Search

The recent integration of digital technology and financial services has given rise to the newly emerging modality of digital finance. However, does digital finance improve the efficiency of financial services while influencing the investment behavior of brick-andmortar businesses? With the help of the data about Chinese listed companies, this paper uses multiple regression analysis, instrumental variables, and other methods to empirically test whether and how digital finance affects the financial asset allocation decisions of brick-and-mortar enterprises. The findings suggest that digital finance has a galvanizing effect on financial asset allocation. However, this effect mainly stems from the fact that firms allocate more illiquid financial assets and has a dampening effect on liquid financial assets. Path analysis shows that easing financing constraints is a causal pathway through which digital finance dampens firms’ liquid financial asset allocation. Moreover, rising risk exposure levels partially mediate the stimulus of digital finance, motivating firms to allocate illiquid financial assets. This paper contributes to the research on the economic consequences of digital finance and provides policy recommendations on how digital finance can better serve the real economy. [ABSTRACT FROM AUTHOR]

In light of the implementation of the Environmental Protection Tax Law (the EPT Law) in China on 1 January 2018, this paper employs the difference-in-difference model (DID) to empirically investigates how the environmental regulations affects the green transformation of highly polluting firms. The results indicate that the EPT Law has significantly aided in the green transformation of highly polluting firms, with the increasing pressure of environmental legality acting as a partial mediating effect. This paper adds to the research on the economic effects of the environmental regulations and provides new evidence to support the incentive perspective on environmental regulations. [ABSTRACT FROM AUTHOR]