Heterogeneous expectation lays confounding impacts on both social demand and supply sides, as well as the monetary policy transmission. While China employs macroeconomics policies in an effective and well-coordinated way and maintains positive trajectory over the long run, it still faces the pressures of shrinking domestic demand, uncertain external environment, and weakening expectations. In this context, macroeconomic uncertainty increases the difficulty for agents to precisely perceive the fundamental information about economic development, leading to the variation in expectations. Therefore, it is of great importance to assess how heterogeneous expectations affect the transmission of monetary policy in China. This study aims to answer the following questions: How do heterogeneous expectations affect the transmission of monetary policy in China？ What are the underlying mechanisms through which heterogeneous expectations influence monetary policy？ Furthermore, what measures can the central bank take to address the impacts of heterogeneous expectations？
The empirical part of our paper examines the impacts of heterogeneous expectation on China's monetary policy transmission. Using household survey data on inflation expectations from the People's Bank of China for the period 2001 to 2021, we calculate the variable for heterogeneous expectations, and employ a smooth-transition vector autoregression (ST-VAR) model with the heterogeneous expectations as the regime variable. The empirical findings reveal that heterogeneous expectations negatively impact monetary policy in China. During periods of high heterogeneous expectations, a 1% monetary-easing shocks lead to 'inverse' effects, with output gaps decreasing by roughly 3% in the short run. Conversely, during periods of low heterogeneous expectations, monetary policies are carried out effectively. These results are consistent for both quantitative-based and price-based monetary policies.
Our theoretical part introduces a New Keynesian model that incorporates information acquisition costs to explain how heterogeneous expectations influence monetary policy transmission. The mechanism can be summarized as follows: agents deviate from perfect information rational expectations due to the cost of acquiring information. As the variation in information among agents increases, expectations become highly heterogeneous, with a larger proportion of agents opting for incomplete information expectations. This amplifies the information effect of monetary policy and hinders its transmission. In the model, heterogeneous expectations of agents' optimal decision-making are divided into two stages. In the first stage, agents choose their expectation type (perfect information rational expectation/incomplete information expectation) based on the trade-off in information cost. In the second stage, they solve a standard optimization problem based on the expectation formed in the first stage. Quantitative analysis shows that heterogeneous expectations reduce the transmission efficiency of monetary policy for both output and inflation. To counteract the negative effects of heterogeneous expectations, we suggest strengthening expectation management and adjusting the intensity of monetary policy as viable strategies.
The research conclusions and policy implications are as follows. Heterogeneous expectation plays a crucial role in monetary policy transmission. Monetary policy becomes less effective and even have ‘inverse' effects under high heterogeneous expectation. The monetary authority should pay attention to public communication and authoritative information disclosure to reduce the public information acquisition cost and enhance the effectiveness of monetary policy transmission. This paper provides both empirical evidence and a theoretical explanation on heterogeneous expectation's effect on monetary policy transmission, enhancing the efficiency of China's monetary policy transmission and for the more effective utilization of monetary policy in macroeconomic management.

High-quality development is the primary task for China in recent years, and the financial system plays a key role in this process. As one of the most significant financial innovations in recent years, digital finance has provided new opportunities for financial support of high-quality development. With the rapid development of digital finance, research on this topic has become a focal point. Existing literature has examined the achievements, impacts, and challenges of digital finance development from multiple perspectives, including countries, regions, industries, sectors, enterprises, households, and individuals. However, looking towards the future, there is a lack of systematic discussion on how to develop digital finance, and in which industries, enterprises, and sectors should we focus efforts to support high-quality development better and prevent systemic financial risks.
This paper aims to review the literature on how digital finance can support high-quality development, from the perspectives of theoretical foundations, empirical findings and mechanisms. With innovation as the primary driving force, it systematically reviews recent research findings on how digital finance supports high-quality development. It extracts the main mechanisms of digital finance services for high-quality development, summarizes the main experiences in digital finance practice, and discusses future policy formulations and academic research directions.
To understand the mechanisms and practices of digital finance in supporting high-quality development, it is necessary to first review the corresponding theories. This paper examines the generalization of the long-tail theory, information asymmetry theory, and transaction cost theory in the field of digital finance, which helps to explain how digital finance can promote capital accumulation, improve the efficiency of capital allocation, and foster innovation. This lays the theoretical foundation for subsequent discussions.
The paper further reviews the literature from two perspectives: how digital finance directly and indirectly support the high-quality development of the real economy. For the first perspective, the paper mainly focuses on supporting rural revitalization and the development of enterprises and industries. In terms of rural revitalization, how to promote it through the development of digital finance is an important contemporary issue. The paper reviews existing literature around the “agriculture, rural areas, and farmers” theme, focusing on empowering agricultural transformation and upgrade, deepening financial services for farmers, and aiding rural inclusive finance. In supporting enterprise development, the development of enterprises is crucial for the high-quality development of China's economy. However, the problem of “expensive and difficult loans” for medium-, small and micro enterprises has not been properly resolved, and the slowdown in the growth of total factor productivity over the past decade has also triggered attention to innovation-driven development. Additionally, China's digital financial services have mainly focused on the retail finance sector, but services for the industrial internet are still in their infancy. The current status and impact of digital finance in aiding the development of the industrial internet deserve attention. Therefore, the paper reviews related literature from three dimensions: digital finance alleviating the financing difficulties of medium-, small and micro enterprises, improving enterprise operations, promoting enterprise innovation, and industrial digital finance facilitating the digitalization of industries.
