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We examine the impact on bond credit ratings of reduced information processing costs from two investor interactive platforms in China, i.e. 'Easy Interaction' and 'e-Interaction'. These online platforms provide investors with a channel to directly communicate with listed companies and learn much of corporate operations. Replies and explanations from management assist investors in integrating disclosed information and reducing information processing costs. The reduced costs likely impose reputational concerns on credit rating agencies (CRAs), leading to more stringent rating standards and less rating inflation. We find that more interactions result in lower credit ratings of corporate bonds. This effect is more pronounced for bonds rated by global-partnered CRAs and bonds whose issuers have higher information complexity, and less pronounced for bonds whose issuers have official consultation websites. Further analyses show that reduced information processing costs are associated with more information contents in rating downgrades and timelier ratings. Our findings provide evidence for the disciplinary effect of reduced processing costs on CRA behavior. [ABSTRACT FROM AUTHOR]

The ordered logit (OLogit) model is a regression model for an ordinal dependent variable. For a conventional time series OLogit model, both the dependent variable and the independent variables are required to be observed at the same frequency. However, this requirement is violated under the circumstance of mixed frequency data. To this end, we introduce the unrestricted MIDAS (U‐MIDAS) method into the OLogit model and develop a novel U‐MIDAS‐OLogit model, in which high‐frequency covariates are used to predict a low‐frequency outcome with ordinal categories. The U‐MIDAS‐OLogit model enlarges the application of OLogit and enables to produce timely forecast. To verify its effectiveness, we conduct extensive Monte Carlo simulations. The numerical results show that the U‐MIDAS‐OLogit model is superior to several typical OLogit models in terms of prediction performance. We then apply the U‐MIDAS‐OLogit model to predict credit ratings of listed companies in China and the US, respectively. The empirical results also confirm its promising in practical applications. [ABSTRACT FROM AUTHOR]

This study examines the relationship between inventory performance and credit ratings and explores how this relationship is affected by supply chain concentration in the context of small- and medium-sized enterprises (SMEs). Financial indicators and bond rating data for SMEs in China's manufacturing sector are obtained from two large public data sources, and hierarchical ordered logistic regression analysis is used to investigate our research questions. The findings show that inventory performance is positively associated with SME credit ratings and that this relationship is positively moderated by customer concentration but negatively moderated by supplier concentration. This study provides valuable theoretical contributions to the interface of supply chain and finance research and offers important managerial implications that SMEs can follow to increase their credit ratings. [ABSTRACT FROM AUTHOR]

Asset-backed securities are developed through complex processes such as asset restructuring and credit enhancement. Therefore, the information asymmetry between issuers and investors is greater compared to traditional securities, which imposes higher requirements on information disclosure for asset-backed securities. Asset-backed securities have characteristics such as diversified disclosers, differentiated disclosure content, and specialized risk factors. China has already formulated a series of rules and regulations regarding information disclosure of asset-backed securities. It is imperative to develop specialized laws and regulations for asset-backed securities, encompass original equity holders and credit enhancement agencies as information disclosers, incorporate information such as underlying asset details, cash flow projections, and credit ratings and enhancements into the disclosure content, and improve the legal liability rules to effectively address false disclosures. [ABSTRACT FROM AUTHOR]

The State Taxation Administration (STA) of China established the tax credit rating system in 2015. Together with the banking regulatory authorities, STA entitles the higher‐level firms to favourable bank lending. We find that higher‐level firms are positively associated with capital investment, R&D expenditures and employment. These effects are more pronounced in private firms, small firms, and financially constrained firms. We identify that firms rated higher‐level receive more debt financing at lower cost, and hoard less cash for the precautionary reasons. Our findings highlight the importance of the government rating, especially a developed credit rating market in which is absence in emerging economies. [ABSTRACT FROM AUTHOR]

While global supply chains provide firms with a buffer against local shocks, they expose firms to multiregional risks. The COVID‐19 pandemic and its differential impact on different regions in the world offer an opportunity to explore these effects. We investigate the multiregional supply chain risk by focusing on credit risk measured by abnormal credit default swaps (CDS) spreads and US–China supply chain networks. Our evidence shows that local risks propagate through global supply chains to other regions. Using a matched sample, we find that abnormal CDS spreads for firms with Chinese supply chain partners increase by 12% to 13% relative to the average raw CDS spreads due to supply chain disruptions during the economic shutdown in China, and the abnormal CDS spreads decrease by 9% to 13% relative to the average raw CDS spreads when the supply chain activities resume in China. We also find that having a more global customer base can mitigate the effects of local household demand shocks. Lastly, we discover that firm size, supply chain network centrality, cash holdings, inventory, strong credit ratings, capital redeployability, and the number of segments increase resilience to global supply chain shocks, while financial leverage, operational leverage, and market competition weaken supply chain resilience. [ABSTRACT FROM AUTHOR]

