Financing Difficulties Research Articles

Blockholders, Environmental Information Disclosure, and the Cost of Debt

ABSTRACT Debt financing is an essential source of external funds for Chinese-listed companies, but enterprises in heavily polluting industries face more severe financing difficulties due to the “financing penalty effect.” Solving the financing difficulties of heavy pollution enterprises has become a hot topic in academic and practical circles. This article applies heavily polluting listed companies from 2013 to 2022 in China as a sample to examine the impact of multiple blockholders (MB) on debt financing costs (DFC), considering the intermediary role of environmental information disclosure (EID). This article reveals that improved environmental information disclosure, driven by multiple blockholders, especially state-owned ones, can effectively reduce debt financing costs for heavily polluting enterprises compared to those dominated by a single major shareholder. These findings remain robust even after considering a series of checks, including the instrument variable method, propensity score matching (PSM), and alternative variables. In cases where the separation of ultimate control rights and cash flow rights is slight or the entity is state-owned, state-owned blockholders tend to exert a more effective governance role. Our research helps understand the role of multiple blockholders in corporate “green governance” and can provide a reference for alleviating the financing constraints of heavy-polluting enterprises.

Green Financing, Energy Transformation, and the Moderating Effect of Digital Economy in Developing Countries

AbstractThe energy sector in many developing nations faces the difficulty of insufficient financing throughout the low-carbon transition, highlighting the importance of international green financing in alleviating financial constraints. The advancement of digital technology could facilitate green financing for energy transition in the digital economy, but this statement lacks empirical evidence. The primary objective of this research is to investigate the impact of international green financing on low-carbon energy transformation in developing nations. Additionally, we investigate the moderating role of digital economy between the two. Our findings validate the favorable impact of international green financing on low-carbon energy transformation, and this impact is particularly evident for hydro and wind energy consumption. We show that this beneficial effect is greater for low-income countries or regions with high levels of energy transition. We also provide evidence of the positive moderation effects of digital economy and find that its effects are still present in the transition to hydro and wind energy. This research helps to broaden green financing channels for the energy sector in developing countries, especially from the perspective of digital economy.

Problems And Solutions of Real Estate Industry in China

Since real estate industry is one of the national pillar industries in China, therefore, it has great contributions to China’s economy and society. for example, promoting the Chinese economic growth in the long-run, and it provide financial support to government and benefits for cities development. Secondly, real estate also helping the development of relevant business, creating large amount of job opportunities to society, for residents, they can enjoy higher living standard. However, at same time of rapid development of real estate industry and economic boost, they exist series of problems that harmful to society like real estate bubble, unfinished buildings and cooperates financing difficulties. aiming at these problems, this paper suggest that government can through promulgate some new policies, laws, and establish the compete financing channel mechanism to solve these kinds of problems. The target of this study is to help real estate industry in China keep healthy development.

Research on the Impact of Disclosure of Key Audit Matters on Corporate Financing Constraints

This paper studies the impact of key audit disclosures on corporate financing constraints through empirical analysis. Although the disclosure of key audit matters can help to reduce the information differences between management and investors and improve the audit quality, such disclosure may also be regarded as a risk signal, and the warning function to investors may cause the difficulty of corporate financing to increase. This study concludes that the increase in the number of key audit disclosures will make corporate financing more difficult. When an enterprise announces more key audit matters, the market may regard them as a stronger risk signal, causing investors to be more cautious in making investment decisions, thus increasing the financing difficulty of the enterprise. However, in companies with large board sizes, the disclosure of key audit matters can alleviate the financing constraints. Larger boards are more likely to make the right decisions and therefore may disclose fewer risky aspects of key audit matters. This study provides a new understanding of key audit issues in financing activities and a useful reference for the possible impact of macro-policy adjustments on corporate profitability. In addition, the research also provides useful information support for enterprises to understand and adapt to the new auditing standards.