For the second perspective, the paper considers how digital finance can transform the financial system, thereby enhancing its ability to contribute to high-quality development. Digital finance not only directly changes the way financial institutions contribute to the economy but also triggers a transformation of the entire monetary and financial system. The innovation of digital finance provides new opportunities for the monetary and financial system, while posing new challenges to the stability of the entire financial system. This section mainly unfolds from five aspects. First, the development of digital finance puts pressure on the profitability of traditional financial institutions, prompting banks to undergo digital transformation to improve their service efficiency and quality. Second, it assesses the impact of digital finance development on the transmission of monetary policy. This includes considering how digital finance affects monetary policy transmission through traditional currency and discussing the impact of digital currency. Third, it evaluates the relationship between digital finance development and financial stability, which is further explored from the relationship between digital finance and financial risks and the prevention of digital financial risks. Fourth, it discusses how digital finance can play a role in the context of an accelerating aging process. Fifth, it explores the relationship between digital finance and green finance, as well as the relevant impact of digital finance on green finance.
High-quality development is development that satisfies the people's ever-growing needs for a better life; it is coordinated and shared development. Digital finance may play a positive role by consolidating poverty alleviation efforts, improving financial inclusiveness, and promoting economic convergence between regions. Therefore, the paper further revolves around the important goal of common prosperity, focusing on three aspects: digital finance and poverty reduction, social equality, and urban-rural regional coordinative development. It reviews and assesses the role and impact of digital finance in satisfying the people's needs for a good life and achieving coordinated development.
By summarizing the main mechanisms of digital finance services for high-quality economic development, this paper summarizes the main experiences in digital finance practice and discusses policy implications and academic research directions. It points out that in addition to deepening research in existing fields, issues such as how digital finance can effectively utilize financial data, develop digital finance infrastructure, and support China's high-level opening-up are all worthy of further exploration.

Starting from November 2021, the PBC has created and implemented two green structural monetary policies (Carbon Emission Reduction Support Tool and Special Loan for Clean and Efficient Coal Utilization), which provide 60% and 100% refinancing capital support to the principal of eligible carbon emission reduction loans and coal cleanup and efficient utilization loans of commercial banks. For more than two years, China's green structural monetary policy has been expanding and the scale of the balance has been growing. At the end of the 3rd quarter of 2023, the carbon emission reduction support tools balance issued by the PBC amounted to 509.8 billion yuan, and the balance of special refinancing loans to support the clean and efficient utilization of coal amounted to 262.4 billion yuan. Green structural monetary policy has an important role in promoting green and high-quality development, but there still need much more improvement and the transmission channel should be further dredged.
Previous scholars have mostly quantitatively analyzed the impact of a specific green credit policy or green financial policy on green development, and most existing research related to green structural monetary policy is based on qualitative description and policy analysis, and there has not been a quantitative study specifically focusing on the effect of the implementation of green structural monetary policy. Previous scholars have not analyzed the transmission mechanism of green structural monetary policy on carbon emission reduction and energy efficiency improvement of enterprises through the technical method of data testing, and less carried out heterogeneity analysis based on the specific situation and characteristics of the target enterprises, which makes it difficult to put forward policy suggestions to promote the green development of enterprises. Based on this, it is of practical significance to test the effect of green structural monetary policy and analyze the transmission mechanism of green structural monetary policy. This paper helps the central bank to understand and grasp the implementation effect of the green structural monetary policy, timely and appropriately adjust the next stage of green structural monetary policy strength and direction, and has a positive role in promoting the implementation of green finance in the five major articles proposed by the Central Financial Work Conference.
This paper firstly combs through the monetary policies of central banks in various countries to promote green development, including green QE, green mortgage collateral expansion, green preferential interest rate auctions, green violation sanctions, and green structural monetary policy. The research summarizes the results of previous scholars on the monetary policy, the transmission mechanism of the monetary policy, and the heterogeneous effects of the monetary policy to promote green and low-carbon development. From this, three hypotheses are distilled: green structural monetary policy is conducive to improving the carbon emission reduction performance and energy use efficiency of enterprises; green structural monetary policy can promote the green development of enterprises by enhancing their green innovation, reducing their financing costs and increasing their green investment; and green structural monetary policy has differentiated effects on enterprises in different regions, with different pollution levels and different nature of the effect.
