study the impact of accelerated depreciation tax policy (ADTP) for fixed assets on IPO underpricing using a sample of China's A-share IPO firms from 2010 to 2019. The findings suggest that ADTP significantly reduces IPO underpricing. The channel tests show that ADTP reduces IPO underpricing by alleviating financial constraints and reducing a firm's risk level. The moderating analysis shows that the effect of ADTP on lowering IPO underpricing is more salient for firms with lower capital intensity, higher R&D investment, or non-state-owned. Overall, ADTP is helpful in capital formation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107147"},"PeriodicalIF":7.4,"publicationDate":"2025-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143611443","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-06DOI: 10.1016/j.frl.2025.107171
Lujia Gao , Zhaoying Chen , Wei Zhao , Xuanyu Lai
This study examines the impact of cybersecurity regulation on corporate data-breach risk, leveraging China's Cybersecurity Law implementation as a quasi-natural experiment. Using data from 3,761 Chinese firms from 2007 to 2022, this study reveals that cybersecurity regulation effectively mitigates data-breach risk by enhancing firms’ cybersecurity cultures and systems. Subsequent heterogeneity analysis reveals that the effect is more pronounced for non-state-owned enterprises and high-tech industries. This study contributes to the literature on cybersecurity and data breaches, providing policymakers with insights to optimize cybersecurity regulations.
{"title":"Does cybersecurity regulation reduce corporate data-breach risk?","authors":"Lujia Gao , Zhaoying Chen , Wei Zhao , Xuanyu Lai","doi":"10.1016/j.frl.2025.107171","DOIUrl":"10.1016/j.frl.2025.107171","url":null,"abstract":"<div><div>This study examines the impact of cybersecurity regulation on corporate data-breach risk, leveraging China's Cybersecurity Law implementation as a quasi-natural experiment. Using data from 3,761 Chinese firms from 2007 to 2022, this study reveals that cybersecurity regulation effectively mitigates data-breach risk by enhancing firms’ cybersecurity cultures and systems. Subsequent heterogeneity analysis reveals that the effect is more pronounced for non-state-owned enterprises and high-tech industries. This study contributes to the literature on cybersecurity and data breaches, providing policymakers with insights to optimize cybersecurity regulations.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107171"},"PeriodicalIF":7.4,"publicationDate":"2025-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143600744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.frl.2025.107167
Lingyu Chen, Xiaoxue Dong
This study utilizes the Cobb–Douglas production function and a comprehensive index method to assess the contribution of higher education (HE) to China's economic development from 2008 to 2018. Findings reveal significant “V-shaped” and “√-shaped” regional discrepancies in contribution rates across western, central, and eastern China. Cities such as Beijing, Shanghai, and Tianjin contribute more, whereas other regions lag behind. To enhance contributions, China must optimize HE structures, develop a modern lifelong education system, and implement tailored strategies that address regional needs and promote balanced educational growth across the provinces.
{"title":"Leveraging higher education for economic development","authors":"Lingyu Chen, Xiaoxue Dong","doi":"10.1016/j.frl.2025.107167","DOIUrl":"10.1016/j.frl.2025.107167","url":null,"abstract":"<div><div>This study utilizes the Cobb–Douglas production function and a comprehensive index method to assess the contribution of higher education (HE) to China's economic development from 2008 to 2018. Findings reveal significant “V-shaped” and “√-shaped” regional discrepancies in contribution rates across western, central, and eastern China. Cities such as Beijing, Shanghai, and Tianjin contribute more, whereas other regions lag behind. To enhance contributions, China must optimize HE structures, develop a modern lifelong education system, and implement tailored strategies that address regional needs and promote balanced educational growth across the provinces.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107167"},"PeriodicalIF":7.4,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143611437","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.frl.2025.107095
Zhan Wang , K. Victor Chow , Jiahao Gu
We extend the ex-ante mean-variance (SVIX) asset pricing models of Martin (2017) and Martin-Wagner (2019) to a mean-VIX framework by incorporating higher-moment and co-moment risk in asset pricing, which builds a theoretical connection between equity returns and the commonly used implied volatility—VIX. Our proposed mean-VIX model is risk-neutral with left-tail asymmetries in returns to correct the SVIX approach's downside bias. We derive an option implied market beta of a stock as the weighted average of the betas of SVIX and VIX. Empirically, we develop an investible market portfolio (MKT*) that mimics realized outcomes on the implied market index adjusted for SVIX and VIX. Based on the MKT*, the mean-VIX asset pricing framework shows superior abilities in return prediction and portfolio allocation.
