In recent years, high unemployment rate, particularly among the youth, has drawn widespread societal attention in China. China's economy has long exhibited a dual labor market structure segmented between the public and private sectors. The stability and higher wages of public sector jobs have fostered a strong preference for public employment, making it a crucial mechanism for workers to hedge against market uncertainties. With rising economic uncertainty, labor market choices—especially among university graduates—have shifted increasingly toward public sector jobs, fueling social phenomena such as “Civil Service Exam Craze”, “Public Institution Exam Craze”, and “Teaching Certification Craze”. In response to this severe employment situation, the central government has implemented various employment stabilization policies, focusing on fiscal measures to secure job opportunities, particularly for young workers. However, it remains unclear whether these policies can effectively mitigate preference for public employment, reduce structural unemployment, and enhance fiscal efficiency. To address these questions, this paper conducts an in-depth empirical and theoretical analysis to explore how uncertainty shocks distort labor market allocation, generate structural unemployment, and amplify macroeconomic fluctuations. Furthermore, we develop and quantitatively evaluate various types of simple rule-based employment stabilization policies from the perspectives of economic cycles, welfare costs, and government expenditure multipliers.
Empirical evidence suggests that the primary reasons for the preference for public sector jobs are their stability and higher wages. However, the limited supply of public sector vacancies increases the likelihood of unemployment among those pursuing such positions. Empirical analysis, which matches city-level uncertainty indicators with individual-level labor data, shows that higher economic uncertainty strengthens the preference for public sector employment, thereby exacerbating the overall unemployment rate.
Based on the dual segmentation of the public and private labor sectors, this paper constructs a two-sector directed search and matching New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) model. Theoretical and numerical simulations reveal that, on the one hand, uncertainty shocks reduce aggregate demand, decrease job supply and wages in the private sector, and thereby generate cyclical unemployment. On the other hand, the relative stability of public sector wages and vacancies attracts more job seekers into the public sector labor market, distorting labor market allocation and generating structural unemployment. It further increases the overall unemployment rate and amplifies economic fluctuations. Impulse response analysis shows that structural unemployment accounts for nearly 40% of the total unemployment effect induced by uncertainty shocks.
The evaluation of simple rule-based employment stabilization policies suggests that a pro-cyclical public sector wage policy can effectively balance employment stabilization with fiscal efficiency in the face of uncertainty shocks. On the one hand, the pro-cyclical public wage policy requires public sector wages to decrease in tandem with private sector wages, preventing excessive labor congestion in the public sector and reducing structural unemployment. On the other hand, this policy optimizes labor market allocation, curbing the overexpansion of public sector employment and fiscal expenditure, reducing the crowding-out effect on private sector labor, and contributing to macroeconomic and fiscal rebalancing.
The marginal contributions of this paper are threefold. First, it develops a directed search and matching NK-DSGE model incorporating both public and private sectors, based on empirical evidence, to investigate the transmission mechanism through which uncertainty shocks generate structural unemployment. The model is calibrated using real economic data from China to evaluates the effectiveness of employment stabilization policies. Second, it explains how uncertainty shocks generate structural unemployment and amplify economic fluctuations through the dual labor market structure, offering a novel theoretical amplification mechanism not previously explored in the literature. Third, this study enriches the literature by analyzing employment stabilization policies from multiple perspectives, including economic cycles, welfare costs, and government expenditure multipliers, moving beyond the traditional focus on job creation alone.
Given the relatively underdeveloped social security system in China, the public sector remains a vital mechanism for workers to hedge against uncertainties. To address the structural unemployment caused by uncertainty shocks, particularly among young people, the government should adopt more proactive employment stabilization policies. First, the pro-cyclical public wage policy can help narrow the income and welfare gap between the public and private sectors, alleviating the preference for public sector employment and reducing structural unemployment. Second, while moderately expanding public sector job supply, it is crucial to establish a rational exit mechanism to break the entrenched perception of the “iron rice bowl” (lifelong secure employment). Lastly, a more comprehensive social security system should be developed to expand the coverage of the “five insurances and one fund” in the private sector, thereby mitigating the impact of uncertainty shocks on household income.

Since the reform and opening up, the absorption of foreign direct investment (FDI) and the integration into the global value chains (GVCs) led by multinational corporations (MNCs) have been the key driving factors for China's export expansion and rapid economic growth. However, external uncertainties, such as geopolitical conflicts, strategic competition among major powers, and public crises, have hindered the current expansion of GVCs. Security concerns have gradually become the primary consideration for MNCs in shaping investment destinations. As for China, with the rise of domestic factor costs, some foreign enterprises are relocating their production lines to neighboring countries with lower production costs. Simultaneously, many Western countries have initiated trends of “reshoring”, “friend-shoring” and “near-shoring” outsourcing of industrial chains so as to marginalize China within GVCs. In this context, the withdrawal of MNCs may pose dual hidden risks to China's “dual-circulation” economic strategy. Therefore, assessing the risk exposure resulting from the FDI withdrawal is beneficial for China to effectively establish a more resilient industrial chain division of labor system, and ultimately safeguard national economic security.