Subsequently, this paper examines the implementation effect and the transmission path of the green structural monetary policy. It uses DID model to test the stage-by-stage effect of green structural monetary policy (including carbon emission reduction support tools and special re-loans to support clean and efficient use of coal), and uses a mediation effect model to verify the effect of the green structural monetary policy on the implementation of green structural monetary policy by enhancing the green innovation of enterprises (using the number of green patent applications of the enterprise as an alternative indicator), lowering the cost of enterprise financing (using the short-term and long-term financing cost of the enterprise as an alternative indicator), and increasing enterprise green investment (using the green investment of the enterprise 's construction and management costs as an alternative indicator), and analyzes the channels to the enterprise level which significantly improves the enterprise's performance in carbon emission reduction and energy utilization efficiency transmission mechanism. At the same time, this paper also tests the differentiated impact of green structural monetary policy on enterprises of different natures. Clean energy enterprises, energy-saving and environmental protection enterprises, carbon science and technology enterprises, and carbon-neutral enterprises are selected as the supporting enterprises of the carbon emission reduction support tools, and energy-efficient enterprises, green and low-carbon enterprises, low-carbon science and technology enterprises, and energy transformation and upgrading enterprises are selected as the supporting enterprises of the special refinancing policy for the clean and efficient utilization of coal. Using the moderating effect model, this paper verifies the differentiated impact of green structural monetary policy on enterprises in different regions, with different pollution levels and of different natures, and puts forward policy suggestions to dredge the transmission path of green structural monetary policy and improve the regulatory effect of green structural monetary policy.
The findings show that: green structural monetary policy promotes carbon emission reduction and improves energy utilization efficiency by promoting corporate green innovation, reducing financing costs, and increasing green investment; the policy has differentiated impacts on enterprises in different regions, with different levels of pollution, and of different natures. The policy recommendations are: increase the implementation of green structural monetary policy and improve the effectiveness of the policy; promote enterprise green innovation, reduce financing costs and increase green investment; implement differentiated green structural monetary policy regulation.

China is expanding the external openness of its financial sector while concurrently advancing the processes of Renminbi (RMB) internationalization through market-oriented reforms in RMB exchange rate and the reduction of capital controls. Consequently, understanding how cross-border borrowing of financial institutions impacts a country's economic fluctuations and determining measures to mitigate associated risks are crucial theoretical and practical considerations. This is particularly pertinent in the current highly complex and uncertain international environment. The urgent need is to investigate the mechanisms through which cross-border borrowing of financial institutions affects the economy and to conduct in-depth analysis on the coordination between cross-border borrowing of financial institutions and exchange rate marketization and policies such as cross-border financing regulation. To address this, we introduce cross-border borrowing of financial institutions into a Dynamic Stochastic General Equilibrium (DSGE) model, analyzing the relationships among cross-border borrowing of financial institutions, exchange rate regime selection, and cross-border financing regulatory policy.
Numerical simulation results indicate that, when financial institutions engage in cross-border borrowing, external shocks impact capital inflows and outflows, causing exchange rate fluctuations. This then affects the financial intermediary's balance sheet, leading to a reduction in the financial intermediary's lending to the real sectors and ultimately resulting in adverse effects on investment and output. If not taking cross-border financing regulatory policy into account, when cross-border borrowing or the cross-border borrowing by financial institutions doesn't exist or is low, the floating exchange rate regime outperforms the fixed exchange rate regime in terms of output stability and welfare implication, aligning with traditional conclusions of studies on monetary policy in open economies.
However, with the increase in the scale of foreign debt borrowed by financial institutions, the negative impact of capital flows and exchange rate fluctuations on the financial system increases. At this juncture, relative to a floating exchange rate, a fixed exchange rate regime proves effective in stabilizing the exchange rate, reducing the volatility of capital flows, and consequently mitigating output fluctuations and welfare losses. Furthermore, the study assesses the role of macroprudential regulatory policy in cross-border borrowing of financial institutions and RMB exchange rate marketization. Results indicate that cross-border financing regulatory policy can mitigate capital flow and exchange rate volatility under cross-border borrowing of financial institutions, thereby reduces the adverse impact of external shocks on the financial intermediary's balance sheet, leading to decreased output fluctuations and welfare losses. The efficacy of regulatory policy increases as the scale of cross-border borrowing by financial institutions increases. In the presence of cross-border financing regulatory policy, the output fluctuations and welfare losses under a floating exchange rate regime are lower than those under a fixed exchange rate regime.
Based on these conclusions, the paper proposes the following policy recommendations. Firstly, as the opening up of financial institutions progresses, China should vigilantly guard against adverse international economic impacts, such as rising global interest rates. The frequent movement of cross-border capital can amplify financial intermediary volatility and systematic financial risks, exacerbating macroeconomic fluctuations. Establishing and refining a policy framework to address cross-border financing risks in the financial intermediary, including implementing macroprudential controls for cross-border financing, is crucial. Secondly, while acknowledging the inevitability of financial institutions' openness, it is imperative to expedite the establishment and improvement of a regulatory framework for cross-border capital flows. On this foundation, the gradual promotion of RMB exchange rate marketization is recommended, allowing for increased exchange rate flexibility. Without a well-coordinated cross-border financing regulation framework, hastening the cross-border borrowing of financial institutions and endorsing exchange rate marketization could compromise the overall financial system's stability, triggering systemic financial risks and potentially inciting a financial crisis, thereby intensifying economic fluctuations. Thirdly, until a comprehensive cross-border financing regulatory framework is in place to manage capital flows, maintaining exchange rate stability and restricting cross-border capital movements remains a necessary means to mitigate adverse impacts of external shocks and guard against systemic financial risks.
