International Review of Economics & Finance最新文献

Green innovation is an important driving force for sustainable development of firms in China's strategic emerging industries. Solving the finance constraints of green innovation is an effective approach to realize this developmental goal. This paper uses the panel data of China's A-share listed firms in strategic emerging industries from 2013 to 2022 to empirically test the effect and mechanism of the fintech on firm green innovation. We find that the fintech can significantly promote firm green innovation, and firm digital transformation also has a positive effect on firm green innovation. Moreover, firm digital transformation is a conduit for the impact of the fintech on firm green innovation. In other words, the fintech facilitates firm green innovation by enhancing firm digital transformation. In addition, the heterogeneity analysis suggests that the effect of the fintech on firm green innovation of firms in eastern region is stronger than that of firms in central and western regions.

Using bond issuance data from listed companies, we demonstrate that firms with myopic management face substantially higher credit spreads, a pattern with both strong statistical and economic significance across multiple robustness checks. Myopic management tends to imprudently allocate longer-term funds to short-term projects, potentially prompting investors to demand higher credit premiums. The rise in credit spreads observed only in long-term bond issuances further reinforces our argument. Inefficient investment decisions made by myopic management, characterized by excessive short-term investments and insufficient long-term investments, may also account for elevated credit spreads. While effective corporate governance and enhanced external monitoring can help alleviate the adverse impacts of managerial myopia on corporate credit spreads, intensified industry competition and increased uncertainty may exacerbate these challenges. Encouragingly, the elevated credit spreads could prompt myopic management to adjust their business strategies, thereby mitigating the worsening economic consequences for the corporate.

This paper examines the impact of foreign institutional investors on the information content of stock prices in China's capital market. Using A-share listed companies in Shanghai and Shenzhen from 2005 to 2021 as the research sample, the study finds that institutional investors play a “leading role” in increasing the information content of the market in both the short and long term. Furthermore, the information content of domestic and foreign institutional investors is complementary, with foreign institutional investors more effective in promoting the increase of information content in the Chinese stock market than their domestic counterparts. These findings provide new empirical evidence on how to enhance the effectiveness of China's stock market by further opening to foreign institutional investors and increasing the price information content.

The phenomenon of a stock price crash involves a rapid, significant decrease in stock prices, severely impacting the market, investors, and the economy. This study introduces the BiGAT-GRU model, which combines Graph Attention Networks (GAT) and Gated Recurrent Units (GRU) to predict stock price crash risk by analyzing multi-scale investor sentiment propagation using data from Baidu search index and public opinion texts. The model demonstrates superior performance in predicting crash risk, providing valuable insights for policymakers and investors.

The importance of competitive advantage for platform enterprises' long-term development necessitates explorations of the factors that influence such an advantage. This study empirically investigates the impact of tax compliance on the competitive advantage of platform enterprises, specifically focusing on the efficiency of contract enforcement using online sales data from the WIND database. The findings reveal that platform enterprises' adherence to enterprises' tax compliance enhances the competitive advantage effect. The results of the panel threshold model regression demonstrate that the positive contribution of tax compliance to competitive advantage is contingent on contract enforcement efficiency. Moreover, the promotional effect is more pronounced in regions with superior contract enforcement efficiency, indicating a nonlinear marginal incremental effect. Heterogeneity analysis reveals that the influence of platform firms' tax compliance on competitive advantage effects is constrained by factors such as tax administration strength, information transparency, firm size, and regional variations. These findings deepen our understanding of the relationship between tax compliance and platform enterprises' competitive advantage, offering valuable insights for such enterprises’ decision-making concerning competitive strategies.

Members of Congress (politicians) are allowed to trade stocks. There is evidence in the literature showing that politicians made informed trades until at least the passage of the Stop Trading on Congressional Knowledge (STOCK) Act of 2012. In this paper, we examine the drivers of congressional stock trading by using politicians’ daily stock trades (daily congressional trading) as the dependent variable. Our analysis is based on 181,029 congressional stock trades from 4630 trading days covering the period from January 2004 to June 2022. We find that politicians’ stock trades on a given day are positively related to their stock trades in the previous trading days. We further document that politicians trade more when Congress is in session and when geopolitical risk is high. We also find evidence of a significant reduction in the number of buy transactions following the passage of the STOCK Act. Furthermore, we show that politicians make more buy trades when economic policy uncertainty and equity market volatility are high. The results of our study suggest that members of Congress make trades to take advantage of the overall uncertainty in economic and political environments. Our paper contributes to the literature and the public debate on congressional trading (and trading by market participants in general) by providing further transparency on the stock trading practices of members of Congress.

Prior studies of corporate debt policy primarily focused on the overall company and ignored the impact of geographical dispersion between the parent and subsidiary companies. Using listed companies in China from 2007 to 2017 as the sample, this study explores the influence of the spatial geographic dispersion of parent and subsidiary companies on the radicalism of corporate debt policy based on a series of relevant models. Moreover, it discusses the regulatory effect of tax collection and management on the aforementioned relationship. The findings suggest a significant and positive relationship between the geographic dispersion of parent–subsidiary relationships and the aggressiveness level of corporate debt policy. Furthermore, tax enforcement has a significant moderating effect on this relationship. Results of this study enrich the research content of the factors affecting corporate debt policy and serve as an important reference for listed companies implementing regional diversification strategies. This study further provides inspiration for the government to improve tax collection and management work and optimize the financing platform.

The influencing factors of household financial asset allocation have been widely discussed in household finance, but little is known regarding the impact of political background. Using data from the China Family Panel Studies spanning 2012 to 2020, this paper examined the relationship between political background and risky financial market participation and investigated whether digital finance could moderate the relationship. The findings demonstrated that political background had a positive impact on households’ participation in the risky financial market in China. Furthermore, social networks, credit support, and subjective well-being were the channels through which political background promoted risky financial asset holdings. In addition, the positive effect of political background on risky financial market participation would be mitigated by the development of regional digital finance. Our study explained the limited participation puzzle in the risky financial market in China from the perspective of political background and highlighted the importance of an inclusive financial environment to reduce the inequality of risky financial market participation.

Controlling shareholders extract private benefits and expropriate minority shareholders through “tunneling” behavior, which causes difficulties for many listed companies. Extant research typically explores corporate governance constraint mechanisms but ignores the role of environmental investments. To address this issue, we investigated the effect of corporate environmental investment (CEI) on tunneling by controlling shareholders. By analyzing a sample of Chinese listed companies during the period 2008 to 2021, we found that CEI constrains tunneling by controlling shareholders, and this effect is driven by non-state-owned enterprises. Further tests demonstrated that the negative relationship between CEI and tunneling is more pronounced in firms with poor corporate governance, which supports our argument that CEI serves as a substitute for corporate governance. The channel analysis revealed that CEI diminishes resources and improves reputation, resulting in reduced tunneling. Overall, the research findings offer guidance and insight for regulatory authorities to formulate relevant policies and effectively ameliorate tunneling by controlling shareholders.

This study delves into the relationship between the issuance of central bank digital currencies (CBDCs) and regional financial stability. Through empirical analysis, we find that the pilot policy of digital yuan has a significant positive impact on financial stability. Further analysis of regional heterogeneity reveals that cities in central and western China, which have a weaker financial foundation, experience more pronounced improvements in financial stability under the digital yuan pilot compared to eastern regions. Additionally, the level of financial technology plays a crucial moderating role in enhancing the effects of the digital yuan pilot policy, particularly in central and western regions. These findings provide valuable insights for policymakers, aiding in the more precise and efficient promotion of digital currency pilots and related financial technology development.