Based on the global input-output tables that distinguish between domestic and foreign enterprises and the production decomposition model, this paper mainly uses the hypothetical extraction method (HEM) to comprehensively measure and compare the risk exposure induced by FDI withdrawal from 2000 to 2020, and further dissects the “dual circulation” structure of the risk exposure. The main conclusions of this paper are as follows. First, the maximum risk exposure induced by complete FDI withdrawal in China's industrial chain roughly shows an evolutionary pattern of “initial rising-subsequent falling”, in which the loss rate of value added in the domestic circulation is higher than that in the international circulation. Second, in terms of industry sectoral distribution, the risk exposure of FDI withdrawal from manufacturing industries is generally larger than that in services and primary sectors. High-R&D-intensity manufacturing industries exhibit the highest risk exposure with strong risk spillover effects. Furthermore, as for the country of origins, the potential risk exposure induced by FDI withdrawal mainly originate from developed economies such as Japan, the United States and South Korea. On a global scale, the FDI risk exposure of typical developed countries is relatively stable, while the FDI risk exposure of developing countries such as Mexico, Thailand and Viet Nam has shown a tendency to expand. In recent years, the “center-periphery” distribution of global FDI risk exposure has become more distinctive. Finally, when considering factors such as the withdrawal rate of FDI and the substitution rate of domestic enterprises, as well as the destination and the decoupling rate of FDI, the level of China's overall FDI risk exposure declines.
The marginal contributions of this paper are mainly as follows. First, this paper innovatively applies the hypothetical extraction method (HEM) to measure the risk exposure arising from the FDI withdrawal capturing the complex interlinkages between foreign capital and China's dual-circulation economic system. Specifically, this paper removes foreign-owned components domestically from the input-output table, and then compares changes in the “dual-circulation” value-added before and after the removal to assess the degree of risk exposure resulting from the FDI withdrawal. Second, this paper compares the industry sectoral distribution and country origins of FDI risk exposure to identify the primary sources of hidden risks. Additionally, it makes a horizontal comparison of the FDI risk exposure across major economies and observes the spatial pattern and bilateral dynamics of global FDI risk exposure. Third, this paper enriches the extension framework of the HEM model by incorporating factors such as the withdrawal rate of FDI and the substitution rate of domestic enterprises, as well as the destination and the decoupling rate of FDI, which helps to explore feasible strategies and solutions for enhancing the resilience of China's industrial supply chains.
The findings of this paper provide some policy implications. First, China should closely monitor the trends and spatial distribution of the FDI withdrawal, with a particular focus on industrial chain links within the domestic circulation that are prominently reliant on foreign capital. Meanwhile, China should enhance the diversity of FDI sources, thereby effectively diversifying the risks involved in the utilization of FDI. Second, China needs to increase innovation subsidies to support domestic basic research and key technological breakthroughs, motivating domestic enterprises to enhance their independent innovation capabilities to address their weaknesses. Third, China needs to actively establish risk buffer zones, fully activate the potential of regional cooperation platforms such as the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP), and extensively utilize third-party market resources to build a more resilient global supply chain network.

This study investigates the impact of operational budget information (OBI) disclosed by firms on supply chain governance, a topic that has received limited empirical attention. Using a manually collected dataset of nearly 100 types of OBI disclosed by A-share listed firms in their financial reports from 2007 to 2020, for the first time, we focus on the transmission of supply chain on operation budget, examine how customers' OBI influences supply and demand fluctuations in upstream direct and multi-tier suppliers and the impact and mechanism of bullwhip effect of the whole supply chain. Our findings indicate that the disclosure of customers' OBI significantly reduces fluctuations in supply and demand for both direct suppliers and multi-tier suppliers. Moreover, this disclosure mitigates the bullwhip effect within the supply chain, thereby enhancing its self-risk management capabilities. Production-and market-related OBI, as well as indicators reflecting target achievement, exhibit stronger risk governance effects. Additionally, the risk governance effect is more pronounced for suppliers with lower integration levels and higher operational risks. Mechanism analysis reveals that the risk governance is achieved through reducing suppliers' deviations in operational planning, optimizing workforce allocation, and improving inventory management efficiency.
Our study makes several important theoretical contributions. First, we expand the research on the disclosure and utilization of operational information in supply chains. While existing literature primarily focuses on the transmission of private information or the impact of general financial data within the supply chain, this paper distinctly emphasizes the role of publicly disclosed, operationally specific information in supply chain governance.
Second, we innovatively extract and organize specific, quantifiable operational budget indicators disclosed by firms. Existing research on operational information is predominantly qualitative, concentrating on aspects such as whether forward-looking information is disclosed or the tone and length of such disclosures. However, there is limited investigation into the impact of specific numerical data provided by operational information on market participants. We analyze the role of these indicators, including budget metrics and performance, from multiple dimensions in mitigating supply chain fluctuations.
Third, we uncover the pathways and screening mechanisms through which OBI impacts the supply chain. By differentiating between various budget types and evaluating information quality, we provide empirical evidence and practical examples that demonstrate the value of quantitative management accounting information for supply chain participants.
Our study also has several important policy implications. First, from the perspective of managing accounting information, we propose solutions to enhance the resilience and stability of supply chains, as highlighted by the Central Economic Work Conference. Additionally, we offer insights into reducing structural imbalances between supply and demand in the real economy and improving the efficiency of information flow within supply chains.
