Pub Date : 2025-12-31DOI: 10.1016/j.pacfin.2025.103052
Lei Zhu , Jiong Wu , Shanshan Xiao
Intergenerational succession in family firms raises a basic question: when control passes to the next generation, do firms take more risk, and why? Using a panel of Chinese A-share listed family firms, we develop a composite index of successor maturity—capturing the successor's business capability and willingness to lead—and examine its association with corporate risk-taking. We find that firms led by more mature successors exhibit higher risk-taking. This relation operates through an external relational mechanism: successor maturity is linked to how the firm co-operates and competes with external stakeholders over resources; we proxy these dynamics using supplier and customer concentration. The effect is stronger when financing constraints are weaker and product-market competition is more intense. Overall, our findings suggest that post-succession risk-taking is shaped not only by the successor, but also by the family firm's position in the broader network of resource coopetition in which it is embedded.
{"title":"The resource coopetition effect in family business succession: Successor maturity and corporate risk-taking","authors":"Lei Zhu , Jiong Wu , Shanshan Xiao","doi":"10.1016/j.pacfin.2025.103052","DOIUrl":"10.1016/j.pacfin.2025.103052","url":null,"abstract":"<div><div>Intergenerational succession in family firms raises a basic question: when control passes to the next generation, do firms take more risk, and why? Using a panel of Chinese A-share listed family firms, we develop a composite index of successor maturity—capturing the successor's business capability and willingness to lead—and examine its association with corporate risk-taking. We find that firms led by more mature successors exhibit higher risk-taking. This relation operates through an external relational mechanism: successor maturity is linked to how the firm co-operates and competes with external stakeholders over resources; we proxy these dynamics using supplier and customer concentration. The effect is stronger when financing constraints are weaker and product-market competition is more intense. Overall, our findings suggest that post-succession risk-taking is shaped not only by the successor, but also by the family firm's position in the broader network of resource coopetition in which it is embedded.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103052"},"PeriodicalIF":5.3,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884180","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 : 2025-12-31DOI: 10.1016/j.pacfin.2025.103053
Wenlian Lin , Jingchen Pan
Using insider sales data from China's A-share market during 2010–2023, we find that insiders exhibit significant anchoring biases. Insider sales rise when stock prices approach their 52-week high while such trades yield lower profits than those made farther from this point. Anchoring-induced insider sales are more pronounced in stocks with low price informativeness where insiders find it difficult to assess whether their private information has been fully incorporated into stock prices. This behavior is attenuated following earnings announcements, and is also reduced by China's capital market liberalization reforms that enhance stock price informativeness. It is stronger among non-core insiders, who rely more on market signals to evaluate their private information. Beyond selling, the 52-week high also affects insider buying. In addition to the stock-level anchor, the market's 52-week high acts as an anchor in insider selling. Anchoring-induced sales are more pronounced among male insiders but are not significant among insiders with a financial background. Our findings highlight the role of anchoring bias in insider trading and the potential of capital market reforms to curb such behavioral distortions.
{"title":"Anchoring-induced insider sales in emerging markets: The role of stock price informativeness","authors":"Wenlian Lin , Jingchen Pan","doi":"10.1016/j.pacfin.2025.103053","DOIUrl":"10.1016/j.pacfin.2025.103053","url":null,"abstract":"<div><div>Using insider sales data from China's A-share market during 2010–2023, we find that insiders exhibit significant anchoring biases. Insider sales rise when stock prices approach their 52-week high while such trades yield lower profits than those made farther from this point. Anchoring-induced insider sales are more pronounced in stocks with low price informativeness where insiders find it difficult to assess whether their private information has been fully incorporated into stock prices. This behavior is attenuated following earnings announcements, and is also reduced by China's capital market liberalization reforms that enhance stock price informativeness. It is stronger among non-core insiders, who rely more on market signals to evaluate their private information. Beyond selling, the 52-week high also affects insider buying. In addition to the stock-level anchor, the market's 52-week high acts as an anchor in insider selling. Anchoring-induced sales are more pronounced among male insiders but are not significant among insiders with a financial background. Our findings highlight the role of anchoring bias in insider trading and the potential of capital market reforms to curb such behavioral distortions.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103053"},"PeriodicalIF":5.3,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884179","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 : 2025-12-31DOI: 10.1016/j.pacfin.2025.103051
Vinod Kumar , Ganesh Kumar Nidugala
Economic theory posits that entrepreneurial finance fosters new entrepreneurs, driving technological diffusion and, ultimately, economic development. An efficient financial market influences economic growth through both qualitative and quantitative channels. As a key component of entrepreneurial finance, the primary equity market has been widely recognized for its potential role in promoting economic growth. Yet, the cross-country empirical studies on the role of the primary equity market in economic development remain scarce, largely due to data availability issues and associated methodological challenges in handling complex econometric issues. This study addresses this gap by employing a macro-panel dataset covering 97 countries over 35 years. Using instrumental variable (IV) regressions with five-year averaged data, we find robust evidence that primary equity market development significantly contributes to economic growth. Cointegration analysis using annual data further reveals a long-run cointegrating relationship between the primary equity market and economic growth. The study of short-run deviation around the long-run cointegrating relationship, using the panel-vector error correction model (VECM), confirms significant short-run interactions between the primary equity market and economic growth, while panel-vector autoregression (VAR) tests indicate that causality predominantly runs from the primary equity market to economic growth, rather than vice versa. These findings highlight the importance of primary equity market development as a strategic policy objective for sustaining economic growth. Moreover, findings suggest that firms and portfolio managers can view primary market activity as a forward-looking indicator of future economic performance.
