Pub Date : 2025-11-04DOI: 10.1016/j.asieco.2025.102065
Xiaojuan Wang , Chao Wang , Shuai Zhao
This paper investigates the causal effect of kinship networks on household investments in risky financial assets. Using the distance of each prefecture’s centroid to the nearest Zhu Xi academy as an instrumental variable, we find that households with stronger kinship networks are more likely to invest in risky financial assets. Kinship networks can futher shape households’ risky asset investments both by facilitating risk sharing through inter-household transfers and by disseminating tacit knowledge to enhance financial literacy.
{"title":"Kinship networks and risky financial asset investment: The power of Confucian clan","authors":"Xiaojuan Wang , Chao Wang , Shuai Zhao","doi":"10.1016/j.asieco.2025.102065","DOIUrl":"10.1016/j.asieco.2025.102065","url":null,"abstract":"<div><div>This paper investigates the causal effect of kinship networks on household investments in risky financial assets. Using the distance of each prefecture’s centroid to the nearest Zhu Xi academy as an instrumental variable, we find that households with stronger kinship networks are more likely to invest in risky financial assets. Kinship networks can futher shape households’ risky asset investments both by facilitating risk sharing through inter-household transfers and by disseminating tacit knowledge to enhance financial literacy.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102065"},"PeriodicalIF":3.4,"publicationDate":"2025-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465817","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-03DOI: 10.1016/j.asieco.2025.102072
Guna Raj Bhatta
Do economic cycles of a small open economy interact within and synchronise with a substantially integrated large emerging market economy? We investigate this concern between Nepal and India by applying the frequency domain filter in the annual data from 1991 to 2024. First of all, we estimate business, financial and inflation cycles of both economies and observe whether these cycles interact with each other. Thereafter, we observe whether Nepal's economic cycles synchronise with India's. We find that Indian economic cycles demonstrate a stronger interaction between their business and financial cycles, a phenomenon absent in Nepal. The findings show a synchronization of Nepal's inflation cycles with India's, justifying the currency peg. We observe the significant role of financial markets in smoothing business cycles and financial institutions in smoothing financial cycles, demanding a balanced development of both financial institutions and markets to better synchronise real and financial cycles, thereby persuading countercyclical policies and avoiding macroeconomic instability.
{"title":"Economic cycle interactions and influence of a highly integrated foreign economy: Case of Nepal and India","authors":"Guna Raj Bhatta","doi":"10.1016/j.asieco.2025.102072","DOIUrl":"10.1016/j.asieco.2025.102072","url":null,"abstract":"<div><div>Do economic cycles of a small open economy interact within and synchronise with a substantially integrated large emerging market economy? We investigate this concern between Nepal and India by applying the frequency domain filter in the annual data from 1991 to 2024. First of all, we estimate business, financial and inflation cycles of both economies and observe whether these cycles interact with each other. Thereafter, we observe whether Nepal's economic cycles synchronise with India's. We find that Indian economic cycles demonstrate a stronger interaction between their business and financial cycles, a phenomenon absent in Nepal. The findings show a synchronization of Nepal's inflation cycles with India's, justifying the currency peg. We observe the significant role of financial markets in smoothing business cycles and financial institutions in smoothing financial cycles, demanding a balanced development of both financial institutions and markets to better synchronise real and financial cycles, thereby persuading countercyclical policies and avoiding macroeconomic instability.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102072"},"PeriodicalIF":3.4,"publicationDate":"2025-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465816","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-01DOI: 10.1016/j.asieco.2025.102070
Ziwei Liu, Yuhang Zhuang, Yibing Ding
There is a significant gap in digital technology between countries, underscoring the issue of uneven digital development. Utilizing data from Chinese firms' outward foreign direct investment (OFDI) between 2009 and 2020, this paper constructs an index to measure the digital divide between China and host countries, and examines its effects on cross-border mergers and acquisitions (M&A). The findings reveal that the digital divide can significantly reduce the success rate of firms' cross-border M&A while increasing investment scale, particularly when the acquiring firms are non-state-owned and the host countries are developed. External uncertainty is the main influencing mechanism. The study also concludes that robust digital governance in host countries can mitigate the negative impacts of the digital divide. Conversely, foreign investment barriers in host countries can exacerbate the adverse effects of the digital divide on firms' cross-border transactions. Therefore, it is imperative for countries to further reduce digital barriers and promote negotiations on digital policies within a multilateral cooperation framework.