Second, rather than focusing on high-cost tools for supply chain transformation, we emphasize the mechanisms and principles of autonomy within supply chains that rely on low-cost management information. Our findings demonstrate that OBI is a critical and cost-effective information source for enabling dynamic adjustments in supply chain governance, further enriching the literature on the spillover effects of management accounting information disclosure from a supply chain perspective.
Third, we assist regulatory authorities in more effectively regulating the disclosure of quantitative management accounting information within firms, identifying which types of information are most advantageous for supply chain risk governance. We provide guidance for regulators to improve information disclosure, implement “precise classification,” and support efforts to mitigate risks and prevent risk spillovers.

While studying the issue of trade and enterprise innovation, the existing literature treats enterprises with independent legal personality as a separate sample, ignoring the fact that a large number of business groups exist. In reality, there is often a great deal of non-market behavior amongst the subsidiaries of groups with independent legal personality, and through the strategic allocation of internal resources, business groups can maximize the interests of the group as a whole, rather than those of individual subsidiaries. Currently, some literature has investigated issues such as “hollowing out”, tax avoidance and pollution transfer within enterprise groups, but there is a lack of research focusing on the performance and coping strategies of business groups in the face of external shocks. Unlike non-group affiliates, enterprise groups have unique internal labor and capital markets and are able to allocate resources on a wider scale, and therefore may have better economic performance under external shocks.
In order to clarify the above issues, in this paper, we investigate the differential impact of import competition on the innovation of firms with different organizational forms by using the large-scale tariff cuts after China's WTO accession as the quasi-natural experiment. Before starting the empirical study, we first provide a theoretical framework based on the theory of ‘organizational resilience’. We analyze in detail the path mechanism of business groups to cope with external shocks from three perspectives: strategic adjustment in the internal market, cross-industry diversification, and organizational restructuring of the group. Afterwards, we conducted descriptive statistics using data on Chinese manufacturing firms and hand-arranged relational networks of enterprise groups, and carried out empirical tests using the DID strategy and the event study method.
The research in this paper provides some interesting findings: (1) The number of group affiliates is only about 29% of the total number of firms in the market, but contributes most of the output, employment and exports. (2) Most of the innovation of Chinese firms is contributed by group-affiliated firms. Specifically, the number of patent applications by group-affiliated firms accounts for about 70 percent of market share, while non-affiliated firms account for only about 30 percent. (3) The impact of import competition on innovation performance varies according to the organizational form of the firm, showing a dampening effect on single firms and a promoting effect on group-affiliated firms. (4) The reason for the better innovation performance of group-affiliated firms under import competition is that enterprise groups not only make use of the internal market to strategically allocate resources among subsidiaries in the same industry and adjust the focus of R&D and innovation across industries, but also adjust their organizational structure to revitalize internal innovation resources by eliminating inferior firms. (5) Further studies show that there is a division of labor for innovation within the group. Specifically, import competition significantly promotes the deepening and expanding innovation of innovative group-affiliated firms, but only promotes the expanding innovation of non-innovative ones; compared with private business groups, import competition has a greater effect on the innovation promotion of state-owned business groups; and import competition increases the number of utility model and design patents filed by the group's subsidiaries, but at the same time inhibits the number of invention patents filed.
This paper not only finds that the innovation risk of a single enterprise is higher, but also, reveals the reasons why enterprise groups have better innovation performance under external shocks, and identifies the potential risk of low-quality innovation of business groups, which provides new ideas for China to co-ordinate openness and safe, and high-quality development, as well as important policy insights for accelerating the development of new-quality productivity. Based on the conclusions of this paper, we put forward feasible policy recommendations: first, against the backdrop of the current turbulent international situation and intensifying uncertainty in the external environment, the importance of business groups in promoting the innovation-driven development strategy should be highly emphasized. It should support and develop high-quality enterprise groups with innovative capabilities, promote their investment and development in key national industries and fields, and cultivate new innovative growth points. Second, reduce the institutional costs and barriers for business groups to fulfil their innovation functions. Further simplify the system of talent flow and asset flow within the group, improve the allocation efficiency of talent and capital among firms, and smooth the circulation channels of innovation factors by formulating a unified system standard for the group. Third, further reduce the system costs within the SOE group by reducing the equity hierarchy, and improve its reaction speed in dealing with shocks. Fourthly, through the establishment of enterprise science and technology innovation awards and titles for experts and talents, incentivize firms to shift to an innovative development model that improves quality and preserves quantity, and the risk-resistant capacity of single firms will be improved by tilting the policies and taking the lead in setting up enterprise alliances.

