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Compared with financial information, whether corporate social responsibility disclosure has impacts on debt financing cost has obviously become a heated topic in the academic. This paper selects A-share listed companies in Shanghai and Shenzhen stock markets of China from 2013 to 2017 as sample to study the impact of corporate social responsibility disclosure on debt financing cost, including bond financing cost and bank loan cost. In addition, this paper divides the sample into voluntary corporate social responsibility disclosure group and mandatory corporate social responsibility disclosure group and studies whether the effects of voluntary corporate social responsibility disclosure and mandatory corporate social responsibility disclosure on bond financing cost and bank loan cost are different. The empirical results are presented as follows: Firstly, enterprise disclosing high-quality corporate social responsibility report is more conducive to reducing the debt financing cost. Specifically, corporate social responsibility disclosure significantly lowers both the bond financing cost and bank loan cost. Moreover, the reduction impact of corporate social responsibility disclosure on bond financing cost is greater than that of bank loan cost. Secondly, enterprises voluntarily disclosing corporate social responsibility reports are more conducive to reducing the debt financing cost than that of enterprises mandatorily disclosing corporate social responsibility reports. Thirdly, non-state-owned enterprises are more conducive to reducing debt financing cost than that of state-owned enterprise. The enterprises with more market competition are more conducive to reducing the debt financing cost than the oligopolistic enterprises. Finally, this paper concludes and gives policy implications. This paper amplifies the literature regarding the economic consequences of corporate social responsibility disclosure and improves the understanding of the impact of corporate social responsibility disclosure on debt financing cost. [ABSTRACT FROM AUTHOR]

Research background: The rapid development of digital economy has set off a new wave of enterprise reform. Developing the digital economy is not only an urgent requirement of the current situation, but also an important way to meet the people's better life. Purpose of the article: This paper attempts to reveal the important role of the development of digital technology on the debt financing cost of micro enterprises, and provide micro evidence for the integration of digital economy and real economy. At the same time, this paper wants to provide relevant guidance for formulating digital related policies and reducing the financing cost of the real economy. Methods: Taking China's A-share listed companies from 2007 to 2020 as a sample, this paper empirically tests the impact of enterprise digital transformation on debt financing cost and its mechanism. In the robustness test, this paper uses the measures of changing independent variables and dependent variables, instrumental variable method and quantile regression method. In the mechanism test, this paper uses the intermediary effect model. In the further study, this paper uses the method of group regression. Findings & value added: The study finds that the digital transformation of enterprises significantly reduces the cost of debt financing. Mechanism tests show that the role of enterprise digital transformation in reducing debt financing costs is mainly realized by reducing information asymmetry and alleviating agency problems. Further tests show that the relationship between enterprise digital transformation and debt financing cost is affected by the degree of market competition, whether it is a high-tech enterprise and audit quality. When the degree of market competition is high, the enterprise is a high-tech one, or it is audited by the four major international accounting firms, the effect of enterprise digital transformation on the reduction of debt financing cost is more significant. The method used in this paper is also applicable to the study of other economic management problems. This paper proves a positive significance of digital transformation, which is conducive to promoting the digital transformation of enterprises. Especially for those enterprises in non-high-tech industries, they should speed up the pace. At the same time, this paper has a certain guiding role for the introduction and implementation of policies to encourage digital transformation. [ABSTRACT FROM AUTHOR]

This paper empirically studies the relationship between the cost of equity capital and annual report tone of listed firms' annual reports from 2007 to 2019 in China. It is discovered that the greater the firm's cost of equity capital, the more positive the tone of the manipulated annual report. In addition, in firms with lower quality of accounting information and higher degree of industry competition, the impact of cost of equity capital on the degree of tone manipulation is more significant, indicating that the impact of cost of equity capital on the positive tone disclosure of annual report is a deliberate manipulation behavior. The heterogeneity analysis shows that the cost of equity capital has a more significant impact on the tone manipulation of corporate annual reports in non-state-owned corporates than in state-owned corporates. Further analysis shows that the increase of the cost of equity capital will lead to the decline of investor's confidence and corporate value and is also the mechanism of the cost of equity capital affecting the annual report note manipulation. Further analysis shows that the increase of the cost of equity capital will lead to the decline of investor's confidence and corporate value, which is also the mechanism of the cost of equity capital affecting the annual report note manipulation. [ABSTRACT FROM AUTHOR]

This paper uses supervised machine learning (sentiment analysis) to analyze the sentiments of social media information in the P2P lending market. After segmentation, filtering, feature word extraction, and model training of the text information captured by Python, the sentiments of media and social media information were calculated to examine the effect of media and social media sentiments on default probability and cost of capital of peer-to-peer (P2P) lending platforms in China (2015–2019). We find that only positive changes in media and social media sentiment have significantly negative effects on the platform's default probability and cost of capital, while negative changes in sentiment do not have any effects. We conclude the existence of an asymmetric effect of media and social media sentiments in the Chinese peer-to-peer lending market. [ABSTRACT FROM AUTHOR]

This paper investigates the divergence in investor behaviour between the United States and China following the abolition of the Chinese presidential term limit in 2018, which may, in part, have reflected the heterogeneous opinions expressed in public online media regarding this event. Compared with Chinese investors, the sentiment among US investors was considerably more pessimistic. Accordingly, we find that Chinese companies listed in the United States significantly underperformed relative to a sample of propensity score‐matched firms listed in China. Additionally, we find that the political connectedness of firms to the Chinese government strongly influenced the stock prices of US‐listed Chinese firms. [ABSTRACT FROM AUTHOR]

