Credit is an important basis for debt financing. Since 2008, the scale of local government debt guaranteed by government credit has increased sharply, causing great uncertainty and systemic risk to the financial market. To avoid the “debt trap,” China implemented the new Budget Law and the Opinions on Strengthening the Management of Local Government Debt (hereafter Article 43) in 2014, aiming at restricting local government borrowing behavior through strengthened political accountability. Unfortunately, the scale of implicit debt guaranteed by government credit continued increasing. In March 2021, China reiterated that it is a key task to mitigate the risk of local government implicit debt and to enhance fiscal sustainability. Clearly, mitigating the risk of local government implicit debt is highly complex, and seeking a solution to mitigate this risk is still challenging at the current stage. However, research on local government implicit debt from the perspective of credit is far from sufficient.
It is beneficial to start with credit, an important basis of debt financing, to seek a solution to mitigate local government implicit debt risk. To do so, we use panel data from 293 cities in China between 2007 and 2019 to investigate how social credit environment affects local government implicit debt in terms of both amount and interest rate. Our main findings are as follows. (1) The deterioration of social credit environment increases both the amount and interest rate of local government implicit debt. (2) These effects on the amount and interest rate stem from both the supply and demand sides of the financial market. The total effects vary in different scenarios. (3) The implementation of the new Budget Law and Article 43 has promoted the marketization of municipal investment bonds by gradually breaking investors' belief in the rigid redemption of these bonds, and local government implicit debt is more subject to market constraints in terms of both amount and interest rate. This process was slow at first but accelerated after the scattered technical defaults since 2017.
This paper contributes to the literature in three aspects. (1) This paper extends the perspective of research on local government implicit debt to the scope of social credit. The literature mainly focuses on the behavior of local governments, whereas this paper studies the impact of social credit, government credit, and their interactions on local government implicit debt. Therefore, this study closes an important gap in the theory of government debt and helps enhance the understanding of the continued expansion of local government debt in practice. (2) The literature on local government implicit debt expansion is primarily grounded on a government perspective, whereas the interactions between the government and the financial market have long been neglected. This paper explores the heterogeneous effects of social credit on local government debt expansion from both the supply and demand sides and when the rigid redemption belief is present or broken. Through these analyses, this paper enriches the literature on the relationship between the government and the financial market. (3) This paper not only reveals the social and economic phenomenon that areas with low social credit have more local government implicit debt in China, but also helps answer whether the new Budget Law and Article 43 have been effective in breaking the rigid redemption belief. The above findings help us understand the risk of local government implicit debt and the effectiveness of various debt governance measures for informing policy makers.
Based on the above analyses, we believe that improving the social credit system, promoting the marketization transformation of local government financing vehicles, adopting implicit debt management methods adapted to local conditions, and reducing the implicit debt demand of local governments are important measures to mitigate the risk of local government implicit debt and important policy paths to regulate the financial market.

In recent years, fintech has developed rapidly in China, which has had a huge impact on traditional financial institutions such as banks. Fintech companies have not only pushed up commercial banks' costs on the liability side (Qiu et al., 2018) and squeezed their market share (Buchak et al., 2018) but have also increased banks' risk-taking (Guo and Shen, 2019). However, on the other hand, the development of fintech offers opportunities to commercial banks to transform and upgrade their business and service models and technologies. Following this trend, commercial banks began to deploy fintech strategies, using technologies such as big data, blockchain, artificial intelligence, cloud computing, and Internet finance to improve transaction efficiency and optimize user experience. In this context, it is of theoretical and practical importance to explore Chinese commercial banks' deployment of fintech strategies, and examine how these have promoted internal changes and digital transformation.
To empirically test the impact of commercial banks' deployment of fintech on their credit risk and performance, we consider four types of commercial banks as research samples (state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks) and manually collect data on strategic cooperation between 323 commercial banks and fintech enterprises in China from 2005 to 2019. The data come from public reports on banks' official websites. As a robustness test, the number of collaborations reported in “Strategic Cooperation between Banks and Technology Enterprises” in the WiseNews database is used as an alternative measure. The bank financial data and macroeconomic data in this paper mainly come from the WIND database and CSMAR database, and missing data are supplemented from banks' annual reports. First, to examine the impact on bank credit risk of banks' deployment of fintech through bank-enterprise cooperation, the dynamic panel SYS-GMM estimation method is used in regression analysis. We also explore the transmission mechanism and bank heterogeneity of the impact of banks' deployment of fintech on credit risk. Second, we analyze how banks' deployment of fintech affects their performance. On this basis, we further explore the mechanism and loan structure heterogeneity of banks' deployment of fintech and its effect on performance.
