Economic green transition is a profound revolution that determines economic high-quality development, in which monetary policy plays an important role of guiding financial allocations. Green structural monetary policy with its precise and direct speciality, supports key areas for carbon reduction, and has become one of the most important macroeconomic regulation tools for the People's Bank of China to help achieve the dual carbon goals. However, China's green structural monetary policy is still in the stage that needs improvement, and divergent expectations about the policy may affect its real effectiveness. What are the real effects of green structural monetary policy on advancing economic green transition in China？ What are the specific mechanisms of the influence？ How do green policy expectations affect the effectiveness of green structural monetary policy？ The in-depth study on the above questions has important practical significance for monetary policy to better promote economic green transition.
Combining theoretical modeling and empirical testing methods, this paper systematically studies how the green structural monetary policy influences micro enterprises' green investment and macroeconomic carbon emissions. For theoretical analysis, we construct a model embedded in the climate module and green structural monetary policy, analyze the mechanisms of green structural monetary policy promoting economic green transition, and extend the model by taking into account the random distribution of policy expectations, to further investigate its effects on the transmission efficiency of green structural monetary policy. For empirical study, we use micro panel data model, local projection method based on mixed frequency data, and nonlinear local projection method to examine how the green structural monetary policy influences green investment and carbon reduction, and identify the specific transmission path. Then, we explore how the policy expectations change the effectiveness of green structural monetary policy. Finally, we conduct heterogeneous analysis of policy effects from two aspects: the green finance reform and innovation pilot zone and environmental information transparency.
The main conclusions of this paper are as follows: (1) Green structural monetary policy can significantly increase green investment through green credit channels and reduce carbon emissions through the path of green investment. (2) More positive green policy expectations can improve the transmission efficiency of green credit channels, thereby strengthening the effectiveness of green structural monetary policy in increasing green investment, and ultimately driving greater carbon reduction efforts. (3) Green finance policy and green structural monetary policy have positive synergy, and improving the environmental information transparency can strengthen the effectiveness of green structural monetary policy in promoting economic green transition.
We propose three policy recommendations for monetary policy to support the realization of the dual carbon goal: (1) Central bank can strengthen the targeted supports of green structural monetary policy by unblocking the green credit channels, and should enhance the precise and direct transmissions of green structural monetary policy from the green investment to carbon reduction. (2) Central bank should adjust green structural monetary policy continuously and gradually, and improve policy transparency to form positive and stable green policy expectations. (3) Further stimulate the policy synergy between green structural monetary policy and other green financial policies, and increase environmental information transparency to reduce potential risks of green washing.
This paper may have following academic contributions: (1) We provide a basic analytical framework for studying the economic green transition effects of green structural monetary policy. We construct a theoretical model embedded in climate module and green structural monetary policy, reveal the mechanism through which green structural monetary policy increases green investment and decreases carbon emissions. (2) From the dual dimensions of green investment and carbon emissions, we evaluate the real effects of green structural monetary policy on promoting economic green transition, and identify the specific path of green structural monetary policy→green credit→green investment→carbon emissions. (3) We reveal the influence of green policy expectations on the effectiveness of green structural monetary policy, and verify the synergy between green financial policies and the heterogeneous influence of environmental information transparency on policy effectiveness. Our study provides useful references for the central bank to further optimize the regulation of green structural monetary policy.

China's financial sector has shifted from a phase of rapid expansion to high-quality development. In the 2023 Central Financial Work Conference, General Secretary Xi Jinping highlighted the imperative to advance five major initiatives to foster the high-quality development of finance, focusing particularly on deepening the structural reforms on the supply side of the financial sector. This paper constructs a Stackelberg difference game model of banking competition, adapting to China's unique conditions. Through numerical simulations and actual data, it examines the impact of banking competition on the profitability of banks with different ownership structures and its impact on household welfare, as well as the broader implications of the profitability in the banking sector on household welfare. This study is significant both theoretically and practically. It presents a framework to analyze competition in China's banking sector and its impact on bank profitability and household welfare, and how banking profits affect household welfare. The findings aim to help policymakers improve financial development and deepen financial reforms by offering guidance for designing policies in the banking sector.
The study begins by formulating a Stackelberg difference game model based on the empirical context of competition between state-owned and private banks in China, anchored in the Monti-Klein framework. Through numerical simulations, it probes the influence of banking competition on industry-wide profits and household welfare. The analysis reveals that increasing deposit and loan interest rates contribute to higher total profits within the banking industry and enhance household welfare. Market competition intensity and loan-to-deposit ratio have a nonlinear relationship to bank profitability and household welfare, which manifests distinct characteristics at various stages of the evolution of the banking industry. The competitiveness in the deposit and loan market has direct influence on the profits of state-owned and private banks, and indirect influence on household welfare through interest rates of deposit and loan. Moreover, the paper delves into the theoretical nexus between bank profits and household welfare. Subsequently, employing an unbalanced panel dataset from 446 Chinese banks between 2007 and 2021, drawn from the CSMAR database, and panel data from 31 Chinese provinces between 2011 and 2018, the empirical section corroborates these insights. The findings demonstrate that increases in deposit and loan rates, alongside intensified market competition and an elevated loan-to-deposit ratio, bolster bank profitability, wherein the intensity of market competition and the loan-to-deposit ratio exert nonlinear influences on profitability. Furthermore, enhancements in deposit and loan rates, market competition, and the loan-to-deposit ratio augment household welfare. Panel threshold regression unveils significant threshold effects between key independent and dependent variables. There is a positive correlation between bank profitability and resident welfare. The empirical analysis also includes mediating effect examinations, offering a nuanced exploration of the relationships between independent and dependent variables, thereby empirically validating the theoretical simulations posited in the earlier sections.
