{"title":"Does judicial procedure reform affect firms' access to trade credit? Evidence from China","authors":"Huaili Lyu , Meng Peng , Yanyan Lin","doi":"10.1016/j.pacfin.2025.102726","DOIUrl":"10.1016/j.pacfin.2025.102726","url":null,"abstract":"<div><div>China initiated a two-year reform of civil procedure in 2020, aiming at promoting the separation of complex and simple cases. Based on the civil procedure reform, this study explores the effect of improved judicial efficiency on trade credit. Using a sample of Chinese A-share listed firms, we find that the civil procedure reform increases firms' access to trade credit by improving judicial efficiency. The positive effect on trade credit is more pronounced for firms located in regions with low social trust and those facing high financial constraints. We further document that the civil procedure reform reduces supplier concentration. Overall, our findings imply that judicial procedure reform plays a critical role in firms' access to trade credit, extending the literature on law and finance.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102726"},"PeriodicalIF":4.8,"publicationDate":"2025-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143563060","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":"Carbon emission trading scheme and green investor entry: Evidence from China","authors":"Zijun Luo, Yue Liu, Weidong Xu","doi":"10.1016/j.pacfin.2025.102727","DOIUrl":"10.1016/j.pacfin.2025.102727","url":null,"abstract":"<div><div>The carbon emission trading scheme (ETS) is one of the most important market-incentive green finance policies aimed at mitigating carbon emissions. Employing the staggered implementation of the Chinese carbon ETS across regions and a triple difference approach, we find that carbon ETS has a significantly positive impact on green investor entry. This finding is further verified through dynamic effect analysis and stacked regression. The positive effect of carbon ETS on green investor entry is driven by improved green performance, intensified media coverage, and enhanced environmental disclosure. Furthermore, this effect is more pronounced when firms have higher analyst following, lower financial constraints, lower product pricing power, and are located in regions with higher levels of green finance development. Overall, our findings provide insightful implications for the construction of a unified national carbon ETS in emerging markets.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102727"},"PeriodicalIF":4.8,"publicationDate":"2025-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143580348","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}
Chentong Sun , Shangkun Yi , Fenglin Wu , Yanshuang Li , Zibing Dong
{"title":"Mainshocks and aftershocks: Assessing the resilience of Asia-Pacific stock markets amid global financial cycle shocks","authors":"Chentong Sun , Shangkun Yi , Fenglin Wu , Yanshuang Li , Zibing Dong","doi":"10.1016/j.pacfin.2025.102720","DOIUrl":"10.1016/j.pacfin.2025.102720","url":null,"abstract":"<div><div>This study introduces a quantitative framework to assess financial resilience and empirically examines the financial resilience of Asia-Pacific stock markets under the “mainshocks” of the global financial cycle. We further investigate whether financial resilience can mitigate the “aftershocks” generated by systemic risk spillovers. Our findings yield several key insights: First, Asia-Pacific stock markets are significantly influenced by global financial cycles, particularly during black swan events, leading to a marked decline in financial resilience. Second, these markets exhibit pronounced interconnectedness and risk spillovers, characterized by the diverse roles that different markets play in transmitting risk. Third, financial resilience reduces network risk spillover effects. Nodes with greater resilience in withstanding “mainshocks” experience fewer “aftershocks”, thereby mitigating spillovers across the system. Notably, this mitigating effect is most pronounced in the early stages with shorter convergence periods. Finally, our findings also underscore the importance of accounting for time effects when conducting resilience analyses across varying dimensions.