Inflation expectations, as an integral component of expectation management, exert a significant influence on the pricing of financial assets and the corporate financing environment. While existing studies have made preliminary attempts to explore the relationship between inflation expectations and corporate bond credit spreads, their conclusions remain notably divergent. Most studies focus predominantly on firm-specific default risks, neglecting systemic macroeconomic factors, thus failing to comprehensively depict the full transmission pathways through which inflation expectations affect credit spreads. In fact, as a forward-looking indicator reflecting market participants' views on future price trends, inflation expectations not only directly affect the pricing level and return structure of financial assets but also influence credit spreads by altering investors' risk preferences and required risk premiums.
This study employs expert inflation forecast data from Securities Market Weekly (2010-2022) as the core explanatory variable, combined with secondary-market transaction data and primary-market issuance data of A-share listed companies' credit bonds, to systematically examine the relationship between inflation expectations and corporate bond credit spreads, as well as the underlying mechanisms. The paper develops a dual-channel transmission framework: (1) the Default Risk Premium (DRP) channel, reflecting investors' required compensation for the probability and potential loss of default; and (2) the Excess Risk Premium (ERP) channel, measuring the additional return investors require for bearing systemic macroeconomic risks.
The empirical findings reveal a pronounced nonlinear U-shaped relationship between China's inflation expectations and corporate bond credit spreads: At a moderate level of inflation expectations, identified at 1.99%, which is close to the 2% inflation target adopted by most central banks, credit spreads reach their minimum, implying lower corporate financing costs. Deviations from this threshold in either direction significantly widen credit spreads. This result remains robust across various model specifications, alternative variable definitions, frequency adjustments, and samples excluding the pandemic period, and is particularly pronounced among non-state-owned enterprises, low-leverage firms, and low-rating bonds. Mechanism analysis shows that inflation expectations affect credit spreads through two distinct channels: First, via the DRP dimension, moderate inflation facilitates “debt deflation” effects, alleviating firms' real debt burdens and reducing default risk. However, when inflation expectations rise excessively, macroeconomic uncertainty increases, growth expectations weaken, and firms' debt-servicing capacity deteriorates, raising default risk. Second, via the ERP dimension, moderate inflation expectations enhance market risk appetite and suppress systemic risk premiums, whereas extreme inflation expectations (either high or low) trigger heightened risk aversion, increasing required risk compensation and thus widening credit spreads.
Extending the analysis to the primary bond market, the study finds that moderate inflation expectations not only compress credit spreads in the secondary market but also reduce issuance yields, shorten issuance maturities, and improve issuers' financing flexibility at the issuance stage, indicating that inflation expectations directly shape real financing outcomes through the primary market. At the monetary policy level, further analysis reveals that unanticipated monetary easing shocks significantly raise inflation expectations and that unexpected policy actions affect bond market volatility by altering expectations. Both excessive expansionary and tightening unexpected monetary policies lead to increased bond yield volatility.
Based on these findings, the paper offers several policy suggestions: First, guide the market toward reasonable expectations. Stabilizing inflation expectations within a moderate range can enhance monetary policy transmission efficiency, reduce financing costs in both primary and secondary markets, and strengthen market resilience. Second, recognize the impact of inflation expectations on microeconomic agents and financial markets. Inflation expectations substantially influence both corporate and investor risk preferences. In the context of heightened global economic uncertainty, policymakers should more precisely identify and monitor both individual and market-wide expectations. Third, enhance policy transparency and consistency. Reducing the disruptive effects of unexpected policy shocks on market expectations, strengthening macroeconomic policy coordination, and combining institutional reforms with market mechanism improvements can further solidify the foundations of the corporate bond market.
The contributions of this study are threefold: First, it systematically documents the nonlinear U-shaped relationship between inflation expectations and corporate bond credit spreads in the Chinese market, linking macro-level expectation management with micro-level financing behavior. Second, it decomposes credit spreads into default risk premiums and excess risk premiums, uncovering their differentiated roles in the transmission process. Third, it incorporates monetary policy surprises into the analytical framework, underscoring the importance of policy communication in stabilizing market expectations. These findings provide empirical support for China's pursuit of high-quality economic growth and financial risk prevention, while also offering valuable insights for central banks worldwide in managing inflation expectations under volatile global financial conditions.

As China accelerates the construction of a modern central banking system and emphasizes the bottom line of preventing systemic financial risks, stock price fluctuation have emerged as one of the core challenges to macroeconomic stability. To address such risks, China is actively constructing a “two-pillar” regulatory framework that coordinates monetary policy with macroprudential policy. However, a fundamental question demands an urgent answer: In an economic environment with stock price fluctuation, how should the “two-pillar” policies optimally respond to economic shocks from different sources？ Traditional research mostly relies on fixed linear policy rules, often leading to generalized conclusions of “leaning against the wind”. Yet, these conclusions diverge significantly from the complex, discretionary practices of real-world policymakers.