Based on the main findings, the paper has the following policy implications: First, carefully adjust deposit and loan interest rates, and expand the banking sector's role in inclusive finance. Second, promote balanced competition to prevent market failures due to under-competition and minimize systemic risks from over-competition. Additionally, understand disparities among regions and development stages of the banking industry, and advocate for more comprehensive structural reforms from the supply side.
This paper contributes to existing literature by integrating the Stackelberg difference game into the analysis of competition within China's banking sector, considering the leader-follower dynamics amongst banks of diverse ownership forms, thus capturing the competitive behaviors between state-owned and private banks in China more precisely. It also introduces the deposit and loan markets in the banking industry, linking these markets through appropriate assumptions to reflect market prices and quantities. Drawing on the Monti-Klein framework and adopting Ljungqvist and Sargent's (2018) recursive contracts analytical framework, the study crafts a theoretical model that simulates time series of profits for market leaders and followers, consumer surplus, and welfare for a comparative static analysis. In contrast to existing studies that predominantly focus on the impact of banking competition on operational outcomes like performance and profitability, this research broadens the analytical lens to encompass the effects of banking competition on bank profitability and household welfare, thus offering a more holistic analysis within a comprehensive market-theoretical system. Future studies may extend to general equilibrium analysis.

In order to promote the market-oriented pricing of loans, the People's Bank of China officially launched the formation and release mechanism of Loan Prime Rate (LPR) in 2013. However, at that time, the LPR was almost determined by the benchmark interest rate, which rarely reflected the market liquidity situations. Moreover, the application of LPR was limited among commercial banks. In the context of declining market interest rate, the real economy still faced financing difficulties and high financing costs. In order to deepen interest rate marketization reforms, enhance interest rate transmission efficiency, and reduce financing costs of the real economy, the People's Bank of China introduced the Loan Prime Rate reform in August 2019. The LPR reform converted the LPR pricing benchmark to the Medium-term Lending Facility (MLF) rate, and clarified that all banks should determine loan rates based on LPR. The central bank hopes to enhance the influence of market factors in the LPR formation and improve the bank's market-oriented pricing ability of loans, with ultimate goals of alleviating the financing difficulties and lowering financing costs. However, can this LPR reform achieve the established goals of the central bank, and what impact will it have on the financing costs and credit allocation efficiency？
To explore the impact of LPR reform on real economy financing conditions, we choose A-share listed companies from 2018 to 2020 as research samples and conduct empirical analysis using financial data and macroeconomic data. The financial data of listed companies come from CSMAR Database and Wind Economic Database, and macroeconomic data come from CEIC China Economic Database. Firstly, since all bank loans are affected by the LPR reform, it is actually impossible to distinguish between the treat group and the control group, and using simple panel regression would have severe endogeneity problems. To explore the impact of LPR reform on the corporate financing costs, we construct a continuous variable that reflects the financing constraints of enterprises, then employ continuous DID method to capture the impact more accurately. Secondly, we examine the internal mechanism and further explore the heterogeneous impact of the reform on the corporate financing costs. Finally, to explore the impact of LPR reform on credit allocation efficiency, we group enterprises based on growth and empirically test whether high-growth enterprises have effectively improved their financing availability after the reform.
The results indicate that the LPR reform significantly reduces the corporate financing costs, and enterprises with lower financing constraints experience a greater decrease in financing costs after the LPR reform. Moreover, the LPR reform improves credit allocation efficiency, with high-growth enterprises experiencing increased loan accessibility at a higher loan rate. Micro-level mechanism tests confirm that the LPR reform lowers financing costs through the interest rate transmission mechanism, the competitive mechanism, and the loan pricing mechanism. Specifically, LPR reform helps to transmit the decline in monetary policy rates and market interest rates to the real economy, after the reform, enterprises are more sensitive to changes in MLF rates and LPR. At the same time, LPR reform reduces the financing costs of enterprises with lower financing constraints by enhancing competitiveness among banks. In addition, the expansion of quoting banks can help guide small and medium-sized banks to set loan prices and reduce loan rates. Finally, heterogeneity results indicate that the impact of LPR reform on corporate financing costs is mainly reflected in low-risk enterprises, strategic emerging industry enterprises, and non-state-owned enterprises.
