{"title":"Whac-a-mole: China's debt policies and local debt risks","authors":"Jingting Zhang, Junping Zeng","doi":"10.1016/j.pacfin.2025.102963","DOIUrl":"10.1016/j.pacfin.2025.102963","url":null,"abstract":"<div><div>To address the problem of implicit local government debt, China's government has rolled out a series of debt management policies. However, these measures have not fully achieved their intended goals. To investigate the issue, we construct a general equilibrium model and employ a generalized difference-in-differences (DiD) method for in-depth research. The study finds that China's debt policies have imbalanced impacts on major financing vehicles of local financing platforms: bonds and loans. The policies can effectively suppress the issuance of urban investment bonds but lack sufficient constraining power over local banks. Local governments usually have close ties with local banks, and under the financial pressure caused by debt policies, local financing platforms turn to riskier bank loans, thereby increasing the overall risk of local debt. China's debt policies are facing a “whac-a-mole” situation, which makes it difficult to achieve the expected effects.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102963"},"PeriodicalIF":5.3,"publicationDate":"2025-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267637","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":"Reliability of analyst recommendations based on the DS-LightGBM model","authors":"Zhimin Li , Weidong Zhu , Yong Wu , Zihao Wu","doi":"10.1016/j.pacfin.2025.102961","DOIUrl":"10.1016/j.pacfin.2025.102961","url":null,"abstract":"<div><div>Securities analysts play a crucial role in the stock market, and their stock recommendations have an important impact on investors' investment decisions. The key to fully leveraging the value of analyst recommendations as an information resource lies in determining the reliability of these recommendations. This study proposes a method for predicting the reliability of analyst recommendations based on the Dempster–Shafer evidence theory and the LightGBM model (DS–LightGBM). The DS–LightGBM model is constructed by incorporating the LightGBM algorithm into evidence theory, which consists of three dimensions: analyst characteristics, rating characteristics, and company characteristics. In the process of reliability prediction, the initial step involves assessing the reliability of the evidence, followed by employing the D<img>S synthesis rule to fuse the information, along with the explainability provided by the SHAP method. The effectiveness of the proposed method is validated through experiments using analysts and A–share market data in China. When compared to the prediction outcomes of random forest, AdaBoost, and similar models, it becomes evident that the DS–LightGBM model exhibits superior prediction accuracy. Additionally, this model effectively measures the contribution and relevance of features, thereby improving the model's explainability and dependability. Consequently, it offers investors, brokers, and other information users a more precise foundation for decision–making purposes.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102961"},"PeriodicalIF":5.3,"publicationDate":"2025-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267638","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":"Robot adoption and corporate supply chain efficiency: Evidence from China","authors":"Chongchong Xu , Anna Min Du , Boqiang Lin","doi":"10.1016/j.pacfin.2025.102958","DOIUrl":"10.1016/j.pacfin.2025.102958","url":null,"abstract":"<div><div>Amid global climate policy shifts, enhancing supply chain efficiency has become a vital channel for renewable energy manufacturers to maximize financial returns and cultivate sustainable competitive advantages. Despite growing literature on manufacturing automation, limited empirical evidence exists on whether robot adoption affects supply chain efficiency in this strategically important sector. Leveraging micro-level data from China's renewable energy manufacturing industry, this study employs a two-way fixed effects model to examine the impact and mechanisms of robot adoption on corporate supply chain efficiency. The findings reveal that: (1) robot adoption significantly enhances supply chain efficiency in renewable energy manufacturing enterprises; (2) inventory management optimization, technological advancements, and transaction cost reduction serve as the primary mechanisms; (3) the positive effects of robot adoption on supply chain efficiency are more pronounced in large-scale enterprises, export-oriented enterprises, and those located in regions with higher levels of marketization. These findings underscore the financial potential of automation investment in improving operational efficiency and value chain performance. Finally, this paper concludes with targeted policy recommendations to support supply chain optimization and guide smart manufacturing investment decisions in the renewable energy sector.