We obtain the following results. First, bank-fintech enterprise cooperation can reduce credit risk and improve bank performance. Second, bank-fintech enterprise cooperation reduces bank credit risk through the channels of bank innovation capability and competitiveness. At the same time, bank type and capital level show heterogeneity in the effect of banks' deployment of fintech on their credit risk. Third, banks improve their performance by deploying fintech through four channels: alleviating bank credit risk, improving inclusive financial service, enhancing operational management capability, and expanding intermediary business. The impact of banks' deployment of fintech on credit risk and performance is heterogeneous in loan structure.
Based on the research findings, policy recommendations are as follows: First, commercial banks in China should continue to deploy fintech strategies. Second, because the effects of fintech deployment differ between different types of banks, commercial banks should choose appropriate fintech development plans based on their risk management, business structure, and corporate governance characteristics. Third, although the deployment of fintech can reduce credit risk and improve performance, banks should be alert to potential negative effects. Finally, supervision methods must timely adapt to developing financial digital transformation, and financial supervision requires stronger technological capability.
The contributions of this paper are threefold. First, this paper studies banks' fintech strategy and focuses on strategic cooperation between banks and fintech enterprises. Second, this paper studies the impact of banks' deployment of fintech on credit risk and performance, providing empirical evidence of the viability of “technology-based” banks. Third, this paper identifies the mechanism by which bank-fintech enterprise cooperation affects banks' credit risk and performance. Given how extensively fintech has impacted the traditional banking industry, this paper not only helps unpack the microeconomic consequences of commercial banks' use of fintech but also provides empirical evidence to assist in formulating economic policies and improving the quality and efficiency of financial services.

In recent years, global warming has led to a significant increase in the frequency of extreme climate events, and the ecological environment on which human beings depend is facing a great threat. China is one of the countries seriously affected by extreme climate events. The frequent occurrence of extreme climate events not only brings severe challenges to the natural ecology and economic development but also transmits the impact of these events on the real economy to the financial system, affects financial stability, and becomes an important source of systemic financial risks. The Chinese government attaches great importance to addressing climate change and its related financial risks. On September 22, 2020, China announced its carbon peak and neutrality goals (dual carbon goals) at the United Nations General Assembly. In addition, the People's Bank of China actively organized climate risk stress tests and used the green credit performance evaluation of financial institutions as one of the important bases for macro-prudential assessment and the rating of financial institutions.
Climate-related financial risks are physical and transition risks. Although in the long term, we need to pay close attention to the impact of transition risks, in the short term, we should pay more attention to the physical risks caused by affected subjects' loss of assets. At the same time, due to the high degree of uncertainty in the evolution of climate change and the emergence of extreme situations, the interaction mechanisms between climate change and the financial system are very complex. Identifying and assessing physical risks has become one of the challenges for financial institutions in coping with climate-related financial risks. At present, the Chinese financial system is dominated by indirect financing led by commercial banks. Extreme climate may increase banks' risk-taking and further endanger the stability of the financial system. Therefore, in the context of striving to achieve China's dual carbon goals, discussing the impact of extreme climate on banks' risk-taking in China is not only conducive to providing empirical evidence and theoretical references for commercial banks to identify and prevent physical risks, but is also of practical importance for building a macro-prudential management system to manage climate-related risk, prevent and control systemic financial risks, and coordinate development and security.
This paper empirically examines the impact of extreme climate on banks' risk-taking and the mechanisms of this impact by taking 281 local commercial banks in China from 2004 to 2018 as the sample and using the annual number of extreme climate days as the proxy for extreme climate. Additionally, this paper tests the moderating effects of extreme climate prevention and mitigation measures and bank risk management on the relationships between extreme climate and banks' risk-taking, and the heterogeneity of these effects due to the different service objects of local commercial banks. The results show the following. First, while extreme precipitation significantly increases banks' risk-taking, extreme high and low temperatures have no obvious impact on banks' risk-taking. Second, extreme precipitation mainly affects the quality of banks' credit assets and the probability of default by bringing economic losses to banks' credit subjects, which in turn affects banks' risk-taking. Third, improving the level of pre-disaster insurance protection, increasing the intensity of carbon emission reduction, and ensuring adequate bank capital are all conducive to alleviating the negative impact of extreme climate on banks' risk-taking. Finally, compared with local commercial banks that mainly serve urban industrial and commercial groups and households, extreme climate will have a greater impact on the risk-taking of local commercial banks in counties that mainly serve the rural sector.