The contributions of this paper lie in the following aspects. Firstly, this paper employs a continuous DID method based on corporate financing constraints, which more accurately explores the impact of LPR reform on corporate financing costs. Secondly, this paper analyzes and tests the impact of LPR reform on credit allocation efficiency from the perspective of information asymmetry in the credit market. Thirdly, this paper complements the research on the micro-level mechanism of the impact of LPR reform on the financing costs, and the existence of interest rate transmission mechanism, competitive mechanism, and loan pricing mechanism has been verified. Heterogeneous impacts of reform on different enterprises have also been discovered. This paper not only provides empirical evidence for the central bank to assist in market-oriented pricing of loans, but also provides direction guidance for further deepening interest rate marketization reform in the future.

Since Brunnermeier and Pederson (2009), it has been recognized that financial institutions' funding liquidity plays a key role in maintaining financial market stability. However, the majority of existing studies have focused on the interaction between financial asset market liquidity and financial institution funding liquidity (He and Krishnamurthy, 2012; He and Xiong, 2012a; He and Xiong, 2012b). There has been a paucity of research exploring the financing function played by high-quality collaterals. China's large-scale local bond issuance commenced with the local government debt replacement initiative initiated in 2015. The cumulative volume of local debt issuance from 2015 to 2021 exceeds 36 trillion yuan. Commercial banks have been the primary underwriters of local debt issuance, purchasing more than 80% of local government bonds and holding them for an extended period. A further question arises: as a high-quality collateral security second only to treasury bonds, is the large-scale supply of local government bonds conducive to facilitating banks' collateralized financing transactions, thereby enhancing bank funding liquidity？ This question has been somewhat overlooked by many researchers.
This paper examines the impact of banks' holdings of local bonds on their participation in collateralized financing transactions and the liquidity effects of bank financing induced by local bond issuance. However, since the breakdown items of bank holdings are not publicly available, in order to overcome the difficulty of data availability, this paper innovatively utilizes the policy change of removing the 20% restriction on bank investment in lead underwritten local bonds issued by China Banking and Insurance Regulatory Commission in August 2018, and conducts a quasi-natural experiment to identify the impact of the change in the proportion of lead underwritten banks' holdings of local bonds on their repo financing transactions. The paper employs a difference-in-difference empirical strategy, utilizing the policy change of the 20% restriction removal. The baseline regression results indicate that the removal of the 20% restriction can significantly increase the proportion of bond repo transactions of local bond lead underwriting banks in the current period as well as in the two subsequent periods. Furthermore, an increase of one yuan in the bank's lead underwriting of local bonds after 2018 can lead to an increase of about 0.12-0.15 yuan in the bond repo transactions in the same period. The bank's lead underwriting of local bonds after 2018 is associated with an increase of approximately 0.12-0.15 yuan in bond repo transactions in the same period. This is a notable and economically significant effect. Two approaches are employed to address the potential endogeneity issue. Firstly, the distance between the city where the bank is located and the provincial capital of the province is selected as the instrumental variables for the share of bank's lead underwriting of local bonds. We then perform DID estimation based on the instrumental variable. Secondly, we use PSM to select a matched sample, and then conduct DID estimation based on the matched sample. The estimation results of both approaches are consistent with the baseline regression. The paper also finds that the lifting effect of the 20% restriction removal on their bond repo transactions is greater in the samples with higher liquidity difficulty, higher liquidity creation, higher sensitivity between interest expense and interest rate, and higher sensitivity between deposit and interest rate. Furthermore, the paper finds that local bonds in regions with higher economic development growth are used more for repo financing transactions; the removal of the 20% restriction does not have a significant effect on the cost of bank bond repo transactions; there is a significant positive effect of increased bank holdings of local bond on bank's future risk-taking.
This paper has the following policy suggestions:
Firstly, it is imperative to maintain a certain scale of local bond issuance. Secondly, local governments must take every possible step to ensure that local bonds are repaid in full and on time, and to strengthen the protection of the legitimate rights and interests of local debt investors. Thirdly, other qualified investors should be actively encouraged to participate in the issuance and trading of local bond, in order to optimize the investor structure and effectively improve the secondary market liquidity of local bonds.
This paper contributes to the existing literature by filling the gap on the causal link between local bond supply and bank funding liquidity. It provides insights into the mechanism of the coordinated operation of fiscal and financial affairs with Chinese characteristics. Furthermore, it offers a valuable reference basis for the public to judge the overall impact of local bond issuance on the Chinese economy. Moreover, there is a paucity of micro-empirical studies on the repo market in China. This paper may be the first empirical research to examine the repo behaviour of Chinese banks utilizing microdata at the bank level. Consequently, this paper also contributes to a full comprehension of the dynamics within the Chinese repo market.
Future research should pay attention to the expansionary effects and economic consequences of the large supply of local bonds in the bank funding market. As local bonds are increasingly used for collateral financing in the bank repo market as well as for financing through the central bank's monetary policy instruments, it is worthwhile for researchers to examine in depth the possibility of an expansion of financing by financial institutions that is not planned by the central bank, and whether this poses a threat to the stability of the financial system.

In order to categorize and transform local government financing platforms (LGFPs) and modernize China's financial governance, it is imperative to improve the performance of LGFPs. China has implemented a number of regulatory policies to standardize LGFPs' management and encourage the transformation of companies with stable operating income and cash flow. One important regulatory tool representing the classified regulatory policy is the China Banking Regulatory Commission's (CBRC) LGFP list-based management system.