{"title":"Entrepreneurial finance, primary equity markets, and growth: Evidence from a macro-panel of 97 economies","authors":"Vinod Kumar , Ganesh Kumar Nidugala","doi":"10.1016/j.pacfin.2025.103051","DOIUrl":"10.1016/j.pacfin.2025.103051","url":null,"abstract":"<div><div>Economic theory posits that entrepreneurial finance fosters new entrepreneurs, driving technological diffusion and, ultimately, economic development. An efficient financial market influences economic growth through both qualitative and quantitative channels. As a key component of entrepreneurial finance, the primary equity market has been widely recognized for its potential role in promoting economic growth. Yet, the cross-country empirical studies on the role of the primary equity market in economic development remain scarce, largely due to data availability issues and associated methodological challenges in handling complex econometric issues. This study addresses this gap by employing a macro-panel dataset covering 97 countries over 35 years. Using instrumental variable (IV) regressions with five-year averaged data, we find robust evidence that primary equity market development significantly contributes to economic growth. Cointegration analysis using annual data further reveals a long-run cointegrating relationship between the primary equity market and economic growth. The study of short-run deviation around the long-run cointegrating relationship, using the panel-vector error correction model (VECM), confirms significant short-run interactions between the primary equity market and economic growth, while panel-vector autoregression (VAR) tests indicate that causality predominantly runs from the primary equity market to economic growth, rather than vice versa. These findings highlight the importance of primary equity market development as a strategic policy objective for sustaining economic growth. Moreover, findings suggest that firms and portfolio managers can view primary market activity as a forward-looking indicator of future economic performance.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103051"},"PeriodicalIF":5.3,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145976870","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 : 2025-12-31DOI: 10.1016/j.pacfin.2025.103050
Wei Li , Wenhua Hu
Central bank communication helps to optimize monetary policy. This paper uses a quasi-natural experiment to identify the brief commentary in open market operation notices (OMO “small notes”). It investigates how this implementation narrows the deviation of the market interest rate from its policy-intended level. We further evaluate the heterogeneous effects of liquidity comments of “small notes” on interest rate spreads. Our results suggest that OMO “small notes” improve the central bank transparency and close the gap between the market interest rate and its policy-intended level and that all liquidity comments of “small notes” enhance the effectiveness of monetary policy transmission to some extent, with “excessive liquidity” comments being the most effective. These outcomes prove that “small notes” may have the potential as a regular monetary policy communication mechanism.