The contributions of this paper are as follows. First, it contributes to the literature on climate-related financial risks by theoretically analyzing the mechanisms through which extreme climate affects banks' risk-taking and showing evidence of the impact of extreme climate on banks' risk-taking based on local commercial banks in China. Second, from the perspective of insurance guarantees, carbon emission intensity, and bank risk management, this paper investigates the moderating effect of relevant institutional arrangements on the impact of extreme climate on banks' risk-taking and provides a theoretical and empirical basis for policy formulation in the process of achieving China's dual carbon goals. Finally, we analyze the heterogeneity based on the differences in business scope and service objects of different local commercial banks, and provide a theoretical reference for Chinese local commercial banks to formulate differentiated policies and measures to deal with climate-related financial risks.

With increasing uncertainty in the international environment and the long-lasting impact of COVID-19, promoting consumption is crucial to maintaining economic growth and building a new development pattern for China. Reducing expenditure risks and stabilizing residents' expectations are the key to achieving consumption growth. A common explanation for the low consumption rate is that China's medical security system is insufficient: families must save for potential large medical expenses in the future, which will negatively impact current consumption. Supplementary health insurance, especially China's Critical Illness Insurance, which reimburses after the reimbursement of basic health insurance, can help families resist the risk of large medical expenses. Therefore, expanding the coverage of supplementary health insurance and improving the multilevel medical security system are important measures to stabilize families' expectations and promote consumption.
In the context of China's deepening reform of the public health insurance system, the policy effect of China's Critical Illness Insurance on consumption has not been systematically and rigorously investigated. Critical Illness Insurance is supplementary to Urban Resident Basic Medical Insurance and New Rural Cooperative Medical Insurance. After the reimbursement of basic public health insurance, at least 50% of large medical expenses borne by individuals are reimbursed. What role does Critical Illness Insurance play in promoting resident consumption？ What is the heterogeneity and impact mechanism？ This study aims to answer these questions.
By using the prefecture-by-prefecture rollout of China's Critical Illness Insurance and data from the China Family Panel Studies, we estimate the impact of supplementary health insurance on resident consumption through the difference-in-differences method. Our results show that Critical Illness Insurance significantly increases per capita consumption by approximately 6%. This effect is more pronounced in families with a higher initial hospitalization rate and higher savings rate, and in wealthier households. Furthermore, we test three potential mechanisms and find that Critical Illness Insurance mainly promotes household non-medical consumption and total consumption by reducing expectations for future health expenditure risks. These findings have policy implications for establishing a multilevel health insurance system and promoting consumption in China.
Our work has important academic and policy implications. Academically, this paper makes the following two contributions. First, our results deepen the understanding of Chinese household consumption behavior. Most studies analyzing the influencing factors of resident consumption in the past 5 years focus on the effects of wealth changes. Few studies investigate the role of social security policies. Moreover, these studies focus more on basic pension insurance and basic health insurance, whereas our work studies the impact of supplementary health insurance on consumption and its impact mechanism, which extends the literature on consumption behavior. Second, this study enriches relevant research on supplementary health insurance, especially on China's Critical Illness Insurance. The literature on supplementary health insurance mainly focuses on its impact on health and medical expenses. In contrast, there are few studies on resident consumption, and most of them may suffer from sample selection bias and still have room for improvement in the method of causal identification.
As China has achieved full coverage of basic public health insurance, this paper studies the impact of supplementary health insurance on consumption, which has strong policy implications for further promoting consumption and improving China's medical insurance policy. This paper finds that Critical Illness Insurance increases consumption, confirming that Chinese residents' concern about high medical expenses affects their consumption. Although China achieved full coverage of basic medical insurance from 2011 to 2012 and the government's funding for public health insurance keeps growing, the incidence of catastrophic health expenditure remains at a high level. Our results show that developing universal supplementary health insurance and improving the multilevel medical security system are effective measures to stimulate consumption. Especially when China's economic development is facing the triple pressure of shrinking demand, shocking supply, and weakening expectations, improving the medical security system is conducive to reducing residents' concerns related to consumption and stabilizing their expectations, and to further expanding domestic demand and promoting consumption. It is suggested that policymakers consider policies that improve the medical security system and even the social security system as one of the policy options to promote consumption and stabilize the economy.