In comparison to existing literature, the contributions of this paper lie in several aspects. Firstly, departing from prior studies that predominantly focused on currency mismatches in the balance sheets of enterprises in an open economy, this paper focuses on the balance sheets of financial intermediaries to investigate the impact of cross-border borrowing of financial institutions on economic fluctuations. This is particularly relevant given the accelerating opening up of China's financial industry and provides a foundational analytical framework for subsequent research. Secondly, the findings of this paper provide a novel perspective on understanding the impact of cross-border borrowing of financial institutions on macroeconomic policies. Cross-border borrowing of financial institutions amplifies economic volatility resulting from external shocks. Without considering cross-border financing regulatory policy, a fixed exchange rate regime outperforms a floating exchange rate regime in terms of both output fluctuations and welfare implication, which is significantly different from the previous results derived from the perspective of enterprise behavior. Finally, beginning with the stability of the financial system, this paper comprehensively synthesizes the coordination and collaboration among cross-border borrowing of financial institutions, floating exchange rates, and cross-border financing regulatory policy within a general equilibrium framework. This holds theoretical significance and provides policy insights for the ongoing practice of financial institutions' openness.

In November 2021, the People's Bank of China introduced the Carbon Reduction Support Tool (CRST) policy, providing refinancing support for the principal of carbon reduction loans issued by commercial banks that meet the criteria. As a kind of innovation in structural policy tools, the CRST links central bank funds with financial institutions' lending to carbon reduction projects, creating a unique advantage in precisely targeting the green real economy. While leveraging the basic role of market resource allocation, it has achieved the policy goal of directing funds towards green and low-carbon development projects. However, it is an important proposition to verify whether commercial banks, as the main carriers of this structural monetary policy, can obtain sufficient incentives and compensation through participation in the CRST to offset the higher credit risks of green loans and mitigate the impact on operational performance due to green lending.
This paper, based on manually collected data on whether 42 listed commercial banks have issued carbon reduction loan disclosure announcements, comprehensively organizes data on the amount of carbon reduction loans issued, the number of loan projects, the fields of loans, and the carbon reduction achieved. Innovatively, this paper matches commercial bank carbon reduction loan data with market value and operational management data of listed commercial banks for empirical analysis. The study finds that commercial banks' participation in the CRST and the expansion of carbon reduction loan portfolios can effectively enhance bank market values. Key mechanisms include signal transmission effects, market reputation effects, and risk governance effects. Carbon reduction loans in clean energy and environmental protection sectors significantly have boosted market value, whereas the impact of carbon reduction technology loans is not yet clear. Additionally, the higher the proportion of carbon reduction loans in green lending, the more significant the enhancement in bank market value.
The potential innovations of this paper are mainly reflected in the following aspects: Firstly, by comprehensively collecting and organizing data on carbon reduction loans issued by banks, this paper systematically explores the impact of commercial banks' participation in the CRST on their market value, providing a data foundation and empirical evidence for analyzing and revealing the policy participation, loan scale, and loan fields of commercial banks. This is of both theoretical and practical significance for assessing the effectiveness of structural monetary policy innovations in green systems. Secondly, the findings suggest that enhancing stock liquidity, optimizing market reputation, increasing central bank borrowing, improving capital adequacy ratios, and reducing stock price crash risks are significant channels to enhance bank market values. These findings not only offer specific strategic recommendations for banks to enhance market values through green financial activities but also provide crucial market insights for banks and financial institutions to exert the value-enhancing effects of green finance in formulating future business strategies and investment decisions. Thirdly, through the heterogeneity analysis in the field of carbon reduction and the comparative analysis of green loans, this paper reveals significant differences in the impact of different types of green financial activities on the market value of commercial banks, providing practical evidence for regulatory bodies and policymakers to further refine and optimize structured monetary policies.
The research conclusions of this paper have the following policy implications: Firstly, although commercial banks' issuance of carbon reduction loans can significantly enhance their market value, issuing ordinary green loans does not have the same effect. This indicates that due to the higher risks, longer cycles, greater uncertainties, and the shortage of specialized personnel affecting green finance at this stage, the development and promotion of green finance at this stage still face significant challenges. Therefore, to further promote the development of green finance, regulatory bodies should adopt diversified strategies, extending the support policies and successful experiences of carbon reduction loans to more areas of green finance. Secondly, in today's highly developed information technology society, to promote the development of green finance, banks should focus on the disclosure of information on green finance practices, regularly publish green finance reports with detailed progress, results, and challenges of their green credit projects, and actively communicate with the public, clients, and investors through various channels, including social media, official websites, and industry conferences, to increase transparency. This not only helps establish a positive image of banks in the field of green finance but also promotes the overall development and maturity of the green finance market. Thirdly, to achieve long-term environmental protection goals, particularly in reducing carbon emissions and addressing climate change, regulatory bodies and banks must work together to enhance research and support for carbon reduction technology loans. Banks and regulatory bodies should consider setting up special green finance funds or credit products to provide financial support for the research and commercialization of carbon reduction technologies. Additionally, by enacting preferential policies and fiscal and tax incentives, the costs and risks for enterprises adopting carbon reduction technologies can be reduced, ultimately promoting the early realization of the national “Dual Carbon” strategy and sustainable development goals through financial supply-side reforms.