In recent years, credit reporting agencies are under pressure to reform themselves to reach higher levels of transparency. In this context, the critically considered digitally-implemented credit reporting system in China—the Chinese Social Credit System (SCS)—is of particular interest. Compared to traditional credit reporting systems, the SCS has a wider range of goals, including enhancing social control, establishing a state-defined notion of trustworthiness and increasing market efficiency. It covers not only Chinese citizens, companies, and organizations but also foreign ones which have activities in or with China. This paper studies the transparency of the SCS from the perspective of foreign organizations. We conducted interviews with employees from German organizations that are engaged in commercial activities in or with China to understand how transparent the SCS is to them and to gather their perceptions about the role of the system in increasing the transparency of the Chinese business landscape. Our analysis of the interviews showcased an interesting contrast between reservations with respect to the system's transparency and the belief that the SCS would enhance the transparency of the Chinese business landscape. Drawing on our analysis of the interviews, we discuss factors affecting SCS transparency and the role of the SCS in increasing corporate transparency. We further highlight that there are inherent limits when credit rating systems (such as the SCS) aim to provide transparency about market participants, while pursuing other objectives at the same time. [ABSTRACT FROM AUTHOR]

This paper aims to effectively reduce CO2 emissions by examining the impact of three distinct incentive and constraint policies on the quality of rating and certification information in China's green bond issuance market. To accomplish this, the government has implemented incentives, while regulators have introduced constraints to curb the spread of inflated rating and certification information. We build on the integrated rating and certification regulation mechanism by presenting a two-stage Stackelberg game model that involves four key participants: the China Securities Regulatory Commission, local governments, green evaluation and certification agencies, and credit rating agencies. We incorporate environmental effects indicators into the expected utility of rating and certification agencies to investigate the equilibrium conditions under three policy scenarios: a single financial incentive policy, a single regulatory constraint policy, and a combined incentive and constraint policy. The paper employs Stackelberg game theory to analyze how different policies mitigate the occurrence of "inflated" ratings and "greenwashing" in certifications. Numerical analysis is conducted to validate the theoretical findings. Moreover, we assess the impact of these policies on the quality of rating and evaluation information, using data from China's green bond issuance market between 2016 and 2021. Our research offers valuable management insights and regulatory recommendations for both regulators and local governments. [ABSTRACT FROM AUTHOR]

We study the relation between bond characteristics and corporate bond returns in China's two distinct and segmented bond markets--the interbank market and the exchange market--with a large cross-sectional dataset of 8318 corporate bonds from January 2010 to December 2022. Corporate bonds with large sizes, long maturities, old ages, poor credit ratings and large Amihud illiquidity earn high monthly returns in the interbank market. The return predictive patterns of bond size, time to maturity, and credit rating are similar in the exchange market, but bond age and Amihud illiquidity predict returns in the opposite direction, implying market segmentation. We construct two factors based on credit rating and Amihud illiquidity to represent the common risk of corporate bonds--credit risk and liquidity risk--and use the Hansen-Jagannathan distance to evaluate the performances of factors in explaining the returns of corporate bond portfolios. We find that the two characteristic-based factors help reduce the model specification errors of the five factors in Fama and French (1993). [ABSTRACT FROM AUTHOR]

Construction supervision companies (CSCs) in China are engaged by owners mainly to ensure a project is constructed safely and to the quality standards as required under the law in a supervision system that has existed for decades, their credibility and integrity being vital for project safety assurance and quality control. Recently, the Chinese government has proposed a credit scoring mechanism to assess the credibility of CSCs and requested the incorporation of credit scores into the CSC selection processes for public projects. This study investigates the status quo of the credit scoring mechanism and evaluates how credit scores have impacted the competitiveness of CSCs when bidding for supervising public projects by analyzing the bidding results of 5582 public projects and credit scores of 514 CSCs in Nanjing, the capital city of Jiangsu Province in China. The results show that (1) the average CSC credit scores have followed a downward trend in recent years; (2) the score weights in the selection process have significantly increased and the scores start to impact on bidding results when their weights are at or above 4%; (3) signs of local protectionism have been observed as local CSCs have significantly higher credit scores than non-local CSCs; and (4) high scoring CSCs are more competitive than others in terms of revenue generation. The study provides an insightful understanding of China's existing credit scoring mechanism and its impact on the selection of CSCs for public sector projects, often a major concern of policymakers, researchers, and industry practitioners. [ABSTRACT FROM AUTHOR]