{"title":"Small notes, big impact: Enhancing monetary policy transmission through central bank communication","authors":"Wei Li , Wenhua Hu","doi":"10.1016/j.pacfin.2025.103050","DOIUrl":"10.1016/j.pacfin.2025.103050","url":null,"abstract":"<div><div>Central bank communication helps to optimize monetary policy. This paper uses a quasi-natural experiment to identify the brief commentary in open market operation notices (OMO “small notes”). It investigates how this implementation narrows the deviation of the market interest rate from its policy-intended level. We further evaluate the heterogeneous effects of liquidity comments of “small notes” on interest rate spreads. Our results suggest that OMO “small notes” improve the central bank transparency and close the gap between the market interest rate and its policy-intended level and that all liquidity comments of “small notes” enhance the effectiveness of monetary policy transmission to some extent, with “excessive liquidity” comments being the most effective. These outcomes prove that “small notes” may have the potential as a regular monetary policy communication mechanism.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103050"},"PeriodicalIF":5.3,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145925440","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 : 2025-12-23DOI: 10.1016/j.pacfin.2025.103048
Ye He , Nan Lin , Dingkun Lu , Yanyu Zhou
This paper investigates the causal impact of government policy interventions on capital allocation using a geo-coded firm-level panel dataset of Chinese manufacturing firms and geo-referenced highway routes spanning 1998–2007. To address the endogeneity arising from the non-random distribution of highways, three sets of time-varying instrumental variables are employed. The results indicate that improved highway proximity enhances the allocative efficiency of capital and reduces the dispersion of the marginal revenue product of capital (MRPK). Specifically, highway infrastructure mitigates MRPK dispersion through four primary channels: (i) lowering productivity volatility, (ii) reducing markup dispersion, (iii) exerting heterogeneous effects via financial constraints, and (iv) policy distortions. These findings highlight that investments in transportation infrastructure can serve as an effective policy instrument for improving capital allocation efficiency, thereby fostering productivity growth and broader economic development.
{"title":"Highway infrastructure policy, financial frictions and capital misallocation: Evidence from China","authors":"Ye He , Nan Lin , Dingkun Lu , Yanyu Zhou","doi":"10.1016/j.pacfin.2025.103048","DOIUrl":"10.1016/j.pacfin.2025.103048","url":null,"abstract":"<div><div>This paper investigates the causal impact of government policy interventions on capital allocation using a geo-coded firm-level panel dataset of Chinese manufacturing firms and geo-referenced highway routes spanning 1998–2007. To address the endogeneity arising from the non-random distribution of highways, three sets of time-varying instrumental variables are employed. The results indicate that improved highway proximity enhances the allocative efficiency of capital and reduces the dispersion of the marginal revenue product of capital (MRPK). Specifically, highway infrastructure mitigates MRPK dispersion through four primary channels: (i) lowering productivity volatility, (ii) reducing markup dispersion, (iii) exerting heterogeneous effects via financial constraints, and (iv) policy distortions. These findings highlight that investments in transportation infrastructure can serve as an effective policy instrument for improving capital allocation efficiency, thereby fostering productivity growth and broader economic development.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103048"},"PeriodicalIF":5.3,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884148","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 : 2025-12-23DOI: 10.1016/j.pacfin.2025.103047
Remya Tressa Jacob , Rudra Sensarma
The study examines the role of debt literacy as an empowerment device in accessing credit in rural India. We analyse data from the first national survey conducted within the new institutional context of high levels of financial inclusion. Using Instrumental Variable regressions, we find a positive and significant effect of debt literacy on credit usage for female respondents. This is in contrast with international studies that found a negative relation between debt literacy and debt. Our finding that individuals with higher debt literacy tend to hold more debt underscores the importance of debt literacy in their ability to avail of credit. Our major results remain consistent in the robustness check using Propensity Score Matching and other follow-up analyses. Our findings could help financial institutions use debt literacy training as a part of responsible lending and could also inform the design of financial education policies to address the informational and capability limitations of rural households.