In the current context of significant employment pressure and weak economic expectations, "ensuring employment stability and strengthening confidence" has become a key factor in further promoting economic recovery and improvement. The VAT credit refund is the "highlight" of large-scale tax reduction and fee reduction, a major measure to reduce the burden on enterprises and stimulate market vitality, and a major choice for macro policies to support steady growth, employment and structural adjustment. Therefore, it is of great theoretical value and practical significance to study the impact of the tax refund policy on employment.
This paper studies the impact of VAT credit refund on employment scales of enterprises, using A-share listed companies from 2016 to 2022 as the research sample and multi-period Difference-in-Differences (DID) model. Robustness tests were carried out in a number of aspects. The micro data of enterprises in this paper are derived from CSMAR database and Wind database, the macroeconomic data are derived from CEInet Statistics Database, and the text data of enterprise expectations and government expectations management level are derived from the economic news database in CNRDS database and infobank database.
The study finds that the VAT credit refund led to an average increase of 2.31% in enterprise employment scale. Moreover, this effect was more pronounced for capital-intensive, growth-oriented, non-state-owned, and financially constrained enterprises. Mechanism tests indicate that this effect is achieved through alleviating corporate liquidity constraints, altering factor investment decisions, and boosting the confidence of business entities. Additionally, the study pays attention to the expectation management of fiscal policy, and finds that in regions with higher government expectation management levels, the employment promotion effect of the VAT credit refund is more pronounced. This shows that strengthening the expectation management of fiscal policy can give full play to the policy effect, and it is necessary to do a good job of expectation management from the two-way interaction between enterprises and government.
This paper comprehensively evaluates the impact of the VAT credit refund on enterprise employment, providing important insights into how to further give full play to the employment effect of this policy. Firstly, as the most important preferential tax policy in recent years, the tax refund policy has provided valuable cash flow support to enterprises through unprecedented tax rebates, thereby significantly expanding the employment scale of enterprises, and playing an important supporting role in ensuring the employment of residents and protecting business entities. Secondly, the tax refund policy can directly provide enterprises with funds to alleviate the liquidity constraints of enterprises. In order to give full play to the regulatory role of the policy, we can further pay attention to the implementation of tax rebates for non-state-owned, capital-intensive and capital-constrained enterprises, and effectively provide support for these enterprises with relatively greater financial pressure, which is of far-reaching significance for stabilizing the micro-subjects and developing the macroeconomy. Thirdly, the tax rebate can play a role in stabilizing employment by improving enterprise expectations, and good local government expectation management can amplify the employment effect of tax refunds, which provides an empirical basis for the importance and necessity of "stabilizing expectations and strengthening confidence" work.
The main innovation of this paper mainly lies in the following three aspects: Firstly, it explores the new mechanism of action. By constructing the enterprise expectation index based on the tone of the corporate annual report, this paper discusses whether the tax refund affects the employment of enterprises through the expectation of enterprises, and further analyzes the impact of government expectation management on the policy effect from the perspective of the government, which provides a new perspective for how the government can promote the full play of the role of fiscal and taxation policies. What's more, this paper expands the existing literature, further identifies the impact of the tax refund policy on business entities from the perspective of employment, and clarifies that the tax refund policy can "stabilize employment and strengthen confidence", which enriches the research on the impact of tax reform on the employment scale of enterprises. Finally, This paper refines the identification strategy within the scope of available data. According to the 2018-2022 policy documents on the enterprise industry, enterprise size, corporate tax credit, and whether it is the beneficiary of other tax refund policies, this paper is more accurate to identify the experimental group of enterprises than only industry identification.
It should be noted that this paper takes A-share listed companies as the research sample. Although the impact of the 2022 tax refund policy on the employment scale of small and micro enterprises is considered in the empirical evidence, due to the large scale of listed enterprises, the research sample of small and micro enterprises involved in this paper is very limited. In future research, we can consider using the research samples of small and micro enterprises to further enrich the analysis of the effect of the tax refund policy.