Firms in transition economies often suffer financial constraints. In initial public offerings (IPOs), however, many newly listed Chinese firms raise funds in excess of what is originally planned. This paper examines whether these excess IPO funds are wasted on value‐destroying spending or enable firms to take growth opportunities. After controlling for the endogeneity issue, we find that Chinese firms with excess IPO funds have better post‐IPO operating performance, especially those with limited financing channels. In revealing the mechanism, we find that excess IPO fundraising alleviates financial constraints and reduces the cost of debt. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate how opening high-speed railways affects the cost of debt financing based on China's background. Design/methodology/approach: Using panel data on Chinese listed firms from 2008 to 2017, this study constructs a quasi-natural experiment and adopts a difference-in-difference model with multiple time periods to empirically examine the relation between the high-speed railway openings and debt financing cost. Findings: Our results show that opening high-speed railways reduces the cost of debt financing, and this negative correlation is more significant in non-state firms, firms with weaker internal control, and firms that hire non-Big Four auditors. Besides, we explore the impact mechanisms and find that opening high-speed railways improves analyst attention, institutional investor participation, and information disclosure quality, which in turn lowers the cost of debt financing. Research limitations/implications: The results imply that the opening of high-speed railways helps to alleviate the information asymmetry and adverse selection between firms and creditors and ultimately reduces the cost of corporate debt financing. Practical implications: This paper can inform firms and stakeholders about the impact of opening high-speed railways on debt financing cost: it improves the information environment, reduces the geographical location restrictions of debt financing, ensures the reasonable pricing of corporate debt, and thus promotes the healthy and sound development of the debt market. Originality/value: This paper provides theoretical support and empirical evidence for the impact of infrastructure construction on the information environment of the debt market in China, which enriches the research on the "high-speed railway economy." In addition, as an exogenous event, the opening of high-speed railways instantly shortens the time distance between firms and external stakeholders, which gives us a natural environment to conduct empirical research, thus providing a new perspective for financial research on firms' geographical location. [ABSTRACT FROM AUTHOR]

In coastal cities, a large amount of cold energy is released into the nearby seawater during the process of regasification of liquefied natural gas (LNG) at the receiving terminal, and meanwhile, a large amount of exported and/or imported foods need to be frozen by bulk cold energy near the sea. In this paper, a new multistage cold energy recovery/utilization system is investigated to link the LNG cold energy directly to supply the coastal cold store. This design uses a realistic case in Ningbo LNG receiving station in China, and for the very first time considers how to utilize the LNG cold energy in an efficient manner regarding the technical, economic, and environmental benefits. A three‐stage LNG cold energy utilization system is designed and evaluated by considering different temperatures, pressures, and heat exchange parameters. Compared to conventional electric‐driven cold stores, the proposed multistage cold energy recovery/utilization system has a much cheaper capital cost during the initial investment stage, and also avoids the utility power consumption during the daily operation period. In the case study, from Ningbo LNG receiving station to a 10 MW class cold store, the proposed multienergy system can save the energy of 20.05 kilotons of standard coal, and the carbon emission reduction is up to 1.49 × 108 kg per year. [ABSTRACT FROM AUTHOR]

While theoretical deductions propose that environmental disclosure helps reduce cost of capitals, this conclusion is not always supported in empirical investigations and many factors moderate this connection. In this paper, we re-examine the issue against a unique background, say in the new development stage of China that pursues a balance between economic growth and environmental protection. Specifically, we build an environmental disclosure index and relate it with the costs of equity and debt capitals. We find the disclosure does not significantly contribute to the variation in either cost, when the relationship is estimated in pooled samples. However, when regulation intensity is involved, the puzzle is resolve. In the debt market, we find institutional investors generally devalues environmental disclosure but appreciate disclosure by essentially polluting firms. In contrast, retail investors in the stock market generally respond to environment disclosure in a positive way, but the disclosure by traditionally recognized polluting firms leads to increase in the cost of equity capital. Our work features important heterogeneity between debt and equity markets, and also the role of regulation intensity in moderating the connection. [ABSTRACT FROM AUTHOR]

Market efficiency can be enhanced by market liquidity if it promotes value creation, leading to increasing stock returns. A positive relation between liquidity and stock returns implies capital movement towards more efficient investment at a low cost for value creation. Existing studies are controversial for the relation being positive, negative, or inconclusive. With such inconsistency, this paper uses data from more than 3,200 company stocks from the UK, the United States, Germany, and China securities markets over a 10-year period to estimate the relation across these four markets, respectively. The framework of estimation is robust to outliers and macro shocks, while eliminating the issues of multicollinearity, autocorrelation, and endogeneity. The study finds some interesting results. We report strong evidence for Germany and the UK of a positive relationship between returns and liquidity. In contrast, China exhibits the opposite result, and the United States provides inconclusive evidence, possibly caused by significant diversification of value perception on liquidity. Our results imply that the German and the UK markets are more efficient than the emerging market of China because liquidity assists capital movement more efficiently. The policy implication of this research is that, for emerging stock markets, the costs of capital movement should be reduced in order to increase the efficiency of funding allocation. [ABSTRACT FROM AUTHOR]

This paper explores whether the assessment of local government officials affects firm participation in targeted poverty alleviation. Using a sample of Chinese A‐share listed companies in the Midwest from 2016 to 2019, the results show that the greater the importance of officials' poverty alleviation assessment, the higher the participation of firms in precise poverty alleviation. State‐owned enterprises (SOEs) contribute more to the reduction of destitution than private enterprises. We further find that local SOEs' participation in precision poverty alleviation enhances the likelihood of executive promotion, while private enterprises' participation in precision poverty alleviation increases government subsidies and reduces the cost of debt financing. These findings imply that the evaluation mechanisms of Chinese officials can effectively promote enterprises fulfilling social responsibilities. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of volatility in profitability shock, capital price distortion and adjustment costs on capital misallocation among Chinese industrial firms. We estimate a dynamic model pertaining firms' investment decision, incorporating institutional differences between state and private firms, so the model can reproduce salient features observed from Chinese firms. Our analysis shows: (i) capital price distortion is more severe among state firms than private ones; (ii) adjusting capital is more costly for state than private firms; (iii) volatility in profitability shock is a major source that causes capital misallocation for both types of firms. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between environmental violations and the cost of corporate bonds, and further analyzes whether refinancing constraints, the lending restrictions on penalized firms, are an important channel through which environmental violations affect the cost of corporate debt financing in China. Using the manually collected environmental violation events from 2008 to 2020, we find that the bond cost of firms violating environmental regulations increases significantly after being penalized. The finding is robust to potential sample selection bias and endogeneity problems. Furthermore, we find that the effect of environmental violations on the cost of corporate bonds is more profound in short‐term debt‐dependent firms and can be alleviated by the internal financing dependence. These results confirm that the refinancing risk arising from China's green loan policy on pollution‐intensive firms plays a key role in the relation between environmental violations and the cost of capital in the firms. In the context of the growing concerns of global society about climate change, our findings have great implications for pollution‐intensive firms, bond investors, and regulatory authorities in emerging economies to manage the increasing environmental risk. [ABSTRACT FROM AUTHOR]