{"title":"Does knowledge empower? Debt literacy and credit usage in rural consumer finance","authors":"Remya Tressa Jacob , Rudra Sensarma","doi":"10.1016/j.pacfin.2025.103047","DOIUrl":"10.1016/j.pacfin.2025.103047","url":null,"abstract":"<div><div>The study examines the role of debt literacy as an empowerment device in accessing credit in rural India. We analyse data from the first national survey conducted within the new institutional context of high levels of financial inclusion. Using Instrumental Variable regressions, we find a positive and significant effect of debt literacy on credit usage for female respondents. This is in contrast with international studies that found a negative relation between debt literacy and debt. Our finding that individuals with higher debt literacy tend to hold more debt underscores the importance of debt literacy in their ability to avail of credit. Our major results remain consistent in the robustness check using Propensity Score Matching and other follow-up analyses. Our findings could help financial institutions use debt literacy training as a part of responsible lending and could also inform the design of financial education policies to address the informational and capability limitations of rural households.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103047"},"PeriodicalIF":5.3,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840641","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 : 2025-12-23DOI: 10.1016/j.pacfin.2025.103049
Jiyuan Li , Yicong Li , Lili Yan , Mengying Zhao
We investigate how the power dynamics between CEOs and CFOs impact corporate debt maturity structures, focusing particularly on CFO co-option—when CFOs are appointed after the CEO's tenure begins. Using a comprehensive sample of S&P 1500 firms from 1996 to 2022, we find that companies with co-opted CFOs significantly favour longer-term debt maturities, a pattern that reduces external creditor oversight and reinforces CEO authority. This effect is particularly pronounced during the initial years of the CEO-CFO relationship, for specialist CFOs, in firms with weak external and internal monitoring mechanisms, and in companies led by CEOs approaching retirement. Through multiple robustness tests and alternative specifications, we consistently find that CEO influence manifests in financial policy decisions that potentially prioritize managerial interests over optimal governance structures. Our findings contribute to the growing literature on executive relationships and their impact on corporate financial policies, highlighting how subtle power dynamics between top executives can shape fundamental corporate decisions with significant governance implications.
{"title":"The long game: CEO-CFO power dynamics and corporate debt maturity choices","authors":"Jiyuan Li , Yicong Li , Lili Yan , Mengying Zhao","doi":"10.1016/j.pacfin.2025.103049","DOIUrl":"10.1016/j.pacfin.2025.103049","url":null,"abstract":"<div><div>We investigate how the power dynamics between CEOs and CFOs impact corporate debt maturity structures, focusing particularly on CFO co-option—when CFOs are appointed after the CEO's tenure begins. Using a comprehensive sample of S&P 1500 firms from 1996 to 2022, we find that companies with co-opted CFOs significantly favour longer-term debt maturities, a pattern that reduces external creditor oversight and reinforces CEO authority. This effect is particularly pronounced during the initial years of the CEO-CFO relationship, for specialist CFOs, in firms with weak external and internal monitoring mechanisms, and in companies led by CEOs approaching retirement. Through multiple robustness tests and alternative specifications, we consistently find that CEO influence manifests in financial policy decisions that potentially prioritize managerial interests over optimal governance structures. Our findings contribute to the growing literature on executive relationships and their impact on corporate financial policies, highlighting how subtle power dynamics between top executives can shape fundamental corporate decisions with significant governance implications.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103049"},"PeriodicalIF":5.3,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884149","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 : 2025-12-19DOI: 10.1016/j.pacfin.2025.103044
Liangyong Wan , Xiaowei Xu , Jianyou Ou , Bingxuan Lin
This study explores the role of digital transformation in shaping corporate venture capital (CVC) investments, focusing on Chinese A-share listed firms from 2009 to 2019. Digital transformation creates strategic opportunities by enhancing internal information coordination and external information transparency, allowing firms to better identify and leverage CVC opportunities. Additionally, we highlight the importance of a firm's absorptive capacity, its ability to adapt and integrate new knowledge as a key factor in maximizing the benefits of digitalization in CVC initiatives. Digital transformation also promotes diversification in CVC portfolios across industries and regions, suggesting a broadened strategic scope. Our findings underscore the necessity of organizational readiness in fully realizing the advantages of digital transformation for corporate investment strategies in today's digital era.
{"title":"How digital transformation shapes corporate venture capital: Insights from China","authors":"Liangyong Wan , Xiaowei Xu , Jianyou Ou , Bingxuan Lin","doi":"10.1016/j.pacfin.2025.103044","DOIUrl":"10.1016/j.pacfin.2025.103044","url":null,"abstract":"<div><div>This study explores the role of digital transformation in shaping corporate venture capital (CVC) investments, focusing on Chinese A-share listed firms from 2009 to 2019. Digital transformation creates strategic opportunities by enhancing internal information coordination and external information transparency, allowing firms to better identify and leverage CVC opportunities. Additionally, we highlight the importance of a firm's absorptive capacity, its ability to adapt and integrate new knowledge as a key factor in maximizing the benefits of digitalization in CVC initiatives. Digital transformation also promotes diversification in CVC portfolios across industries and regions, suggesting a broadened strategic scope. Our findings underscore the necessity of organizational readiness in fully realizing the advantages of digital transformation for corporate investment strategies in today's digital era.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103044"},"PeriodicalIF":5.3,"publicationDate":"2025-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884178","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 : 2025-12-17DOI: 10.1016/j.pacfin.2025.103043
Ziyang Wang , Yunpeng Li , Zhihao Cui , Weinan Zheng , Ting Wang
This study develops an early-warning system for financial distress among Chinese listed service enterprises by predicting ST and *ST designations. To address the underexplored role of supply chain dynamics in distress propagation, we construct a hybrid dataset combining conventional financial ratios with supplier/customer concentration, logistics efficiency, and partner stability indicators. A three-stage framework—feature selection using Mutual Information, SelectBest, and recursive feature elimination; evaluation of four resampling techniques; and benchmarking of eight machine-learning models—shows that XGBoost with SMOTE achieves the highest performance (F1 = 0.950). Supply-chain variables rank prominently among predictors and exhibit strong nonlinear threshold effects. The findings highlight the value of integrating supply-chain intelligence into credit-risk assessment and provide actionable guidance for regulators, investors, and managers.