This study analyzes the impact of enterprise integrity on corporate innovation from the perspective of the contract theory. We used the tax credit ratings of listed firms provided by China's State Administration of Taxation from 2014 to 2017 to measure enterprise integrity. Our results suggest that enterprises with tax integrity have a higher intensity of research and development (R&D) investment than those without. In addition, institutional investors and financing constraints play an incomplete intermediary role between tax integrity and corporate innovation. The impact of tax integrity on corporate innovation is heterogenous; tax integrity has a more significant impact on state-owned enterprises, non-high-tech enterprises, and enterprises in areas with lower marketization levels. This study does not only complement the theoretical research on integrity and corporate innovation; it also provides empirical evidence for stakeholders to understand the economic consequences of integrity from the perspective of the contract theory. [ABSTRACT FROM AUTHOR]

We examine the incremental predictive power of credit rating on a firm's future financial distress using a sample of Chinese credit ratings from 2008 to 2019. Our findings suggest that such credit ratings, especially those using investor-pay mode, improve the incremental predictive power of firms' future financial distress. Specifically, a one notch rating level increase of issuer-pay (investor-pay) credit rating translates into 1.69% (10.24%) lower probability of financial distress. The findings are robust to using a propensity score matching sample and an alternative metric for financial distress. Additional analysis suggests that the incremental predictive power of credit rating on financial distress is more salient for subsamples of credit ratings 1) issued by credit rating agencies (CRAs) with large market shares, 2) when a CRA has a low likelihood of collusion with a firm, or 3) when a firm receives both investor-pay and issuer-pay credit rating. [ABSTRACT FROM AUTHOR]

Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community. [ABSTRACT FROM AUTHOR]

This paper analyzes a BigTech lender's pricing strategies in the business‐to‐customer unsecured loan market using a proprietary data set of consumer loans in China. We find that the credit rating constructed by the BigTech lender is informative of the customers' default risk. Moreover, the interest rate decreases and the credit limit increases with the credit rating. Interestingly, the BigTech lender charges different interest rates to its customers based on the customer channel, although it does not provide information about the customers' default risk. Following the passage of the China Banking Regulatory Commission Act, which reduced credit market competition, the BigTech lender increased the current rate and decreased the credit limit. We rationalize these empirical findings in a simple model of credit contract design. [ABSTRACT FROM AUTHOR]

This paper proposes a procedure to measure firms' longitudinal accounting comparability and investigates whether it affects bond risk premiums. The results provide robust evidence that bonds of firms with more longitudinally comparable accounting information have lower credit spreads. This effect is stronger when the firms' financial performance is poor and for bonds with speculative credit ratings. Results also reveal that firms with less longitudinally comparable accounting information are more informationally asymmetric and do have a higher expected default probability. Finally, the effects of the longitudinal and the cross‐sectional comparability in reducing bond credit spreads are incremental to each other. [ABSTRACT FROM AUTHOR]

This study examines the key influencing factors of voluntary dual ratings selection in corporate bond financing and the effect of dual ratings on risk premium and default risk, based on corporate bond data issued from 2016 to 2021. It shows that the worse the bond issuers' credit qualifications, the more likely they are to seek dual ratings before issuance. Compared to a single credit rating, the risk premium for a bond with dual ratings is lower, and the effect becomes more significant in the low-rated and non-listed company samples. There are dual ratings before bond issuance, and the higher the average credit rating level of the bond, the lower the bond's default risk. The research findings provide a theoretical basis and empirical evidence for the practice of voluntary dual ratings in China, expand research on the influencing mechanism of bond issuance pricing in the context of voluntary dual ratings selection, and examine the information content of credit ratings from the perspective of their ability to predict bond default. [ABSTRACT FROM AUTHOR]

China's Social Credit System (SCS) has been widely considered a centralized surveillance project, whereas recent research found multiple scoring systems co-existing in various fields at multiple administrative levels and in diverse forms. Despite the broadened view toward the complexity of SCS, these research projects continue to focus on SCS mainly as political and digital control mechanisms. Instead, this paper is interested in the social and cultural meanings of SCS constructed in the media, both at the national and local levels. Based on the analyses of news reports since the year 2003, when the term SCS was officially coined, this paper examines the historical narratives about SCS, including its rationales, stakeholders, and intended goals/tasks. It argues that the SCS construction has been a societal project anchored in a distinct moral orientation of financial credit. While credit systems are often used to classify consumers and financial subjects in Western contexts, the case of Chinese SCS shows that the moral dimension of financial credit scoring has enabled its spread into other non-financial domains. Also, the institutionalization of such moral standards is considered an effective approach to addressing various socio-economic and ethical issues that have long baffled economic development and social justice in China's reform era. [ABSTRACT FROM AUTHOR]