This paper investigates the association between real earnings management and the cost of equity from the perspective of the heterogeneity of institutional investors. Based on a sample of publicly listed high-tech firms in China from 2008 to 2017, our empirical results suggest that there is a significant negative correlation between earnings management and the cost of equity capital. This finding is contrary to previous conclusion, indicating that, in China, real earnings management cannot be effectively identified by external investors, and the company could easily obtain financing from the capital market and reduce its cost of equity due to its masked excellent performance by manipulating the real earnings management. Furthermore, we find that compared with transient institutional investors, stable institutional investors with the intention of holding the stock for the long-term can effectively reduce the cost of equity. Our results also show that real earnings management under the supervision of stable institutional investors could be more easily identified by shareholders and stable institutional investors could diminish the impact of earnings management on the cost of equity. [ABSTRACT FROM AUTHOR]

Environmental protection and innovation performance are key issues that affect the sustainable development and value growth of cities. Using data of 272 prefecture-level cities during 2002–2016 and 2,169 listed companies, and the air ventilation coefficient and government environmental regulations, as the instrumental variables for PM2.5 concentrations, this paper applies two-stage OLS (2SLS) to investigate how air pollution affects China's technological innovation and its realization mechanism. The results indicate that the rise in air pollution significantly inhibits the technological innovation level of regions as a whole as well as individual enterprises. When considering the spatial effect of the spread of PM2.5 concentrations, due to positive spillover effects on innovation activities, the spread of air pollution has negative impacts on technological innovation activities in surrounding cities. Human capital and labour costs are important channels through which air pollution influences China's technological innovation. The implementation of pilot carbon trading policies can effectively reduce air pollution and then contribute to the achievement of the goals of the green growth strategy. [ABSTRACT FROM AUTHOR]

Examining the coexisting policies for mandatory and voluntary disclosure of environmental information, this paper focuses on the unique background for such disclosure in the context of domestic companies in heavy pollution industries (EHPIs), a topic thus far overlooked by the literature. We aim to identify, in regard to compulsory environmental information disclosure in financial reports, whether adding further voluntary information disclosure to corporate social responsibility (CSR) results in an extra discount from investors during an equity financing. We evaluate a sample of 4390 A-share listed companies in EHPIs operating in China between 2010 and 2018. Specifically, linguistic analysis and image recognition are conducted with Python, and a regression model is applied to test our hypotheses. The positive impact of the following variables on the cost reduction in equity capital is thus demonstrated: (a) CSR disclosure, (b) higher quality CSR reports, (c) increased environmental information disclosure in CSR reports (CSR_E), (d) more accurate environmental investment information, and (e) additional graphs and text. Moreover, the degree of CSR_E disclosure's reduction in the cost of equity is 30 times that of CSR disclosure, while charts have specific positive effects that text does not. Therefore, we identify a new path for remitting information asymmetry in a financial market by extending information manipulation research, especially studies of nonfinancial information. Overall, information disclosure should be taken seriously by both firms and supervisors. Hence, this study offers guidelines for regulatory authorities to explore the coordination effect of mandatory and voluntary disclosure policies, i.e., to achieve environmental governance and the sustainable development of enterprises by improving corporate governance. [ABSTRACT FROM AUTHOR]

Social responsibility fulfillment helps modern enterprises achieve sustainable development. Based on empirical data on China's A-share listed companies in 2013–2016, this paper examines the impact of corporate social responsibility performance on a company's financing costs from the perspective of targeted poverty alleviation. Specifically, we find that enterprises' engagement in poverty alleviation social responsibility helps to reduce the cost of equity capital. The result is robust to using alternative indicators of the cost of equity capital, propensity score matching method, change model and sample removed financial sector. Furthermore, we find that the negative relationship between enterprises' engagement in poverty relief and the cost of equity capital is mainly concentrated in private enterprises and in the central and eastern regions of China. Moreover, the negative relationship mainly exists after China's listed companies were forced to disclose information on poverty alleviation. This paper also finds that institutional investors' shareholding plays a partial mediating role in this reduction effect and that enterprises' poverty alleviation efforts help companies improve their financial performance and firm value. This study enriches the relevant literature on corporate social responsibility and the cost of equity capital and has reference value for corporate sustainable development. It also provides a theoretical basis for corporate poverty alleviation work in developing countries and the economic results of CSR. [ABSTRACT FROM AUTHOR]

This paper evaluates the causal effects of climate change on firm productivity from the perspective of drought, which is a complicated climate phenomenon. Based on the panel data of agriculture-related firms in China, we present strong evidence that drought significantly reduces firm' total factor productivity. Mechanism analysis shows that the negative effect is rooting from higher costs of equity capital, higher operation costs, and lower investment efficiency. Finally, we find that government subsidy and policy stimulating corporate innovation can help firms adapt to climate change. [ABSTRACT FROM AUTHOR]