{"title":"A machine learning-based study of credit risk in supply chain finance of listed service-oriented enterprises in China","authors":"Ziyang Wang , Yunpeng Li , Zhihao Cui , Weinan Zheng , Ting Wang","doi":"10.1016/j.pacfin.2025.103043","DOIUrl":"10.1016/j.pacfin.2025.103043","url":null,"abstract":"<div><div>This study develops an early-warning system for financial distress among Chinese listed service enterprises by predicting ST and *ST designations. To address the underexplored role of supply chain dynamics in distress propagation, we construct a hybrid dataset combining conventional financial ratios with supplier/customer concentration, logistics efficiency, and partner stability indicators. A three-stage framework—feature selection using Mutual Information, SelectBest, and recursive feature elimination; evaluation of four resampling techniques; and benchmarking of eight machine-learning models—shows that XGBoost with SMOTE achieves the highest performance (F1 = 0.950). Supply-chain variables rank prominently among predictors and exhibit strong nonlinear threshold effects. The findings highlight the value of integrating supply-chain intelligence into credit-risk assessment and provide actionable guidance for regulators, investors, and managers.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103043"},"PeriodicalIF":5.3,"publicationDate":"2025-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840640","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 : 2025-12-13DOI: 10.1016/j.pacfin.2025.103040
Chuanhai Zhang , Zhongjie Zheng , Tao Bing
Due to global warming, extreme climate events have become increasingly frequent, posing new challenges to both the real economy and the financial system. In this paper, we construct both extreme temperature and precipitation risk indicators as two proxies for climate risk to examine their impact on the pricing of Chinese Chengtou bonds. The main findings are summarized as follows. First, both extreme temperature and precipitation risks significantly increase the issuance spreads of Chinese Chengtou bonds, and the main findings are supported by a series of robustness checks. Second, mechanism analyses reveal that extreme temperatures weaken the solvency of LGFVs and the implicit guarantees of local governments, while extreme precipitation has no such effect. Third, heterogeneity analysis reveals that climate risk has a greater impact on Chengtou bonds that receive more public attention and are issued by platforms at higher administrative levels, while no significant differences are observed across bond maturities.
{"title":"The impact of climate risk on municipal bonds pricing: Evidence from Chinese Chengtou bonds","authors":"Chuanhai Zhang , Zhongjie Zheng , Tao Bing","doi":"10.1016/j.pacfin.2025.103040","DOIUrl":"10.1016/j.pacfin.2025.103040","url":null,"abstract":"<div><div>Due to global warming, extreme climate events have become increasingly frequent, posing new challenges to both the real economy and the financial system. In this paper, we construct both extreme temperature and precipitation risk indicators as two proxies for climate risk to examine their impact on the pricing of Chinese Chengtou bonds. The main findings are summarized as follows. <em>First</em>, both extreme temperature and precipitation risks significantly increase the issuance spreads of Chinese Chengtou bonds, and the main findings are supported by a series of robustness checks. <em>Second</em>, mechanism analyses reveal that extreme temperatures weaken the solvency of LGFVs and the implicit guarantees of local governments, while extreme precipitation has no such effect. <em>Third</em>, heterogeneity analysis reveals that climate risk has a greater impact on Chengtou bonds that receive more public attention and are issued by platforms at higher administrative levels, while no significant differences are observed across bond maturities.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"96 ","pages":"Article 103040"},"PeriodicalIF":5.3,"publicationDate":"2025-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145790907","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}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号