We employ the staggered difference-in-differences model to estimate the effect of CBRC's regulatory policy on the performance of LGFPs using manually collected data from 2010 to 2018, with the withdrawal from the list-based management system as a quasi-natural experiment. Additionally, we explore mechanisms through which classified regulatory policy influences the performance of LGFPs and the heterogeneous effects from the perspectives of regional marketization, debt ratio, credit rating, and business type of LGFPs.
Our main findings are as follows. (1) Classified regulatory policy is conducive to promoting the performance of LGFPs. The aforementioned conclusion holds after a number of tests, including parallel trend tests, exclusion of samples from municipalities directly under the central government, exclusion of other policies, alternative estimation methods, and placebo tests. In terms of the calendar effect, this positive association becomes apparent primarily since 2015. (2) The classified regulatory policy significantly improves the performance of LGFPs located in more marketized provinces, as well as LGFPs with higher debt ratios, credit ratings, and operational business, but not conducive to improving the performance of LGFPs for public welfare activities. (3) The mechanism analysis demonstrates that the classified regulatory policy can promote the performance of LGFPs through revenue improvement, cost control and operating efficiency enhancement. (4) The extended analysis reveals that LFGPs have optimized the debt structure following their departure from the list-based management system, with an increase in the percentage of long-term debt but a loss in their long-term solvency.
The conclusions carry significant policy implications. (1) The classified regulatory policy needs to be further improved in order to support LGFPs' development and transformation. (2) It is imperative to investigate multifaceted approaches to improve LGFPs' capacity for sustainable development and to encourage the transformation of their classification through performance-targeted assessment management. (3) It is crucial to strengthen the debt risk management of LGFPs, prevent and resolve such risks.
We make three potential contributions to the literature. (1) This study assesses the impact of CBRC’s regulatory policy on the performance of LGFPs from the perspective of classified regulation, providing empirical evidence for understanding the effectiveness of classified regulatory policy. (2) While most previous studies have focused on the causes of the debt risk of LGFPs and the impact of regulatory policies on their debt risk, we examine the impact of classified regulatory policy on the performance of LGFPs and explore its intrinsic mechanism. Moreover, we investigate the heterogeneous effects of classified regulatory policy from regional marketization, debt ratio, credit level, and business type of LGFPs. (3) The results of this study not only reveal the effectiveness of classified regulatory policy on the long-term development of LGFPs, but also examine the impact of classified regulatory policy on the debt scale and solvency of LGFPs. Our findings also provide insightful policy recommendations for further understanding the effectiveness of regulatory policies and accelerating the pace of classified transformation of LGFPs.

Following the revision of the Securities Law in December 2019 in China, the minority investor protection and the enforcement practices within Chinese legal system have gradually strengthened. The litigation risk faced by listed firms arising from false disclosures, illegal guarantees, or market manipulation is becoming increasingly prominent, triggering great uncertainty for corporate operations. Although institutional investors have been proven effective in mitigating corporate litigation risk, the impact of their shareholding networks, a social attribute, on litigation risk, remains poorly understood in China.
With the establishment and merger of a large number of financial institutions, the prevalence of common institutional ownership, formed by institutional investors simultaneously holding shares in firms within the same industry, has substantially increased in China. This trend has been on the rise since 2016. Particularly, those common institutional investors with Chinese characteristics, embodying both governmental and market attributes, bear multiple responsibilities such as compensating for market resource allocation failures and preventing financial risks. In the emerging Chinese market, where the formal legal system is relatively weak, extensive shareholding networks are likely to strengthen the incentives and capabilities of common owners, enabling them to play pivotal roles in mitigating corporate litigation disputes. But there is also a possibility that common owners exert a collusive tunneling effect, exacerbating corporate litigation risk.
Utilizing the data of Chinese A-share listed companies from 2016 to 2020, this paper empirically examines the impact of common institutional ownership, a special shareholding mode, on corporate litigation risk. Our evidence reveals that common institutional ownership significantly reduces corporate litigation risk, supporting the synergy governance view. We address potential endogeneity concerns by adopting methods like propensity score matching, difference-in-difference, and instrumental variables. Specifically, we use whether other companies in the same industry held by the same common owners have been removed from the CSI 300 Index or the CSI Smallcap 500 Index as instrumental variables that trigger exogenous changes in a firm's common institutional ownership.
Our mechanism tests indicate that the breadth (i.e., information economies of scale) and depth (i.e., industry power) of within-industry shareholding networks endow common institutional shareholders with sufficient motives and capabilities to implement shareholder activism. Common institutional ownership reduces corporate litigation risk by leveraging interest synergy and risk governance effects, with information disclosure, monitoring, and compliance serving as key channels. Further analyses unveil that common ownership is an effective alternative governance mechanism for internal and external corporate governance. The role of common institutional ownership in reducing litigation risk is more significant in private enterprises. Heterogeneity tests document that non-pressure-sensitive, transactional, and stable common institutional investors significantly reduce corporate litigation risk. Common institutional ownership mainly affects litigation risks closely associated with corporate capital (creditors and shareholders) and operations (partners and competitors).