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102720"},"PeriodicalIF":4.8,"publicationDate":"2025-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143549940","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":"ESG and stock price crash risk revisited: Evidence from mandatory ESG disclosure policy in China","authors":"Jing Hao , Ran Sun , Xu Gong , Xiaoyu (Ross) Zhu","doi":"10.1016/j.pacfin.2025.102729","DOIUrl":"10.1016/j.pacfin.2025.102729","url":null,"abstract":"<div><div>This study examines how corporate environmental, social and governance (ESG) information disclosure impacts stock price crash risk (SPCR). Unlike previous studies, it finds that mandatory corporate ESG information disclosure has no significant effect on stock price crash risk in recent years. Heterogeneity analysis shows that ESG disclosure can effectively reduce stock price crash risk in firms with higher corporate governance levels or stronger external supervision. Further research reveals that ESG rating is a key factor in reducing stock price crash risk. This study provides new insights into the economic consequences of ESG disclosure and its underlying mechanisms in the current digital era.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102729"},"PeriodicalIF":4.8,"publicationDate":"2025-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143593287","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}
Jinhua Xu , Xinran Xiong , Xiaoxia Li , Shanmin Li
{"title":"Digital merger & acquisition and corporate innovation: Evidence from China","authors":"Jinhua Xu , Xinran Xiong , Xiaoxia Li , Shanmin Li","doi":"10.1016/j.pacfin.2025.102723","DOIUrl":"10.1016/j.pacfin.2025.102723","url":null,"abstract":"<div><div>Breaking through innovation bottlenecks is one of the most important issues in promoting high-quality development of the Chinese economy. Using a stacked difference-in-difference strategy, we show that digital Merger & Acquisition (M&A) has a positive effect on corporate innovation, and the effect is more salient for firms with lower levels of knowledge stock and those located in regions with lower levels of digital finance development. Further analysis shows that digital M&A promotes corporate innovation by improving human capital. Our empirical results provide policy implications for the improvement of digital capability and achievement of high-quality development.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102723"},"PeriodicalIF":4.8,"publicationDate":"2025-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143549939","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":"Local government debt and corporate cash holdings: Evidence from China","authors":"Guanglong Zhang, Chuyu Wang","doi":"10.1016/j.pacfin.2025.102722","DOIUrl":"10.1016/j.pacfin.2025.102722","url":null,"abstract":"<div><div>This study, based on Chinese data, examines how local government debt (LGD) affects the cash holding policies of local firms. We find that a higher LGD significantly increases cash holding levels of local firms, mainly by impeding their access to external financing, particularly bank loans, prompting a precautionary cash buildup. Heterogeneous analyses suggest that the impact of LGD on cash holdings is more pronounced for firms without financing privileges (non-state-owned enterprises and those without political connections), firms located in provinces with a stronger non-state-owned economy, and firms located in cities with more restricted bank credit supply. Additionally, a higher LGD leads to slower adjustments of cash holdings toward target levels and higher market value of excess cash holdings for local firms. These findings provide new insights into the economic implications of increased government debt and contribute to our understanding of corporate cash holding policies.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102722"},"PeriodicalIF":4.8,"publicationDate":"2025-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143644975","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":"Can enhanced intra-regional transport accessibility alleviate corporate financing constraints? Evidence from China","authors":"Mengting Zhang , Ziwen Bao , Binghao Chen , Feng Yu","doi":"10.1016/j.pacfin.2025.102724","DOIUrl":"10.1016/j.pacfin.2025.102724","url":null,"abstract":"<div><div>This study systematically investigates a crucial yet relatively underexplored mechanism in corporate finance: the role of intra-regional transport accessibility in alleviating financing constraints. Based on the detailed vector data of highway networks in the OpenStreetMap (OSM), we develop a novel measure of transport accessibility across 1914 district/county pairs in 256 Chinese cities (2013−2022), employing GIS-based spatial analysis. Our findings reveal that an enhancement in intra-regional transport accessibility significantly mitigates the degree of corporate financing constraints, with a marginal effect of approximately 1.2 %. This result remains robust after subjecting it to a series of robustness checks and effectively handling the endogeneity problem through the use of an instrumental variable (IV). This improvement effect occurs by reducing the time cost of corporate financing, alleviating information asymmetry, and strengthening the supply chain finance. Moreover, this positive effect is relatively more pronounced among debt-financing enterprises, capital-intensive enterprises, higher supplier concentration enterprises, and those located in cities equipped with subway. We also find a significant substitution effect between digital infrastructure and regional transportation in facilitating corporate financing. Furthermore, the financial services market benefits from this process, highlighting a mutually advantageous outcome for both enterprises and the broader financial ecosystem.