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In the digital economy era, digital empowerment is a crucial measure to enhance capital allocation efficiency (CAE). To examine the effect of digital empowerment on CAE, we conducted a study using Chinese listed firms as a research sample. Our findings indicate that (1) Digital empowerment significantly enhances the CAE. (2) Digital empowerment improves the CAE in enterprises by reducing agency costs and enhancing operational capabilities. (3) This effect is even more pronounced in non-state-owned enterprises, enterprises with low leverage, and those with weak levels of external oversight. (4) Further research suggests that digital empowerment leads to a reduction in under investments and reduces operating investments. The research in the article provides a theoretical framework for enterprises to enhance CAE and governance level. It also offers policy insights for promoting effective digital transformation of businesses and presents valuable references for advancing digital economy in China. [ABSTRACT FROM AUTHOR]

Taking China's A-share listed manufacturing enterprises from 2014 to 2020 as objects, this paper discusses the impact and mechanism of corporate digital transformation on supply chain relationship transactions from the perspectives of information asymmetry and agency costs. The findings show that digital transformation significantly inhibits the supply chain relational transactions; the mechanism testing results reveal that digital transformation is conducive to the alleviation of information asymmetry and agency costs, which thereby reduces the degree of supply chain relational transactions; the regulatory effect analysis demonstrates that the impact of digital transformation on supply chain relationship transactions becomes more significant in non-high-tech enterprises and enterprises with less fierce industry competition. Finally, this paper confirms that a decline in the proportion of supply chain relationship transactions can significantly reduce the operational risk of enterprises. [ABSTRACT FROM AUTHOR]

Using the enactment of Document No. 18 as a quasi-natural event, we take a sample of Chinese A-share listed companies from 2010 to 2017 to test the impact of depoliticization on stock price crash risk based on the difference-in-differences (DID) model. Our results show that depoliticization reduces future stock price crash risk more significantly among non-state-owned enterprises. Furthermore, depoliticization can mitigate stock price crash risk through the effects of financing needs, censorship risk and agency cost. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine whether a firm's demand for high-quality auditors is influenced by multiple large shareholders (MLS). As one type of ownership structure, MLS have gained popularity in China recently and have different types of large shareholders, including large institutional shareholder, large foreign shareholder and large state shareholder. The authors also examine whether different types of MLS have heterogeneous impacts on appointing high-quality auditors. Design/methodology/approach: With a sample of 27,131 firm-year observations from Chinese public companies from 2003 to 2018, the authors use multivariate regressions to examine the effect of MLS on auditor choice. Heckman two-stage analysis, a firm fixed effects model, propensity score matching and difference-in-differences test are used as robustness checks. Findings: This paper finds that the presence and power of MLS increase the likelihood of appointing high-quality auditors. With regard to the types of MLS, large institutional shareholders and foreign shareholders have significant positive effects on appointing high-quality auditors, while the presence of state-owned large shareholders has no effect on auditor choice. Further analyses reveal that the positive effect of MLS on high-quality auditor choice is more pronounced in firms with severe agency problems and information asymmetry. Taken together, these results suggest that MLS play a monitoring role by demanding high-quality auditors. Originality/value: This paper contributes to the literature on the determinants of auditor choice. While prior studies primarily focus on the impact of concentrated ownership structure, corporate governance and the pressure from stakeholders on auditor choice, this paper complements the literature by providing evidence from the heterogeneous effects of different types MLS. This paper also extends the literature on the consequences of MLS from the perspective of auditor choice. [ABSTRACT FROM AUTHOR]