Our study documents that common institutional ownership acts as an effective informal governance mechanism for mitigating the litigation risk faced by micro-enterprises, compensating for the deficiencies of formal macro systems in regulating corporate behavior. In addition to expanding the literature on factors influencing litigation risks, our research extends the branch of research on law and finance to the informal micro-institutional dimension represented by equity arrangements. From the perspective of stakeholder protection, this study highlights the synergy governance effect of common institutional ownership, providing insights tailored to the Chinese context. By emphasizing the social attribute of institutional investors' shareholding networks, we contribute to the existing literature on common institutional ownership and social networks.
Our findings have several practical implications. Firstly, regulatory authorities should cultivate mature common institutional investors and encourage them to expand shareholding breadth and depth appropriately. This will enable them to fulfill roles in rectifying corporate governance failures, meeting the demands of stakeholders, and stabilizing the capital market. Notably, regulators need to closely monitor and be vigilant against the potential for collusive monopolistic practices driven by common owners. Secondly, listed companies can leverage the professional expertise of common institutional shareholders to compensate for internal and external governance deficiencies, mitigate conflicts of interest, avoid cutthroat competition, and prevent litigation risks. Thirdly, minority shareholders and other stakeholders can identify well-governed enterprises with low litigation risk by observing and learning from common owners' investment behavior, thereby reducing transaction risks through improved screening of portfolio targets.

Mutual fund is a popular financial instrument that a few professionals serve most non-professionals for operating funds to earn higher returns, but it is often complained by lots of fund holders that “funds make money while investors lose money”. Intuitively, in 2022, there are over 10,000 mutual funds with total size over 26 trillion yuan (21.5% of China's GDP that year) in China. Among them, all the stock funds and stock-oriented hybrid funds earned over 1.5 billion average weighted net profit themselves while made about-18.23% average weighted return for their fund holders. Existing research has worked on explaining this phenomenon, criticizing fund holders' irrationality as the main reason. But this only explains why investors lose money, as it ignores the fact that the interest between fund holders, fund managers as well as fund management companies should have been highly consistent due to funds' mechanism. Moreover, most papers, affected by the corporate-based form in the US, take fund management companies and fund managers, or fund management companies and fund holders, as a whole and investigate their relationship, while ignoring the truth that fund management companies and fund holders have heterogenous incentives on fund managers under the form of contractual fund in China.
In view of this, based on the common agency theory (multi-principals vs. one agent), we constructed a game model that describes the interests, incentives and behavior among fund management companies, fund managers and fund holders in China. The general framework is as follows: (1) Fund holders' income is determined by fund's performance; fund management companies' income is determined by fund's size (fixed management fee rate); fund managers' income is determined by both fund's size (scale-based compensation) and fund's performance (performance-based compensation). (2) Fund's size is determined by fund holders' purchasing and redemption, and fund holders' purchasing and redemption are determined by their “rationality” (how they react to fund's last-period performance). (3) Fund's performance is determined by fund managers' effort, and fund managers' effort is determined by the incentives of fund management companies (via scale-based compensation and performance-based compensation) and fund holders (via how they purchase and redeem), as well as how fund managers weight them. (4) Fund holders choose how and how much their subscription and redemption react to fund's performance in the last period, fund management companies choose how much they compensate fund managers on both fund's size and performance, and fund managers choose how much they weight different incentives to maximize their net incomes. Under this framework, we then prove that: (1) If fund holders are “rational” (purchase funds with positive last-period performance and redeem funds with negative last-period performance), the “equilibrium” of the game will be that all parties focus on improving or compensating for fund's performance and can all “make money”. (2) If fund holders have a disposition effect (redeem funds with positive last-period performance and keep holding funds with non-positive last-period performance), the equilibrium of the game will be that fund management companies and fund managers both seek to maintain “zero performance” on every single fund and to issue more funds (to make money via management fees), leading to the result that “fund makes money while investor loses money”. Meanwhile, we set proper parameter values according to both market practice as well as academic research to run numerical simulation to prove the robustness of our game model. Thus, we finally propose following policy implications: (1) Since rationality is the key determinant of the coordination of interests of all parties, fund holders should be educated as investors to increase their rationality under the current form of contractual fund. (2) Pilot scheme of the corporate-based form, which may eliminate the potential interest conflicts between fund management companies and fund holders by “merging” them as one.
Our marginal contributions may include: (1) Our model takes fund management companies, fund managers and fund holders into account rather than consider either fund management companies and fund managers or companies and fund holders as one single party as most papers did, thus focusing on the governance problem of public funds in China. (2) We are the first to build a theoretical game model describing the contractual funds' operation in China, thus digging out the root of how different market subjects choose to behave and provide a new perspective and the theoretical basis for future research. (3) Using our game model, we provide a fundamental theoretical explanation to why funds make money while investors lose money, giving a deeper understanding of its reasons and solutions. Our future work based on this paper is to refine the model by relaxing assumptions to expand its applicability to more types of funds (such as close-end funds, regular open-end funds, etc.) and explaining more problems (such as floating management rate reform).