To bridge the gap between theoretical models and policy practices, the core methodological innovation of this paper lies in employing the Ramsey optimal policy framework. Unlike the traditional approach of optimizing parameters for “optimal simple rules”, the Ramsey method takes the equilibrium equations of the entire economy as constraints and solves directly for the policy path that maximizes social welfare. The resulting optimal policy response functions are fully flexible and nonlinear, unconstrained by any preset structure, thereby revealing the truly optimal policy choices under different economic states and providing a robust theoretical foundation for “going beyond the Taylor rule”.
We construct a dynamic stochastic general equilibrium (DSGE) model that incorporates equity market and two-pillar policy tools. Stock prices can generate self-fulfilling fluctuations through collateral channels. Through parameter calibration and Bayesian estimation with the characteristics of the Chinese economy, we obtain four main findings.
Firstly, the choice of optimal two-pillar policies is not static but highly dependent on the nature of economic shocks. We overturn the conventional “leaning against the wind” paradigm and point out that when the economy faces positive fundamental productivity shocks, the optimal policy is a “tailwind” approach of “dual easing”, involving simultaneous interest rate cuts and relaxation of leverage ratios to encourage investment and fully seize growth opportunities. Conversely, when the economy faces positive sentiment shocks originating from non-fundamentals, the optimal policy is a “headwind” approach of “dual tightening”, raising rates and resolutely curbing excessive investment and protecting the real economy from irrational exuberance.
Secondly, compared to a single monetary policy, the two-pillar framework can significantly enhance social welfare. Its advantage lies in achieving an effective division of tasks among policy tools: macroprudential policy primarily regulates investment levels and maintains financial stability, while monetary policy can focus more on stabilizing inflation. This coordination breaks the difficult trade-off between “stabilizing growth” and “mitigating risks” faced by a single policy, enabling the economy to operate closer to the socially optimal state when facing shocks.
Thirdly, through comparative analysis, we find that the main flaw of optimal simple rules lies in their one-size-fits-all “leaning against the wind” approach, which erroneously suppresses investment under productivity shocks, resulting in welfare losses. To address this, we innovatively propose a “dual simple rules” scheme that is both optimal and operational, suggesting that policymakers switch between different simple rules under “productivity-dominated” and “non-productivity-dominated” modes based on the current economic environment, serving as a practical guide for approximately achieving Ramsey-optimal policies.
Lastly, in an extended model that more closely resembles Chinese reality by incorporating a large number of non-bankable firms, we find that rising stock prices in credit-accessible firms can generate positive “spillover effects”, thereby amplifying total investment. This mechanism necessitates that optimal two-pillar policies exercise greater caution during pro-cyclical easing and adopt more forceful measures during counter-cyclical tightening.
The research in this paper holds significant theoretical and practical value for the construction of China's modern central banking system. We not only provide a clear roadmap for the discretionary coordination under the two-pillar policies but also reveal the complex, dual role of equity bubbles in the economy. They are both sources of risk and potential tools for alleviating financial frictions. Our conclusions support the view that policymakers should construct a decision-making framework that goes beyond traditional rules and relies on in-depth macroeconomic analysis, harnessing rather than suppressing the energy of equity market prosperity through precise monitoring, expectation guidance, and differentiated regulation to serve high-quality economic development. Meanwhile, the “shock-dependent” policy paradigm proposed in this paper also holds profound implications for understanding and addressing asset price fluctuations in other key sectors like real estate.

China has a bank-dominated financial system. As the primary force in financial resource allocation, the banking sector must promote high-quality development of the real economy through its own advancement while simultaneously balancing development and security to firmly guard against systemic financial risks. As one of the most significant asset prices, to what extent do fluctuations in real estate prices affect bank credit allocation？ In the context of China's pursuit of high-quality economic development, investigating whether and how asset price fluctuations influence bank credit allocation holds significant importance for enhancing the effectiveness of financial services to the real economy and preventing systemic risks.
However, research on whether and how asset price fluctuations affect bank credit allocation remains limited in China. First, given China's bank-dominated financial system, localized empirical evidence is urgently needed to understand how banks' excessive reliance on real estate collateral, admist housing price volatility, impacts credit allocation. Second, existing literature primarily examines the indirect effects of housing price changes on non-financial enterprise investment through collateral and crowding-out channels from the firm perspective, lacking direct evidence from the banking perspective. Third, China is currently in a critical phase of transitioning toward high-quality development, where the stable operation of the banking sector is essential for coordinating development and security. Against this backdrop, a systematic analysis of housing price fluctuations' impact on bank credit allocation and their transmission mechanisms carries substantial value for preemptively predicting, analyzing, and addressing financial risk exposures arising from downward pressure on housing prices.