Since China's enactment of the Reform and Opening-Up policy in 1978, China has become one of the world's fastest growing economies, with an annual GDP growth rate exceeding 10 % between 1978 and 2008. But in 2015, Chinese GDP grew at 7 %, the lowest rate in 5 years. Many corporations complain that the borrowing cost of capital is too high. This paper constructs Chinese Divisia monetary aggregates M1 and M2, and, for the first time, constructs the broader Chinese monetary aggregates, M3 and M4. Those broader aggregates have never before been constructed for China, either as simple-sum or Divisia. The results shed light on the current Chinese monetary situation and the increased borrowing cost of money. GDP data are published only quarterly and with a substantial lag, while many monetary and financial decisions are made at a higher frequency. GDP nowcasting can evaluate the current month's GDP growth rate, given the available economic data up to the point at which the nowcasting is conducted. Therefore, nowcasting GDP has become an increasingly important task for central banks. This paper nowcasts Chinese monthly GDP growth rate using a dynamic factor model, incorporating as indicators the Divisia monetary aggregate indexes, Divisia M1 and M2 along with additional information from a large panel of other relevant time series data. The results show that Divisia monetary aggregates contain more indicator information than the simple sum aggregates, and thereby help the factor model produce the best available nowcasting results. In addition, our results demonstrate that China's economy experienced a regime switch or structure break in 2012, which a Chow test confirmed the regime switch. Before and after the regime switch, the factor models performed differently. We conclude that different nowcasting models should be used during the two regimes. [ABSTRACT FROM AUTHOR]

This paper studies the impact of mandatory corporate social responsibility (CSR) disclosures on cost of debt financing (COD) in China, using a quasi-natural experiment that mandates a subset of listed firms to issue CSR reports. We find that these firms exhibit cheaper debt financing after they are subject to this mandate and easier access to long-term bank loans, and the decrease in the COD is more pronounced among firms with longer CSR reports and higher CSR scores and that follow Global Reporting Initiative (GRI) guidelines. In addition, we introduce regulatory theory to verify firms that are politically connected enjoy a greater reduction in the COD after the mandate than those that are not politically connected. Our results have important implications for our understanding of the economic consequences of mandatory CSR disclosures from the perspective of the debt market. [ABSTRACT FROM AUTHOR]

Corporate bonds with large increases in implied volatility over the past month underperform those with large decreases in implied volatility by 0.6% per month. In contrast to existing studies that show implied volatility changes carry information about fundamental news, our evidence suggests that implied volatility changes contain information about uncertainty shocks to the firm. Our results are consistent with the notion that informed traders with new information about firm risk prefer to trade in the option market and the corporate bond market underreacts to this information. This paper was accepted by Haoxiang Zhu, finance. Funding: We thank the Canadian Derivatives Institute for financial support. J. Cao and X. Zhan acknowledge generous financial support of the Research Grant Council of the Hong Kong Special Administrative Region, China [Grants GRF 14501720, 14500919]. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4379. [ABSTRACT FROM AUTHOR]

Li, Y. and Zhang, S., 2019. Relationship between environmental information disclosure and cost of equity of listed companies in China's marine industry. In: Li, L.; Wan, X., and Huang, X. (eds.), Recent Developments in Practices and Research on Coastal Regions: Transportation, Environment and Economy. Journal of Coastal Research, Special Issue No. 98, pp. 42–45. Coconut Creek (Florida), ISSN 0749-0208. At present, the marine industry has become an important growth driver for China's economic development. This paper empirically studies the impact of environmental information disclosure on the enterprise's cost of equity (COE) by taking China's listed companies of marine industry in 2016–18 as the research objects. The research results show that (1) the quality of environmental information disclosure of listed companies in China's marine industry is significantly negatively correlated with the COE, indicating that improvement in the quality of environmental information disclosure may reduce the COE; (2) compared with nonstate-owned listed companies in the marine industry, the environmental information disclosure of state-owned listed companies plays a more significant role in reducing their COE. On the basis of this, this paper puts forward some suggestions for improving and enhancing the environmental information disclosure of listed companies in China's marine industry. This shall continuously improve the quality of China's marine ecological environment while developing China's marine economy. [ABSTRACT FROM AUTHOR]

The novel part of this paper is to examine the individual and joint effects of the real estate segments (RETs) and environmental information disclosure (EID) on the cost of debt (COD) in the real estate industry in China. Building on extant literature, using 1,250 firm‐year observations from 2006 to 2016 and applying both Feasible General Least Squares and Two‐stage Least Squares Instrumental Variable approaches, we provide evidence that the commercial RET leads to an increase in the COD, while EID leads to a decrease in the COD. The joint effects of the RETs and EID on the COD indicate a significantly positive relationship with the COD. This signifies that even with the increased levels of EID in commercial real estate sectors, its COD is higher than for residential real estate sectors. These findings have important policy implications for environmental risk assessments for real estate sectors, their lending institutions and wider stakeholder groups. [ABSTRACT FROM AUTHOR]

Based on the data of A-share listed companies in China from 2016 to 2020, this study empirically analyzes the relationship among corporate social responsibility, debt financing cost and enterprise innovation by constructing a regulated mediation effect model. The results show that enterprises perform social responsibility actively can enhance the level of enterprise innovation. Besides, debt financing cost plays a part of the intermediary role between corporate social responsibility and enterprise innovation. It is found that market competition degree positively regulates the relationship between corporate social responsibility and enterprise innovation, and market competition degree strengthens the part of the intermediary effect of debt financing cost. The conclusions not only help to reveal the impact mechanism of corporate social responsibility on enterprise innovation, but also provide empirical evidence for promoting enterprises to actively assume social responsibility, improve the level of innovation, and provide empirical evidence for the government to formulate corresponding policies according to the degree of competition in different markets. [ABSTRACT FROM AUTHOR]