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102958"},"PeriodicalIF":5.3,"publicationDate":"2025-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267639","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":"Consumption measurement and the limits of insurance: Evidence from Australia","authors":"Jennifer Z. Sun","doi":"10.1016/j.pacfin.2025.102956","DOIUrl":"10.1016/j.pacfin.2025.102956","url":null,"abstract":"<div><div>This study constructs disaggregated consumption measures using household- and individual-level panel data from the Household, Income and Labour Dynamics in Australia (HILDA) survey to examine the full consumption insurance hypothesis. The results reject full insurance, showing that individual consumption responds to idiosyncratic income shocks despite partial within-household risk-sharing. To strengthen empirical identification, new proxies for idiosyncratic risk are introduced, including involuntary job loss and financial stress. Overall, the evidence suggests that incomplete insurance and heterogeneous risk exposure undermine representative-agent assumptions, reinforcing the need for asset pricing tests based on micro-level consumption data.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102956"},"PeriodicalIF":5.3,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267641","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":"What it costs: Family firms' supply chain efficiency losses","authors":"Xin Huang , Hao Huang , Fushun Zhang , Tianren Li","doi":"10.1016/j.pacfin.2025.102959","DOIUrl":"10.1016/j.pacfin.2025.102959","url":null,"abstract":"<div><div>We study whether family control shapes firms' supply chain efficiency. Using panel data on Chinese A-share listed firms from 2000 to 2023 and a staggered difference-in-differences design that exploits transitions into family control, we find that family-controlled firms operate with lower supply chain efficiency, reflected in inventory turnover cycles that are, on average, 17.77 days longer than comparable non-family firms (baseline DID estimate). Results are robust to multiple identification checks and alternative measures. We trace the effect to two mechanisms. First, family firms rely more on stable, relationship-based supplier ties, which dampens flexibility and competitive discipline. Second, family-centric talent practices constrain professional operations capabilities. The efficiency penalty is stronger when family involvement in management is deeper, during intergenerational succession, and when boards are less independent; it is weaker under tighter financing constraints and stronger market competition. Our study links ownership structure to operational outcomes, qualifying the presumed advantages of relational governance and identifying circumstances under which external discipline improves supply chain performance.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102959"},"PeriodicalIF":5.3,"publicationDate":"2025-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145267640","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":"Do multicultural barriers hinder fintech development? A pre-registered report","authors":"Haiyang Zhang, Lina Wang, Wenda Song","doi":"10.1016/j.pacfin.2025.102953","DOIUrl":"10.1016/j.pacfin.2025.102953","url":null,"abstract":"<div><div>This pre-registered report aims to explore the impact of cultural diversity on fintech development through the perspective of dialectal diversity. Specifically, we want to investigate three key questions: (1) Does cultural diversity influence fintech development? (2) If it does, what are the underlying mechanisms? (3) Moreover, does the impact of cultural diversity on fintech development vary across regions or households with heterogeneous characteristics? To explore these questions, we plan to utilize regional dialect data and analytical methods such as instrumental variables and fixed effects to examine fintech adoption at the household level. This report contributes to understanding the informal institutional factors underpinning the development of fintech, and provides new theoretical and practical perspectives for building a more comprehensive and inclusive fintech system.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102953"},"PeriodicalIF":5.3,"publicationDate":"2025-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145227310","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":"Mixed-ownership reform and AI adoption in state-owned enterprises: A pre-registered report","authors":"Ziteng Han, Lingxi Chen, Teng Zhong","doi":"10.1016/j.pacfin.2025.102954","DOIUrl":"10.1016/j.pacfin.2025.102954","url":null,"abstract":"<div><div>This pre-registered study is going to investigate the relationship between mixed-ownership reform and adoption of artificial intelligence (AI) in state-owned enterprises (SOEs). We try to address four questions in this study: 1) Does the involvement of non-state shareholders foster SOEs to apply AI? 2) If so, what's the underlying mechanism driving this effect? 