Based on loan-level data from a joint-stock commercial bank in China covering 2010-2021, this study finds that rising housing prices significantly increase bank lending, with the collateral channel playing a key role. However, unlike empirical evidence from advanced economies, no direct evidence was found at the data level showing that loans to real estate enterprises significantly crowd out lending to non-real estate enterprises during periods of rising house prices. The reasons are twofold: (1) Within China's shadow banking system, non-real estate enterprises often act as intermediaries for real estate enterprises to access credit. (2) During periods of real estate market boom, non-real estate enterprises actively engage in the real estate market by investing in land and properties, accumulating collateral that enhances their ability to secure bank loans. Heterogeneity analysis reveals that the effect of housing price changes on bank credit allocation varies significantly with enterprises' financial strength, regional economic institutions, market environments, and credit policy cycles.
This paper's main contributions are threefold. First, distinct from research based on Western data, it identifies no significant crowding-out effect of rising house prices within China's institutional settings. Second, differing from firm-level studies, this paper utilizes bank loan data to provide the first direct evidence from the bank's perspective, identifying that housing price fluctuations affect credit allocation via the collateral channel. Third, this research holds substantial practical relevance. Against the backdrop of recent housing price corrections, banks are becoming more cautious when lending to firms dependent on collateral, forming a “falling asset prices-credit contraction” feedback mechanism. The credit allocation mechanisms and collateral dependency paths revealed in this study provide valuable insights into understanding related credit allocation dynamics, financial risk exposures, and policy design.
The research yields the following policy implications: First, commercial banks must accelerate their transformation by reducing reliance on traditional collateral and expanding the scope of new types of pledged assets such as intellectual property rights, data assets, and carbon emission rights. They should also establish dynamic collateral stress-testing mechanisms with differentiated loan-to-value (LTV) thresholds to mitigate cascading risks caused by declining valuations. Second, enhanced penetrative regulation is needed to prevent the spread of financial risks. Given the hidden and contagious nature of financial risks in highly leveraged sectors, regulators must adopt targeted and penetrative supervisory measures. Third, legal and institutional reforms should be advanced to strengthen property rights protection and credit risk prevention mechanisms. This includes improving property rights protection and default recovery mechanisms by refining systems for property registration, bankruptcy liquidation, and information disclosure to enhance assets' legal protection. Additionally, corporate credit assessment systems should be refined, and early warning mechanisms for credit risks should be enhanced to reduce adverse selection problems stemming from inadequate legal protection.

The Chinese economy is in the stage of high-quality transformation and development, characterized by industrial upgrading and structural optimization. Therefore, how to stimulate market entities' vitality, especially how finance can boost corporate vitality, is an urgent task for current economic development. In the Chinese financial system, which is dominated by indirect financing, real enterprises, especially small and medium-sized enterprises, often choose bank loans as the relatively safe path when conducting external financing. The market-oriented competition transformation in the banking industry is bound to influence corporate investment and strategic vitality. The existing studies show that the development of small and medium-sized banks (subsequently referred to as SMBs) can break the monopoly of large banks on the banking market and promote healthy competition in the banking industry, then alleviate the enterprises' financing constraints through the Market Power effect and Distance-Information effect, and optimize the financial resource allocation.
Based on the thesis that bank competition affects corporate strategic aggressiveness, we first construct a tripartite dynamic evolutionary game model including enterprises, large banks, and SMBs for theoretical analysis and numerical simulation experiments. Then we conduct empirical research based on the data of Chinese listed companies from 2004 to 2021. We find that an increase in the market share of SMBs enhances bank competition, which can improve the capital allocation efficiency and relieve enterprises' financing constraints, and in turn has a positive effect on corporate strategy aggressiveness. Moreover, through heterogeneity analysis, we find that the positive effect of bank competition on corporate strategic choice is more significant in enterprises with higher information asymmetry and without a specific bank-enterprise relationship, which demonstrates the Distance-Information effect and Market Power effect. Extended analysis further demonstrates that bank competition induces enterprises to adopt more aggressive strategies, which in turn improves innovation output and total factor productivity significantly.
This paper contributes to the literature in two main aspects. First, previous studies primarily focused on the impact of bank competition on single-dimensional enterprise activities, which may ignore the multi-dimensional and long-term nature of business strategies, as well as the overall strategic adjustment of enterprises. Our research starts from a more comprehensive strategy perspective. We not only consider the impact of bank competition on enterprises' R&D, but also analyze its effect on enterprises' other strategic behavior, such as market expansion and organizational structure change. Based on this foundation, our study further demonstrates, through the perspective of corporate strategy, how benign bank competition stimulates enterprises to pursue more aggressive strategies, thereby elevating both innovation output and productive efficiency. The results reveal that the optimization of banking market structure plays a more extensive and far-reaching role in promoting the high-quality development of the real economy.
Second, previous studies on bank competition and enterprise business primarily focused on empirical research, and the theoretical model analysis are especially insufficient. Although some relevant studies have conducted theoretical model analysis based on the equilibrium theory, such models ignore the differences in behavioral responses of different entities and their interactions under non-equilibrium conditions, and lack corresponding model simulation evidence. We innovatively construct a tripartite dynamic evolutionary game model. Through rigorous theoretical derivation and simulation experiment, this paper intuitively shows the evolution path of different entities from a non-equilibrium state to an equilibrium state. This can provide a more solid micro foundation for studying the impact of bank competition on corporate strategies.