This study investigates the effect of market competition on the reputational concerns of credit rating agencies (CRAs) in the Chinese bond market. We find credit ratings increase when the market share distance between an incumbent CRA and its closest peer competitor decreases. This spatial competition effect only exists at the provincial level. We also find the market competition deteriorates the ability of ratings to predict future bond defaults, while the correlation between credit ratings and market‐implied credit spreads is unaffected. Our findings suggest that because of the market inefficiency in emerging economies, CRAs privilege current profits over reputational concerns. [ABSTRACT FROM AUTHOR]

Public credit risk is an important factor in private capital's decision to participate in public–private partnership (PPP) projects. We explore why private capital participates in such projects using dynamic game theory. We assess the framework of credit rating agencies assessment of local fiscal risk and construct a measure of fiscal commitment risk and public credit risk evaluation indicators. Using China's provincial panel data from 2013 to 2019, we found that government credit risk reduces private partner participation. Private capital participates in PPP projects for profit if the local government has established good credit awareness and contractual spirit. [ABSTRACT FROM AUTHOR]

In this paper, a method for dealkalization and upgrading of high alkali coal by supercritical CO2 fluid-citric acid extraction system is proposed. The leaching mechanism was explored by microstructural changes of elements and functional groups in coal samples, and single-factor optimization experiment was conducted. The result shows that supercritical CO2 fluid-citric acid extraction can effectively remove alkali and alkaline earth metals. The extraction mechanism is the reaction of H+ with inorganic minerals and the ion exchange of H+ with the form of phenolic hydroxyl and carboxyl groups. Under the optimum conditions, the removal rates of Ca and Mg are 44.95% and 65.75% respectively. The ash content of coal is 2.42%, and the content of Na2O (calculated by ash) is 1.13%, which meet the standards of power coal in China. Supercritical CO2 fluid-citric acid extraction is an effective and promising method for the cleaning of high alkali coal. [ABSTRACT FROM AUTHOR]

Copyright of Policy & Internet is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Although China's bond market is expanding quickly and on a bigger scale than the stock market, it still faces a number of issues. One issue that restricts its long-term development is the relatively small scale of credit bonds. For the growth of credit bonds, it is necessary to boost the credit rating market first. In this study, it is assumed that the higher the credit rating of the bonds, the lower the issue cost will be. To prove this hypothesis, an empirical analysis has been made herein on the influence of credit ratings on the bond floatation market. [ABSTRACT FROM AUTHOR]

This paper uses the geographic distance between corporate locations and headquarters of credit rating agency as a proxy for corporate private information acknowledged by rating agency, to investigate the effect of corporate private information on its credit ratings. Our samples include the Chinese institutional and corporate bond's credit ratings from 2008 to 2018. Results indicate the geographic distance is negatively associated with the corporate private information accessed by rating agency, leading to a higher information asymmetry, worse institutional and corporate bonds' credit rating and lower quality of the rating information content. Results remain solid and significant after controlling for the implicit guarantee of the government, corporate public information, ownership structure and analysts' skills. We find corporate private information generates more values for corporates whose information environments are more complex, reflected in more business segments and less covered analysts. We also find the open of high-speed railway in China facilitates rating agency's access to corporate private information, thus reducing the impact of geographic distance, while the lockdown periods of Covid-19 pandemic in China suddenly increase the cost of collecting private information and thus aggravating the distance effect. [ABSTRACT FROM AUTHOR]

Objective: This paper studies the impact of the subjective life expectancy of the elderly on their commercial pension insurance participation at micro perspective, providing new evidence to explain the motivation of commercial pension insurance participation in China. Methods: Using 4 waves of data from the China Health and Retirement Longitudinal Study (CHARLS) from 2011 to 2018, a multiple linear regression model is constructed to investigate the effect of subjective life expectancy on commercial pension insurance participation among the Chinese elderly, and IV model estimation shows that the results are robust. Meanwhile, the heterogeneity of the effect of elderly life expectancy on commercial pension insurance participation behavior among different characteristic groups is also studied. Results: A one standard deviation improvement in our measure of subjective life expectancy predicts a 0.9% point higher participation rate in commercial pension insurance. We also find that there is significant heterogeneity in the effects of subjective life expectancy on the participation of elderly people in commercial pension insurance with respect to gender, education, hukou, and wealth. Conclusion: This paper provides a new perspective to explain the factors influencing commercial pension insurance participation in China. We suggest that improving residents' awareness of life expectancy is beneficial to their reasonable retirement planning, in the background of stepping into an aging society in China. [ABSTRACT FROM AUTHOR]