{"title":"Implied equity premium and market beta","authors":"Zhan Wang , K. Victor Chow , Jiahao Gu","doi":"10.1016/j.frl.2025.107095","DOIUrl":"10.1016/j.frl.2025.107095","url":null,"abstract":"<div><div>We extend the ex-ante mean-variance (SVIX) asset pricing models of Martin (2017) and Martin-Wagner (2019) to a mean-VIX framework by incorporating higher-moment and co-moment risk in asset pricing, which builds a theoretical connection between equity returns and the commonly used implied volatility—VIX. Our proposed mean-VIX model is risk-neutral with left-tail asymmetries in returns to correct the SVIX approach's downside bias. We derive an option implied market beta of a stock as the weighted average of the betas of SVIX and VIX. Empirically, we develop an investible market portfolio (MKT*) that mimics realized outcomes on the implied market index adjusted for SVIX and VIX. Based on the MKT*, the mean-VIX asset pricing framework shows superior abilities in return prediction and portfolio allocation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107095"},"PeriodicalIF":7.4,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143611442","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.frl.2025.107165
Zhenzhen Wang , Junting Jia
This study examines how digital transformation (DX) affects organizational resilience through management empowerment and financing efficiency pathways in Chinese listed companies (2010–2022). Our findings reveal distinct patterns across organizational contexts: nonstate enterprises profit more from DX than state-owned enterprises, whereas industry-specific analysis shows pronounced effectiveness in non-heavily polluting and high-tech industries. Heterogeneous effects contribute to theoretical knowledge by establishing critical boundary conditions for DX success, emphasizing how ownership structure, environmental restrictions, and technological capabilities influence organizational resilience outcomes. These findings contribute to the DX literature while offering practical implications for diverse institutional contexts.
{"title":"Digital transformation and organizational resilience","authors":"Zhenzhen Wang , Junting Jia","doi":"10.1016/j.frl.2025.107165","DOIUrl":"10.1016/j.frl.2025.107165","url":null,"abstract":"<div><div>This study examines how digital transformation (DX) affects organizational resilience through management empowerment and financing efficiency pathways in Chinese listed companies (2010–2022). Our findings reveal distinct patterns across organizational contexts: nonstate enterprises profit more from DX than state-owned enterprises, whereas industry-specific analysis shows pronounced effectiveness in non-heavily polluting and high-tech industries. Heterogeneous effects contribute to theoretical knowledge by establishing critical boundary conditions for DX success, emphasizing how ownership structure, environmental restrictions, and technological capabilities influence organizational resilience outcomes. These findings contribute to the DX literature while offering practical implications for diverse institutional contexts.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107165"},"PeriodicalIF":7.4,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143593859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.frl.2025.107134
Kai Duan , Chuan Qin , Shenglin Ma , Xue Lei , Qianqian Hu , Jinhuika Ying
Using long-term panel data from Chinese A-share listed manufacturing companies from 2009 to 2022, this study investigates the relationship between environmental, social, and governance (ESG) disclosure and corporate sustainability. Findings indicate that ESG disclosure positively affects economic and social-environmental sustainability performance, with corporate earnings persistence and financing restrictions acting as mediators. The heterogeneity study suggests that the positive effect of ESG disclosure on corporate sustainability performance is more pronounced in non-state-owned enterprises and those with higher analyst attention. Therefore, whether corporate sustainability performance can be enhanced by disclosing integrated environmental, social, and corporate governance information is a current academic issue worthy of study.
{"title":"Impact of ESG disclosure on corporate sustainability","authors":"Kai Duan , Chuan Qin , Shenglin Ma , Xue Lei , Qianqian Hu , Jinhuika Ying","doi":"10.1016/j.frl.2025.107134","DOIUrl":"10.1016/j.frl.2025.107134","url":null,"abstract":"<div><div>Using long-term panel data from Chinese A-share listed manufacturing companies from 2009 to 2022, this study investigates the relationship between environmental, social, and governance (ESG) disclosure and corporate sustainability. Findings indicate that ESG disclosure positively affects economic and social-environmental sustainability performance, with corporate earnings persistence and financing restrictions acting as mediators. The heterogeneity study suggests that the positive effect of ESG disclosure on corporate sustainability performance is more pronounced in non-state-owned enterprises and those with higher analyst attention. Therefore, whether corporate sustainability performance can be enhanced by disclosing integrated environmental, social, and corporate governance information is a current academic issue worthy of study.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107134"},"PeriodicalIF":7.4,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143644849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-05DOI: 10.1016/j.frl.2025.107166
Qiong Liu , Hairong Wang
This study investigates how digital transformation (DT) affects environmental, social, and governance (ESG) performance through innovative capabilities in Chinese A-share listed companies from 2010 to 2022. Analyzing 31,323 firm-year observations, we demonstrate that DT directly and indirectly improves ESG performance through breakthrough and incremental innovation routes. Breakthrough innovations offer revolutionary sustainability solutions through invention patents; meanwhile, incremental innovations enable continuous improvement of sustainable practices. DT has a stronger effect on social and governance dimensions than on environmental performance, with a greater impact in non-pollution industries and state-owned enterprises. Findings underscore how different innovation types translate digital capabilities into improved ESG performance in various contexts.