This study offers policy insight that, to achieve the goals of efficiently allocating financial resources and stimulating the strategic vitality of market entities, a critical part is to unleash the positive competitive effects of SMBs. Specifically, they should foster a new pattern featuring effective competition and differentiated complementarity. For joint-stock banks, they should strengthen nationwide competitiveness, leveraging their integrated and diversified strengths. Regional banks, such as city commercial banks and rural commercial banks, should concentrate their competitive efforts on local real economy through their innate local advantages, and try to evolve into pivotal hubs in their local credit markets. By stimulating the development vitality and competitive advantages of SMBs, the efficient financial system can provide accurate and efficient financial support for the construction of a modern industrial system and the development of new quality productive forces.

Industrial policy serves as a crucial instrument for a promising government, aiming to direct scarce resources toward specific industries and firms, thereby optimizing resource allocation and enhancing efficiency.As a core factor in production activities, the accessibility and efficiency of capital directly shape firms' capacity for production expansion and innovation. The effectiveness of industrial policy lies not only in whether it helps firms secure financing, but more importantly, in whether firms can efficiently transform such financing into output and competitiveness. At present, bank loans remain the primary financing channel for firms, with reliance on bank credit being particularly pronounced during the early stages of development. Existing studies suggest that industrial policy can alleviate firms' financing constraints to a certain extent and effectively deliver additional economic benefits—such as fiscal subsidies, tax exemptions, and credit support—to targeted firms and industries. However, critical questions remain insufficiently explored at the micro-firm level: how firms allocate acquired loans, whether they utilize them efficiently, and whether such financing truly accelerates firm growth. This raises the central research motivation of this paper: while industrial policy enhances firms' access to loans, does it also improve the efficiency of credit utilization？ Moreover, through what primary mechanisms does industrial policy affect firms' credit use efficiency？
This paper utilizes data on China's key industrial policies and listed firms from 2006 to 2020 to construct an indicator measuring firms' credit utilization efficiency by the ratio of operating revenue to bank loans, and empirically tests the impact of key industrial policies on this efficiency. The findings reveal that, compared with firms not supported by such policies, those receiving key industrial policy support exhibit a higher level of output per unit of loan. This indicates that under policy incentives, firms are able to convert credit more effectively into operating revenue, reflecting stronger credit utilization efficiency. Heterogeneity analysis shows that this policy effect is more pronounced among firms with longer establishment histories, stronger profitability, and higher R&D investment. This may be attributed to such firms' superior resource acquisition capabilities, higher compliance with policy implementation, and greater efficiency in factor transformation. Further mechanism analysis suggests: (1) In terms of credit resource allocation, key industrial policies significantly optimize the flow of bank loans, effectively alleviating firms' credit shortages and channeling credit toward enterprises with greater development potential; (2) As for firm behavior incentives, key industrial policies substantially enhance firms' cash turnover efficiency and utilization efficiency of current assets, thereby intensifying the utilization of credit resources; (3) For the guidance of industrial development directions, key industrial policies help steer firms toward long-term development by encouraging them to expand fixed asset investment, increase R&D expenditure, and strengthen their long-term investment intentions.
The implications of this study suggest that China should further optimize the design of industrial policies to enhance overall resource utilization efficiency and promote high-quality economic development. First, industrial policy design should be refined to strengthen its functional role in resource allocation. Compared with traditional selective industrial policies, future approaches should place greater emphasis on the role of industrial policy in guiding the efficient allocation of resources. Second, diverse market actors should be incorporated into the policymaking process to enhance the precision and foresight of industrial policies. Third, key industrial policies should place a stronger emphasis on resource utilization efficiency in order to improve the effectiveness of resource allocation. To further enhance the actual efficiency of credit utilization, the role of financial institutions in the implementation of industrial policies should be strengthened. Finally, the role of industrial policy in shaping industrial development directions should be reinforced, thereby fostering stable expectations among market participants. It is also essential to shift in a timely manner from traditional selective industrial policies toward market-enhancing industrial policies, with greater emphasis on the guiding role of industrial policy, so as to promote consensus and coordinated actions among market participants.

In recent years, the global environment for foreign direct investment (FDI) has become increasingly complex. On the one hand, intensified tax competition and international reforms, most notably the global minimum tax, have limited the scope for multinationals to shift profits to low-tax jurisdictions. On the other hand, emerging economies continue to seek high-quality FDI as a means of upgrading industrial structures and integrating more deeply into global value chains. China presents a particularly interesting case: despite unifying corporate income tax rates for domestic and foreign enterprises, it remained the world's second-largest FDI destination in 2023. This phenomenon suggests that the role of foreign ownership networks, forged through cross-shareholding structures, is central to understanding how external uncertainties are mitigated and how firms adapt their tax planning strategies in a changing international environment.