The development of the banking sector plays a crucial role in supporting and facilitating China's economic growth. Although banking structure is a widely studied topic in current research, there is a notable lack of in-depth exploration of the underlying reasons for its adjustments. This study utilizes the refrom of import and export operation rights in China in 2003 as the quasi-natural experiment and employs a DID model to investigate the impact of SME development on banking structure. Prior to 2003, China imposed high registration capital barriers for domestic enterprises wishing to participate in direct exports, thereby allowing only a limited number of firms to engage in such activities. Starting from 2003, these entry barriers were gradually lowered and were eliminated by 2004, facilitating greater access for SMEs to international markets and generating new financing demands that could influence the supply structure of the banking sector. The findings suggest that as trade barriers were relaxed, regions with a high concentration of SMEs experienced a shift in banking structure towards a pattern dominated by medium and small banks, supporting the viewpoint that smaller banks have a comparative advantage in serving SMEs. Mechanism analysis reveals that SMEs' participation in direct trade drove adjustments in regional banking structure. SMEs that relied on external financing, exhibited comparative advantages, and those facing financing gaps tended to establish closer connections with the banking sector. Further analysis indicates that the comparative advantages of medium and small banks primarily arise from their relational and geographical benefits, which are reflected in superior capabilities for processing soft information and shorter decision-making chains. In regions characterized by a low social credit environment and relatively decentralized economic activities, the comparative advantages of medium and small banks were further accentuated.
Drawing upon these findings, this paper proposes three policy recommendations. Firstly, the development of medium and small banks should be aligned with the growth trends of local SMEs. As trade policy uncertainty increases and deglobalization trends, like decoupling of international industry chain, escalate, the development of SMEs is constrained to some extent. Consequently, medium and small banks should avoid unconsidered expansion and should promptly adopt contraction and restructuring measures to mitigate potential financial risks associated with serving single region. Secondly, adjustments in banking structure should target SMEs that heavily rely on external financing, possess competitive advantages, and face significant financing gaps. As China's industries undergo transformation and upgrade, appropriate policies should be formulated to direct financial resources towards emerging sectors, such as new energy and information technology. This involves establishing differentiated regulatory frameworks and incentive measures to encourage medium and small banks to sustain financial support for SMEs with high financing demands and growth potential in the new developmental stage. Finally, as large banks enhance their service offerings to SMEs through FinTech, small banks should fully leverage their relational and geographical advantages to serve SMEs that possess insufficient information and lack loan records, thereby establishing differentiated competition with large banks. Moreover, medium and small banks could offer integrated services, including market expansion, financial consulting, and tax planning to maximize their unique role within the banking system.
The marginal contributions of this study are primarily reflected in three aspects. Above all, in terms of research, existing literature predominantly focuses on the supply side, examining the positive impact of a banking structure dominated by medium and small banks in serving SMEs. The innovation of this study lies in shifting the focus to the demand side, investigating how the development of SMEs affects the banking structure, an approach that is relatively less explored in current academic research. Additionally, in terms of research content, this paper elucidates the relationship between changes in banking structure and characteristics of the real economy from three dimensions: financing dependence, comparative advantages, and financing gaps, providing a substantial reference for smaller banks to enhance their connection with the real economy. Lastly, in terms of research conclusions, using regional heterogeneity test, this study identifies the comparative relational and geographical advantages of medium and small banks in supporting SME development. This offers valuable strategic insights for medium and small banks seeking to achieve differentiated competition in an environment where large banks are enhancing inclusive financial services through FinTech and other technologies.

Extensive research finds that traditional culture is a key determinant of firm value and overall economic growth. This study attempts to shift the research focus to the impact of cultural value systems on behavioral norms within the financial industry. We explore a unique cultural characteristic of the regions where small and medium-sized financial institutions (SMFIs) are located—merchant guild culture—and the behavioral norms it induces, such as regional trust, financial literacy, and interpersonal relationships. This cultural milieu may help SMFIs adhere to their social objectives while achieving financial sustainability, thereby mitigating the likelihood of mission drift and contributing to the development of a more inclusive financial service system.
Using panel data on SMFIs from 2010 to 2020, we investigate the possible link between merchant guild culture and mission drift of SMFIs. First, following prior literature on culture and finance, such as studies on religion and Confucian thought (Du, 2019; Zhang et al., 2021), we construct a set of merchant guild culture variables based on geographical proximity. Secondly, to capture the service orientation of SMFIs in supporting small and micro enterprises (SMEs) and agricultural communities, we employ the breadth of poverty alleviation coverage as a proxy for mission drift. Specifically, we gauge mission drift using two key indicators: the proportion of loans to SMEs and the proportion of agriculture loans. Our empirical results show that merchant guild culture has a significant inhibitory effect on the mission drift of SMFIs. A one-standard-deviation increase in the influence of merchant guild culture reduces the degree of mission drift by 4.57% when measured by the proportion of loans to small and micro enterprises, and by 2.77% when measured by the proportion of agriculture loans. The conclusions remain robust after employing instrumental variables using regional average elevation, propensity score matching (PSM) methods to mitigate endogeneity issues and controlling for random factor disturbances and omitted variables.
Moreover, we explore the impact of the formal institutional environment and the development level of digital inclusive finance in each region on our research conclusions. The results show that in regions with limited government intervention, more developed private economy, and advanced digital inclusive finance, the inhibitory effect of merchant guild culture on the mission drift of SMFIs is stronger. This finding confirms the synergistic relationship of mutual promotion and joint efficiency between formal and informal institutions, and also illustrates the coupling effect of digital technology and traditional culture in optimizing the social performance of SMFIs. Our study provides theoretical support for policy recommendations such as transforming traditional culture into industry self-discipline norms and personal behavioral guidelines, improving the level of group financial literacy, and enhancing digital inclusive finance.