Copyright of Chinese Journal of Preventive Veterinary Medicine / Zhongguo Yufang Shouyi Xuebao is the property of Chinese Journal of Preventive Veterinary Medicine Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper selects weekly transaction data from the Shenzhen Exchange and Shanghai Exchange for 2012 to 2018 to investigate factors including corporate size, the ration of book-to-market, default risk, term and credit rating that influence the corporate bond spread. It can be concluded that small firms prefer to issue high yield spread bonds while large firms issue bonds with low yield spreads. High (low) book-to-market firms issue high (low) yield spread bonds. The most important factors influencing corporate bond spread yield are default risk, terms, and credit ratings. We suggest that China Securities Regulatory Commission should encourage small firms to issue corporate bonds and there should be more kinds of credit ratings bonds in China bond market. [ABSTRACT FROM AUTHOR]

This article establishes a novel credit rating model for small enterprises, thereby solving the problem that commercial banks cannot accurately obtain financial information about small enterprises or reasonably evaluate the credit risk of small enterprise loans. Through the identification of default status and removal of redundant information for indicator screening, this article adopts a weighting method that can be used to classify small enterprises. The empirical results show that the discriminant precision of default status by the credit rating system of China's small enterprises, constructed by this article, is up to 91.9%. The weighting results show that in the credit rating of small enterprises, financial indicators cannot reflect all the liabilities, and the role of qualitative indicators in credit ratings is more important. This article empowers 30 indicators based on the principle of distinguishing different types of customers, classifies customers into nine different levels, and avoids the unreasonable phenomenon that default customers have higher credit scores than non-default customers. The results can help commercial banks to distinguish customers of different significance levels. [ABSTRACT FROM AUTHOR]

In China, with the rise of third-party payments such as WeChat Pay and Alipay, the traditional business of banks has been greatly affected. Banks can encourage and expand QR code payments to merchants. Therefore, it is meaningful to analyze and study the QR code work of banks. The purpose of this study is to analyze the effect of the execution of the zero-rate of the comprehensive payment QR code combined with the payment cycle and Funds Transfer Pricing (FTP) on commercial banks in China. Based on the manually collected customer data of Chinese commercial banks, this paper conducts a case analysis combined with the calculation method of financial indicators. As a result of the study, it was found that commercial banks need to continue to implement the policy as the advantages of introducing the integrated QR code fee rate 0 policy are greater than the disadvantages. This paper provides feasible suggestions on how to quickly occupy the offline payment market for commercial banks, which has guiding significance for commercial banks' marketing decisions. Presently, there are few studies on the zero-rate subsidy policy implemented by Chinese commercial banks. [ABSTRACT FROM AUTHOR]

This study examines whether and how tax integrity affects the cost of debt. Whereas most previous studies capture firms' trust indirectly, we capture a firm's earned trust more directly by using its tax-paying credit rating as a proxy. We find that tax integrity is negatively related to the cost of debt. We also examine whether the firm ownership affects the relationship between a firm's tax integrity and the cost of debt, and find a negative effect that is only significant for non-state-owned enterprises. Finally, we identify business risk as a channel through which tax integrity affects the cost of debt. [ABSTRACT FROM AUTHOR]

To protect the interest of the investors, the corporate bond market in China has implemented a trustee system. However, before the first bond default happened in 2014, implicit government guarantee for the issuers ensured a market with zero default. In recent years, the rising amount of corporate bond defaults has ignited concerns about the credit risk and brings China's underdeveloped trustee system to authorities' attention. Based on the textual content of the trustee reports from 2013 to 2018, this paper examines the association between the textual content of trustee reports and the credit spreads. Results show that the extent of risk disclosure in trustee reports is positively correlated with the credit spreads. Furthermore, a higher positivity of the trustee reports is associated with lower credit spreads. These results reveal the monitoring and informational role of the trustees in China. Also, incremental explanatory power of the trustees lends support for improving corporate bond risk management. [ABSTRACT FROM AUTHOR]