{"title":"How does the digital divide affect Chinese firms’ cross-border M&A?","authors":"Ziwei Liu, Yuhang Zhuang, Yibing Ding","doi":"10.1016/j.asieco.2025.102070","DOIUrl":"10.1016/j.asieco.2025.102070","url":null,"abstract":"<div><div>There is a significant gap in digital technology between countries, underscoring the issue of uneven digital development. Utilizing data from Chinese firms' outward foreign direct investment (OFDI) between 2009 and 2020, this paper constructs an index to measure the digital divide between China and host countries, and examines its effects on cross-border mergers and acquisitions (M&A). The findings reveal that the digital divide can significantly reduce the success rate of firms' cross-border M&A while increasing investment scale, particularly when the acquiring firms are non-state-owned and the host countries are developed. External uncertainty is the main influencing mechanism. The study also concludes that robust digital governance in host countries can mitigate the negative impacts of the digital divide. Conversely, foreign investment barriers in host countries can exacerbate the adverse effects of the digital divide on firms' cross-border transactions. Therefore, it is imperative for countries to further reduce digital barriers and promote negotiations on digital policies within a multilateral cooperation framework.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102070"},"PeriodicalIF":3.4,"publicationDate":"2025-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465814","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-31DOI: 10.1016/j.asieco.2025.102069
Yang He , Xuerong Wang , Yu Wang , Renfu Luo
Parenting styles play a pivotal role in formulating effective family policies to support early childhood development, with enduring intergenerational implications for children’s outcomes. Drawing on survey data from children aged 6–24 months and their primary caregivers, this study investigates whether the mental health of the second generation (G2) mediates the relationship between the parenting styles of the first generation (G1) and the social-emotional development of children in the third or fourth generation (G3/G4). In a three-generation model, gendered parenting by G1 predicts warm parenting behaviors in G2, whereas hostile parenting by G2 negatively affects the social-emotional competence of G3. In the four-generation model, overprotective parenting by G1 exerts an indirect effect on social-emotional problems in G4, mediated by G2’s mental health. Notably, the positive influence of protective parenting by G1 fathers diminishes with lower educational attainment in G2, while the adverse effects of protective parenting by G1 mothers intensify with higher G2 education. These findings underscore the importance of early preventive interventions to improve caregivers’ mental health and parenting practices during early childhood.
{"title":"Parenting styles across generations and children’s social-emotional development: The mediating role of caregivers’ mental health","authors":"Yang He , Xuerong Wang , Yu Wang , Renfu Luo","doi":"10.1016/j.asieco.2025.102069","DOIUrl":"10.1016/j.asieco.2025.102069","url":null,"abstract":"<div><div>Parenting styles play a pivotal role in formulating effective family policies to support early childhood development, with enduring intergenerational implications for children’s outcomes. Drawing on survey data from children aged 6–24 months and their primary caregivers, this study investigates whether the mental health of the second generation (G2) mediates the relationship between the parenting styles of the first generation (G1) and the social-emotional development of children in the third or fourth generation (G3/G4). In a three-generation model, gendered parenting by G1 predicts warm parenting behaviors in G2, whereas hostile parenting by G2 negatively affects the social-emotional competence of G3. In the four-generation model, overprotective parenting by G1 exerts an indirect effect on social-emotional problems in G4, mediated by G2’s mental health. Notably, the positive influence of protective parenting by G1 fathers diminishes with lower educational attainment in G2, while the adverse effects of protective parenting by G1 mothers intensify with higher G2 education. These findings underscore the importance of early preventive interventions to improve caregivers’ mental health and parenting practices during early childhood.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"102 ","pages":"Article 102069"},"PeriodicalIF":3.4,"publicationDate":"2025-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145685474","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-26DOI: 10.1016/j.asieco.2025.102068
Yuhang Zhuang , Chaoshuai Zhang , Liyunpeng Zhang
Amid the increasing fragmentation of globalization and rising geopolitical risks, China’s industrial policies, especially those aimed at enhancing exports, have emerged as a reference model for development strategies in some developing countries. However, given China’s distinctive administrative structure and its strong implementation capacity, it is essential to reassess the impact and scope of government decision-making within its multi-tiered governance system. Using a novel dataset of government projects in China from 2009 to 2017, we construct a province-product level measure of multi-level project governance (MLPG) and estimate its impact on regional export technological complexity (RETC). We find that MLPG significantly increases RETC, primarily by expanding financial resource supply and fostering economic agglomeration. Its effectiveness is further enhanced when local governments are both capable and constrained. The magnitude of this effect, however, varies systematically across regions. MLPG has a greater impact in regions with stronger material foundations and more coherent coordination across government tiers and interregional markets. By contrast, its effects weaken in regions with higher levels of market development. These findings underscore that the success of MLPG depends not only on governing capacity but also on its alignment with local development conditions, offering broader insights into how governance instruments can be adapted to diverse regional contexts in developing countries.