3) Does the effect of mixed-ownership reform on AI adoption vary across different types of SOEs? 4) What's the economic consequence of enhanced AI applications in SOEs? To address these questions, we are going to utilize a comprehensive dataset of A-share listed SOEs from 2008 to 2023. This paper contributes to the literature on the drivers of AI adoption and provides new insights into the high-quality development of SOEs.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102954"},"PeriodicalIF":5.3,"publicationDate":"2025-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145227305","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":"The impact of excessive financial investment on corporate risk","authors":"Haonan Zhang , Qinghua Zhang , Jian Chen","doi":"10.1016/j.pacfin.2025.102955","DOIUrl":"10.1016/j.pacfin.2025.102955","url":null,"abstract":"<div><div>This study examines the rising trend of financialization among Chinese non-financial corporations, emphasizing its implications for the real economy and sustainable development. Using data from publicly listed companies on China's A-share market from 2009 to 2023, the research investigates how excessive financial investment behaviors affect corporate risk. The study conducts an extensive empirical analysis using data from the Chinese A-share market. It employs fixed-effects models and instrumental variable methods to establish a causal relationship between financial investment activities and corporate risk. The results demonstrate that excessive financial investment significantly increases corporate risk. Specifically, investments in trading financial assets and real estate primarily drive this heightened risk. Such investments divert corporate attention from core activities by reducing research and development expenditures and creating financial mismatches. However, effective corporate governance can partially offset these negative impacts of financialization. This study contributes uniquely to existing literature on financial investments by non-financial firms. It goes beyond traditional metrics such as total investment scale or profit share, instead distinguishing between moderate and excessive financial investments. Furthermore, this study specifies the role of corporate governance as a critical boundary condition, which provides new evidence for understanding the relationship between financialization and the stability of the real economy and offers significant insights for corporate risk management and relevant policy-making.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102955"},"PeriodicalIF":5.3,"publicationDate":"2025-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145266856","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":"Insider trading patterns during the COVID period","authors":"George J. Jiang , Xiaoli Ma , Yun Ma","doi":"10.1016/j.pacfin.2025.102957","DOIUrl":"10.1016/j.pacfin.2025.102957","url":null,"abstract":"<div><div>We investigate insider trading patterns during the COVID period and document distinct behaviors in purchases and sales. A significant increase in insider purchases occurred from late February to early April 2020, alongside a fourfold increase in insider sales throughout the year. We find a strong link between insider trading and market performance. Regression analysis shows that insiders act as contrarians, buying undervalued and selling overvalued stocks. This contrarian behavior is primarily driven by opportunistic insiders, while routine trades appear less responsive to past returns. Moreover, insider trading during the COVID period significantly predicts future stock returns, underscoring the enhanced informational content of insider activity during periods of extreme market uncertainty.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102957"},"PeriodicalIF":5.3,"publicationDate":"2025-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145266855","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":"Does cultural diversity affect trade credit provision?","authors":"Liang Ma, Yuetang Wang, Yuan Yuan","doi":"10.1016/j.pacfin.2025.102952","DOIUrl":"10.1016/j.pacfin.2025.102952","url":null,"abstract":"<div><div>This study demonstrates that cultural diversity promotes the trade credit provision in China. The main findings remain robust across various measures of trade credit provision and after addressing potential endogeneity concerns. Mechanism analysis reveals that cultural diversity enhances trade credit provision by improving the stability of customer relationships within supply chains and alleviating financing constraints. The impact of cultural diversity on trade credit provision is particularly significant for firms in non-Mandarin-speaking regions, coastal areas, and non-state-owned enterprises. Overall, the results align with the financial theory of trade credit.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"94 ","pages":"Article 102952"},"PeriodicalIF":5.3,"publicationDate":"2025-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145227309","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}