Haiyan Jiang

This study examines whether a firm engages in green innovation or greenwashing in response to pressure from its business rivals' engagement in green innovation. Using a sample of 2958 firm‐year observations from 720 US publicly listed firms from 2010 to 2023, we find that a gap in green innovation between a focal firm and its top business rivals is significantly and positively associated with the focal firm's greater greenwashing but not green innovation. This effect is more pronounced when the firm is financially constrained, operates in a non‐carbon‐intensive industry, or faces stronger product market competition. These findings provide new insights for investors, policymakers, and scholars into the externalities, showing that rival firms' positive environmental initiatives may generate negative spillovers when focal firms respond opportunistically.

This paper examines whether restrictions on talent poaching prompt firms to increase vertical integration. Exploiting the staggered adoption of the Inevitable Disclosure Doctrine (IDD) by U.S. state courts as an exogenous shock to talent mobility, we find that competitors of IDD-protected firms significantly increase vertical integration. Mechanism analyses suggest that this response is driven by weakened supply chain bargaining power and reduced innovation efficiency resulting from limited access to skilled labour. The effect is stronger among innovation-oriented firms and those in concentrated industries. We further show that in the face of reduced opportunities for talent poaching, firms’ market power and production efficiency increase when they become more vertically integrated. Overall, our findings demonstrate how labour mobility restrictions reshape firm boundaries and competitive dynamics.

This study investigates how the stringent administration of taxes resulting from the Chinese corporate income tax collection reform (the 2002 CITC Reform) affects the intensity of the discharge of pollution by firms. The 2002 CITC Reform, launched on 1 January 2002, required state tax bureaus (STBs) to start collecting income tax from firms incorporated on and after 1 January 2002, while the income tax from firms incorporated before this date is still collected by local tax bureaus (LTBs). Leveraging a Regression Discontinuity Design, we reveal that newly established firms strategically responded to the reform with high levels of wastewater and sulphur dioxide (SO₂) emissions. The main finding is robust to a battery of robustness tests. Cross-sectional tests demonstrate that the discontinuity in pollution discharge among the firms whose taxes are managed by STBs is more pronounced among non-state-owned enterprises and firms located in provinces with less strict environmental regulations. Collectively, the findings suggest an unintended spill-over effect of the government’s tax policy on the environment.

We examine the effect of the inevitable disclosure doctrine (IDD) on cost of debt. Our difference‐in‐differences analyses reveal that the IDD significantly reduces the loan spread for borrowers in adopting states. To elucidate the mechanisms of such finding, we find that the IDD's effect is weaker in industries with high management turnover but stronger for long‐term loans. Moreover, cross‐sectional tests reveal that the effect is weaker for firms facing high industry competition, internal control weakness, and information asymmetry. IDD also mitigates loan covenant tightness. These findings elucidate the implications of IDD on corporate borrowing costs.

Using an international sample of firms from 36 countries over the period 2002 to 2018, we investigate whether short sellers take firms’ climate risk into consideration when making investment decisions. Our empirical results show that short sellers increase their short-selling interest in firms with high carbon emission intensity but shun good carbon performers. Furthermore, the effect of climate risk on short-selling interest is more pronounced for firms operating in countries or regions that have adopted an emission trading scheme (ETS) as well as in countries characterized by higher regulatory quality and greater media pressure. We also document that short sellers in countries with stringent carbon regulations, higher environmental awareness, and superior environmental performance are more sensitive to climate risk. Our channel analyses highlight that stock overvaluation and an opaque information environment are two potential motives for short-selling interest in carbon-risky firms.

This study examines the role of increased short selling threats in firms’ directors and officers liability insurance (D&O insurance) purchase decision against the backdrop of the Chinese deregulation of short sale. Using a difference-in-differences (DiD) research design, we demonstrate a positive effect of short selling threats on firms’ likelihood of purchasing D&O insurance policies after controlling for the known determinants of D&O insurance. We then perform tests to validate the DiD analysis result, including a test of the parallel trend assumption and placebo tests. To shed light on the mechanism through which the effect of short selling takes place, we perform a path analysis. The results reveal that firms’ litigation risk explains the effect of short selling pressure on D&O insurance purchase decision. Further cross-sectional analyses show that the positive effect of short selling threats on D&O insurance is ameliorated when firms have strong internal control or have great analyst coverage.

Purpose: This study aims to investigate whether firms purchase directors' and officers' liability (D&O) insurance when the country-level economic policy uncertainty (EPU) is high.Design/methodology/approach: This study uses D&O insurance data from Chinese listed firms between 2003 and 2019 to conduct regression analyses to examine the association between D&O insurance and EPU.Findings: The results show that government EPU, despite being an exogenous factor, increases the likelihood of firms' purchasing D&O insurance, and this effect is more pronounced when firms are exposed to great share price crash risk and high litigation risk, suggesting that firms intend to purchase D&O insurance possibly due to the accentuated stock price crash risk and litigation risk associated with EPU. In addition, the results indicate that the effect of EPU on the D&O insurance purchase decision is moderated by the provincial capital market development and internal control quality.Practical implications: The study highlights the role of uncertain economic policies in shareholder approval of D&O insurance purchases.Originality/value: The study enriches the literature on the determinants of D&O insurance purchases by documenting novel evidence that country-level EPU is a key institutional factor shaping firms' decisions to purchase D&O insurance.

This study examines whether social trust mitigates both principal-agent and principal-principal agency costs. Using data from China, we find that those firms headquartered in regions with high levels of social trust have a lower level of perk consumption, a high asset turnover ratio, and a low level of financial tunneling. Thus, the findings provide strong evidence that social trust serves as an invisible hand mitigating agency costs. Additionally, the results demonstrate that social trust’s effect is attenuated when external monitoring is already in place, suggestive of a more pronounced monitoring effect of social trust when firms lack formal governance mechanisms. Additional analyses on State-Owned Enterprise (SOE) and non-SOE subsamples reveal that social trust has a more pronounced effect in reducing managerial perk consumption in SOEs than in non-SOEs, whereas the constraining effect of social trust on tunneling is stronger in non-SOEs than it in SOEs.