Finance is an important part of poverty alleviation and development strategies; however, the problem of imbalanced and inadequate development persists and is mainly reflected in the allocation of financial resources. Financial development in rural areas is relatively slow, and the financing needs of disadvantaged groups, such as poor households, have not been effectively met. Digital finance is an important aspect of the development of inclusive finance; it can effectively expand the coverage and ensure the penetration of inclusive finance, and it has a major impact on the relative poverty and vulnerability of households. However, the development of digital finance is controlled by various factors, such as the “divide.” Because of the uneven distribution of digital technology and obstacles, vulnerable groups may encounter new financial exclusions owing to a lack of resources such as Internet tools and financial literacy.
Using a combination dataset from the China Household Financial Survey and The Peking University Digital Financial Inclusion Index of China, this study focuses on the impact of digital finance on the relative income and vulnerability of households and examines the impact of the “divide” on this effect. This paper provides a new perspective on how the development of digital finance can reduce household poverty and offers a reference for overcoming the imbalance and inadequacy of financial development and for the formulation of policies to reduce the income gap of residents by ensuring digital financial inclusion.
Our empirical results show that digital finance inclusion, especially extending access to digital finance, can increase the relative income and reduce the vulnerability of households. We explore these channels and find that digital finance inclusion can effectively increase the availability of financial services to households and improve the ability of potential investment, non-farm employment, and self-employment to help households reduce poverty. Further study shows that the development of digital finance is inclusive but has not broken space constraints. Digital finance has a stronger poverty reduction effect in advantaged areas such as urban regions and households as well as among individuals with digital literacy and financial education; however, it has little effect on the relative income of disadvantaged households or poor or digitally illiterate individuals. In brief, this phenomenon reflects the urgency of breaking the “divide” between disadvantaged and advantaged regions, households, and individuals.
This study makes the following contributions to the literature. First, it is important to verify the impact of the development of digital finance on the relative income and vulnerability of households and to analyze its micromechanisms because it is the key to promoting common prosperity. This paper systematically analyzes the above problems, not only enriching the literature on digital finance and poverty reduction but also clarifying the role of digital finance on households' relative income and vulnerability. Second, we examine whether the effect of digital finance on the relative income and vulnerability of households is affected by the “divide” because this is a difficult problem that must be overcome in the development of digital finance and will reduce the poverty reduction effect of digital finance. Analyzing the impact of the “divide” will accelerate the formulation of relevant policies and promote the differentiated development of digital finance.
Apart from the abovementioned empirical findings, first, we must develop digital finance and maximize its inclusive effects. We should use the advantages of digital technology to promote digital financial innovations in the future, such that households can use finance to achieve factor accumulation and increase their income. Second, we should increase investments in communication infrastructure in poor villages and help poor households and families without digital devices to buy mobile phones or computers. For example, we can implement an “Internet equipment to the countryside” plan to overcome the “tool exclusion” of poor households to ensure that poor households in remote areas also enjoy high-quality financial services. For poor households that lack financial literacy, the government should increase poverty alleviation efforts by offering education and improving their financial literacy through lectures and websites to prevent financial exclusion because of the “divide” in digital finance.

China's manufacturing industry remains large but not robust. To transition from a manufacturer of quantity to one of quality, China needs to promote new economic forces and enhance its capacity for independent innovation.Intelligent manufacturing is currently seen as the key to empowering business and fostering economic growth. The ensuing question is whether intelligent manufacturing can become a new driving force for increasing quality among Chinese manufacturing firms, and if so, through what mechanism it can do so.
In accordance with the Announcement of the List of Pilot Demonstration Projects of Intelligent Manufacturing issued by the Ministry of Industry and Information Technology of the People's Republic of China, this paper uses the propensity score matching method with difference-in-differences to investigate the effect of intelligent manufacturing on enterprise innovation behavior and the mechanism. The results show the following:
(1) Intelligent manufacturing promotes enterprise innovation, and the effect holds following a battery of endogeneity and robustness tests.
(2) Intelligent manufacturing facilitates enterprise innovation through the information channel, the human capital channel, and the capital channel. Through the information channel, intelligent manufacturing fosters innovation by enhancing firms' information gathering and processing capabilities, which in turn boost the flow of information in the research and development system. Through the human capital channel, intelligent manufacturing improves innovation by improving employees' innovation ability through optimizing the organization's human capital structure, increasing employees' on-the-job training behavior, and establishing effective human-machine collaboration. Through the capital channel, intelligent manufacturing enhances innovation by optimizing the supply chain relationship, bank-enterprise interactions, and the acquisition of legislative subsidies, thereby expanding the organization's innovation resources.