The contributions of our study can be summarized as follows: First, it enriches the theory of small bank advantage, which is conducive to China's construction of a multi-tiered, broadly covered, and differentiated banking institution system to meet the structural and diversified financial service needs of the real economy. Second, from the perspective of excellent traditional Chinese culture, it extends the research perspective of mission drift, combining the special businesses of Chinese SMFIs such as loans to agriculture and small and micro enterprises, and studies their initial mission. These studies help us further understand the role of informal institutions in financial institutions and credit markets. Third, it broadens the research boundary of traditional culture values, revealing the positive role of merchant guild culture in inhibiting the mission drift in SMFIs from the perspective of the financial industry. Finally, it further explores the synergistic relationship between merchant guild culture as an informal institution and formal institutions such as the level of private sector development and government supervision, as well as the development of digital inclusive finance. Future research could further expand the research perspective to comprehensively assess the impact of merchant guild culture on various types of inclusive finance businesses, as well as the depth and breadth of poverty alleviation coverage.

As an important driving force of China's economic growth, the digital economy is profoundly reshaping the financial behavior of residents, which will trigger changes in the income level and income structure of households. Whether the digital economy can promote common prosperity depends on whether its ability to increase the opportunities for disadvantaged areas or groups to escape from poverty and alleviate the consolidation of classes. In this context, it is of great significance to clarify the evolution of Chinese households' income mobility and explore the impact of digital economy development on households' income mobility and its potential mechanisms.
Based on this, this paper uses the multi-dimensional digital economy development index and the China Household Finance Survey (CHFS) data from 2013 to 2019, to analyze the evolution characteristics of Chinese households' income mobility, and investigates the impact of digital economy development on households' income mobility from a micro-level perspective. Descriptive analysis that from 2013 to 2019, the income mobility of Chinese households declined first and then increased, and the middle-income group was the main driving force for the increase of the income mobility of Chinese households. Empirical analysis shows that the development of digital economy can significantly promote the improvement of household income mobility. However, the enhancement effect of digital economy development on households' income mobility is more significant among households residing in urban areas, those with higher human capital and higher income. This indicates that the gap in income mobility of households with different characteristics in China may be further widened, and the inclusive benefits of the digital economy development on the improvement of income mobility has not yet been reflected. The mechanism analysis shows that promoting employment participation and financial asset investment are key channels through which digital economic development promotes the improvement of. Moreover, the employment promotion effect is more pronounced in better educated households, which deserves further investigation.
The possible contributions of this study are mainly reflected in the following three aspects. Firstly, this paper empirically examines the influence of digital economic development on the income mobility of households. It not only provides a new research perspective for the study of households' income mobility, but also helps deepen the understanding of the impact of digital economic development on income distribution. Secondly, this paper investigates the heterogeneous impact of digital economic development in improving households' income mobility from multiple aspects. This will be conducive to answering the theoretical controversy over whether digital economic development is conducive to promoting inclusive growth and achieving the goal of common prosperity. Thirdly, this article analyzes the characteristics of the income mobility in China from both the aspects of the magnitude and quality of income mobility, and conducts a comparative analysis of the income mobility of urban and rural households to display the evolution of the characteristics of households' income mobility in China in recent years in more detailed depiction.
The findings of this paper carry important policy implications. First of all, we should vigorously develop the digital economy, continuously optimize its development model, and identify the weaknesses in its development, so as to more effectively play the role of digital economy development in boosting households' income growth. Secondly, we should strengthen the construction of digital infrastructure, the training of digital professionals and the development of digital economy in underdeveloped areas such as rural areas, so as to break the inhibiting effect of the digital divide in underdeveloped areas on the dividends of digital economy. This paper finds that the development of digital economy has no significant effect on the income mobility of households in rural areas. Therefore, underdeveloped areas such as rural areas should introduce the development experience of advanced areas, rationally plan and build communication and network infrastructure, and pay attention to the cultivation and introduction of corresponding technologies and talents, so as to effectively improve the enjoyment level of digital economy dividend. Finally, actively popularize and promote digital technology-related education to comprehensively improve households' digital literacy. Government departments in less developed regions are encouraged to collaborate with communication and infrastructure departments to enhance the digital skills of vulnerable groups and their usage of digital products and services, ensuring that the development of digital economy can truly benefit the people.
This study has some limitations. For example, the empirical analysis in this paper fails to clearly clarify the impact of digital economy on income mobility within urban households, income mobility within rural households, and the income mobility between urban and rural households. This remains an important issue worthy of further investigation.