At the domestic level, institutional frictions in China's tax incentive system persist. Approval processes remain complex, tax authorities retain broad discretion, and firms often face information asymmetries in accessing preferential policies. Moreover, regional tax competition has exacerbated the uneven allocation of capital and widened disparities in effective tax burdens. These challenges highlight the need for a more comprehensive framework to assess how foreign ownership networks influence corporate taxation outcomes.
This paper addresses the limitations of existing research, which often relies upon incomplete indicators of tax burden and pays insufficient attention to firm-level mechanisms, particularly among small and medium-sized enterprises (SMEs). We combine China's National Enterprise Tax Survey (2013-2020), which covers a broad spectrum of firms, including micro and small enterprises, with ownership data from the Bureau van Dijk Orbis database. By constructing refined measures of effective corporate tax burden and developing indicators of foreign ownership networks, such as network embedding and degree centrality, we provide a systematic examination of the relationship between network participation and firms' effective tax burden. Furthermore, by distinguishing between tax motivation and tax capacity, we uncover the channels through which foreign capital linkages affect firms' tax outcomes.
The study makes three major contributions. First, it introduces a macro-open economy perspective to explain persistent heterogeneity in effective tax burdens across firms, especially non-listed and smaller enterprises, which traditional datasets and theories have struggled to account for. Second, it advances the measurement of foreign ownership by capturing overlapping, interdependent equity linkages that reflect the complex nature of capital networks, thus reducing biases associated with conventional FDI proxies. Third, it offers policy-relevant insights, showing how institutional barriers in the current tax regime hinder the attraction and upgrading of FDI quality, while also suggesting how policy tools can be redesigned to remain effective under the global tax reform wave.
Empirical analysis provides strong evidence in support of these arguments. First, embedding in foreign ownership networks significantly reduces firms' effective tax burden, with the effect driven by endogenous advantages generated within the network rather than parent company size or exogenous preferential policies. Second, the reduction in tax burden functions through two distinct channels: stronger motivation to engage in tax optimization and enhanced capacity to implement tax planning strategies. These effects are especially pronounced among upstream firms and medium-to-large enterprises. Third, participation in foreign ownership networks not only lowers tax burdens but also improves firm performance, strengthens long-term value creation, and indirectly enhances the host country's attractiveness for high-quality FDI inflows.
The findings carry clear policy implications. Policymakers should prioritize attracting foreign investors with extensive network linkages and nurturing hub enterprises within these networks. At the same time, tax authorities should reinforce cross-border monitoring of tax sources, leverage big data and blockchain technologies to identify profit-shifting activities, and implement risk-based classification to allocate enforcement resources more efficiently. Simplified cross-border VAT procedures, automated preferential policy matching, and accelerated rebates for foreign affiliates engaged in technology transfer would further reduce compliance costs and strengthen innovation incentives.
By linking foreign ownership networks to effective tax burdens, this paper contributes to a more comprehensive understanding of corporate taxation in the era of global tax reform. It also provides concrete pathways for emerging economies to stabilize FDI inflows, upgrade FDI quality, and integrate more effectively into global industrial and financial networks.

In recent years, U.S. export controls have triggered a deep restructuring of global supply chains. In particular, the post-2018 strengthening of Entity List sanctions has markedly increased the uncertainty faced by Chinese strategic high-tech firms in semiconductors, 5G, and artificial intelligence. In this context, our paper employs a multi-period difference-in-differences design to empirically examine how sanction shocks have reshaped the upstream sourcing, innovation strategies, and operating performance of Chinese listed firms.
The results show that affected firms significantly increase the number of total suppliers and are more likely to allocate new relationships to economies with which they have signed trade agreements or with relatively close institutional proximity. At the same time, these firms increase the number of domestic Chinese suppliers. This spatial and institutional reallocation helps circumvent regulatory “chokepoints” and reduce supply-chain risks. Regarding innovation, there is a rebalancing phenomenon that external supply-chain innovativeness declines in the short term, but that increases in the innovativeness of domestic supply chains and in firms' internal R&D spending provide an effective offset.
In addition, the resilience gains from supplier diversification are contingent on specific structural conditions. A firm's search capability is a prerequisite for successful diversification, while switching costs pose a short-term financial barrier. Reconfiguring supply chains entails substantial switching costs that directly affect a firm's ability and willingness to absorb diversification adjustments in the near term. When confronted with large switching-cost shocks, government subsidies play a critical role as external financing support and risk buffer, enabling firms to overcome short-term obstacles and initiate diversification. High-tech firms－ asprimary targets of the U.S. Entity List－ have an even greater need to implement diversification strategies tomitigate potential technology-related risks. An increase in the number of U.S. firms within indirect supplyrelationships may reduce the number of suppliers available to firms facing technology embargoes.
Sanctions also have network spillover effects. Technology peer firms and upstream and downstream partners engage in “preventive diversification” with the upstream-to-downstream transmission being more pronounced.