The Twentieth Central Committee of the Communist Party of China adopted a resolution on further comprehensively deepening reform to advance Chinese modernization at its Third Plenary Session. The resolution outlines plans for “strengthening antitrust and anti-unfair competition” and “stimulating internal motivation and innovative vitality throughout society”. This underscores the importance of anti-monopoly regulation and incentives for the innovation and development of the real economy. With the rapid growth of China's internet industry, many internet firms utilize mergers and acquisitions (M&A) as a strategic approach to cope with market competition and pursue innovation breakthroughs. However, the surge in M&A activities has raised concerns among regulatory agencies and society about capital expansion and potential formation of monopolies. The existing literature on mergers and acquisitions focuses on traditional industries such as manufacturing and medicine. As a representative sector of the new economy, the internet industry exhibits distinct technological characteristics, organizational structures and industrial organizations compared to traditional industries. These differences render traditional theories and extant empirical conclusions inadequate to fully explain emerging phenomena in the internet industry. Additionally, regulatory agencies face serious challenges due to limitations in cognitive understanding and technological support in such new areas. Therefore, deeply exploring the internal logic and development law of the internet industry holds theoretical and practical implications.
In light of this, this paper takes the Chinese listed internet firms from 2010 to 2020 as samples, and empirically examines the impact of M&As on innovation investment of internet firms. It also explores the underlying mechanisms from the perspective of the unique hierarchical monopoly and competition structure in the internet industry. The analyses yield several findings. Firstly, there are significant long-term disparities in scale and market power between monopolistic and competitive firms in the internet industry. M&As of monopolistic firms demonstrate notable inhibitory effects on innovation, whereas M&As of competitive firms significantly enhance innovation. Secondly, mechanism analyses show that M&As of competitive firms can enhance innovation willingness, improve governance levels, and reduce financing costs, thereby promoting innovation. In contrast, monopolistic firms tend to reduce innovation incentives, increase agency costs, and tighten financing constraints after M&As. The effects of these two types of internet firms' M&A stem from their different motivations for M&As, which are influenced by the polarized market competition status. Thirdly, the impact of M&As on innovation is more pronounced for competitive firms located in the eastern region and those having vertical M&As. The inhibitory effects of monopolistic firms on innovation are primarily observed in firms located in the eastern region and those engaged in horizontal M&As. Furthermore, M&As exhibit substitutionary and complementary interactions with corporate information disclosure and the external supervisory environment respectively, regarding their impact on innovation conditions. Finally, M&A significantly elevate financial risks for monopolistic firms, while enhancing the value of competitive firms.
Compared to existing research, the marginal contribution of this paper are as follows. Firstly, the paper adds new evidence regarding the economic impact of M&As. Most existing studies use mixed samples from multiple industries, lacking sufficient consideration of industry-specific characteristics. This research focuses specifically on the internet industry, and explores how M&As affect innovation investment from the perspective of strategic behaviors of internet firms in response to different market competition status. Secondly, this paper helps to supplement and enrich the research on the factors affecting innovation investments in the internet industry. The existing literature primarily analyzes changes in capital resources and costs after the M&A and their impact on innovation behaviors. This study innovatively incorporates the hierarchical monopoly and competition structure in the internet industry, making full use of its novel characteristics of “stable coexistence” and “dynamic adjustment” between monopoly and competition status. This integration links market structure, M&A activities, and innovation decisions, which facilitates to more accurately grasp the actual motivations driving internet firms' M&As and clarifies the internal mechanisms affecting innovation, viewed through the lens of market competition. Finally, this paper conducts a thorough assessment of the impact of M&As among monopolistic and competitive internet firms, exploring various aspects such as regional differences, competition status, and diverse M&A types. The findings offer valuable insights to facilitate the strategic and systematic progression of China's antitrust policies, ultimately promoting the sustainable growth of the internet industry in China.

In recent years, the scale of China's bond market has continued to expand, significantly enhancing its ability to serve the real economy. However, as economic downward pressure persists, the debt risks of some enterprises have gradually emerged, making bond default risk one of the major risks faced by China's financial system, which severely restricts the effective financial services to the real economy. To ensure the healthy and orderly development of the bond market, China's regulatory authorities have carried out a series of market-oriented and legal reforms. The inquiry mechanism in the process of reviewing the issuance and listing of corporate bonds by stock exchanges is the key to the reform of the bond registration system centered on information disclosure, and the role of underwriters in this process has not been thoroughly studied. Unlike other intermediaries, underwriters play an informational intermediary role throughout the bond financing process, and their reputation is closely related to the quality of their practice, which can significantly influence the audit attitude of exchanges in the process of issuance reviewing and listing of corporate bonds.
Using feedback text information generated by exchanges during the review of corporate bond issuance and listing, this paper employs penalty events from the China Securities Regulatory Commission (CSRC) as a measure of underwriter reputation damage (URD). By sampling corporate bond issuance data from May 2015 to October 2022, the paper empirically tests the impact of URD on the review pressure of corporate bond issuance and listing. The results show that the URD leads to more rigorous review of clients' corporate bonds by the exchanges during the process of issuance and listing. At the same time, the URD has resulted in increased information content, enhanced risk disclosure, and a negative tone in review feedback letters (RFLs), and the issuers' response time was also extended. The mechanism test reveals that the URD would lead the exchanges to lose trust in the bond issuance information provided by the underwriters, resulting a more stringent audit inquiry and also exclude the alternative explanation of poor information disclosure quality by the issuers. Furthermore, the review pressure from the exchanges has a positive moderating effect on the increase in bond issue spread caused by the URD, and the higher the information quality and readability of the response letters, the greater the ability to mitigate this effect to some extent.
