Da Huo , Yongdong Shi , Chao Wang , Lihan Wang , Weize Xing , Mo Yang , Jingjing Zhao
{"title":"Measuring systemic risk in China: A new hybrid approach incorporating ensemble learning and risk spillover networks","authors":"Da Huo , Yongdong Shi , Chao Wang , Lihan Wang , Weize Xing , Mo Yang , Jingjing Zhao","doi":"10.1016/j.pacfin.2025.102764","DOIUrl":"10.1016/j.pacfin.2025.102764","url":null,"abstract":"<div><div>To address the limitations of traditional systemic risk indices in measuring nonlinearity and network interdependence, we introduce ESRISK, a novel systemic risk measure that incorporates ensemble learning and risk spillover networks. Our approach can effectively analyze the complex nonlinearity in high-dimensional data, enabling more accurate quantification of systemic risk in China's financial system. Comprehensive evaluations reveal that ESRISK outperforms prevailing systemic risk measures, particularly in predictability, accuracy in measuring systemic risk, and effectiveness in early warning detection of systemic events. Moreover, ESRISK demonstrates superior predictive power for macroeconomic downturns. Our findings highlight the importance of applying machine learning methods and considering inter-institutional spillovers when measuring systemic risk in China's financial ecosystem.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102764"},"PeriodicalIF":4.8,"publicationDate":"2025-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143783592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Xiao Cao , Runsheng Gu , Xiaoqing Ji , Yuhang Li , Ruifeng Zhang
{"title":"The dual effect of upper-level government implicit guarantees on subordinate municipal corporate bond credit risk: An empirical analysis","authors":"Xiao Cao , Runsheng Gu , Xiaoqing Ji , Yuhang Li , Ruifeng Zhang","doi":"10.1016/j.pacfin.2025.102759","DOIUrl":"10.1016/j.pacfin.2025.102759","url":null,"abstract":"<div><div>This paper investigates the impact of upper-level government implicit guarantees on the credit risk of city-level municipal corporate bonds in China by analyzing the dual effect of guarantee capability and willingness on municipal corporate bonds credit spread. The results indicate that the implicit guarantee capability and willingness significantly reduce credit spreads, with the latter exerting a more pronounced effect. Furthermore, regional economic development moderates the effects. In less-developed regions, the influence of implicit guarantees on bond pricing is more substantial due to heightened investor reliance on upper-level government support. The study incorporates the 2020 “Yongmei” default event as an exogenous shock to examine changes in market expectations. The findings reveal that after this event, upper-level government implicit guarantees' effect on municipal corporate bond pricing weakened, underscoring the evolving nature of investor confidence. This study advances the literature by highlighting the role of upper-level governments in municipal corporate bond pricing mechanisms and offering insights into the interplay between implicit guarantees, regional economic conditions, and investor expectations in the Chinese municipal corporate bond market.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102759"},"PeriodicalIF":4.8,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143748640","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Government accounting reform, fiscal transparency, and local government debts: Evidence from China","authors":"Xihong Wan , Min Guo , Ping Jiang , Lei Xu","doi":"10.1016/j.pacfin.2025.102763","DOIUrl":"10.1016/j.pacfin.2025.102763","url":null,"abstract":"<div><div>Government debt is fundamentally influenced by the specific institutional context in which it operates. The recent Government Accounting Reform (the Reform) in China is posited to enhance the quantification and reporting of local government debts (LGDs), serving as a critical mechanism to mitigate fiscal crises. LGDs in China are composed of explicit debt and implicit debt. The article primarily investigates explicit debt, which is further divided into existing debt and incremental debt. Utilizing a dataset sourced from the Ministry of Finance in China, our study reveals that the scale of explicit debt has increased following the Reform. Moreover, the Reform exerts distinct disclosure and constraint effects on existing and incremental debts. Specifically, the Reform has effectively influenced the scale of LGDs by fostering greater fiscal transparency. Additionally, it has been observed to reduce government borrowing costs. These effects are particularly pronounced in regions characterized by higher deficits or lower transparency. The implications of the Reform are significant for the risk management of LGDs, underscoring its broader relevance in the fiscal landscape.