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102724"},"PeriodicalIF":4.8,"publicationDate":"2025-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143529123","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}
Yedong Wang , Junchao Xiao , Lei Wang , Daoping Wang
{"title":"News sentiment and the cost of debt1","authors":"Yedong Wang , Junchao Xiao , Lei Wang , Daoping Wang","doi":"10.1016/j.pacfin.2025.102721","DOIUrl":"10.1016/j.pacfin.2025.102721","url":null,"abstract":"<div><div>Based on 4.4 million news articles from approximately 6000 newspapers, this paper investigates the relationship between news sentiment and the cost of debt. We find that news sentiment is negatively associated with firms' offering yield spreads. The analysis reveals that news sentiment influences the cost of debt at both firm level and market level. Further research finds that since Chengtou firms, state-owned firms and firms in developed provinces have strong government support, the impact of news sentiment will be moderated. Additionally, the impact of news sentiment is attenuated for firms with higher credit rating, lower debt ratio, or higher cash ratio. The findings are robust to controls for standard yield determinants, alternative measures of dependent and independent variables, and potential endogeneity concerns.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102721"},"PeriodicalIF":4.8,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143534207","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":"How does subordinated debt affect the cost of capital for banks?","authors":"Leyla Yusifzada","doi":"10.1016/j.pacfin.2025.102714","DOIUrl":"10.1016/j.pacfin.2025.102714","url":null,"abstract":"<div><div>This paper studies the relationship between banks’ subordinated debt and the cost of capital in OECD countries from 2000 to 2019. Consistent with the hypothesis that subordinated debt disciplines risk-taking, empirical results show that the total cost of capital decreases with subordinated debt, keeping the equity capitalization and deposits constant. The main results hold for the US and the EU subsamples and are driven by the Global Financial Crisis of 2007–2009. Furthermore, the paper demonstrates that one-time subordinated debt issuance and low levels of subordinated debt do not suffice to discipline risk-taking.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102714"},"PeriodicalIF":4.8,"publicationDate":"2025-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143487700","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}
Huaigang Long , Cuixia Tao , Zhongwei Yao , Yanjian Zhu
{"title":"Visible hands versus invisible hands: Default risk and stock price crashes in China","authors":"Huaigang Long , Cuixia Tao , Zhongwei Yao , Yanjian Zhu","doi":"10.1016/j.pacfin.2025.102715","DOIUrl":"10.1016/j.pacfin.2025.102715","url":null,"abstract":"<div><div>This paper revisits the default-crash risk relation in the context of China. We find that firms with higher default risk have lower stock price crash risk at both monthly and yearly frequencies. To identify the causal effect, we use the first-ever default event in China’s onshore bond market in 2014 as an exogenous shock to the strength of implicit guarantees. The negative relation arises from the active involvement of the government before 2014 and creditors after 2014 in corporate governance. Consistent with the external scrutiny mechanism, the impact of default risk on stock price crashes is stronger in situations where creditors are more likely to engage in active monitoring (i.e., firms with higher liquidation costs, lower liquidation value, higher levels of information asymmetry, and non-state-owned firms), with these effects being primarily observed in the post-2014 period. Overall, our study highlights the role of the “invisible hand” in the absence of the “visible hand”.</div></div>","PeriodicalId":48074,"journal":{"name":"Pacific-Basin Finance Journal","volume":"91 ","pages":"Article 102715"},"PeriodicalIF":4.8,"publicationDate":"2025-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143527384","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}