(3) The innovation structure analysis shows that intelligent manufacturing can optimize the enterprise innovation structure and improve enterprise innovation quality. In particular, implementing intelligent manufacturing can foster enterprises' joint innovation, optimize the quality of enterprise innovation, and increase the number of patents cited by enterprises.
(4) Based on the enterprise, industry, and market heterogeneity analyses, this paper shows that the positive effects of intelligent manufacturing on enterprise innovation are more pronounced for enterprises that are larger, non-state-owned, labor-intensive, in a highly competitive industry, and located in an area with a high level of intellectual property rights protection.
(5) The value effect shows that intelligent manufacturing enables enterprise innovation to improve the current and future performance of enterprises, thus enhancing their long-term potential.
This paper's contribution is mostly evident in the following three areas:First, this paper broadens the research paradigm related to the practical effect of intelligent manufacturing. Research on intelligent manufacturing lacks both a theoretical model and an empirical test. Based on the quasi-natural experiment of China's intelligent manufacturing demonstration project, this paper establishes a link between technology promotion and enterprise innovation and supplements and enriches research on the economic effects of intelligent manufacturing.
Second, this paper enriches the literature on the factors that affect enterprise innovation. There are abundant studies on the factors influencing enterprise innovation, but few that examine the impact of the combination of informatization and industrialization on innovation behavior from the standpoint of information technology development. Against the backdrop of worldwide initiatives to promote intelligent manufacturing, it is crucial to investigate this topic.
Finally, this paper offers guidance for and practical insight into the implementation and development of intelligent manufacturing. This paper examines the effects of the promotion and characteristics of intelligent manufacturing on the influencing mechanism and regulating factors of enterprise innovation. The results have practical implications for promoting China's national policy on intelligent manufacturing and the transformation and upgrading of enterprises.

In 2010, China promulgated the Outline of the National Medium-and Long-term Talent Development Plan (2010-2020). In response to the call of the plan, local governments have issued policies to introduce local talent according to the talent development plan. Against this background, this paper investigates how local talent introduction policies affect the human capital level and talent incentive methods of local companies from the perspective of micro companies.
The theoretical basis of this paper is that local talent introduction policies provide material incentives such as talent introduction bonuses, housing subsidies, and housing allocation, as well as spiritual incentives such as preferential medical treatment, preferential treatment of children's education, and high-ranking positions. Thus, it reduces the cost of introducing talent for local companies, guarantees the legitimacy of introducing talent, and sends a signal to the market that the government attaches importance to the development of companies. Therefore, in theory, local talent introduction policies should improve the human capital level of local companies. At the same time, these policies promote competition in the talent market, and competitive pressure may lead a company's older employees to resist the promotion of these policies. To appease these employees, the company has an incentive to relax their performance appraisal in exchange for promoting talent introduction policies. Therefore, local talent introduction policies may weaken companies' incentive mechanisms.
We collect the specific time of promulgation and content of the talent introduction policies in each city from city government official websites, Human Resources and Social Security Bureau official websites, and relevant talent policy news. We take the promulgation of talent policies in each city as the quasi-natural experiment and Chinese A-share companies from 2011 to 2018 as the research object. We used the staggered difference-in-differences model to investigate the impact of local talent introduction policies on human capital and the incentive mechanism of local companies. The results show that local talent introduction policies significantly improve the human capital level of local companies. Moreover, to promote these policies, companies appease their older employees in relation to policy implementation by weakening their incentive mechanisms, resulting in some efficiency loss in the compensation governance of these companies. In general, however, local talent introduction policies improve the human capital level and production efficiency of companies.
The policy suggestions put forward in this paper are as follows. First, local governments in economically underdeveloped areas should increase the introduction of talent, actively respond to the talent-strong country strategy, narrow the economic gap with developed areas and step forward to the goal of common prosperity. Second, local governments should implement talent introduction policies according to the different characteristics of different industries. Third, governments and companies should jointly formulate specific plans and governance countermeasures for gradually implementing talent policies, establish a talent quality evaluation system before talent introduction and a supervision system after talent introduction, and urge companies to establish specific countermeasures to appease their older employees. Fourth, talent policies should not be implemented using a “one-size-fits-all” approach, but the double-track incentive system of “old way for the old, new system for the new” should be considered. In the follow-up implementation of these policies, companies should adhere to the 14th Five-Year Plan and the spiritual guidance of the 2021 Central Talent Work Conference, persist in deepening the reform of the talent development system, and improve the market-oriented compensation distribution mechanism.