Focusing on the toughest-ever environmental policy in China, this paper investigates the causal evidence of how environmental regulations influence listed firms' capital structure dynamics. The difference-in-difference estimation findings showed that the speed of leverage adjustment of highly polluting firms significantly declined after the implementation of tightened environmental regulations, compared with that of low-polluting firms. The dynamics of this impact turned out to be significant instantly after the policy shock and persisted for at least two years. Furthermore, the negative impact of environmental regulations on the speed of leverage adjustment by highly polluting firms was much weaker for firms with better corporate governance capacity and stronger for firms with higher information asymmetry. This study also identified that the possible channel of these main findings is that the cost of the debt and equity of highly polluting firms significantly increased after the implementation of the environmental regulations. Additional findings suggested that the tightened environmental regulations mitigated the speed of leverage adjustment of highly polluting firms because they increased these firms' adjustment costs. All main empirical findings passed a variety of endogeneity tests, including propensity score matching difference-in-difference and the inclusion of province fixed effects. These findings were also consistent across a battery of robustness tests, such as an alternative indicator of highly polluting industries, an alternative estimator of the speed of leverage adjustment, the extension of the sample period, and placebo tests with falsified event dates. [ABSTRACT FROM AUTHOR]

We develop a valuation model of companies under financing constraints and investment time lags. Moreover, we investigate the specific time lag effect of investment on company value through Panel-VAR models using data from 622 companies listed on the Shanghai and Shenzhen stock exchanges in China from 2011–2019. The impact of cash flow and debt financing cost on company value is also dissected. The results indicate a one-period time lag effect for the investment. Cash flow is more valuable to finance-constrained companies than to non-financing constrained companies. The debt financing costs of finance-constrained companies is positively related to company value. [ABSTRACT FROM AUTHOR]

This paper empirically examines whether the price difference between Chinese A shares, which are traded in the domestic market, and their matching H shares, which are traded in the Hong Kong market, can be explained by firms' corporate governance characteristics. We find that the A- to H-share price premiums are higher for firms in which the controlling shareholders and corporate insiders have greater potential to expropriate wealth from outside investors. This result is robust when we use a variety of corporate governance variables specific to listed Chinese companies to explain the A-share price premiums and when we control for differences between domestic and foreign investors in required returns, degree of speculative trading, liquidity, information, and demand elasticity. Our findings highlight the important role of corporate governance in explaining the price difference in segmented stock markets. [ABSTRACT FROM AUTHOR]

What is the relationship between investment and output at a macro-level? What limit is there in capital investment that cooperates with technology? How can this limit be measured and controlled? This paper will answer these questions using basic variable functions of investment that include an endogenous cost of capital and the corresponding valuation ratio. Functions of investment are formulated by my endogenous growth model/production function and with a new method to estimate the relationship between consumption and investment and between wages and rents, each by country and sector. It is urgent for policy makers to pay much more attention to a minus government saving and a minus valuation value and to realise how the growth rate of the total economy is damaged. [ABSTRACT FROM AUTHOR]

As an important provision in a company's charter, the requirement of staggered board elections can help management protect themselves or protect the interests of investors. We examined a unique dataset of Chinese listed firms from the period of 2004–2014, and our findings are twofold. First, we find that the establishment of a staggered board in a company's article of association increases the equity financing costs as well as the debt financing costs. This result is in line with management defense hypothesis that staggered boards are an overprotection for the management. Second, our results show that a cumulative voting system plays an effective role in reducing the impact of a staggered board on a firm's financing costs. This moderating impact is higher for the debt financing costs and lower for the equity financing costs. The result shows that "debt investors" value a cumulative voting system because of its control of the corporate operations and board activities, while "equity investors" believe staggered board elections have a larger influence on the corporate governance. [ABSTRACT FROM AUTHOR]

This paper matched the data for all non-financial listed firms in China from 1990 to 2017 with weather data and used temperature and precipitation to represent climate change. Using daily temperature and daily precipitation data, we constructed temperature bins and precipitation bins. This study presents a potential first empirical analysis that applies the risk perception theory to comprehensively examine the impacts of daily temperature and daily precipitation on firms' debt financing costs. Compared to a day with a suitable temperature, a day with temperatures above 30 °C increases firms' debt financing costs by 0.2411%. Compared to a sunny day, a day with torrential rain increases firms' financing costs by 0.2697%. Approximately $122.13 million and $20.49 million in extra costs were incurred across all firms in 2017. We conducted a series of heterogeneity tests. We found that the negative impacts of climate change on debt financing costs are greater for firms that investor considers more vulnerable. Finally, we found two possible mechanisms. First, from the firm's subjective initiative perspective, firms that respond proactively during seasons of high temperatures and heavy rains can reduce the negative impacts. Second, adverse weather caused by climate change may also increase firms' debt financing costs by blocking travel. These results enrich the literature on firms' debt financing costs and contribute to the understanding of climate change's impact on firms. [Display omitted] • An extra high-temperature day increases firms' debt financing cost by 0.2411%. • An extra heavy-rain day increases firms' debt financing costs by 0.2697%. • The negative impacts will be greater for those firms that investor considers more vulnerable. • Firms' response proactively can reduce the negative impacts. • Climate change also may increase firms' debt financing costs by blocking travel. [ABSTRACT FROM AUTHOR]

In response to the Global Financial Crisis (GFC) of 2007-2009, stringent capital requirements in the form of Basel III Accord have been implemented for the banking sector across the globe. Critics argue that banks may face difficulty in raising costly equity and may either decrease loans or charge higher cost on bank credit. We argue that cost efficiency can help banks to accumulate capital through profits, while at the same time, enable them to charge lower cost on bank credit. Analyzing a panel dataset of 224 banks from China and India over the period 2007-2015, we find robust evidence that cost efficiency has a positive impact on bank capital formation and a negative effect on the cost of bank credit. We further observe that the recent GFC has a substantial positive impact on banks' capital ratios and the cost of bank credit. Chinese banks are more cost-efficient and highly concentrated compared to Indian banks. We draw important implications for bank regulators and banks. [ABSTRACT FROM AUTHOR]