Finally, this paper finds that the impact of export controls on firm performance exhibits a “two-stage” pattern. In the short term, due to rising costs of search, certification, and coordination, along with the use of suboptimal substitute components, corporate operating performance deteriorates. In the medium term, if firms can combine diversification strategies with improvements in supply-chain efficiency, the negative effects diminish significantly and the pace of recovery accelerates, facilitating performance restoration.
Based on these findings, this paper proposes the following policy recommendations. Externally, it is essential to complete a network of high-standard free-trade agreements, prioritizing cooperation with countries with similar institutional frameworks and complementary technologies. Domestically, high-tech firms subject to controls should lead the formation of innovation consortia with high-potential suppliers and research institutions, focusing on bottleneck segments and providing targeted R&D subsidies. Simultaneously, a risk-warning and joint-response platform should be built to enhance the efficiency of searching for and matching substitute suppliers. Firms hindered by high specificity and network concentration should receive low-interest loans and subsidies to help them overcome sunk costs, adjust technological paths and processes, and rebuild more resilient supply chains.
The contributions of this paper are threefold. First, drawing on micro-level supplier-customer relationships, it provides direct evidence that under export controls, Chinese listed firms reconstruct upstream networks through spatial reallocation and source substitution. Second, it depicts the vertical asymmetry in how shocks propagate along technology peer groups and value chains, offering new perspectives on policy spillovers and systemic risk. Third, it shows that rapid diversification does not necessarily lead to persistent performance losses: as long as diversification is coupled with improvements in supply-chain efficiency, firms can achieve a balance between risk and efficiency in the medium term. Future research should refine supplier substitution processes by considering product-technology complexity, clarify the characteristics of substitute products, and incorporate factors such as product quality and logistics friction into structural assessments. This would enable more precise quantification of the risk-efficiency trade-offs of rapid diversification, providing more actionable guidance for industrial policy and corporate strategy.

Employment constitutes the most critical livelihood issue, directly affecting public welfare, determining the sustained and healthy development of the economy and society, and even impacting national long-term stability. In recent years, Chinese central government has emphasized a people-centered development philosophy, explicitly proposing an employment-first strategy. Guided by this directive, local governments have actively placed ensuring and expanding employment as fundamental tasks for regional economic development. They have implemented comprehensive employment-promotion policies combining various policy instruments, such as fiscal subsidies, tax incentives, and credit support, tailored to local conditions.
From a theoretical perspective, economists have extensively studied how public policies affect employment since the global economic crisis of the 1930s. Keynes's seminal work, “The General Theory of Employment, Interest and Money”, pioneered a modern analytical framework by integrating employment issues into the core of macroeconomic policy analysis, while economists such as Lucas further explored labor market imbalances and frictions. Although existing literature has extensively addressed the relationship between macroeconomic policies and employment, systematic and in-depth research specifically examining employment-oriented policies driven by local governments remains scarce, especially concerning their concrete impacts on micro-level enterprise recruitment.
To empirically investigate the actual effects of local government employment policies from a micro-level perspective, this study utilizes approximately 62.04 million online recruitment data records from January 2017 to December 2020, covering non-listed small-and medium-sized enterprises. Employing a multi-period difference-in-differences (DID) model, the study examines these policies' impacts empirically. The results indicate that employment-promotion policies significantly increased enterprises' online recruitment activities, with an average increase of approximately 4.2% in enterprise recruitment postings at the city level following policy implementation. The mechanisms behind policy effectiveness involve three dimensions: first, direct fiscal subsidies significantly reduce recruitment costs; second, skill training and employment guidance provided to laborers reduce recruitment barriers and enhance worker productivity, thereby raising enterprises' expected returns; third, improvements in employment information services mitigate information asymmetry, enhancing matching efficiency between enterprises and laborers.
Regarding the effectiveness of policy tools, direct fiscal subsidies outperform tax incentives and credit supports, particularly the subsidies characterized by immediate and unconditional payment. Policies evaluated by incremental employment rather than existing employment scales also demonstrate greater effectiveness. Further analysis reveals more significant policy benefits exist for non-high-tech sectors, state-owned enterprises, and financially constrained firms. Cities with weaker locational advantages, lower administrative status, and relatively limited R＆D capacities experience more pronounced marginal policy effects. Additionally, the study explores actual employment absorption, finding that employment policies not only increase recruitment postings but also substantially enhance actual employment, particularly for R＆D positions, and notably improve overall enterprise wage levels.
The innovations and contributions of this study are threefold: first, it systematically examines the micro-level impacts of specialized local government employment policies on enterprise recruitment behaviors, addressing a critical research gap regarding micro-level decision-making in employment policy; second, it innovatively utilizes large-scale Internet recruitment data to precisely capture changes in enterprises' recruitment decisions, providing highly detailed micro-level evidence; third, from the perspective of labor-capital interactions, this study comprehensively evaluates the impact of employment policies on enterprise productivity, providing extensive insights for comprehensive policy assessment and future research opportunities.