With the development of science and technology, the rapid rise of multimedia technology has led to significant changes in computer network system, including mobile communication system, and plays a more and more important role in people's life. The shared economy as an emerging business model is rapidly emerging at home and abroad and is strongly affecting and changing the production and lifestyle of people everywhere. The business model of sharing economy promotes the reuse of social resources as multimedia networks in China and has become a prominent highlight of China's economic transformation and upgrading in the new era. Internet finance is a new product, a new form of integration between the sharing economy and the traditional financial industry. Government work reports have repeatedly mentioned the need to promote Internet financial regulation and healthy development. It is especially important to study the new characteristics of Internet finance development under China's shared economy, reveal the development of Internet finance, and understand its development trend. This paper takes Internet finance as the research object, discusses its concept and characteristics, and analyzes the development status of Internet finance under the shared economy, it is found that in 2017, the potential market scale of China's personal credit investigation industry was 26.9 billion yuan, and the actual market scale was 22.2 billion yuan. In this way, problems in the development of the Internet under the Chinese sharing economy were discovered. The purpose of this paper is to explore the development of Internet finance under the sharing economy, to discover its development trends, and to propose improved business models. This paper summarizes the current development difficulties of Internet finance in the sharing economy and puts forward corresponding suggestions for these dilemmas, with a view to have reference value. [ABSTRACT FROM AUTHOR]

The main goal of this paper is to discuss how we establish the framework of CAFE system by applying the hologram approach in Fintech which is suitable for Chinese markets, and how our CAF system is able to resolve the current three major issues of "rating being falsely high, the differentiation of credit rating grades being insufficient, and the poor performance of predicting early warning". After nearly 30 years of rapid development in China's financial industry, the current domestic credit rating market is facing at least these three problems: 1) the rating is falsely high; 2) the differentiation of credit rating grades is insufficient; and 3) the poor performance of predicting early warning and related issues. These issues and problems show that by so far there is no Credit Assessment System suitable for China with "BBB" credit rating grade as the basic investment level in accordance with international standard for capital markets in the practice, which have severely restricted the healthy development of Chinas capital market. From the perspective of financial technical processing, the main reason for this phenomenon is due to a simple fact that there is not enough default (bad) samples available from the markets in China, which led to the difficulty for domestic and foreign rating agencies to establish reliable credit rating assessment criteria for entities and bonds/debts for capital markets in China. Thus we must consider how to create a reasonable number of "bad samples by using new approach in dealing with non-structured data, which is called "hologram approach as a fundamental tool. In this way, it allows us to extract risk features based on the heterogeneous big data from different sources as breakthrough points to establish the so-called "CAFE Risk Assessment System" (CAFE System). [ABSTRACT FROM AUTHOR]

The literature has widely studied the market response to the financial news or events but mainly focused on the stock market. This article associates the concept of internet news with the bond market response and attempts to examine how credit rating agencies (CRAs) and bond investors, two important bond participants, react to financial news on the internet with a range of multiply regressions. Our empirical study leads to several findings. First, CRAs tend to ignore the warnings of financial news on the internet, whereas bond investors strongly react to such news. Second, there is an asymmetry in bond investors' reactions to good news compared to bad news, with investors being more sensitive to bad news. Third, there is heterogeneity in the psychological reaction where bond investors do not react to the news about central state-owned enterprises (SOEs) but to the news about other enterprises. Finally, there is an asymmetric response driven by news timeliness that bond investors are more sensitive to the latest news articles than old ones. Overall, our study confirms the existence of psychological reactions to the financial news on the internet in China's bond market, which has significance for keeping bond market participants from overreacting or underreacting to market news. [ABSTRACT FROM AUTHOR]

Copyright of Policy & Internet is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The online trading platform Alibaba provides financial technology (FinTech) credit for millions of micro, small, and medium-sized enterprises (MSMEs). Using a novel data set of daily sales and an internal credit score threshold that governs the allocation of credit, we apply a fuzzy regression discontinuity design (RDD) to explore the causal effect of credit access on firm volatility. We find that credit access significantly reduces firm sales volatility and that the effect is stronger for firms with fewer alternative sources of financing. We further look at firm exit probability and find that firms with access to FinTech credit are less likely to go bankrupt or exit the business in the future. Additional channel tests reveal that firms with FinTech credit invest more in advertising and product/sector diversification, particularly during business downturns, which serves as effective mechanisms through which credit access reduces firm volatility. Overall, our findings contribute to a better understanding of the role of FinTech credit in MSMEs. This paper was accepted by Haoxiang Zhu, finance. [ABSTRACT FROM AUTHOR]

Default prediction is an important issue in credit lending, specifically for personal loans. Zhima Credit Score, as the most popular third party online credit scoring in China, reflects borrower's credit status. This paper reveals the influence of Zhima Credit Score on default prediction for personal loans. An experiment is designed and performed on a dataset which includes more than 20 thousand online personal loans. The experimental results show that the Zhima Credit Score can indeed improve the classification performances, and the degree of improvement is different on different classifiers. Among the six classifiers, SVM have results which are most obvious improved. [ABSTRACT FROM AUTHOR]