The Beijing Stock Exchange (BSE) was registered on September 3, 2021, and officially commenced trading on November 15 after extensive preparations. All stocks on the NEEQ Select listed on the BSE mandatorily (hereinafter referred to as mandatory transfer listing, MTL), initiated an era with three concurrent stock exchanges in China. The establishment of the BSE is essential to the NEEQ, and the effects should be analyzed deeply. Exploring the market performance and impact mechanism of MTL not only promotes the development of the BSE but also deepens our understanding of the economic consequences of listing or tier transferring.
Firstly, this study explores potential channels through which MTL might affect firm value. It empirically tests the initial, overall, and net listing effects of MTL, as well as MTL’s impact on stock liquidity, investor recognition, and price efficiency, using a sample of 45 companies that were already listed on the NEEQ Select prior to the announcement day. This study mainly draws on methods from Kadlec and McConnell (1994) and Li et al. (2008). Secondly, this study empirically tests the relationship between changes in stock liquidity, investor recognition, and price efficiency and the initial, overall, and net listing effect using regression. Thirdly, this study also examines the heterogeneity of the impacts of MTL. Fourthly, this study further explores the impact of MTL on similar companies within the Innovation Tier that meet the selection criteria of the NEEQ Select.
The study finds that: (1) The market reaction to MTL is significantly positive, and the initial listing effect, overall listing effect, and net listing effect are 14.84%, 16.28%, and 8.77%, respectively. (2) Following MTL, the price impact significantly decreases, while turnover significantly increases; the number of institutional investors markedly rises, and the number of shareholders decreases, while the proportion of institutional shareholding does not show a significant increase. The price delay and the price informativeness significantly decrease, while the change of Gamma is not significant. (3) In regressions using the initial listing effect of individual stocks as the dependent variable, the coefficients for changes in the price impact, turnover, Gamma, and price delay are significantly negative, while those for changes in the number of institutional shareholders and price informativeness are significantly positive. In regressions using the overall and net listing effects of individual stocks as dependent variables, the coefficients for changes in turnover and Gamma become insignificant. (4) MTL has a larger positive impact on smaller companies and those with lower stock liquidity. (5) Compared with companies from the original NEEQ Select, the establishment of the BSE has a greater positive impact on similar companies within the NEEQ's Innovation Tier.
Based on these findings, the study proposes the following policy suggestions: Firstly, the BSE should further expand market making, increase the inclusion of underlying stocks, and implement the institution of designated market making, if possible, to allow companies to purchase liquidity. Secondly, the BSE should reinforce securities regulation, improve the information disclosure quality, strengthen investor protection, and reduce the adverse selection cost faced by investors. Thirdly, the BSE should implement the listing standards strictly, and enhance the attractiveness of listing on the BSE through policy reforms. Fourthly, the BSE should increase institutional investors' enthusiasm in investing stocks on the BSE.
The potential contributions of this study are as follows: First, it measures the economic value of MTL for the first time and explores the according mechanisms. In existing literature, decisions regarding listing or transferring are made voluntarily by firms; however, MTL decision is exogenous, thereby providing an excellent opportunity to directly measure the economic value of listing. Second, it enriches the studies of the economic consequences of transferring from non-exchange market to exchange market within the domestic context. Most literature in China focuses on tier transferring within non-exchange market or board transferring within exchange market, not on listing actions from non-exchange market to exchange market, making this study a valuable addition to existing literature. Third, the study explores the listing expectation effect following the establishment of the BSE for the first time. Post-MTL, companies on the Innovation Tier that have similar characteristics to those on the NEEQ Select may develop strong listing expectations, yet its magnitude has not been thoroughly investigated.

Effectively preventing and resolving economic and financial risks is one of the major issues of current economic work in China. Among them, household financial risks are an important component. Analyzing the household financial vulnerability is an important point for studying how to prevent and resolve household financial risks. Therefore, exploring effective ways to reduce household financial vulnerability is particularly important. Concurrently, the role of social networks as informal institutions in the economy and society has always been a hot topic in social science research. Especially for developing countries like China, social networks have a significant impact on people's economic behavior and daily life. Does social network relationship affect household financial vulnerability？ If there is a significant impact, what is the specific mechanism？ Is there heterogeneity due to differences in other factors？ These questions are worth exploring in depth.
This paper uses data from the China Household Finance Survey (CHFS) in 2017 and 2019 to examine the impact and mechanism of social networks on household financial vulnerability. The research conclusion is as follows: Firstly, social networks significantly reduce household financial vulnerability. This conclusion still holds after a series of robustness tests, such as overcoming endogeneity, replacing independent variables and dependent variables, replacing instrumental variables, and replacing samples. Secondly, the mechanism by which social networks affect household financial vulnerability is mainly reflected in three aspects: alleviating liquidity constraints, playing a role in risk sharing, and promoting information transmission. Thirdly, social networks have a more significant impact on the financial vulnerability of rural, low-income, low net assets, elderly, low education levels, and risk-averse households. These households have relatively scarce material or human capital. It can be seen that social networks have inclusive characteristics for the healthy and sustainable development of family economy. Fourthly, social networks, as an informal institution, play a complementary role with formal finance in reducing household financial vulnerability.