This paper examines the income distribution effect of enterprise financing. As enterprises are the main agents of investment and financing, whether the reform of the financing system can regulate income distribution remains questionable. Essentially, the majority of members in society are employees, and their main source of income is salary provided by companies. The internal salary distribution within the company has a significant impact on the overall income distribution pattern of the society. Income inequality has become a major problem restricting China's economic development and social stability. Therefore, studying the impact of enterprise financing on income distribution has important theoretical and practical significance.
From the perspective of IPO pricing of new shares, we study the causal relationship between financing constraints and internal income inequality of companies. We use the expected investment project information disclosed by enterprises during the issuance and listing process to accurately measure the degree of financing constraints faced by the enterprises based on the actual gap between the actual raised funds and the planned investment. We take the advantage of the exogenous fluctuations in financing constraints created by the changes in new share issuance pricing (moving from control to relaxation, then back to control and relaxation again), and test the causal relationship between the exogenous alleviation of financing constraints and internal income inequality of companies based on the instrumental variable method. The results show that compared with companies listed during the pricing control stage, the exogenous alleviation of financing constraints in the market-oriented pricing of new shares has intensified the internal income inequality of companies. The mechanism test reveals that the alleviation in financing constraint brought about by the changes in new share issuance pricing not only directly increases the company's cash flow, but also promotes capital investment of the enterprise, significantly improves the operating performance of the enterprise, and thus increases the rent shared by employees and the company. However, the management can obtain more rent sharing, thereby exacerbating the internal income inequality of the company. The heterogeneity analysis reveals that the expansion of the influence of financing constraints on internal income inequality is mediated by the management's power and the motivation for executive compensation manipulation, while the power of employees and external environmental constraints can effectively inhibit the impact of financing constraints on internal income inequality.
Compared with existing studies, the marginal contributions of this paper may lie in the following aspects: First, this paper strictly confirms the causal relationship between the alleviation of financing constraints caused by excessive IPO financing and the internal income inequality of enterprises. Based on the instrumental variable method, this paper effectively identified the relationship between the financing constraints (alleviation) brought about by excessive IPO financing and the internal income inequality of enterprises due to the different pricing regulations for new share issuance. This will further enrich the research on the influencing factors of income distribution inequality. Second, the main problem faced by this paper is how to accurately measure the actual intensity of financing constraints faced by micro enterprises. This paper proposes a new method for measuring financing constraints, which is to directly measure the relative degree of financing constraints (alleviation) by the level of excessive IPO financing of enterprises. On the one hand, this method conforms to economic intuition and can intuitively reflect the essence of financing constraints; on the other hand, this method has strong applicability and can also be applied to other financing scenarios where enterprises disclose their investment plans. Third, this paper helps us to examine the economic consequences brought about by market-based pricing of new shares from the perspective of income distribution. The IPO issuance system has been gradually reformed towards marketization. The market-oriented reform of new share issuance has indeed improved the pricing efficiency and is conducive to the support of the capital market to the development of the real economy. However, the funds raised by IPO issuance are used for the future production and operation of enterprises, but now they are unequally and separately directed to the company's management and other employees in the form of monetary compensation, which exacerbates the internal income inequality of enterprises. Allocating and using the funds raised by IPO issuance strictly based on the expected use of funds in the prospectus not only requires the enterprises themselves to fulfill their responsibilities, but also requires the regulatory authorities to strengthen the supervision of the use of funds.

With the growing awareness of environmental responsibility among investors, as a professional financial institution, public funds have become an important vehicle for social capital to participate in green investment. However, public funds still face theoretical and practical obstacles in the process of helping green investment and financing, and improving the green financial system. If the two factors of fund financial performance and environmental performance are not included in the empirical model, it is impossible to identify the dual investment goals of green fund investors to pursue both financial and environmental returns. Especially for China's fund market, there is little direct evidence that investors will pursue the environmental performance brought by green investment, and the above problems have hindered the practice of green investment and financing, market supervision and guidance, and further academic research. Clarifying the above issues is not only helpful for current investor guidance and fund operation, but can also promote long-term corporate green transformation, sustainable economic development, and ethical and social responsibility practice.
Based on data on China's active public offering of funds obtained from Wind, CSMAR, and other databases, this paper measures the environmental performance of funds as a non-financial performance indicator by referring to different green enterprise measurement standards. On this basis, we incorporate environmental performance indicators into the fund performance-flow relationship model, and find that both fund financial performance and environmental performance will significantly increase fund net inflow. In order to test the robustness of the model, this paper adjusts several technical processes of environmental and financial performance indicators, and takes measures such as controlling more factors and excluding samples that may introduce confounding effects, and finds that the main conclusions remain robust. In other words, this paper obtains consistent research conclusions in different indicators, models, and samples, especially in different defining methods of green enterprises.
Further research shows that both institutional and individual investors have the following characteristics. Green fund investors have a higher degree of positive reaction to environmental performance. The fund's holding of green stocks has no significant impact on its financial performance. In addition, investors of funds with lower financial performance rankings, smaller size, and more recent establishment are more responsive to environmental performance.