This paper presents two significant theoretical contributions. Firstly, it enriches the existing literature on inquiry letter system. While previous studies have primarily focused on inquiry letters pertaining to firms' financial reports, mergers and acquisitions (M&A), and initial public offerings (IPO) activities, there is a paucity of literature examining the RFLs issued by exchanges during the process of corporate bond issuance and listing. Given that investors in the bond market often confront more serious information asymmetry, it becomes urgent for exchanges to fully exert their regulatory role in the bond issuance and listing and urge issuers to continuously improve the content of information disclosure. Therefore, this paper extends the relevant research on inquiry letters from the stock market to the corporate bond market. Secondly, this paper enriches the research on underwriter reputation. The existing literature primarily discusses the influence of underwriter reputation on bond pricing from the perspective of bond investors' market behavior. However, the registration system, with information disclosure as its core, aims to elevate the regulatory threshold and reinforce the responsibility of intermediaries. As a result, the reputation of underwriters will also have a significant impact on the attention of regulators. Therefore, this paper expands the research content by examining the effectiveness of underwriter reputation in the bond market.
This paper makes three key policy implications. Firstly, underwriters should pay attention to maintain their reputation by establishing a quality-oriented due diligence system for issuers. They should urge issuers to enhance the quality of information disclosure and effectively function as “gatekeepers”. Secondly, the CSRC should continue to strengthen the inspection and supervision of relevant intermediaries in the bond market, ensuring severe measures are taken against any illegal behaviors. Simultaneously, the exchanges should make full use of the front-line regulatory role, establish clear standards for review and inquiry, thoroughly disclose issuers' risks during the review process, and strive to reduce information asymmetry faced by external investors. Thirdly, issuers should consistently improve the information disclosure of issuance listing application documents, effectively safeguard investors' interests, and pursue sustainable development by minimizing financing costs.

Labor share refers to the proportion of compensation received by workers in newly created value within a country or region during a specific period. This indicator reflects the distribution of national income between workers and capital owners, and is crucial for understanding income distribution patterns and promoting sustainable economic development. For a long time, the labor share in many countries has remained relatively stable, a phenomenon that Kaldor included as one of the “stylized facts” of economic growth. However, doubts about the stability of labor share have persisted. In recent years, the global trend of declining labor share has attracted widespread attention and discussion in academic circles. As the world's second-largest economy, changes in China's labor share have significant implications for the global economic landscape. Although existing research has extensively examined China's labor share from a macroeconomic perspective, the calculation of labor share at the macro level is highly sensitive to the accounting scope of labor compensation. Moreover, macro-level analyses often rely on simplified micro-environment settings, sacrificing the rich information contained in micro-heterogeneity, resulting in an “incomplete explanation” of labor share changes and their influencing factors.
In light of this, this paper attempts to examine the evolution of China's labor share and its driving factors from a micro perspective to address the limitations of existing research. We combine the China Industrial Firm Database and the National Tax Survey Database to construct a large-sample firm dataset with broad coverage and a long time-span. Based on this dataset, we describe the trends in China's labor share from 1998 to 2016, employ various decomposition methods to identify the underlying driving forces, and quantify the impact of various factors through a structural estimation model. Our findings are as follows: First, China's labor share exhibited a distinct U-shaped trend between 1998 and 2016, with 2007 as the lowest point. Notably, the labor share across all industries consistently rose after the 2008 financial crisis. This finding provides micro-level support for the upward trend in macroeconomic labor share during the same period. Second, dynamic decomposition results show that incumbent firms are the main contributors to the evolution of labor share in the manufacturing sector during the sample period, with their contribution to total labor share changes exceeding four times the combined contribution of entering and exiting firms. Third, decomposition results of the wage-to-sales revenue ratio indicate that understanding the significant slowdown in per capita sales growth relative to per capita wage growth for incumbent firms after 2007 is key to exploring the driving factors behind the U-shaped reversal of labor share during the sample period. Fourth, structural estimation results show that demand-side factors, represented by markup rates, can only explain a small portion of the changes in labor share, while production-side scale effects are not the main drivers of labor share changes. Considering all evidence, this paper argues that biased technological progress or changes in labor market institutions are likely the key factors behind the reversal of China's declining labor share trend after 2007.
The potential contributions of this paper are threefold: First, it provides new micro-evidence for the U-shaped reversal of China's labor share based on a large-sample firm database. Second, it broadens the approach of analyzing and evaluating the driving forces of labor share by decomposing them into production-side and demand-side based on firm optimization behavior and constructing a structural estimation system to separate the effects of different factors. Finally, it excludes the possibility of production-side scale effects and demand-side product market power acting as primary influencing factors. This notably differs from recent conclusions on the driving forces of U.S. labor share, which found demand-side firm market power to be the main cause.