Digital Inclusive Finance Supports the Modernization of Agriculture Development

In the process of financial development, the high threshold and credit asymmetry not only increase the difficulty and cost of financing in rural agriculture, but also hinder the upgrading of agricultural industrial structure and delay the development of agricultural modernization. With the development of information technology and the wide application of big data, digital inclusive finance has become an important path and inevitable choice to promote the upgrading and modernization of China's agricultural industrial structure. The project intends to use the entropy method to measure the development level of agricultural modernization; Based on the two-way fixed effect model, the paper explores the effect of digital inclusive finance on agricultural modernization. With the help of the intermediary effect model, this paper explores the internal mechanism of the influence of the digital inclusive financial policy on the development of rural modernization from the level of "the upgrading of agricultural industrial structure". Based on the empirical results, this paper analyzes the heterogeneity of the effects of digital financial inclusion policies from the two dimensions of rural location and rural characteristics, and explores an effective path to promote digital financial inclusion and industrial upgrading in rural areas with prominent internal differences, with a view to providing reference and basis for the formulation and implementation of future digital financial inclusion and agricultural modernization development policies.

Can environmental protection tax alleviate the mismatch of financing and investment maturities of heavily polluting enterprises?

The gradual implementation of environmental protection tax policies has incentivized enterprises to engage in green production, effectively promoting China's accelerated achievement of the “dual‑carbon” goal. Although environmental protection tax has an important impact on the investment and financing decisions of heavily polluting enterprises (HPE), few studies have focused on the relationship between environmental protection tax and mismatch of financing and investment maturities. In this paper, we consider China's environmental protection tax reform as a “quasi-natural experiment”, and utilize the data of A-share listed companies from 2013 to 2022, and use a difference-in-differences (DID) model to assess the impact of this policy on the degree of mismatch of financing and investment maturities of HPE. The study shows that the implementation of the environmental protection tax policy (EPTP) significantly reduces the investment and financing maturities mismatch of the HPE, but this effect “fails” in the high tax rate area, and the policy is difficult to reverse the financing difficulties of the enterprises with a large degree of their own investment and financing maturities mismatch. The mediation mechanism test proves the EPTP acts on the mismatch of financing and investment maturities through two paths: alleviating the financing constraints faced by enterprises and increasing external supervision pressure; the impact of the policy has a time-differentiated effect, which is weakened year by year.

Study on Financing Constraints of Small and Medium-sized Enterprises Eased by Financial Technology

Small and medium-sized enterprises (SMEs) are increasingly important for economic growth, employment opportunities, and innovation. However, the traditional financial system has failed to meet its diverse financing needs, especially in terms of information asymmetry and risk assessment. There is a lack of systematic theoretical analyses and empirical tests on how FinTech affects the financing constraints of SMEs. This paper explores in detail the role of information asymmetry, leverage, and financial sector concentration in the financing process of SMEs through an in-depth study of the mechanism of FinTech's impact on SMEs' financing constraints. The results of the study show that the development of FinTech has a significant effect on alleviating the financing constraints of SMEs. In addition, this study finds that FinTech is particularly effective in alleviating the financing constraints of SMEs in the eastern region. However, in the Western region, the financing difficulties faced by SMEs are still severe. Therefore, the state should vigorously promote the development of fintech, especially in the less developed regions in the West, with a view to reducing the imbalance between the East and West in terms of economic development, and thus promoting balanced development nationwide.

Research on the Coordinated Development of Inclusive Finance and Financing for Small and Medium-sized Enterprises

As an important force in promoting economic and social development, small and medium-sized enterprises play a crucial role in enhancing China’s economic strength, creating employment opportunities, and promoting industrial structural transformation. However, due to their inherent weaknesses, small and medium-sized enterprises often face difficulties in financing within the traditional financial service system. This makes it difficult for small and medium-sized enterprises to inject vitality into the development of the market economy by expanding their financing scale. Since 2013, China has vigorously developed inclusive finance and extended the services of traditional financial institutions to small and medium-sized enterprises, providing policy guidance, resource support, and technical support to alleviate the financing difficulties of small and medium-sized enterprises. Based on this, this article focuses on the current financing problems faced by small and medium-sized enterprises and specifically elaborates on how to lower the financing threshold for small and medium-sized enterprises and broaden their financing channels through inclusive finance, in order to promote the development of inclusive finance and a virtuous cycle of financing for small and medium-sized enterprises.