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102763"},"PeriodicalIF":4.8,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143777006","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Dark side of analyst coverage? The case of cash holding adjustment toward the optimal level","authors":"Su-Young Choi , Hyungjin Cho","doi":"10.1016/j.pacfin.2025.102762","DOIUrl":"10.1016/j.pacfin.2025.102762","url":null,"abstract":"<div><div>We examine the association between analyst coverage and the speed at which firms adjust their cash holdings toward the optimal level. We find that firms exhibit a slower adjustment speed toward the optimal level of cash holdings when covered by analysts, and when more analysts cover them. This finding is stronger when analysts cover firms which are smaller, audited by non-big accounting firms, without institutional investors, younger, and not affiliated with conglomerates, suggesting that firms under greater pressure from analysts are more likely to alter their cash holding policy based on analyst coverage. We also find that the finding is more pronounced when analyst forecasts are less accurate and more optimistic. Additional tests show that analyst coverage is positively associated with investment and payouts to shareholders even if firms have smaller cash holdings than the optimal level.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102762"},"PeriodicalIF":4.8,"publicationDate":"2025-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143737824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Overseas R&D and Technological Innovation: Empirical Evidence of Chinese Listed Companies","authors":"Defeng Liu , Xingao Xu , Xinyu Lyu , Yaobo Shi","doi":"10.1016/j.pacfin.2025.102754","DOIUrl":"10.1016/j.pacfin.2025.102754","url":null,"abstract":"<div><div>This study utilises data from A-share listed businesses spanning 2009 to 2019 and empirically examines the correlation between the construction of abroad R&D centres and corporate innovation output from the host country's perspective. The study indicated that the creation of international R&D centres by companies markedly enhances their innovation output, while the innovation linkages, business climate, trade obstacles, and other attributes of the host nation influence the innovation output of the parent organisation. Moreover, international R&D centres exert varying innovation-enhancing impacts on firms with distinct features.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102754"},"PeriodicalIF":4.8,"publicationDate":"2025-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143767646","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Wei Kong , Susan Sunila Sharma , Xin-Xin Zhao , Yao-Bo Shi
{"title":"The rescue effect of local government financing vehicles on real estate enterprises in China","authors":"Wei Kong , Susan Sunila Sharma , Xin-Xin Zhao , Yao-Bo Shi","doi":"10.1016/j.pacfin.2025.102744","DOIUrl":"10.1016/j.pacfin.2025.102744","url":null,"abstract":"<div><div>In recent years, the Chinese real estate market has undergone significant changes and challenges, leading the entire industry into a downturn cycle and facing multiple difficulties. Based on this, this study takes 32 prefecture-level and above cities in China as the research objects to study the rescue effect of LGFVs' land-underpinning behavior on the difficulties of real estate enterprises. The study finds: First, the real estate downward cycle has intensified land acquisition by LGFVs; Second, the land-underpinning behavior of LGFVs exerts a rescue effect on the difficulties of real estate enterprises; Third, the land-underpinning behavior of LGFVs through two methods to rescue real estate enterprises: strengthening cooperation with real estate enterprises and reducing land price fluctuations.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102744"},"PeriodicalIF":4.8,"publicationDate":"2025-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143706393","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Digital inclusive finance harvest: Cultivating creditworthiness for small agricultural businesses","authors":"Chen Zhang , Yanjun Li","doi":"10.1016/j.pacfin.2025.102731","DOIUrl":"10.1016/j.pacfin.2025.102731","url":null,"abstract":"<div><div>Digital inclusive finance (DIF) is progressively reshaping traditional banking through innovative technology to address global challenges. The wide range of digital products and services provided by DIF empowers enterprises, enhancing profitability and local competitiveness. This study systematically investigates the impact of DIF on firm creditworthiness, measured by red- or blacklisting in the National Enterprise Credit Information Publicity System. Using firm-level panel data from small and micro agricultural enterprises, we find that higher county-level DIF indices significantly reduce the likelihood of blacklisting while increasing red-listing. The most influential factors are credit investigations and online investment trends. Notably, firms that had previously faced unfavorable loan conditions due to factors like ownership, size, or industry benefited the most from DIF.