Research background: In the digital era, digital transformation has become a strategic imperative for leadership agenda. Many firms have accelerated their pace in digital transformation to improve their performance and competitiveness. Despite increasing attention in the literature on the role of digital transformation in firms' operations, understanding the effect of digital trans formation on corporate finance remains limited. This study focuses on cash holdings, which are essential for firms to survive and thrive. Purpose of the article: The aim of this paper is to examine the critical role of digital transformation on the cash holdings of listed firms in China and provide micro evidence regarding the economic consequences of the digital economy from firm level. This study also aims to deepen our understanding of the influence of digital transformation on firms' operation and financial policy. Additionally, this paper attempts to provide relevant guidance for implementing policies to promote digital transformation and devise corresponding cash holding strategies. Methods: The text analysis method is used to measure the degree of digital transformation of China's A-share listed companies. The sample covers 19,337 observations from 2007-2020. A multiple regression model with firm and year fixed effect is developed to investigate the relationship between digital transformation and corporate cash holdings. In the robustness test, this paper substitutes the independent and dependent variables, and adopts instrumental variable estimation method. In the mechanism test, this paper uses the sub-sample regression method in the mechanism test. Findings & value added: This study reveals that digital transformation can significantly reduce corporate cash holdings by alleviating the precautionary motive, agency motive and transaction motive of cash holdings. Further analysis shows that the negative effect of digital transformation on cash holdings is more profound in high-tech firms and non-state-owned enterprises. The methodology applied in this paper can be used in other economic research of firms. This study provides insights into the effects of digital transformation on corporate financial policy. This provides a solution for reducing firms' cash holdings. This study also deepens the understanding of digital transformation from a corporate perspective. [ABSTRACT FROM AUTHOR]

High-quality economic development can be achieved if a major strategic direction for China are delivered from the macro level to the micro level. Taking A-listed enterprises in China from 2005 to 2018 as samples, this paper studies the impact of directors and officers liability insurance (D&O insurance) on the highquality enterprise development. The research results show that D&O insurance can promote high-quality development. In addition, the mechanism test shows that D&O insurance can reduce agency costs and improve innovations and high-quality enterprise development. Further analysis shows that when stateowned enterprises including their internal controls has no major defects, D&O insurance has more significant positive impact. Thus, this paper suggests that the insurance should be promoted for realizing high-quality enterprise development. [ABSTRACT FROM AUTHOR]

This paper examines the impact of pay gap on the quality of the internal control. Using state-owned enterprises listed in China from 2012 to 2019 as samples, we find new evidence of an inverted U-shaped relationship between the pay gap and internal control quality, which includes the executives' internal pay gap, external pay gap, and executives-employees pay gap. Furthermore, we also find that there is an inverted U-shaped relationship between the pay gap and the internal control quality in state-owned enterprises with commercial competition, but we don't find similar results for the samples of state-owned enterprises with specific functions. In addition, we provide evidence that the pay gap not only has a direct impact on internal control quality but also has an indirect impact on internal control quality through agency costs. This study supplements research on internal control quality from the perspective of incentives. [ABSTRACT FROM AUTHOR]

Corporate VAT planning, though difficult to observe, has become more prominent. By considering the Chinese VAT transition as an external policy shock, this article adopts a difference-in-difference model to study this issue for the period 2006–2009. The results indicate that companies, in particular companies with high financing constraints and low type I agency costs, had investment-shifting behavior, so as to reduce the tax burden. Compared with agency costs, financing constraints have a greater influence on firms' shifting. Further, the market has a positive attitude toward shifting of high financing constraints companies, but a negative attitude toward that of high agency costs companies. [ABSTRACT FROM AUTHOR]

This study explores the relationship between ethnic diversity and corporate investment in Chinese listed firms. Based on data from China's A-share market companies and the national census dataset, we find that local ethnic diversity is negatively related to corporate investment efficiency. Furthermore, we explore the channel through which ethnic diversity affects corporate investment efficiency, and our study indicates that both social trust and agency cost play mediating roles between ethnic diversity and investment efficiency. Robustness tests verify our conclusions. [ABSTRACT FROM AUTHOR]

In this research, the mixed strategy complete information static game was adopted to explain the effect of mandatory dividend policy on agency cost, and Chinese mandatory dividend policy introduced in 2011was regarded as the institutional background, and whether mandatory dividend policy can reduce the agency cost of listed companies as an accidental impact was studied. Empirical test indicates that mandatory dividend policy significantly inhibits the agency cost of enterprises. Further research finds that the mandatory dividend policy has a better effect on reducing agency costs for the companies listed on the main board and those with normal dividends, while it has no significant effect on restraining agency costs for the companies with micro-dividends and small and medium-sized boards. The study supports the dividend agency cost theory and provides empirical evidence for the regulating departments to improve the follow-up policy of capital market governance. [ABSTRACT FROM AUTHOR]