The Impacts of Digital Finance on Economic Resilience

Enhancing economic resilience is crucial to sustainable development. However, issues such as resource misallocation and financing difficulties have severely impacted supply chain stability and security. The rise of digital finance presents potential solutions to these problems. Based on panel data from 30 provinces in China from 2011 to 2020, this study explores the mechanisms and pathways through which digital finance enhances economic resilience. The results reveal four key findings. First, the development of digital finance significantly enhances economic resilience by improving innovation capabilities and consumption vitality. Second, a high degree of marketization strengthens the promoting effect of digital finance on economic resilience. Third, in areas with higher levels of industrial advancement or lower levels of traditional financial development, the enhancement effect of digital finance on economic resilience is more significant. Fourth, digital finance significantly improved the economic resilience of geographically adjacent areas through spatial spillover effects. Overall, this study provides a new perspective on the impact of digital finance on economic resilience in developing countries such as China. In addition to its academic contributions, this study offers detailed practical implications.

Lessons from the Collapse of Silicon Valley Bank

The Federal Reserve's consecutive interest rate hikes led to a decline in the prices of US Treasuries and mortgage-backed securities (MBS), which comprised a significant portion of Silicon Valley Bank (SVB)'s asset portfolio. As a result, SVB experienced substantial floating losses, exceeding its owner's equity, creating immense pressure on its assets and liabilities. The analysis also highlights the simple deposit and asset structures of SVB, with a high proportion of demand deposits and a significant allocation to bonds. The aggressive interest rate hikes by the Federal Reserve, coupled with financing difficulties for startups, accelerated deposit consumption and intensified debt pressure for SVB. Furthermore, the article reveals the low coverage rate of deposit insurance, particularly at SVB, where only 7% of deposits are insured. This adds to the vulnerability of SVB and its depositors. In conclusion, this article examines SVB's balance sheet and interest rate risk exposure, identifies shortcomings in the management supervision system, and provides three reflections on the financial event.

How to Reshape the Selection Boundaries between Traditional and Digital Supply Chain Finance Based on the Pledge Rate and Default Loss: Two Tripartite Game Models

The development of digital technologies such as blockchain has provided new possibilities for solving the financing difficulties of small and medium-sized enterprises (SMEs). In order to explore the mutual influence of the participants in the supply chain, this paper constructs two static tripartite game models for traditional and digital supply chain finance, including a small and medium-sized enterprise (SME), a core enterprise (CE), and a financial institution (FI). The conditions for SME, CE, and FI to participate in digital supply chain finance, and the equilibrium strategy (repayment, repayment, loan) after participating in digital supply chain finance, are figured out. It is found that compared with the traditional supply chain, the digital supply chain expands the probability range of repayment for SME and CE by the change of pledge rate and default loss and broadens the probability range of repayment for CE by the change of default loss. Further, compared with the traditional supply chain finance, the greater the pledge rate of digital supply chain finance and the smaller the default loss, the stronger the willingness of the SME and CE to participate in the digital supply chain and the lower the willingness of the FI. After the three parties participate in the digital supply chain, however, the conclusion is the opposite. The smaller the pledge rate and the greater the default loss, the stronger the repayment willingness for the SME and CE and the stronger the loan willingness of the FI. Therefore, it is suggested to find the critical values of pledge rate and default loss and raise these two variables to an appropriate range to encourage all parties to voluntarily and consistently participate in digital supply chain financing.