The main innovation of this paper is to take the exogenous impact of local talent introduction policies as a quasi-natural experiment by using unique data on talent policies and the differential method to verify the micro mechanism of talent policies affecting economic development. The main contributions of this paper are that it verifies the effectiveness of local talent introduction policies, provides supporting evidence that implementing these policies assist in developing a quality workforce, and points out the shortcomings in the implementation of local talent policies, providing a policy reference for local governments to improve the implementation of such talent policies. At the same time, by examining how talent introduction policies affect companies' human capital, this paper reveals the mechanism through which macro talent policies affect micro corporate behavior.

The development of urban agglomerations led by central cities is the key to China's regional coordinated development strategy in the new era. Emerging industries are an important guiding force in supply-side structural reform and economic and social development. How to realize the full allocation of talents in emerging industries within the urban agglomeration has therefore become the core content of building a new development pattern. Studies have shown that factors such as wages, personal growth opportunities, and housing prices affect employee mobility, but more fundamentally, transportation improvement provides possibilities for employee mobility. Besides, compared with the labor force of traditional manufacturing industries, the labor force of emerging industries has the characteristics of rich knowledge or skill, rational thinking, and open-mindedness, and is more susceptible to transportation improvement when deciding workplace.
On this basis, the opening of high-speed rail indisputably promotes the optimization of regional resource allocation and the development of enterprises. But it may also have a siphoning effect in theory, that is, larger cities can better attract talents and natural resources from the surrounding area, leading to severer resource outflow and limited development of small cities. A large number of news reports have provided cases for this argument. China's high-speed rail construction has created many “one-hour high-speed rail circles”, shortening the time distance between cities, and making small-city talents seek employment in nearby big cities along the line more common. For example, after the high-speed rail was opened, employees in small cities go to work in big cities in the morning and return to live in small cities after work, creating a “Tale of Two Cities” in the morning and evening. The integration of resources such as population and land within the region has become possible.
In this context, this paper takes Chinese A-share listed companies from 2003 to 2020 as a sample to discuss the siphoning effect of employee mobility. It finds that after the opening of the high-speed rail, the employee mobility of emerging industry companies is differentiated according to the size of the city. Obtaining employees has become easier for emerging industry companies in large cities, but has become more difficult for companies in small cities, which indicates that the employee mobility of emerging industries has a siphoning effect of more market-oriented allocation in urban agglomerations. This conclusion still holds after a series of robustness tests. Further research shows that the outflow of employees from small cities is due to the ease of obtaining employment opportunities in big cities and the relieved pressure on housing prices after the opening of high-speed rail, but it is not affected by high wages in big cities. Finally, the aforementioned siphon effect has spatial limitations, it mainly exists in small cities within 2 hours of high-speed rail travel from big cities.
This paper makes contributions in the following three aspects. First, the labor force of emerging industries has characteristics that are obviously different from those of traditional industries, this paper uses it to study the siphoning effect of employee mobility after the opening of high-speed rail, which expands academic research on the development of emerging industries from the labor force level. Second, based on the perspective of talent acquisition in emerging industries, this paper finds the heterogeneous consequences of transportation improvement on employee mobility, contributing to a comprehensive understanding of how transportation improvement affects labor mobility. Third, this paper studies the siphoning effect of employee mobility in emerging industries under the city size heterogeneity and expands on the microeconomic consequences of the opening of high-speed rail.
This paper has the following policy implications. In the context of the coordinated regional development strategy and the construction of a unified national market, the key to the coordinated development of infrastructure construction and emerging industries lies in the precise and differentiated competition of emerging industries in accordance with local characteristics and endowments under the high-level unified planning. Therefore, it is necessary to break through the limitations and drawbacks of single urban planning, identify endowments and make overall planning from the height of each urban agglomeration in the region. This paper finds that the construction of transportation infrastructure represented by the opening of high-speed rail helps the talent elements of emerging industries flow with market orientation among cities, which is of great significance for the overall planning of the functional positioning of each city within the urban agglomeration and the cultivation of emerging industries.

Legal system reforms are an important measure to intensify financial development to promote high-quality economic development; however, how legal system reforms affect labor employment has received limited attention. As a country with a large labor force, China faces constant employment problems and increasingly prominent structural problems in the labor market. Thus, our study of how the construction of the financial market legal system affects the enterprise labor force structure and the underlying mechanism not only deepens and extends the potential consequences of law and finance but also provides new insights into enterprises' employment decisions, labor market problems, and the improvement of peoples' livelihood.