Given the constraints on carbon emissions due to their impact on global warming, carbon disclosure has become an important way to deliver signals to the market. We examine the benefits associated with carbon disclosure from the standpoint of corporate social responsibility (CSR) for China’s manufacturing industries from 2010 to 2014. We divide corporations into heavily polluting and non-heavily polluting groups in order to control the industry factor. Based on the Principal-Agent Theory, we empirically test the relationship between carbon disclosure and financial transparency, and we evaluate the effect of carbon disclosure on agency costs and operations. Our results highlight that carbon disclosure is negatively associated with agency costs. However, we do not find enough evidence to prove what role financial transparency plays in the relationship between carbon disclosure and agency cost. Therefore, the influence of financial transparency as a mechanism is not yet clear. This study provides a way to look at the intentions of firms that disclose carbon information, and it also enhances the literature on carbon disclosure and agency costs in China based on Chinese data. [ABSTRACT FROM AUTHOR]

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We examine whether firms' political connection affects their corporate social responsibility (CSR) engagements and how the effects vary with different political ties, namely symbolic and material connections. These ties reflect different degrees of political embeddedness, interest alignment, network size, and monitoring with the government, and therefore impart divergent effects on managerial incentives for CSR practices. Our analysis indicates that CSR in firms with symbolic connection is much more associated with agency cost than CSR in firms with material connection. We also find that large firms with symbolic connection exhibit lower CSR performance than those with material connection, probably because the former group tends to substitute the prestige of their political capital for the goodwill associated with CSR engagement. These results show that accounting for the effects of different types of political connection on managerial incentives contributes some clarity to the debate about the compatibility of CSR with primary corporate mandates. • We examine whether a firm's political connection affects its CSR engagements • CSR engagement in firms with symbolic connection is associated with agency cost • CSR engagement in firms with material connection is associated with good governance • Large firms with symbolic connections exhibit lower CSR performance [ABSTRACT FROM AUTHOR]

On the basis of stimulation theories on listed companies, the necessity for stimulation is analyzed for China's listed companies. A pay-based stimulation model is proposed to prove that the model is effective in promoting the development of enterprises. It is concluded that the low level of share-holding in management cannot effectively stimulate the development of listed companies. [ABSTRACT FROM AUTHOR]

This paper concentrate on related theories based on moral hazard arid agency costs to divide the stakeholder into two categories. By making several assumptions, we establish the overlapping-generations model based on genetic replication equation and analyze the stakeholder in stock market with evolutionary game and then conclude the evolutionary equilibrium based on data of Chinese stock market. [ABSTRACT FROM AUTHOR]

With the development and application of e-commerce in the process of supply chain integration, the choice of supplier centralized strategy or decentralized mode and how to use supplier financing have become significant contents of supply chain management. This study investigates the effect of competition and cooperation on the corporate cash dividend policy under the influence of the supplier relationship strategy and its mediating mechanism based on Chinese data. The motivation of this study is to provide a basis for enterprises to grasp the dynamic evolution process of the economic consequences of supply chain relationships based on big data and adjust the relationship strategy in time to maximize the positive effects of supplier relationships. This study considers supplier concentration and supplier financing as two dimensions to measure the supplier relationship strategy and selects the balanced panel data of Chinese A-share listed companies from 2007 to 2020 as samples by applying the Logit and Tobit model. The results demonstrate that the supplier relationship is negatively correlated with the cash dividends. The intermediary effect found that the competition effect of the supplier relationship aggravates the agency conflict of enterprises and intensifies the degree of financing constraints, and thus acts on the cash dividends of enterprises. This study expands the economic consequences of relational transactions and provides an explanation of dividend policies from the perspective of a supply chain., Competing Interests: The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest., (Copyright © 2022 Yang and Sun.)