{"title":"The effect of multi-level project governance on regional export technological complexity in China","authors":"Yuhang Zhuang , Chaoshuai Zhang , Liyunpeng Zhang","doi":"10.1016/j.asieco.2025.102068","DOIUrl":"10.1016/j.asieco.2025.102068","url":null,"abstract":"<div><div>Amid the increasing fragmentation of globalization and rising geopolitical risks, China’s industrial policies, especially those aimed at enhancing exports, have emerged as a reference model for development strategies in some developing countries. However, given China’s distinctive administrative structure and its strong implementation capacity, it is essential to reassess the impact and scope of government decision-making within its multi-tiered governance system. Using a novel dataset of government projects in China from 2009 to 2017, we construct a province-product level measure of multi-level project governance (MLPG) and estimate its impact on regional export technological complexity (RETC). We find that MLPG significantly increases RETC, primarily by expanding financial resource supply and fostering economic agglomeration. Its effectiveness is further enhanced when local governments are both capable and constrained. The magnitude of this effect, however, varies systematically across regions. MLPG has a greater impact in regions with stronger material foundations and more coherent coordination across government tiers and interregional markets. By contrast, its effects weaken in regions with higher levels of market development. These findings underscore that the success of MLPG depends not only on governing capacity but also on its alignment with local development conditions, offering broader insights into how governance instruments can be adapted to diverse regional contexts in developing countries.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102068"},"PeriodicalIF":3.4,"publicationDate":"2025-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145416582","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-25DOI: 10.1016/j.asieco.2025.102067
Ziqi Lei , Ziyi Zhang , Yanhong Guo
With the increase in extreme climate events, the government plays an important role in sustainable development. This paper examines how the central bank in China addresses the risks and opportunities posed by climate change. First, based on the Copula-CoVaR model, we construct a climate financial stress index to quantify the impact of climate risk on systemic risk. Then, we introduce this index into the time-varying Taylor rule model to analyze the monetary policies of the central bank under different climate risk levels. We find that the increase in the climate financial stress index significantly strengthens asymmetric effects on monetary policies of the central bank. In a country with high climate risk, the central bank may focus on financial stability, less responsive to inflation and output gaps. The policy rate adjustments are more pro-cyclical when the country suffers extreme climate events. Our paper provides the theoretical analysis for improving the functions of central banks and a new perspective for monetary policy adjustment in addressing climate change.
{"title":"How does central bank address the climate risks through monetary policies in China?","authors":"Ziqi Lei , Ziyi Zhang , Yanhong Guo","doi":"10.1016/j.asieco.2025.102067","DOIUrl":"10.1016/j.asieco.2025.102067","url":null,"abstract":"<div><div>With the increase in extreme climate events, the government plays an important role in sustainable development. This paper examines how the central bank in China addresses the risks and opportunities posed by climate change. First, based on the Copula-CoVaR model, we construct a climate financial stress index to quantify the impact of climate risk on systemic risk. Then, we introduce this index into the time-varying Taylor rule model to analyze the monetary policies of the central bank under different climate risk levels. We find that the increase in the climate financial stress index significantly strengthens asymmetric effects on monetary policies of the central bank. In a country with high climate risk, the central bank may focus on financial stability, less responsive to inflation and output gaps. The policy rate adjustments are more pro-cyclical when the country suffers extreme climate events. Our paper provides the theoretical analysis for improving the functions of central banks and a new perspective for monetary policy adjustment in addressing climate change.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102067"},"PeriodicalIF":3.4,"publicationDate":"2025-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145416581","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-25DOI: 10.1016/j.asieco.2025.102066
Anirban Sanyal
Food inflation in India is often driven by adverse supply shocks stemming from poor harvests, extreme weather events, and supply chain disruptions, further exacerbated by export restrictions and geopolitical tensions. This study employs various VAR models and connectedness measures using quarterly data from Q1: 2012–13 to Q2: 2024–25 to assess the impact of supply shocks on food inflation in wholesale and retail markets. Findings indicate that supply shocks influence food inflation with a one-quarter lag, persisting for 2–3 quarters, with recent inflation being largely supply-driven. Time-varying impulse responses highlight an increasing dependence of food inflation on supply conditions, while connectedness measures suggest that food inflation is a net receiver of shocks, whereas supply shocks act as net emitters. The study also finds that supply shocks have a stronger impact when agricultural growth is high, and during COVID-19, supply management played a crucial role in stabilizing food inflation, weakening its link with agricultural growth.