It should be noted that as an initial attempt to explore the evolution of China's labor share and its underlying driving factors from a micro perspective, this paper has evident limitations and room for improvement. First, we were unable to directly estimate labor-augmenting productivity, thus limiting our ability to further discuss its mechanism of influencing labor share in depth. Second, our model does not consider labor market frictions, making it impossible to directly evaluate the impact of labor market institutional factors on labor share. How to simultaneously identify multiple dimensions of firm heterogeneity, such as the direction of technological progress, product market monopoly power, labor market monopoly power, and labor adjustment costs, in one comprehensive model and directly assess their impact on Labor share remains a challenging issue and a worthwhile direction for future research.

With the extension of individual life expectancy, the financing of retirement and medical funds becomes a popular need for individuals to address the longevity risk. This planning of personal retirement financing should fully reflect individual differences and subjective expectations. In addition to the allocation of wealth capital, it is also necessary to actively allocate various capitals including health capital and human capital. This paper systematically examines the financial situation of individuals in their old age from the perspective of retirement financing, based on the consumption-saving theory and the life-cycle model. It further subdivides stages of old age according to working and health status, and constructs a pension financing assessment model. By measuring the expected terminal assets, it integrates the funding needs and expenditure for elderly care and health, as well as the wealth creation from labor and health behaviors, into a unified analytical system. The calculation indicates that more than 60% of the elderly in China are at risk of depleting their assets. Heterogeneity analysis shows that the terminal assets of rural, low-educated, female, non-married, and disabled groups are lower. Finally, this paper uses the logical principle of information-prediction-behavior to calculate the specific effects of adjusting various financing planning behaviors according to expectations, and discusses the sufficiency of financing for the elderly from a more general level, proposing practical planning adjustment plans for the elderly and their families to effectively cope with the risk of longevity.

At present, the monetary policy cycle of major developed countries in Europe and the United States is frequently changed, which constitutes an external currency shock on the emerging economies with limited room for policy maneuver. The negative impact of external monetary shocks on domestic financial stability has attracted increasing attention, although the academic community has theoretically discussed the spillover effect of central countries' monetary policies on other economies and the significance of developing countries' proactive policies to offset external shocks and maintain financial stability. However, due to the endogeneity of money supply under the credit standard, it is difficult to accurately answer this question from the angle of causal identification. Nevertheless, China in the 1930s provided us with a rare opportunity to observe and answer this question at the institutional level. By collecting the information on customs imports, city prices, bank finance and so on in modern China, this paper studies the causal effect of external monetary shock on financial stability by using the impact of the US Silver Act of 1934, and analyzes the role of China's free banking system in coping with the crisis.
In the early 1930s, China was the only major country in the world that used the silver standard system, and its silver stock and total money supply were controlled by the balance of payments and the international silver price. At the same time, China had no substantive central bank, forming a banking system that resembled a "free banking system." As the previous silver price downturn hurt the interests of the seven silver producing states in the United States, under the promotion of these silver interest groups, the Roosevelt government promulgated the Silver Act in June 1934, authorizing the Treasury Department to buy silver from the international market at a high price, resulting in an increase of 70 percent in the international silver price in less than a year. The Silver Act had a significant impact on China under the silver standard, including a large outflow of silver and deflation. However, scholars, including Milton Friedman and Thomas Sargent, held opposing views on the actual impact of the Silver Act and the role of the free banking system. Contrary to the monetarist view, economists such as Sargent argued that China's deflation at the time was only the result of international arbitrage, and China's real economy was not greatly affected.
In order to re-examine the impact of the Silver Act, an exogenous monetary tightening shock, on China's financial economy in modern times from a micro perspective, we manually collected and sorted out the available data of China's urban prices, customs imports, bank finance, real economy, etc. These data come from the statistics of the Chinese old customs, the National Bank Yearbook compiled by the Bank of China, the industrial survey of the Nanking National Government and other authoritative archival materials at that time. We construct an index to measure the shock intensity of the Silver Act based on China's silver standard monetary system and commercial banks' currency issuance system .Through the exogenous shock of the Silver Act and the analysis of the price indices of major Chinese cities, we find that, in addition to controlling the impact of international price arbitrage, the monetary tightening has led to a significant decline in prices and deflation, as well as a shortage of liquidity in the interbank market. Concerned about tight market liquidity and rising risks, banks have reduced the size of their loans and reduced their support for the real economy. This means that the monetary tightening shock has a negative impact on the stability of the financial system and macro liquidity.
In addition to the direct impact on the financial system, the Silver Act also had a significant negative impact on the real economy. Under the tightening shock, the number of new enterprises and the area of real estate construction have declined significantly, suggesting that external monetary shocks not only affect the price level, but also have significant actual effects. At the same time, the analysis of the free banking system shows that the free banking system under the absence of the central bank cannot resolve the negative impact of external currency shocks in time. This also means that it is important to ensure the flexibility of the monetary policy of the central bank to cope with the impact of external monetary shocks.