The conclusions of this paper have implications for investor guidance, enterprise green information disclosure, fund operation guidance, and other aspects. First, in terms of investor guidance, improving investors' awareness of environmental protection and social responsibility can guide more social funds to invest in funds with better environmental performance. Second, strengthening corporate green information disclosure and establishing a unified green enterprise evaluation standard can help investors more accurately evaluate the environmental benefits of fund investment. Third, in the fund portfolio management and follow-up supervision, guiding funds to effectively screen and actively increase their holdings of green stocks can help improve their capital inflow. In particular, for green funds, implementing green investment principles and striving to improve environmental performance should become their rational choice.
The marginal contributions of this paper are as follows: First, for the study of the impact of non-financial factors on capital flow, this paper directly incorporates the non-financial performance factor of environmental performance into the model, thus providing more targeted and robust empirical evidence. Second, in the context of controversial green stock screening standards, this paper comprehensively uses a variety of different standards to quantitatively evaluate the environmental performance of funds and obtains consistent conclusions among different indicators. Third, this paper provides the latest empirical evidence for the existing debate on the impact of green investment of funds on fund performance. Fourth, this paper further expands the empirical evidence of fund investors' pursuit of fund environmental performance by screening samples based on prospectus information and analyzing the heterogeneity of fund financial performance ranking.
If the subsequent disclosure frequency of fund position information can be improved, the data frequency can be refined from quarterly to monthly. Exploring the differences in the relationship between environmental performance and capital flows between funds in different countries and their determinants is also valuable for future research.

In recent years, China's capital market has faced numerous risks and challenges, highlighting the urgency of preventing and mitigating financial risks. As the cornerstone of long-term capital in the market, mutual funds possess both the ability and the responsibility to enhance capital market stability. However, existing research has not yet fully uncovered the mechanisms through which they stabilize the market, largely because it neglects the network linkages formed by fund shareholding behaviors and their significant implications.
Mutual funds, aiming to maximize the overall value of their investment portfolios, influence not only the enterprises in which they invest directly but also generate associative effects among different stocks through their holistic investment strategies. Social network theory suggests that network relationships shape individual behavior and performance. Therefore, examining the impact and pathways of funds' shareholding behaviors on market stability, based on the network connections they establish among enterprises, can provide deeper insights into their role in the market and contribute to enhancing overall market stability.
Drawing on social network theory and the hypernetwork model, we use data on A-share listed companies and mutual fund holdings in China from 2015 to 2023 to construct mutual fund shareholding hypernetworks, in which firms serve as nodes and stock portfolios of funds serve as hyperedges. We investigate how the network established by mutual funds among firms affects market stability. The findings reveal that fund shareholding hypernetwork exhibits significant resource effect. Mutual funds promote information exchange and resource sharing along network links among firms and effectively attract market attention, thereby enhancing firms' informational advantages and market attention. The integration of these resources helps firms effectively reduce the risk of extreme stock price fluctuations. During periods of major market instability, firms can still acquire resources through the fund shareholding network, although the mitigating effect of network resources on stock price crash risk becomes weaker. Mechanism analysis shows that network resources primarily stabilize stock prices by improving firms' internal behaviors, such as enhancing information disclosure quality, strengthening corporate social responsibility, and curbing managerial short-termism. Further analysis indicates that the resources in the fund shareholding network can significantly hedge against the stock price risks induced by fund fire sales. Moreover, while mitigating extreme risks, mutual funds also play an active role in boosting market activity.
This study offers important policy implications. First, mutual funds should strengthen multi-channel information exchange, continuously improve their capacity to acquire and interpret information, and promote the transmission of value information among firms. Second, mutual funds should actively identify and invest in firms with growth potential that have not yet received sufficient market attention, while also improving the disclosure of shareholding information by explicitly articulating investment rationales. This would help market participants better identify value targets and enhance external monitoring of firms. Third, regulators may leverage the hypernetwork model to monitor the concentration of fund holdings, guide funds toward diversified investment, and thereby improve the allocation efficiency of network resources. Fourth, during periods of severe market volatility, regulators should establish emergency mechanisms to promptly transmit value information to funds and firms, while adopting appropriate measures to support the sustained stabilizing role of funds in the market. Fifth, regulators should further clarify the functional positioning of mutual funds, encouraging them to reasonably foster market activity while closely monitoring excessive stock price fluctuations.
This paper contributes to the literature in three ways. First, it expands research on the market impact of mutual fund shareholdings. While prior studies have primarily focused on the effects of funds on individual portfolio firms, we uncover the inter-firm linkages established through fund shareholdings and examine the mechanisms by which such network connections influence market stability. Second, it deepens the understanding of the role of mutual funds. We find that the mutual fund shareholding network exhibits resource effects, and these network resources can effectively mitigate stock price crash risks, thereby identifying a new pathway through which mutual funds contribute to market stability. Third, we innovatively apply the hypernetwork model to the study of fund shareholdings, offering a comprehensive depiction of the complex shareholding structures formed by mutual funds simultaneously holding multiple stocks, thus providing methodological support for future research in this field.