{"title":"From farm to table: How supply shocks are fuelling food inflation in India","authors":"Anirban Sanyal","doi":"10.1016/j.asieco.2025.102066","DOIUrl":"10.1016/j.asieco.2025.102066","url":null,"abstract":"<div><div>Food inflation in India is often driven by adverse supply shocks stemming from poor harvests, extreme weather events, and supply chain disruptions, further exacerbated by export restrictions and geopolitical tensions. This study employs various VAR models and connectedness measures using quarterly data from Q1: 2012–13 to Q2: 2024–25 to assess the impact of supply shocks on food inflation in wholesale and retail markets. Findings indicate that supply shocks influence food inflation with a one-quarter lag, persisting for 2–3 quarters, with recent inflation being largely supply-driven. Time-varying impulse responses highlight an increasing dependence of food inflation on supply conditions, while connectedness measures suggest that food inflation is a net receiver of shocks, whereas supply shocks act as net emitters. The study also finds that supply shocks have a stronger impact when agricultural growth is high, and during COVID-19, supply management played a crucial role in stabilizing food inflation, weakening its link with agricultural growth.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102066"},"PeriodicalIF":3.4,"publicationDate":"2025-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145465815","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-19DOI: 10.1016/j.asieco.2025.102064
Jiajia He , Qianyao Yang , Yuhan Zhao
While existing literature has extensively examined value creation from firms' internal data assets, the interorganizational diffusion of data value across supply chains remains poorly understood. This paper develops an innovation diffusion framework to analyze how data value propagates across firm boundaries. Using a novel dataset of Shanghai and Shenzhen A-share listed firms (2008–2023) and Double Machine Learning (DML) methods, we document the presence of significant upward diffusion effects: a customer firms' data value enhancement improves their suppliers' operational and financial performance. We identify governance coordination and learning imitation as key transmission channels. Heterogeneity analysis reveals stronger effects among suppliers facing lower financing constraints and employing a higher share of technical workers, highlighting the moderating role of absorptive capacity. These findings advance the data economics literature by mapping supply chain diffusion pathways and informing policies to enhance cross-firm data synergies.
{"title":"Research on the diffusion effects of data value in supply chains","authors":"Jiajia He , Qianyao Yang , Yuhan Zhao","doi":"10.1016/j.asieco.2025.102064","DOIUrl":"10.1016/j.asieco.2025.102064","url":null,"abstract":"<div><div>While existing literature has extensively examined value creation from firms' internal data assets, the interorganizational diffusion of data value across supply chains remains poorly understood. This paper develops an innovation diffusion framework to analyze how data value propagates across firm boundaries. Using a novel dataset of Shanghai and Shenzhen A-share listed firms (2008–2023) and Double Machine Learning (DML) methods, we document the presence of significant upward diffusion effects: a customer firms' data value enhancement improves their suppliers' operational and financial performance. We identify governance coordination and learning imitation as key transmission channels. Heterogeneity analysis reveals stronger effects among suppliers facing lower financing constraints and employing a higher share of technical workers, highlighting the moderating role of absorptive capacity. These findings advance the data economics literature by mapping supply chain diffusion pathways and informing policies to enhance cross-firm data synergies.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102064"},"PeriodicalIF":3.4,"publicationDate":"2025-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145416584","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-16DOI: 10.1016/j.asieco.2025.102063
Jinying Huang , Minghai Zhou
Healthcare utilization disparities among the older population is a concerning public health problem. However, our understanding of the extent of healthcare utilization inequality associated with socioeconomic status remains limited. To address this gap, the study aims to examine on how changes in elderly’s healthcare utilization over time and changes in the elderly ’s positions in the income ranking by using three waves of China Health and Retirement Longitudinal Study (CHARLS). Our findings indicate a significant pro-rich inequality and inequity among elderly individuals. The increase of inequality for outpatient service accounts for the fall in access among the poorest individuals. While the rise in access to inpatient services among the poorest individuals results in decreased inequality. During this transitional period, income is the primary contributor to the phenomenon, while an increase in the share of public pension aids in mitigating this issue to some extent. The results suggest that policies aimed at redistributing sources of income could be an effective means of reducing healthcare utilization disparities.