Theoretically, credit availability is an important factor affecting enterprises' labor force structure, for which capital-skill complementarity is a potential channel. When enterprises use advanced machines and equipment or perform technology research and development, they need to allocate highly skilled laborers who can operate the new machines and engage in research and development. However, once the availability of external financing is exhausted, enterprises pay more attention to short-term cash flow in their decision-making. For example, when purchasing machinery and equipment, enterprises are more likely to choose used or obsolete equipment with less cash outflow in the current period; however, are less likely to perform research and development activities with a larger initial cash outflow but longer payback period and higher risk. Thus, there is a corresponding reduction in the employment of highly skilled laborers. Moreover, during the process of labor allocation, timing mismatches between cost payment and cash inflow and the “quasi-fixed attribute” amplify the constraint effects of credit availability. Constraints on credit availability may therefore significantly reduce the allocation of highly skilled labor to firms.
We use the implementation of the Property Law to conduct a quasi-natural experiment to overcome the problems of endogeneity. We also investigate the Property Law's impact on the labor structure of enterprises. Based on prior studies, this study uses the proportion of the enterprises' fixed assets before the implementation of the Property Law to identify the treatment and control groups and then uses the difference-in-differences method to test the data. We find that compared with the control firms, the treatment firms have significantly more high-skilled labor force growth after the implementation of the Property Law and that the proportion of this high-skilled labor force increases accordingly. Next, we find that the increases in advanced machinery and equipment and innovation activities are a driving force that changes the labor force structure and that this effect is more pronounced when firms' credit availability is lower or financial constraints are higher in the pre-reform period. Finally, the influence of the security system reforms on the labor structure of enterprises can improve total factor productivity and profitability.
This paper contributes to the literature on credit availability and labor allocation in firms. The relationship between credit availability and labor allocation continues to attract considerable attention; however, the interaction between credit availability and labor allocation poses challenges to the identification of the causal effects in this field. More importantly, the research in this field currently focuses on the employment of the labor force because investigations related to labor force structure are limited. In contrast, the current study uses security system reforms to examine the impact on enterprise labor structure because of their exogenous impact on credit availability. Our findings provide empirical evidence regarding the causal relationship between credit availability and labor allocation from the perspective of labor structure, which supplements the literature in this field. Moreover, this paper focuses on the labor force structure, and the study findings not only improve our understanding of the construction of a legal system to resolve the structural problems of the labor market but also provide evidence regarding the labor structure in terms of related research on the consequences of legal construction. Finally, this paper provides certain policy implications. To expand the current employment capacity and improve the quality of employment and relieve employment structural contradictions, the legal system should promote reforms. Market-oriented reforms to promote the improvement of basic financial systems can improve the financial ecology, eventually helping the real economy and benefiting people's well-being.

Improving the capital market's resource allocation efficiency and TFP are the key objectives of the registration system reform. It is unknown whether China's registration-based initial public offerings have a significant effect on the efficiency of the capital market and business choices. As a result, we examine this question from the perspective of firm investment.
Information disclosure is the foundation of the registration system, and firms listed on the Shanghai Stock Exchange Sci-Tech Innovation Board (STAR Market) typically have higher information disclosure standards and richer content, including comprehensive, advanced, and multidimensional industry information, as well as information specific to these high-tech firms. It improves the capital market's information richness, lowers investment uncertainty, and benefits other firms in the same industry in making economic decisions (Edmans et al., 2012, 2015; Badertscher et al., 2013). The STAR Market focuses primarily on scientific and technology innovation firms that are at the forefront of technology in those fields and meet the needs of the government in terms of critical core technologies. As a result, the competitive pressure within the same industry increases and leads to learning through imitation (Lieberman and Asaba, 2006). The aforementioned two factors may lead firms in the same industry to modify their strategies for dealing with potential growth and changes.
Based on a firm-year sample from 2017 to 2020, we use a time-varying difference-in-differences framework to explore the spillover effects of information disclosure by STAR Market listed firms on firms in the same industry. We find that the information disclosure of STAR Market listed firms increases the research and development (R&D) expenditure of firms in the same industry, and the effect improves as the content and accuracy of information disclosure increase. The results remain constant when we address endogeneity issues. The mechanism analysis shows that the spillover effects are due to the reduction in information uncertainty and the increase in competitive pressure. Meanwhile, information disclosure by STAR Market firms improves peer managers' awareness of innovation and increased media attention, thereby promoting R&D expenditure.