Properly evaluating the management franchise values of scenic spots can scientifically curb opportunism behaviors, and can reduce business disputes related to the transfer process of management franchises in cooperative ventures between the government and enterprises. However, it is difficult for academics in China to scientifically and quantitatively evaluate capitalization rate values used in the income capitalization approach. To approach this problem, this paper conducts a review of the literature on quantitative estimates of capitalization rates, analyzes share prices and data on corporate debt for Chinese listed tourism companies involved in scenic spots from 2004 to 2011, and reveals that the weighted average cost of capital, which comprises equity capital cost and debt capital cost, can be taken as a reasonable and objective estimate of capitalization rate. Additionally, this paper analyzes the trend of change in the capitalization rate from the perspective of diversified business modes. Moreover, based on the random / fixed effects econometrics model of unbalanced panel data, we discuss the factors of control ownership structure, board independence and creditor governance, and measure their corporate governance effects on capitalization rates of the studied companies under the conditions in which company level factors are controlled. The research conclusions of this paper are as follows: first, the studied companies have higher cost of equity capital than of debt capital. Capitalization rates are generally moderate, but differ considerably among the studied companies. The mean curve of the capitalization rates approximates the shape of the letter "W" in the annual period, and this shape changes to approximate an "inverted U" as the company's degree of diversification increases. Second, there exists a non-linear "inverted U" relationship between control ownership structure and capitalization rate, but board independence has no significant effect on the capitalization rate. In addition, an appropriate proportional increase in debt financing can strengthen constraints on managers, reduce the capitalization rate, and exert a positive effect on corporate governance. Third, there is a significant positive correlation between the profitability, solvency and capitalization rate of the companies. Moreover, enhancing the growth ability of the companies can reduce their capitalization rate. Company size has no significant effect on the capitalization rate. The policy implications of the research findings are as follows: first, according to the first and second conclusions, companies should make lull use of debt financing to reduce their capitalization rates. Second, the average capitalization rate of 14.66% identified in this study can be used as a scientific capitalization rate value when the income capitalization approach is applied to assess the economic values of scenic spots. Third, according to the first conclusion, companies should increase their diversification to reduce the capitalization rate. Finally, improving corporate governance structure is the simplest measure that companies can implement to reduce the capitalization rate. Companies should avoid a highly concentrated ownership structure to reduce "tunneling" behavior. They should also increase the proportion of outside directors so as to increase the independence of the board of directors. In addition, they should make lull use of mandatory debt interest payments to strengthen constraints on the top management team. [ABSTRACT FROM AUTHOR]

Water transfer systems are increasingly seen as a response to regional water stresses. The expensive capital cost of such massive projects calls for satisfying the desired requirements with a minimum investment, i.e., achieving a high rate of return on investment. This paper develops a new theoretical cost-benefit analysis framework considering the tradeoffs between investment cost and expected water shortage loss to determine the optimal water transfer capacity for water transfer systems. The optimal capacity is determined through theoretical and hydro-economic analysis considering the compensation effects of the capacity of existing reservoirs and reservoir inflow variability. Theoretical analysis show that the ratio between the slopes of the investment cost and water shortage loss functions, which is obtained analytically with the optimality condition, is equal to the water shortage probability (i.e., 1-reliability) when cost and loss functions are linear. Application to the Biliuhe water transfer system, northeast China, further demonstrates the equivalence between the proposed approach and reliability based simulation approach, as well as the advantage of the proposed approach in simplicity, accuracy and computational efficiency. Furthermore, effects of model parameters, demand uncertainty, inflow variability and probability distribution type on the optimal design of the water transfer system are discussed. This paper demonstrates that the proposed approach provides a theoretical basis for explicitly addressing the uncertainties in the design process of water transfer systems. [ABSTRACT FROM AUTHOR]

The evaluation of geothermal resources and ground-source heat-pump systems has been performed for a wide variety of individual buildings and cities. However, the assessment of ground-source heat-pump systems for multiple cities with different climatic and ground conditions has rarely been performed. The feasibility of ground-source heat-pump installation strongly depends on the local climatic, geological and geothermal conditions. This paper first investigates the shallow geothermal resources, including the thermal resources of open reservoirs (lakes and rivers, surface water), underground aquifers and geological materials. Then, the potential for ground-source heat-pump system applications in eleven provincial capitals in the Yangtze River Basin in China is assessed. The Yangtze River Basin covers a wide range of territory with dramatically different climates and geological conditions. The potential of ground-source heat-pump systems is evaluated by modeling the energy consumption of a certain conventional building with defined thermal and geometric characteristics under various climatic conditions. The results indicate that three ground-source heat-pump systems, namely, surface-water heat pumps, groundwater-source heat pumps and ground-coupled heat pumps, show different potentials among the investigated cities. The findings from this study are meant to optimize the high capital costs of ground-source heat-pump systems in the study area. • Three types of geothermal resources are investigated in eleven provincial capitals in the Yangtze River Basin. • The potential of geothermal resources depends strongly on the local geological, hydrogeological and geothermal conditions. • The climatic conditions have significant influences on the thermal load of buildings. • The potential for GSHP application corresponds well to the geothermal resource distribution in these cities. [ABSTRACT FROM AUTHOR]

Highlights • Two-stage planning method of multi-energy system is proposed. • Novel energy pricing strategy is first proposed. • Load aggregator is used to conduct the integrated demand response program. • Model of district heating/cooling network under quantity regulation is built. Abstract This paper proposes a two-stage planning and design method for the multi-energy system (MES), which consists of multiple combined cooling, heating and power (CCHP) systems connected by the district electrical network and district heating/cooling network. In the first stage, the optimal objective is to minimize the annual capital and operating costs of the CCHP systems, as well as to obtain the optimal type and capacity of the equipment using the system parameters and load data. Then, a novel nodal energy pricing strategy is first proposed and calculated using the flow-tracing method. The nodal energy price comprises two parts: (i) nodal producing price and (ii) nodal transmission price. In the second stage, depending on the electrical, heating and cooling prices, a load aggregator (LA) is applied to manage the electrical, heating and cooling loads of the end users using an integrated demand response (IDR) program. The objective of the LA is to minimize the annual consumption expense of the end users and update the loads for the optimization in the first stage. In addition, the IDR program includes electricity-load shifting and flexible electrical, heating/cooling supply. Three cases are presented to demonstrate the effectiveness of the planning and design method and to show the influence of the nodal energy prices on the IDR program as well as the penetration of solar energy based on a reconstructive MES in northern China. [ABSTRACT FROM AUTHOR]