The financial vulnerability of older households is an important dimension in measuring the financial risk of older households. Since the turn of the 21^st century, the degree of aging population in China has become increasingly severe, accompanied by challenges such as “growing old before becoming wealthy” and “growing old before being adequately prepared.” Factors such as insufficient reserves of old-age wealth, the relatively low financial literacy of the population, and increased health risks will all lead to an increase in the financial vulnerability of older households and a further accumulation of household financial risks. It is worth noting that, against the background of rapid population ageing in China, digital technology is also developing rapidly with the continuing expanding scale of the digital economy. Objectively speaking, the development of the digital economy, represented by digital finance, has significant “inclusive” characteristics, which can improve the financial accessibility of disadvantaged groups and thus enhance their ability to cope with risks. However, due to the influence of culture, skills, tools and health-related factors, older households, especially those in rural areas, face a substantial gap in digital access and usage compared to other groups, highlighting the problem of the digital divide among old age. The existence of the digital divide not only prevents older households from benefiting from digital advancements, but also deprives them of their existing resources, resulting in damage to household welfare. Therefore, it is necessary to explore in depth whether the digital divide affects the financial vulnerability of older households, and if it does, what is the specific mechanism of action？ Addressing the above questions is of great significance in preventing and resolving household financial risks and enhancing societal well-being.
This paper uses data from the 2017 and 2019 China Household Finance Survey (CHFS) to construct a household digital divide index and explore the impact of the digital divide on the financial vulnerability of older households as well as the specific mechanism of action. The findings are as follows. Firstly, the digital divide significantly exacerbates the financial vulnerability of older households. After a series of robustness tests, such as endogeneity treatment, replacing dependent and independent variables, replacing samples, and replacing models, the above conclusion remains robust. At the same time, it implies that narrowing the digital divide in old age is conducive to reducing household financial vulnerability. Secondly, the mechanism through which the digital divide affects older households' financial vulnerability is mainly reflected in the following three aspects: weakening social networks, increasing health risks and aggravating financial exclusion. Thirdly, further analyses show that different sub-dimensions of the digital divide significantly exacerbate the financial vulnerability of older households. Fourth, heterogeneity analyses reveal that the impact of digital divide on household financial vulnerability is more pronounced among relatively disadvantaged older households such as those in rural areas, those with low human capital and those without commercial insurance.
This study contributes to the existing literature in the following ways. Firstly, it adopts appropriate methods to measure the current digital divide and financial vulnerability of elderly households in China, and systematically analyses the relationship between the two, expanding the breadth of research on the financial problems of elderly households. Secondly, it clarifies the mechanisms through which the digital divide affects the financial vulnerability of elderly households from different perspectives, such as weakening social networks, increasing health risks and aggravating financial exclusion, and explores the different impacts of urban-rural and household characteristics and heterogeneity of household head characteristics, so as to provide useful insights for the implementation of policies related to more efficiently managing the digital divide in old age and reducing the financial vulnerability of households.
The policy implications of this paper lie in the following. Firstly, it is necessary to pay attention to and prevent and resolve the financial risks of older households. Narrowing the digital divide is one of the effective strategies to reduce the financial vulnerability of older households. Policymakers should strengthen the top-level institutional design, improve as soon as possible the system of laws, regulations and regulatory systems with the core objective of narrowing the digital divide in old age, and establish a long-term mechanism to solve this issue. Secondly, narrowing the digital divide among the elderly hould focus on two key areas. On the supply side, improving the accessibility of the Internet to elderly households, accelerating the construction of digital infrastructure, and increasing the penetration rate of smartphones and other Internet devices. For example, initiatives such as the construction of digital villages and the Internet equipment project in the countryside can help rural elderly groups overcome the problem of “tool exclusion”. On the demand side, it is necessary to make joint efforts to improve the Internet usage of elderly households from both the supply side and the demand side, not only to deepen the ageing of Internet applications and accessibility transformation, but also to strengthen the cultivation of digital literacy among the elderly through various means, so as to help them integrate into the digital society as soon as possible, and share the digital dividends.
This paper initially establishes a theoretical framework of the digital divide affecting the financial vulnerability of elderly households, and conducts empirical tests and puts forward targeted policy recommendations. However, there are still the following aspects for further exploration: firstly, the empirical data on older households can be further updated in terms of years of data to understand the development of digital divide and financial vulnerability of older households. Secondly, the impact of the digital divide on the financial vulnerability of older households is not only an economic issue, but also a multifaceted challenge related to the ability of the older population to better integrate into the digital society, which should be researched from the perspectives of sociology, demography and psychology in a cross-cutting and comprehensive manner in the future, so as to obtain more actionable research results.

Rural issues have consistently been a central focus in China's economic and social development agenda. During the phase of poverty alleviation, China implemented an innovative mechanism known as Resident Work Teams (RWTs) to ensure the precise execution of poverty alleviation strategies, with implementationss reaching directly to households and individuals. RWTs aim to closely integrate external aid with local communities, thereby strengthening grassroots organizational structures, empowering villagers to foster local development initiatives, fostering the transformation and upgrade of agricultural industries, and ultimately improving rural living conditions. Collectively, these efforts lay the foundation for a sustainable, long-term development path for rural economies, thereby contributing to broader societal progress. Although RWTs share similarities with international anti-poverty initiatives such as BRAC’s graduation programme, their distinctiveness lies in the phased and large-scale implementation strategy. In China's precision poverty alleviation campaign, 255,000 resident work teams and more than 3 million village cadres have been dispatched.