{"title":"Income-related inequality and inequity in healthcare utilization: A longitudinal study of elderly populations in China","authors":"Jinying Huang , Minghai Zhou","doi":"10.1016/j.asieco.2025.102063","DOIUrl":"10.1016/j.asieco.2025.102063","url":null,"abstract":"<div><div>Healthcare utilization disparities among the older population is a concerning public health problem. However, our understanding of the extent of healthcare utilization inequality associated with socioeconomic status remains limited. To address this gap, the study aims to examine on how changes in elderly’s healthcare utilization over time and changes in the elderly ’s positions in the income ranking by using three waves of China Health and Retirement Longitudinal Study (CHARLS). Our findings indicate a significant pro-rich inequality and inequity among elderly individuals. The increase of inequality for outpatient service accounts for the fall in access among the poorest individuals. While the rise in access to inpatient services among the poorest individuals results in decreased inequality. During this transitional period, income is the primary contributor to the phenomenon, while an increase in the share of public pension aids in mitigating this issue to some extent. The results suggest that policies aimed at redistributing sources of income could be an effective means of reducing healthcare utilization disparities.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102063"},"PeriodicalIF":3.4,"publicationDate":"2025-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145416583","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-16DOI: 10.1016/j.asieco.2025.102062
Xi Peng , Yanhong Li , Runcheng Jin , Guangjun Shen
This study investigates the impact of debt maturity on firms’ environmental behavior by matching data from the Chinese Annual Survey of Industrial Firms and the Environmental Survey and Reporting database. We employ the staggered difference-in-differences approach by exploiting the establishment of city commercial banks (CCBs) in China as a natural experiment. The results reveal that the establishment of CCBs reduced the emission intensity of industrial wastewater and waste gas by 8.3 % and 18.0 %, respectively. Mechanism analysis indicates that the CCBs intensified competition in the banking sector and increased the share of long-term debt in firms’ total debt, which facilitated investments in wastewater and waste gas treatment equipment. These findings underscore the critical role of financial development in environmental protection, as the shift from polluting to cleaner production requires financial support, particularly long-term financing, for the upgrade of production technology and/or production equipment.
{"title":"Debt maturity and firms’ environmental behavior: Evidence from the establishment of city commercial banks in China","authors":"Xi Peng , Yanhong Li , Runcheng Jin , Guangjun Shen","doi":"10.1016/j.asieco.2025.102062","DOIUrl":"10.1016/j.asieco.2025.102062","url":null,"abstract":"<div><div>This study investigates the impact of debt maturity on firms’ environmental behavior by matching data from the Chinese Annual Survey of Industrial Firms and the Environmental Survey and Reporting database. We employ the staggered difference-in-differences approach by exploiting the establishment of city commercial banks (CCBs) in China as a natural experiment. The results reveal that the establishment of CCBs reduced the emission intensity of industrial wastewater and waste gas by 8.3 % and 18.0 %, respectively. Mechanism analysis indicates that the CCBs intensified competition in the banking sector and increased the share of long-term debt in firms’ total debt, which facilitated investments in wastewater and waste gas treatment equipment. These findings underscore the critical role of financial development in environmental protection, as the shift from polluting to cleaner production requires financial support, particularly long-term financing, for the upgrade of production technology and/or production equipment.</div></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":"101 ","pages":"Article 102062"},"PeriodicalIF":3.4,"publicationDate":"2025-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145362414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"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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