This paper provides the following insights. Firstly, it is necessary to pay further attention to preventing and resolving household financial risks. Social networks are one of the effective ways to reduce household financial vulnerability. Policy makers can encourage the construction of social networks and better reflect the positive role of social networks. Secondly, to leverage the complementary effects of informal social networks and formal institutions for different groups, and jointly build a household financial safety net. Thirdly, increasing household income and asset levels through multiple channels, constructing a multi-level social security system, and improving credit and insurance markets can help enhance households' risk tolerance. This paper provides experience for other countries, especially developing countries, to pay attention to and reduce household financial vulnerability.
The main contributions of this paper are in three aspects. Firstly, we use the Extended Linear Expenditure System (ELES) to measure household basic living expenses and calibrate existing financial margin indicators to more accurately measure household financial vulnerability. Secondly, we analyze effective ways to address household financial vulnerability from the perspective of social networks. This provides micro evidence for understanding the role of social capital in addressing household financial risks. This not only enriches the relevant research on household finance, but also provides useful insights for improving the ability of households to cope with financial risks. Thirdly, we systematically identify the mechanisms by which social networks reduce household financial vulnerability in terms of alleviating liquidity constraints, sharing risks, and enhancing information transmission. Finally, we explore the different impacts of heterogeneity in urban and rural areas, household characteristics, and head of household characteristics. This provides a reference basis for preventing and resolving household financial risks, improving the stability of the financial system, and helping to safeguard and improve people's livelihoods, continuously enhancing their well-being.

As of 2019, China has built over 80 million units of various types of affordable housing and shantytown resettlement housing programs, helping more than 200 million people in need improve their housing conditions and building the world's largest housing security system. As an important component of the social security system, the housing security system has reconstructed new measures such as monetary subsidies, physical guarantees, or mixed bottom-up measures based on the adjustment of traditional welfare housing allocation, fundraising for building houses, and unit purchase policies. This can effectively solve the problem of market mechanisms not being able to meet the needs of all people to achieve a place to live, and alleviate the contradiction between market mechanisms and resident welfare.
Given the important role of housing in family economic decision-making, the significance of the housing security system is not limited to solving the housing problems of disadvantaged groups, but also has multiple functions such as stabilizing housing prices, stimulating consumption, and promoting economic growth. Specifically, the decrease in housing costs—the direct effect of affordable housing—has been proven to effectively promote an increase in non-housing consumption in households. With the continuous intensification of international competition and the increasing uncertainty of external demand, expanding domestic demand has become an inevitable choice to promote sustainable economic growth in China. Against the backdrop of the country's continuous promotion of the supply of affordable housing and the implementation of the strategy to expand domestic demand, it is of great significance to deeply explore the consumption effects and underlying mechanisms of the housing security system.
This article focuses on the current national key promotion of public rental housing (PRH) design, and empirically examines the consumption effect of the housing security system. Specifically, this article focuses on the impact of public rental housing policies on the consumption of mobile households and the degree of social integration. In terms of empirical design, this article designs a fuzzy regression discontinuity (Fuzzy RD) model based on the requirements for household income in the admission conditions of PRH, effectively solving the sample selection problem of the protected group. Empirical study using data from the 2016 and 2017 China Migrants Dynamic Survey (CMDS) finds that: firstly, the PRH policy significantly reduces the housing expenditure of protected households and increases non-housing consumption, but its impact on total expenditure and savings is insignificant; Secondly, PRH policies can influence the consumption choices of protected households through location and income effects, and the latter is more prominent. This article also confirms the existence of these two effects based on the heterogeneity analysis of income change trends and commuting population size; Thirdly, the PRH policy has significantly increased the willingness and perception of social integration among families of protected migrant populations, but has not increased their demand for local housing, which will not have an impact on urban housing prices; Fourthly, the PRH policy has a more significant consumption promotion and social integration enhancement effect on the high educated, young, and unmarried protected groups, which helps to improve the quality of urban labor.
The marginal contribution of this article is mainly reflected in the following points: Firstly, this article empirically examines the impact of PRH policies on the consumption, social integration, and housing demand of migrant households for the first time, enriching and expanding the research results on the economic and social effects of existing housing security systems. Secondly, this article uses the Fuzzy RD method to evaluate the policy effectiveness of the housing security system, effectively solving the endogeneity problem of nonrandom effects in cross-sectional data processing, and ensuring the effectiveness and unbiased estimation of parameters. Thirdly, this article also discusses the impact mechanism and heterogeneity characteristics of the acquisition of PRH on the consumption and social integration of the floating population from multiple dimensions, which helps to have a deeper and more comprehensive understanding of the impact of the housing security system on the economic behavior of the floating population.