Although the existing literature has conducted extensive and in-depth research on the logic and effectiveness of precision poverty alleviation in China, covering a wide range of dimensions ranging from income, human capital, healthcare and education, and regional development, research on the comprehensive impact of RWTs on household economic status is still insufficient when analyzing the role of village-based cadres' assistance. To address this gap, this study examines the impact of RWTs on rural household economic conditions from the innovative perspective of household balance sheets. Based on data from the Inclusive Finance Survey of Six Provinces, which covers 1,593 rural households across Guangdong, Guangxi, Zhejiang, Hubei, Hunan, and Fujian, and incorporating detailed information on RWTs gathered through interviews with village cadres, we conduct a comprehensive analysis.
The research results indicate that RWTs significantly promotes the growth of rural household assets and liabilities, while equilibrium indicators such as net assets do not show significant changes. The RWTs has led to an expansion of household balance sheet of local rural residents while not putting financial pressure on households. These outcomes are driven by several mechanisms, including increased investment in production and business projects, shifts in risk preferences influenced by social security systems, and improved asset allocation efficiency resulting from financial literacy. Further analysis reveals heterogeneity in the impact of RWTs on household balance sheets. Additionally, the effects of RWTs are sustainable; household assets do not decline after the assistance ends, whereas debt levels decrease.
For rural poverty alleviation programs involving external assistance, several key considerations are worth noticing. First, ensuring the sustainability and long-term impact of these initiatives is critical. To achieve equitable and lasting development, stable resource channels must be established, enabling disadvantaged regions to continue their progress independently once external support is phased out. Second, in advancing the process of sustained investment and development in rural areas, it is important to adopt effective debt management strategies to maintain the long-term financial stability of households. Finally, financial exclusion remains a significant challenge in rural areas, and providing services such as low-risk investment options and insurance can help households manage risk and enhance their risk resilience ability, contributing to the broader goals of reducing inequality and fostering shared prosperity.
This study contributes to academic research in the field of poverty alleviation and rural development. First, by systematically analyzing the dynamic changes in household assets and liabilities during the RWT intervention, this study provides important insights into how household economic structures evolve in the context of rural development. Second, this study examines the specific mechanisms by which RWTs help affect household finances, emphasizing the key role of external aid workers in introducing productive business projects, risk attitude change, and knowledge dissemination. Finally, by examining the heterogeneous effects of RWTs on household balance sheets and confirming the long-term sustainability of these impacts after the intervention, this study offers valuable guidance for designing more effective and enduring rural development policies.

The fundamental function of capital markets is to guide resource allocation through security price signals, which must accurately reflect fundamental value (also known as intrinsic value) to be effective. Stock mispricing, which means that prices deviate from their fundamental value, impairs this function. Thus, studying the drivers and mechanisms of stock mispricing is crucial for restoring fair valuation and advancing capital market quality. With growing awareness of sustainable development, ESG (Environmental, Social, and Governance) has become a key factor in investment decisions. Rating agencies, as professional processors, release ESG ratings that investors use to assess company risks. However, ESG ratings often diverge across agencies for the same company. Understanding how these divergences affect stock prices' reflection of intrinsic value is vital for capital market effectiveness in supporting the real economy.
This paper constructs a theoretical model to analyze how ESG rating divergence drives heterogeneous beliefs to impact stock mispricing. It examines the roles of information transparency and noise traders, and investigates whether ESG rating divergence leads to stock overvaluation or undervaluation, especially under short-selling constraints, and further investigate the heterogenous impact of ESG rating divergence on mispricing. Based on the Atmaz and Basak (2018) model, the study builds a theoretical model of how ESG rating divergence affects stock price deviations from intrinsic value and further discusses the mispricing effect and the mechanism embedded. Empirically, it tests these effects using a sample of non-financial firms listed on the Shanghai and Shenzhen A-share markets, rated by 10 agencies from 2010 to 2022, and evaluates the impact, mechanisms and conditional heterogeneity of the findings.
The research findings are as follows: The theoretical model confirms that ESG rating divergence exacerbates stock mispricing over time, with its impact increasing as the divergence increases. Empirically, ESG rating divergence worsens stock mispricing by reducing information transparency, increasing heterogeneous beliefs and affecting noise traders. Specifically, the “information confusion effect” caused by divergent ESG ratings drives stock prices further away from their intrinsic values. Impact Direction: Under short-selling constraints, ESG rating divergence primarily leads to stock overvaluation, indicating that significant divergence tends to overprice stocks. Impact Heterogeneity: When regulatory bodies mandate ESG disclosure, divergent ratings assist investors in assessing corporate ESG performance, playing a “valuation correction” role. However, the internal characteristics of voluntarily disclosed ESG information do not significantly influence the mispricing impact. Comprehensive ESG disclosures and investor interpretation abilities reduce the impact of rating divergence on mispricing. For firms with high-quality financial information, the marginal “information confusion” effect is stronger, resulting in more pronounced mispricing. These results enhance the understanding of ESG rating divergence and its implications for capital markets, offering insights for aligning stock prices with intrinsic values and improving stock market resource allocation.