This paper demonstrates, through a case study of a Chinese city, a process to locate and size both logistics terminals (LTs) and shopping centres, with the objective of minimising the total costs of retail supply chains, including personal shopping trips. We modelled these supply chains from the intercity transportation nodes, through LTs, through shopping centres (SCs) and on to the final consumers. We found a solution that approached minimising all the operating and capital costs. We compared our solution with reality, and found that our results closely replicated real life. We concluded that this case study supports the use of this planning process. One can use such models to indicate how local planning authorities can reduce environmental costs while at the same time reducing total logistics costs. [ABSTRACT FROM PUBLISHER]

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From a perspective of coordinating fiscal and monetary policies, this study constructs the government innovation subsidy indicator using the text search method, and examines the impact and mechanisms of government innovation subsidy on corporate research and development (R&D) investment, then investigates how expansionary monetary policy influences this effect. We find that government innovation subsidy can be a booster for corporate R&D by reducing corporate debt financing cost and increasing internal financing, and loose monetary policy suppresses the positive effect of government innovation subsidy on corporate R&D investment. This study offers macroeconomic policy implications that support corporate innovation. [ABSTRACT FROM AUTHOR]

This research explores the relationship between a company's commitment to Environmental, Social, and Governance (ESG) factors and its capital equity cost (COE) in the Chinese market. Using statistical methods like regression analysis, the study aims to uncover how ESG disclosure relates to COE. Key findings reveal that environmental and social disclosures increase capital equity costs, indicating higher costs for companies with strong ESG practices. However, governance disclosures don't significantly impact COE, suggesting that environmental and social aspects carry more weight in shaping investor perceptions and influencing costs compared to governance. The research also shows that this ESG-COE link is more significant for financially sound companies, indicating greater cost implications for strong performers. The study further demonstrates that strong ESG practices are perceived as lower risk, leading to lower capital equity costs. Chinese firms with high ESG scores tend to have lower capital costs, indicating rising investor appreciation for ESG in the Chinese market. The study's robustness check supports these findings, reinforcing the growing importance of ESG in investment decisions. This research has implications for companies, investors, and policymakers, stressing the role of ESG in attracting investment and reducing costs. Policymakers can use these insights to encourage improved ESG practices and transparency. Overall, the study underscores ESG's impact on capital equity costs in China, offering valuable insights for decision-makers and highlighting ESG's relevance in financial choices. [ABSTRACT FROM AUTHOR]

This study examines the effect of stock liquidity on corporate risk-taking behavior. We find that stock liquidity has a positive and significant effect on corporate risk-taking. We find consistent results when we use the split share structure reform (SSSR) in China as an exogenous shock to stock liquidity. We also investigate the channels through which stock liquidity affects risk-taking and find that increases in stock liquidity lower the cost of capital and increase the pay-for-performance sensitivity of managers. Finally, we conduct cross-sectional tests to rule out privatization as an alternative explanation for our results. Our study sheds light on the real effects of stock liquidity and contributes to the understanding of capital market development. [ABSTRACT FROM AUTHOR]

In 1993 the Hong Kong Government implemented a methodology for capital cost estimating using risk analysis (ERA) in its estimating for the planning of public works projects. ERA is a simple approach and is used to estimate and calculate an amount of money to allow for uncertainties associated with a project. This calculated amount of money replaces the pre-1993 contingency allowance, which was merely a percentage addition on top of the base estimate of a project. A team approach is adopted to identify, classify and cost the uncertainties associated with a project. The sum of the 'average risk allowance' for the identified risk events thus becomes the 'contingency'. A study of the effect of ERA was carried out to compare the variability and consistency of the contingency estimates between non-ERA and ERA projects. This paper presents preliminary results of a survey which compares a total of 72 non-ERA and 19 ERA projects. The result shows a significant difference in variation and consistency between these groups. It indicates initial success in using the ERA method for public works projects to reduce unnecessary and exaggerated allowance for risk. Further improvement and refinement of the ERA method is suggested. [ABSTRACT FROM AUTHOR]

Using data for firms publicly listed in China A-share markets during 2008 and 2019, this study is one of the first to treat Green Credit Guidelines implemented by the government in 2012 as a quasi-natural experiment and construct a difference-in-differences (DID) model to empirically examine the impact of credit availability on corporate risk-taking. Our study finds that credit restrictions on heavily polluting firms reduce their risk-taking behaviour, and the impact is more pronounced on small firms, non-state-owned enterprises, firms without institutional investors or firms located in low marketisation regions. In addition, our study demonstrates that credit restrictions increase financing constraints and reduce investment levels, which leads to less corporate risk-taking. Furthermore, our research shows that credit restrictions increase the cost of debt and reduce investment value and development capacity for firms in energy intensive and high pollution industries. An important implication is that to effectively curb the expansion of heavily polluting industries and promote environmental transformation, green credit policies should target small firms, firms with less state and institutional ownership as well as firms located in regions with poorer institutional reform. [ABSTRACT FROM AUTHOR]

We examine whether the credit market participants price operating lease differently from finance lease in the perspective of risk sharing. Using a unique setting that the new lease standard is enforced in China since 2019, we find that operating (finance) lease asset shares are negatively (positively) related to lessees' costs of debt, the risk-sharing role of operating lease assets is a mechanism of reducing COD, and this effect is more significant at firms with more financial constraints and insufficient cash flow. We fill the gap in the literature with a contribution to separate the risk-sharing effect from the accounting treatment effect in the association between two kinds of lease and costs of debt. These findings have important implications for policymakers and companies. [ABSTRACT FROM AUTHOR]