{"title":"Digital transformation, innovation capability, and ESG performance","authors":"Qiong Liu , Hairong Wang","doi":"10.1016/j.frl.2025.107166","DOIUrl":"10.1016/j.frl.2025.107166","url":null,"abstract":"<div><div>This study investigates how digital transformation (DT) affects environmental, social, and governance (ESG) performance through innovative capabilities in Chinese A-share listed companies from 2010 to 2022. Analyzing 31,323 firm-year observations, we demonstrate that DT directly and indirectly improves ESG performance through breakthrough and incremental innovation routes. Breakthrough innovations offer revolutionary sustainability solutions through invention patents; meanwhile, incremental innovations enable continuous improvement of sustainable practices. DT has a stronger effect on social and governance dimensions than on environmental performance, with a greater impact in non-pollution industries and state-owned enterprises. Findings underscore how different innovation types translate digital capabilities into improved ESG performance in various contexts.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107166"},"PeriodicalIF":7.4,"publicationDate":"2025-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143611433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-04DOI: 10.1016/j.frl.2025.107155
Nohl J. Schwandtner , David M. Smith
We examine actively managed equity portfolios that incorporate venture capital (VC). VC investments carry a high expected return and likely diversification benefits. However, access to the best deals may be reserved for investors with specialized business knowledge to assist target-firm management. Based on PSN data from 2000 to 2022, we document that funds incorporating VC trail their benchmarks and matched non-VC counterparts on a variety of investment-performance metrics. This underperformance suggests that traditional equity portfolio managers fail to access value-enhancing VC opportunities, and their investors do not gain from the excursion into that adjacent asset class.
{"title":"The performance of active equity funds that incorporate venture capital","authors":"Nohl J. Schwandtner , David M. Smith","doi":"10.1016/j.frl.2025.107155","DOIUrl":"10.1016/j.frl.2025.107155","url":null,"abstract":"<div><div>We examine actively managed equity portfolios that incorporate venture capital (VC). VC investments carry a high expected return and likely diversification benefits. However, access to the best deals may be reserved for investors with specialized business knowledge to assist target-firm management. Based on PSN data from 2000 to 2022, we document that funds incorporating VC trail their benchmarks and matched non-VC counterparts on a variety of investment-performance metrics. This underperformance suggests that traditional equity portfolio managers fail to access value-enhancing VC opportunities, and their investors do not gain from the excursion into that adjacent asset class.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"77 ","pages":"Article 107155"},"PeriodicalIF":7.4,"publicationDate":"2025-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143562545","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-04DOI: 10.1016/j.frl.2025.107142
Xinyu Zhan, Lanxin Liang, Mingzhe Yu
This study focuses on the impact of tax incentives on household consumption in the context of personal income tax reform. Our results show that the 2018 personal income tax reform increases household consumption, and the primary mechanism through which the reform promotes consumption operates through increased disposable income, with its magnitude being influenced by liquidity constraint theory and precautionary savings theory. The implementation of special additional deductions in 2018 personal income tax increases household consumption, however, not all deduction items can promote consumption. In different income levels and income types, there is a different effect in this reform.
{"title":"Tax incentives and household consumption: Evidence from the personal income tax reform","authors":"Xinyu Zhan, Lanxin Liang, Mingzhe Yu","doi":"10.1016/j.frl.2025.107142","DOIUrl":"10.1016/j.frl.2025.107142","url":null,"abstract":"<div><div>This study focuses on the impact of tax incentives on household consumption in the context of personal income tax reform. Our results show that the 2018 personal income tax reform increases household consumption, and the primary mechanism through which the reform promotes consumption operates through increased disposable income, with its magnitude being influenced by liquidity constraint theory and precautionary savings theory. The implementation of special additional deductions in 2018 personal income tax increases household consumption, however, not all deduction items can promote consumption. In different income levels and income types, there is a different effect in this reform.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"77 ","pages":"Article 107142"},"PeriodicalIF":7.4,"publicationDate":"2025-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143562549","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-04DOI: 10.1016/j.frl.2025.107148
Yujiao Li , Yunge Han
Using data from Chinese cities and firms, this paper analyzed the impact and mechanisms of the development of digital inclusive finance on enterprise resilience. This study found that although digital inclusive finance can alleviate financing constraints for enterprises, it also increases their debt pressure, especially short-term debt pressure, and leads to blind investment, reducing investment efficiency and resilience. Meanwhile, strengthening the audit supervision of enterprises and improving their investment efficiency can effectively alleviate the negative impact of the digital inclusive finance on enterprise resilience. The conclusion of this article reveals the unexpected risks of digital inclusive finance, which can provide implications and suggestions for improving digital inclusive finance.
{"title":"The unexpected effect of digital inclusive finance on","authors":"Yujiao Li , Yunge Han","doi":"10.1016/j.frl.2025.107148","DOIUrl":"10.1016/j.frl.2025.107148","url":null,"abstract":"<div><div>Using data from Chinese cities and firms, this paper analyzed the impact and mechanisms of the development of digital inclusive finance on enterprise resilience. This study found that although digital inclusive finance can alleviate financing constraints for enterprises, it also increases their debt pressure, especially short-term debt pressure, and leads to blind investment, reducing investment efficiency and resilience. Meanwhile, strengthening the audit supervision of enterprises and improving their investment efficiency can effectively alleviate the negative impact of the digital inclusive finance on enterprise resilience. The conclusion of this article reveals the unexpected risks of digital inclusive finance, which can provide implications and suggestions for improving digital inclusive finance.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"78 ","pages":"Article 107148"},"PeriodicalIF":7.4,"publicationDate":"2025-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143579365","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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