As a significant part of the bond market, credit rating means a lot to investors and issuers. Few studies compare the differences between the existing rating methods and the actual credit performance (default/non-default) based on the underdeveloped bond market, which fails to guide the application of credit rating methods in the real market. The problem of the low rating quality of China's rating agencies has been failing to meet the challenge. The reference function of rating for credit risk prevention and bond pricing has been weakened or even invalid. From a quantitative perspective, this paper focuses on the validity of rating results and the shortcomings of the mainstream rating framework. The results show that the current methods pay too much attention to total assets size but ignore the debt burden and profitability of enterprises, which is different from the actual default impact factor. This finding supports the macroeconomic policy of urging the establishment of a rating quality verification mechanism with default rate as the core, meaning it is conducive to constructing a healthy credit market. [ABSTRACT FROM AUTHOR]

We compare the market reactions to the COVID-19 crisis of Chinese listed firms with high versus low tax integrity. We show negative market reactions to the crisis across all firms, which is consistent with investors expecting COVID-19 to negatively impact firms' future prospects. Using tax-paying credit rating as a proxy for tax integrity, we find that the negative reaction to the COVID-19 crisis is significantly less for firms with high tax integrity, consistent with investors expecting tax integrity to benefit firms during the crisis. In contrast, we find no difference in the negative market reactions to the 2003 SARS outbreak for the same set of firms. As there was no tax credit rating disclosure in 2003, this serves as a control for the treatment effect. Overall, our results suggest that investors expect corporate tax integrity to mitigate the negative effect of exogenous crises such as COVID-19 on firms. [ABSTRACT FROM AUTHOR]

We investigate borrower and lender behaviours when the borrower has experienced a sequence of failed loan applications. Our analysis is based on half a million observations from an established peer-to-peer (P2P) loan platform in China from 2010 to 2018. We find that borrowers who have better credit scores and who accept to pay higher interest rates are likely to reapply for funds after experiencing an earlier failed attempt. However, women and applicants with more education are discouraged from re-applying compared to their male or less-educated counterparts, respectively. On the funding supply side, lenders strive to fund safe borrowers who have high credit ratings and high income, though not those who offer a high interest rate. [ABSTRACT FROM AUTHOR]

In building a predictive credit scoring model, feature selection is an essential pre-processing step that can improve the predictive accuracy and comprehensibility of models. In this study, we select the optimal feature subset based on group feature selection in lieu of the individual feature selection method, to establish a credit scoring model for small manufacturing enterprises. In our methodology, we first select a group of features using the 0-1 programming method, with the objective function of maximising the Gini coefficient (GINI) of the credit score to identify the possibility of default. Then we introduce constraints to remove any redundant features in the same subset, provided they reflect the same information. Finally, we assign weights to different features according to the Gini coefficient, ensuring that the weight of the features reflects their discriminatory power. Our empirical results show that the selection of a set of features more effectively identifies default status than the individual feature selection approach. Moreover, a rating system with more features does not necessarily have better discriminatory power. As the number of features exceeds the optimum number of features selected, the system's discriminatory ability begins to decrease. [ABSTRACT FROM AUTHOR]

SMEs in China always face financing constraints and hardly obtain bank loans under unsound financing system due to the information asymmetry, while thousands of SMEs have contributed greatly to Chinese economic development in the last decades. Credit reporting has been verified to be an effective way to lower information asymmetry. However, existed credit reporting systems for SMEs can not meet the development of SMEs and provide enough information to the financial institutions in China. This paper introduces an active and dynamic credit reporting framework based on Big data and Blockchain for SMEs. The framework is composed of five modules, including credit data acquisition, authentication, evaluation, reporting, and interaction. And it features in capturing diversified data online, conducting evaluation and analysis in real time, generating online credit reports for users automatically, and providing an effective way for different entities to interact. A case study from a real credit evaluation company is also proposed finally to show the proposed framework. [ABSTRACT FROM AUTHOR]

Evidence law has a "credibility" problem. Artificial intelligence creators will soon be marketing tools for assessing credibility in the courtroom. While credibility is a vital concept in the United States legal system, there is deep ambiguity within the law about its function. American jurisprudence assumes that impeachment evidence tells us about a witness's propensity for truthfulness. Yet this same jurisprudence focuses fact-finders on a distinct inquiry: whether a witness has the status or outward appearance of a person who is worthy of belief. In the face of this equivocation about what credibility in the legal system is or should be, the terms of engagement will be set by the creators of algorithms in accordance with their interests. This Article illuminates the actual and purported function of credibility in the law through analogies to two existing algorithmic products. One is the U.S. financial credit score. The other is China's experiment with a "social credit" scoring system. These analogies show that a predictive approach to credibility is structurally distinct from a worthiness-centered one. They also deepen critiques of both approaches as they appear in current practice and as we contemplate the credibility of the future. [ABSTRACT FROM AUTHOR]