Purpose: Prefabricated construction (PC) will play a vital role in the transformation and upgrading of the construction industry in the future. However, high capital cost is currently one of the biggest obstacles to the application and promotion of PC in China. Clarifying the factors that affect the PC cost from the perspectives of stakeholders and exploring key cost control paths help to achieve effective cost management, but few studies have paid enough attention to this. Therefore, this research aims to explore the critical cost influencing factors (CIFs) and critical stakeholders of PC based on stakeholder theories and propose corresponding strategies for different stakeholders to reduce the cost of PC. Design/methodology/approach: Based on the stakeholder theory and social network theory, literature review and two rounds of expert interviews were used to obtain the stakeholder-associated CIFs and their mutual effects, then the consistency of the data was tested. After that, social network analysis was applied to identify the critical CIFs, critical interaction and key stakeholders in PC cost control and mine the influence conduction paths between CIFs. Findings: The results reveal that the cognition and attitude of developer and relevant standards and codes are the most critical CIFs while the government, developer and contractor are crucial to the cost control of PC. The findings further suggest that measures should be taken to reduce the transaction costs of the developer, and the contractor ought to efficiently apply information technology. Moreover, the collaborative work between designer and manufacturer can avoid unnecessary cost consumption. Originality/value: This research combines stakeholder management and cost management in PC for the first time and explores the effective cost control paths. The research results can contribute to clarifying the key points of cost management for different stakeholders and improving the cost performance of PC projects. [ABSTRACT FROM AUTHOR]

Operating leverage increases profitability and reduces optimal financial leverage. Thus, operating leverage generates a negative relation between profitability and financial leverage that is thought to be inconsistent with the trade-off theory but is commonly observed in the data. We demonstrate the effect of operating leverage on firms' profitability and financial leverage, as well as on the empirical relation between profitability and financial leverage, by using China's entry into the World Trade Organization in 2001 and its effect on the capital–labor ratio of U.S. firms. [ABSTRACT FROM AUTHOR]

Long-term exposure to water contaminated with pharmaceutical and personal care products (PPCPs) can cause potential harm to humans and ecosystems. Industrial manufacturing discharge is the source for PPCPs emission into natural water. Since industrial source discharge inventories and environmental fate information of PPCPs are lacking in China, a fast low-cost estimation method of PPCPs industrial source discharge is proposed in this paper. The estimated results are fitting well with the existing field monitoring data, and shows that China's highly industrialized eastern provinces have significantly higher discharge intensity than western and northern provinces. This study provides a valuable approach for rapid response to PPCPs emergency. [Display omitted] • The method for PPCP industrial source discharge estimation is improved in terms of time and capital cost. • Production source emission factors for PPCPs are calculated. • The total discharge from typical PPCP production sources in coastal regions was 227.66 tons in 2019. • Production source discharges of typical PPCPs were highest for caffeine and lowest for chlortetracycline. [ABSTRACT FROM AUTHOR]

We show that those Chinese listed companies that are riding high on the media corporate social responsibility (CSR) ranking lists tend to have greater advertising (sales) expenses and poor environmental performance. This observation suggests that some companies opportunistically use media to greenwash their image, hoping to capture economic rents. Indeed, our evidence shows that greenwashing firms benefit in the lending market by exploiting the media to gain a kind of environmental, social, and governance (ESG) endorsement, thereby allowing them to achieve a lower cost of debt and to experience lower collateral obligations. The evidence suggests an adverse incentive to exploit ESG awareness via media coverage in weak institutional environments and opaque ESG disclosure regimes. [ABSTRACT FROM AUTHOR]

We study the value of the political connections of directors on Chinese boards. We build a new dataset that measures connections of directors to members of the Politburo via past school ties, and find that private firms with politically connected directors in the boardroom get on average about 16% higher subsidies over sales per firm (7 million yuan). Connected state-owned enterprises (SOEs) access debt at 11% cheaper cost, which translates into average savings of close to 32 million yuan per firm in lower interest payments. We find that the value of the political connections persisted after the anti-corruption campaign (ACC) of 2012. It became weaker for the cost of debt in SOEs, but stronger for subsidies to private firms. We argue that the value of connections in the private sector increased after the ACC because they became a less risky alternative to corruption. We also show that connected firms do not perform better. [ABSTRACT FROM AUTHOR]

• The mathematical model of different uncertainties is presented. • The multi-objective stochastic-information gap decision model is developed considering multiple uncertainties in the SOP planning. • The general and systematic solving method of the multi-objective stochastic-information gap decision model is proposed. • The interaction between the power fluctuation and the growth uncertainty can be analyzed by means of the multi-objective stochastic-information gap decision model. Recently, soft open points (SOPs) attract much attention due to providing power flow control and voltage regulation to the distribution system (DS). However, multiple uncertainties and expensive capital cost are referred to as thorny issues in the SOPs planning. In this paper, a multi-objective stochastic-information gap decision (MS-IGD) model is presented to alleviate multiple uncertainties with the limited budget. First, a deterministic SOP planning model is built to minimize the comprehensive cost of distributed system operator (DSO). Then, a MS-IGD model is formulated considering power fluctuation and growth uncertainty in distributed generators (DGs) and loads. To solve this model effectively, it is transformed to a mixed integer linear programming (MILP) by the polyhedron linearization technology, linear programming theory and ε constraint algorithm. In case studies, based on a prospective DS from northern China, the SOPs planning scheme with corresponding accommodation range of multiple uncertainties is presented. Numerical results not only authenticate that the worst-case envelope bound should not be decided in advance because of the complicated relationship between multiple uncertainties and investments, but also demonstrate the negative correlation between the deviation of power fluctuation and growth uncertainty under the same budget. [ABSTRACT FROM AUTHOR]