The contributions and innovations of this paper are as follows: (1) From the perspective of stock price deviations from intrinsic value, this study extends Atmaz and Basak's (2018) heterogeneous belief model to the context of stock mispricing by innovatively introducing the ESG rating divergence factor. This study introduces stochastic differential equations to describe investors' heterogeneous beliefs and a stochastic system with ESG rating divergence is established. Based on the Kalman filter theory, the paper derives the intrinsic mechanism of ESG rating divergence affecting mispricing. The research findings theoretically model how divergent ESG ratings released by multiple rating agencies influence mispricing by driving heterogeneous beliefs. This provides a theoretical basis for regulating the rating market and improving the information environment in capital markets, while also offering a reference model framework for future studies on information disparities in financial markets. (2) The study validates the mispricing effect of ESG rating divergence and finds that ESG rating divergence primarily leads to stock overvaluation. While previous literature has explored ESG rating divergence's relationship with market metrics like stock price and return synchronicity, it has not addressed its impact on the accurate reflection of intrinsic value. This study clarifies the mispricing effects, highlighting market inefficiencies and offering evidence to identify pricing gaps and prevent market bubbles. (3) The study introduces internal and external ESG disclosure characteristics, showing that divergent ESG ratings can correct valuations under certain conditions through the “information production effect”. It also examines how ESG information recognition and financial information quality interact with ESG rating divergence, expanding the understanding of ESG ratings' role and their influence on market behavior.

Cross-regional judicial coordination is not only an inherent requirement of the regional coordinated development strategy but also a practical need to enhance people's well-being. With the improvement of China's regional integration, cross-regional economic and social activities have become increasingly frequent, leading to a growing number of frictions among various entities across regions. As a result, cross-regional judicial coordination has emerged as a crucial venue for mediating significant economic interests and concerns among regions. How to enhance the welfare levels of various regions in the process of promoting cross-regional judicial coordination has become a significant practical issue of the construction of the rule of law in China as well as the pursuit of high-quality economic development.
Based on the judgment document data of 222 prefecture-level cities in China from 2011 to 2022, this paper used the number of court remote entrusted and entrusted cases ruled to reflect the level of urban cross-regional judicial synergy, estimated the level of urban welfare using the MIMIC model. Taking the experience of Secretary of the Political and Legal Committee of prefecture-level cities serving in other locations as an instrumental variable of cross-region judicial synergy, this paper employed the IV-2SLS, spatial Durbin model and mediating effect model to examine the impact of cross-regional judicial synergy on regional welfare and its potential impact mechanism. The study found that (1) cross-regional judicial synergy significantly enhanced regional welfare, but the impact of cross-regional judicial synergy on regional welfare showed decreasing characteristics in the eastern, central and western regions. Relative to cross-provincial judicial synergy, intra-provincial judicial synergy has a greater effect on enhancing regional welfare. Cross-regional judicial synergy in contract, debt disputes, corporate law and intellectual property cases exerts a greater effect on regional welfare compared with that in criminal, traffic and other civil cases. (2) There is spatial spillover and regional interaction between judicial synergy and regional welfare, also known as both local and neighboring regions' judicial synergy have positive effects on local welfare. And there are geographic attenuation characteristics and spatial boundaries for the impact of cross-regional judicial synergy on regional welfare. The geographic threshold of cross-regional judicial synergy on regional welfare is 500 km, and the spatial spillover boundary of regional welfare is 600 km. (3) Cross-regional judicial synergy affects regional welfare through six potential mechanisms: resource reallocation, business environment improvement, social and judicial environment advancement, promoting product diversification, improving public services and improving the ecological environment.
The marginal contributions of this paper are as follows: The first one is a novel research perspective. This paper examines multidimensional regional welfare issues from the new perspective of cross-regional judicial coordination, thereby expanding the research scope on the economic and social effects of judicial activities. The second one relates to a new measurement method. This paper measures the level of cross-regional judicial coordination at the prefecture-level city scale using microdata on the number of cases entrust and entrusted by grassroots courts, addressing the gap in quantitative measurements of cross-regional judicial coordination. The third one concerns a finer spatial scale of data. Given that China's judicial enforcement entities are primarily concentrated at the prefecture-level city and below, the empirical results obtained using prefecture-level city data in this paper have greater practical significance. The fourth one is about considering the spatial spillover effects of regional welfare and the spatial interaction effects between judicial coordination and regional welfare, while also examining the spatial boundaries within which cross-regional judicial coordination influences regional welfare.
This study has important policy implications.Firstly, cross-regional judicial coordination is a crucial means to enhance regional welfare. Efforts should be made to strengthen the alignment between cross-regional judicial coordination and cross-regional economic coordination policies, and to establish a linkage mechanism between judicial institutions and economic management departments across regions.
Secondly, leveraging the welfare-enhancing effects of judicial coordination necessitates adhering to the principles of gradualism and regional differentiation. Eastern regions should focus on providing references for central and western regions in terms of institutional design and innovative practices of judicial coordination. Meanwhile, central and western regions should strengthen legal concepts and effectively uphold the fundamental role of the market in resource allocation through judicial coordination.
Thirdly, harnessing the regional welfare-enhancing effects of judicial coordination requires adhering to the principle of proceeding from the nearby to the distant and from within the province to outside the province, and formulating differentiated judicial coordination policies. It is necessary to establish holistic, spatial boundary, and multidimensional coordination thinking. Besides, a multidimensional coordination mechanism between cross-regional judicial coordination and the economic system should be established as soon as possible to promote the integration of judicial coordination and economic integration.