A study on the impact of supply chain finance on the innovation of small and medium-sized enterprises - mediated by the intermediary effect of financing constraints

Based on a detailed analysis of viewpoints proposed in relevant literature both domestically and internationally, this paper empirically investigates the impact of supply chain finance on the innovation of small and medium-sized enterprises (SMEs), utilizing financial data from listed companies on China's SME board from 2012 to 2022. Additionally, it explores whether the alleviation of financing constraints plays an intermediary effect in this pathway. The findings reveal that: (1) The development of supply chain finance can enhance the innovation capability of SMEs, and its significance level is correlated with the nature of the enterprise's equity; (2) Most SMEs face financing difficulties, and implementing supply chain finance can effectively alleviate these financing constraints. Furthermore, compared to state-owned enterprises, this alleviation effect is more pronounced for non-state-owned enterprises; (3) There exists a significant intermediary effect of financing constraints, indicating that supply chain finance can ease financing constraints, thereby facilitating the improvement of enterprise innovation capabilities. Finally, based on the research findings, this paper presents relevant recommendations from the perspectives of the government, financial institutions, and SMEs.

Why do we invest online? An empirical study of online crowdfunding in China

Purpose The emergence of crowdfunding has provided a new way to solve the problem of financing difficulties for start-ups. Although crowdfunding has attracted great attention from the government and industry, investors are still hesitating to invest online. This paper aims to investigate the investment behavior of China’s debt-based internet crowdfunding market and construct a model to explain online investment decisions from the perspectives of trust and economic valence. Design/methodology/approach This paper uses the survey method to verify the research model. The questionnaire was constructed based on the items in prior studies. The data were collected from users with project investment experience on a leading crowdfunding platform in China. A total of 474 valid responses were collected. Partial least squares-structural equation modeling was used in the data analysis. Findings This paper finds that initial trust and perceived benefits are the key factors influencing investment intentions; investors are more concerned about potential benefits than about risk; perceived benefits partially mediate the relationship between initial trust and investment intentions. Fundraisers’ reputation is also found to have a greater impact on investors’ initial trust than investors’ trust propensity. Originality/value The conclusions of this paper provide important insights into the design of internet crowdfunding platforms and the regulation of policymakers.

The Impact of Fintech on China's Corporate Financing Constraints - Analysis based on the perspective of enterprise life cycle

SMEs, as the cornerstone of the real economy, face greater financing difficulties in accessing traditional financial services, which constrains their further development. In recent years, with the rapid development of the digital economy and the continuous innovation of financial technology, new ideas and solutions have been provided to solve the financing difficulties of SMEs. This paper uses the financial and related data of A-share listed companies from 2010-2022 to construct a regression model and a moderating effect model, which are used to analyse the impact of fintech on financing constraints and the moderating role of life cycle in it. The findings of the study show that, on the whole, fintech significantly alleviates the financing constraints of Chinese enterprises, and the degree of financing constraints varies with the life cycle of the enterprises; further analysis of the moderating effect reveals that the life cycle of the enterprises in the growth and decline periods will play a positive moderating role in the financing constraints of the enterprises affected by fintech. After analysing the heterogeneity, it is found that the development of fintech in the eastern region has a stronger role in alleviating the financing constraints of SMEs, and the role of fintech in alleviating the financing constraints of enterprises with a low degree of science and technology is better than that of enterprises with high technology.