The research conclusion of this article has the following policy implications: Firstly, the national and local governments should fully leverage the power of social capital on the basis of adhering to the expansion of affordable rental housing construction, and explore a market-oriented and sustainable path to solve the housing problems of disadvantaged groups and new citizens. Secondly, various channels should be leveraged to increase the supply of affordable rental housing land, promote the conversion of idle and inefficient nonresidential housing stock into affordable rental housing; urban public transportation networks should be expanded to improve the accessibility of affordable housing in remote areas, and reduce the transportation costs for residents. Thirdly, in the context of increasingly fierce competition for talent among regions, the heterogeneity research in this article finds that optimizing the supply of affordable housing and institutional design by local governments can help attract and retain talent, and contribute to the accumulation of human capital and sustainable economic growth in the local area in the medium and long term. Fourthly, when local governments allocate PRH, they can consider the proportion structure between local residents and outsiders in the community, and adopt measures to combine affordable rental housing with market rental housing, optimize the neighborhood structure of the protected group, and accelerate the social integration of new citizens.

The trade-off theory implies that firms have target levels of tax burden. Firms will adjust towards target level of tax burden when the current level of tax burden deviates from the target level. The research on the dynamic adjustment of the level of tax burden has just started and it is urgent for scholars to carry out in-depth research. The digital transformation of firms has brought about the deep integration of digital technology and strategy, which is very important for firms' high-quality development. Chinese government attaches great importance to the digital transformation of the firm and has repeatedly emphasized and called on the promotion of digital construction of all walks of life in the Government Work Reports in 2021. Under the background of the rapid development of digital economy, a lot of research has been carried out. Previous studies have shown that the digital transformation will change the management model, efficiency, and effect of firms by improving the efficiency of information management and reducing the organizational coordination cost. As an important segment and organic component of firm tax administration, the dynamic adjustment of firm-level tax burden is also highly dependent on information management efficiency and organizational coordination. Because the digital transformation can not only improve the efficiency of information management, but also reduce the cost of coordination, it will inevitably affect the formulation and implementation of firm's tax burden adjustment strategies, and then affect the adjustment speed towards the target level of tax burden. Regrettably, few studies have directly investigated the impact of digital transformation on the firms' adjustment speed towards target level of tax burden up to now.
Based on these, our study uses the data of A-share listed firms in China's capital market from 2007 to 2019 to construct research samples, and tries to investigate how digital transformation affects the adjustment speed towards the target level of tax burden. The results show that digital transformation can significantly improve the adjustment speed towards the target level of tax burden. Under a variety of robustness tests, the conclusion remains unchanged. The mechanism tests show that digital transformation can improve the adjustment speed to the target level of tax burden by enhancing the efficiency of information management and reducing the cost of coordination. Further research shows that there is no significant difference in the impact of digital transformation on the upward adjustment (increasing the level of tax burden to the target value) and downward adjustment (reducing the level of tax burden to the target value) of firms. Besides, the impact of digital transformation on the speed of adjustment to the target level of tax burden is more pronounced for firms that do not have overseas operations, firms with loose separation of decision-making rights, firms with a higher degree of product market compitition and firms in regions with lower tax enforcement intensity.
Possible theoretical contributions of our study are as follows: (1) Enriching related research on the factors affecting the adjustment speed towards target level of tax burden: The research on the determination mechanism behind the adjustment speed has just started and the related research is still very scarce. Based on the perspective of digital transformation, our study makes up for the shortcomings of existing literature to some extent. (2) Providing empirical evidence of the impact of digital transformation on firms from the perspective of tax management activities: Our study not only researches the influence of digital transformation on the level of tax burden adjustment behavior from a dynamic perspective, but also reveals the impact mechanism of digital transformation on the adjustment speed, which is helpful to understand the internal logic and universal law of digital transformation affecting firms' behavior comprehensively and deeply. (3) Introducing the two-stage method of capital structure adjustment into the field of tax burden adjustment which has reference value for subsequent research: We adopt a two-stage method used in the field of capital structure adjustment, by firstly estimating the target level of tax burden, and then estimating the adjustment speed, when studying how digital transformation affects the adjustment speed. Compared with existing methods in the field of tax burden adjustment, this method is easier to expand. By adding the interaction term of the specified variable and the variable of the deviation degree of the firm's level of tax burden, we can test the influence of the variable on the adjustment speed towards the target level of tax burden, which has reference value for subsequent research.
In practice, this paper may have the following contributions: (1) research comprehensively reveals the influence of digital transformation on the firms' fiscal and taxation management and provides a theoretical basis for the firm to vigorously promote digital reform. Since digital transformation requires firms to invest large resources, and there are some uncertainties, the attitude of different industries and different types of firms to digital transformation is not consistent. This study finds that digital transformation can improve the tax management level of firms and provides theoretical support for firms to promote digital construction. (2) The managers should make full use of the advantages brought by digital transformation to realize the rapid adjustment to the target level of tax burden. We find that digital transformation can improve the adjustment speed by meeting the information needs of top managers and reducing the cost of coordination. This means that if a firm wants to effectively improve the level of tax management through digital transformation, it not only needs to organically apply digital technologies to the whole process of collection, processing and transmission of tax-related information, but also needs to use these technologies to better coordinate the interests and resources of all parties. In short, firms should exploit the advantages brought by digital transformation, strive to improve the level of tax management, and achieve high-quality development.