Dagong Global Credit Rating Agency (Dagong) was originally branded as a Chinese national representative credit rating agency. Its international expansion in the US and the EU, in order to challenge the biggest international credit rating agencies, was unsuccessful and achieved little of significance. Dagong's business suffered a complete halt because of a one-year suspension by the Chinese financial regulators. Its ratings heeded China's geopolitical interest and China's strategic plans of economic development rather than signalling the credit risks of debt instruments. Dagong's ratings had a significant political bias towards countries which were China's economic and political allies or supplied raw materials to China. Dagong officially became a state-owned credit rating agency following a reconstruction by the Chinese state in 2019. This article concludes that this new ownership may exacerbate the geopolitical characteristics of Dagong and poses a challenge to the international financial market. [ABSTRACT FROM AUTHOR]

This article investigates the nexus among the liquidity measures, credit ratings, and the yield spreads of green corporate bonds in China using panel data analysis and the generalized method of moments (GMM). Lower market liquidity, a lower credit rating level, and a shorter issued age are more significant for enlarging the yield spreads of ordinary corporate bonds than those of green corporate bonds. Compared with the AAA credit rating level, the illiquidity ratio, nontrade frequency ratio, zero-trade volume, yield volatility, interest rate margin and issued age have more significant influences on the yield spreads of ordinary corporate bonds than those of green corporate bonds. The liquidity and credit rating have greater differences in affecting the yield spreads of green corporate bonds with different issuance terms. [ABSTRACT FROM AUTHOR]

Neoliberalism initially invoked the authority of competitive markets as the ideal epistemic mechanism for socio-economic coordination. Yet, the rise of neoliberal 'market society' in Western advanced economies since the 1970s has been underpinned by a normative political theory that advocates the reconfiguration of society and politics around the authority of economic theory and knowledge in both production, but especially finance. Conversely, the reform-era development of China's 'socialist market economy' has been underpinned by an insistence on retaining centralized political power over the allocation of financial capital. This article argues that the rise of digital algorithmic technologies constitutes one means by which these contrasting politico-economic visions are being more closely reconciled. It investigates the ways in which China's ongoing construction of an explicitly authoritarian capitalism is being facilitated by the deployment of complementary financial technologies that enable the Chinese Communist Party to embrace the micro-level epistemic coordinative function of markets without relinquishing macro-level political power and juridical sovereignty over these markets. Following a comparative historiography of the praxis of 'neoliberal' and 'neostatist' political theory in contemporary capitalism, two case studies of blockchain-enabled currency and big-data driven credit scoring in China illustrate the emergent Fintech foundations of Chinese authoritarian capitalism. The findings contribute to our understanding of how markets are being reshaped by new algorithmic technologies, as well as illuminate some of ideological contradictions in existing conceptions of markets as (neo)liberal institutions at the centre of capitalist political economy. [ABSTRACT FROM AUTHOR]

Repayment failures of borrowers have greatly affected the sustainable development of the peer-to-peer (P2P) lending industry. The latest literature reveals that existing risk evaluation systems may ignore important signals and risk factors affecting P2P repayment. In our study, we applied four machine learning methods (random forest (RF), extreme gradient boosting tree (XGBT), gradient boosting model (GBM), and neural network (NN)) to predict important factors affecting repayment by utilizing data from Renrendai.com in China from Thursday, January 1, 2015, to Tuesday, June 30, 2015. The results showed that borrowers who have passed video, mobile phone, job, residence or education level verification are more likely to default on loan repayment, whereas those who have passed identity and asset certification are less likely to default on loans. The accuracy and kappa value of the four methods all exceed 90%, and RF is superior to the other classification models. Our findings demonstrate important techniques for borrower screening by P2P companies and risk regulation by regulatory agencies. Our methodology and findings will help regulators, banks and creditors combat current financial disasters caused by the coronavirus disease 2019 (COVID-19) pandemic by addressing various financial risks and translating credit scoring improvements. [ABSTRACT FROM AUTHOR]

By data of 10,357 individual investors from Renrendai.com, an established peer‐to‐peer (P2P) lending platform in China over the period of 2011–2014, we examine whether investors' prior investment outcomes influence their subsequent risk‐taking behavior in the credit market. We find strong evidence that a prior trading loss induces greater subsequent risk‐taking. Specifically, investors decrease their number of bids and the bidding amount; and choose listings with a lower interest rate and higher credit grade. The investors who obtain more prior gains become more cautious and take on less posterior risk. Overall, this study complements the lack of relevant research in the credit market. [ABSTRACT FROM AUTHOR]