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102731"},"PeriodicalIF":4.8,"publicationDate":"2025-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143714722","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Impact of venture capital on innovation in key & core technology firms","authors":"Song Wang , Chuang Ma , Mei Yu , Xin Guo","doi":"10.1016/j.pacfin.2025.102756","DOIUrl":"10.1016/j.pacfin.2025.102756","url":null,"abstract":"<div><div>Innovation holds a core position in development and serves as a pivotal force for driving China's economic transformation towards high-quality development. We select firms listed on the Shanghai Stock Exchange Science and Technology Innovation Board (SSE STAR Market) from 2019 to 2024 to investigate the impact of venture capital (VC) involvement on corporate innovation and analyze its mechanisms. The results indicate that earlier investment and higher shareholding by venture capital in STAR Market firms have significant effects on their innovation. Meanwhile, early-stage VC investment and shareholding have different effects on the innovation capabilities of STAR Market firms. Mechanism analysis reveals that venture capital promotes corporate innovation more significantly in firms facing higher industry competition and stronger financing constraints. Further heterogeneity analysis of STAR Market firms adhering to different listing standards shows that earlier investment and shareholding have a more pronounced promoting effect on firms listed under the second set of standards.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102756"},"PeriodicalIF":4.8,"publicationDate":"2025-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725709","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Digital empowered business environment and enterprise innovation: Evidence from China","authors":"Na Li , Xianhua Zhang","doi":"10.1016/j.pacfin.2025.102755","DOIUrl":"10.1016/j.pacfin.2025.102755","url":null,"abstract":"<div><div>This research examines how digital development affects corporate innovation in Chinese listed firms from 2010 to 2023, focusing on marketization, rule of law, and internationalization, under the theoretical framework of institutional theory. Using Poisson, fixed-effects, and difference-in-differences models, the study confirms that a digitally empowered business environment can enhance enterprise innovation. However, heterogeneity analysis reveals a “double-edged sword” effect, where this environment may hinder innovation in super cities and technologically advanced regions, highlighting the “digital paradox”. The study offers recommendations for developing countries to improve their business environments and foster innovation through digital governance.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102755"},"PeriodicalIF":4.8,"publicationDate":"2025-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Siyuan Xuan , Jun Hu , Jinghua Yin , Yang Li , Jie Peng
{"title":"The role of FinTech in shaping urban innovation: A study of financial markets from the perspective of the patent renewal model","authors":"Siyuan Xuan , Jun Hu , Jinghua Yin , Yang Li , Jie Peng","doi":"10.1016/j.pacfin.2025.102750","DOIUrl":"10.1016/j.pacfin.2025.102750","url":null,"abstract":"<div><div>This study explores the impact of FinTech on urban innovation through the lens of financial markets. We utilize a comprehensive FinTech index, derived from Baidu search data, and analyze the innovation capacity of Chinese cities using a patent renewal model. This model accounts for the varying value of patents over time, providing a nuanced understanding of innovation dynamics. Our findings show that FinTech plays a significant role in urban innovation, primarily by integrating into financial markets. We find that FinTech enhances market efficiency, stimulates investment in innovative ventures, and promotes financial inclusivity, creating a favorable environment for technological and entrepreneurial growth in urban areas. The effects are more pronounced in cities with well-developed financial infrastructure, large populations, low reliance on natural resources, and robust coastal economies. Additionally, we emphasize the vital role of intellectual property protection in strengthening the link between FinTech and urban innovation. Furthermore, we highlight FinTech's contribution to green urban development and its support for the real economy. These findings underscore the crucial role of FinTech, as viewed through the lens of financial markets, in driving urban innovation. The results carry significant implications for policy and practice aimed at fostering innovation-driven urban economies in the digital age.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102750"},"PeriodicalIF":4.8,"publicationDate":"2025-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725708","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}