Further analysis indicates that while R&D expenditure is affected by the positive spillover effects of information disclosure, firms tend to reduce their investment in fixed assets and change their investment structure, resulting in improved investment efficiency and reduced over-investment. In conclusion, this paper shows that information disclosure by STAR Market firms improves the investment decisions of peer firms and enhances the efficiency of the capital market.
This paper contributes to the literature in several ways. First, the externality of accounting information is attracting increasing attention (Roychowdhury et al., 2019). Examining the spillover effects of information disclosure is important for researchers and policy makers. Using the implementation of the STAR Market, this paper provides evidence for the spillover effects of compulsory information disclosure as well as theoretical support and empirical evidence for the comprehensive evaluation of the effects of registration system reform. Second, endogeneity issues are the primary concern in the literature on peer effects. The most effective method to determine the effect of peer firms is to identify an exogenous event that can result in a change in peer firms' information disclosure (Seo, 2021). In this paper, we use the registration system reform that was recently implemented in China as a natural experiment to identify causality. Third, the goal of the registration system reform is to advance the marketization process of factor allocation and boost resource allocation effectiveness. The findings of our study provide a policy effect evaluation and policy implications related to how firm behavior can improve the function of the capital market.

China A-share listed companies have recorded significant goodwill impairment since 2015 as a result of increasing ambitious acquisitions during the merger wave. The literature documents that Chinese institutional investors play a supervising role in promoting corporate governance (Cheng, 2006; Gao and Zhang, 2008; Yao and Liu, 2009) and improve corporate post-merger performance by managing corporate merger decisions (Zhou et al., 2017). However, few studies examine how institutional investors affect corporate goodwill impairment risk. In this study, we investigate whether the level of institutional holding lowers the risk of goodwill impairment, whether the influence of different groups of institutional investors differs, and possible mechanisms underlying the above relationship.
Using data from non-financial firms listed on the Shanghai and Shenzhen stock exchanges from 2011 to 2018, we document that institutional investors significantly reduce corporate goodwill impairment risk. Independent institutional investors, represented by investment funds, social security funds, and the QFII, play a more important role than non-independent investors. The mechanism test reveals that institutional investors reduce the risk of goodwill impairment by providing pre-merger advisory services and improving post-acquisition performance.
One potential endogeneity issue stems from sample selection bias among the firms that experienced institutional investors choose to invest or from omitted key variables. We use an instrumental variable approach together with propensity score matching (PSM) and a difference-in-differences (DID) model to address this endogeneity issue. We first use the stock turnover rate as an instrumental variable because the turnover rate can predict changes in institutional holdings. Additionally, using the CSI index reconstitution setting to isolate exogenous shocks to institutional ownership, we test whether institutional investors influence goodwill impairment risk. Each June and December, the CSI assigns firms to the 800 Index (800 largest firms) and the 1000 Index (1,000 next-largest firms) based on market capitalization. The CSI index is mimicked by many institutional investors (quasi-indexers); therefore, this annual reconstitution leads to changes in institutional holdings that are plausibly exogenous to the firm. In conjunction with the exogenous shock, we use a PSM-DID regression that permits cleaner identification. Our results indicate that institutional holdings are negatively related to both the incidence and amount of goodwill impairment. These additional tests help mitigate the alternative explanation that institutions choose to follow firms with low goodwill impairment risk.
This paper contributes to the literature in several ways. First, we demonstrate that institutional ownership inhibits goodwill impairment risk, providing a solution for forestalling major financial risks. Specifically, we find that prior to an acquisition, institutional investors help select high-quality targets through more site visits; subsequent to the acquisition, institutional investors attract a high level of analyst following and improve pay-for-performance sensitivity. Taken together, we provide empirical evidence on how institutional investors reduce goodwill impairment risk. Second, this paper complements research on the monitoring role of heterogeneous institutional investors (Bushee, 1998; Chen et al., 2007; Yang et al., 2012) by investigating the effect of independent and non-independent institutional investors on corporate goodwill impairment risk. This study differs from that of Glaum et al. (2018), which examines investors' substitutional monitoring role for public accounting enforcement because our study provides direct evidence of institutional investors' private monitoring. We find that independent institutional investors can better monitor firms and suggest that regulators keep promoting independent institutional investors' access to the market. Third, most studies on goodwill impairment focus on economic factors and management discretion (Wang, 2015). In this paper, we focus on institutional holdings and demonstrate that institutional investors inhibit goodwill impairment risk, highlighting the role of institutional investors in reducing financial risks.