Research on Stakeholder Behavior Strategy in Green PPP Project Financing

In the context of green development, while promoting green industry and sustainable development, green PPP faces the challenge of financing difficulties. Based on the evolutionary game theory of bounded rationality and taking government, social capital and financial institutions as the game players, this paper constructs an evolutionary game model for the behavioral decision-making of stakeholders in green PPP project financing. Using MATLAB software, we simulate and analyze the key factors affecting the behavioral strategies of each game player. The results indicate that: (1) The additional income obtained from participation in green PPP projects is a key factor affecting the decision-making of social capital and financial institutions, so it is necessary to improve the reasonable return mechanism of green PPP projects and attach importance to the construction of reputation mechanism; (2) Government subsidies can effectively encourage social capital and financial institutions to participate in green PPP projects, but the amount of subsidies should be within a reasonable range; (3) The government's reward and punishment intensity is a significant factor affecting the decision-making of social capital behavior. To this end, it is imperative for the government to enhance the performance evaluation system for green PPP projects and establish a balanced reward and punishment mechanism. This paper puts forward some suggestions on the decision-making of stakeholders in the financing process of green PPP projects, and provides references for the policy formulation of encouraging social capital and financial institutions to participate in green PPP projects.

A Historical Perspective on US Treasuries Risk Premia

The uncontrolled growth of US public debt is causing some anxiety among investors in US Treasuries. It is therefore useful to estimate the current risk premia embedded in the US yield curve and assess the extent to which investors are pricing in potential future financing difficulties for the US government.In this paper, we provide both a theoretical and empirical explanation of the factors driving the US Treasuries yield curve and how it is possible to extract what market participants are currently pricing in.It is widely acknowledged that expectations about future US monetary policy play a crucial role in this market. However, there is a notable underestimation — even within academic literature — of the symmetrical role played by expectations regarding future risk premia. Through our original modeling of the US Treasuries yield curve, we document the history of these expected risk premia. Our findings indicate that from 2000 to 2022, investors consistently underestimated the strength of demandfor US Treasuries, which may explain the somewhat unusual behavior of this key market during that period.Since 2022, however, a new paradigm has emerged. Demand for longterm US treasuries has declined due to the resurgence of inflation, while debt issuance has surged, driven by substantial deficits and the Federal Reserve’s Quantitative Tightening policies. Consequently, risk premia have increased sharply.The future remains highly uncertain as lower inflation could once again bolster demand for US Treasuries while public debt is expected to continue its rapid expansion. In this volatile environment, our model will help investors manage their positions by enabling real-time comparisons between their own expectations and the actual market pricing.

Does voluntary environmental regulation stimulate corporate green innovation efficiency? An empirical study from China’s A-share listed companies

Voluntary environmental regulation has attracted much attention due to the autonomy associated with its implementation. Taking the low-carbon pilot cities (LCPC) program in China as an example, this article evaluates the role of voluntary environmental regulation on the efficiency of corporate green innovation (GIE) based on the listed Chinese A-share companies for the period 2008–2016. In particular, we employ heterogeneity analysis to assess the characteristics of enterprises and local officials (including official source, tenure, age, and education). The results demonstrate that the LCPC program has restrained the development of GIE by increasing enterprise costs, inducing financing difficulties, and enhancing corporate social responsibility. Enterprises led by CEOs with a high education level and located in cities run by external promotion and younger, and long-term officials are linked with weaker inhibitive policy impacts.

Research on Financing Dilemma and Strategy of College Students' Entrepreneurial Enterprises

With the rapid development of China's economy, China is actively promoting the development of college students' innovation and entrepreneurship. As an important force, college students' entrepreneurship is of great significance for promoting economic transformation and upgrading and training young talents. At present, college students' entrepreneurial enterprises are facing serious financing difficulties. Although the government, universities and all sectors of society have issued a series of support policies, there are still many problems in the financing of college students' entrepreneurial enterprises. Therefore, from the perspective of college students' start-up companies, this paper discusses their financial problems and corresponding solutions, and encourages these entrepreneurial students to make rational fundraising decisions based on their own operational conditions, so as to reduce the burden of their companies in raising funds, and at the same time, it can bring certain reference value to more college students' entrepreneurs in the future.

Research on Information Sharing Among Supply Chain Financial Enterprises Based on Blockchain

As a key mechanism to alleviate the financing difficulties of small and medium-sized enterprises, supply chain finance has an important impact on corporate growth and supply chain stability. However, the traditional model faces transparency and trust issues due to insufficient information sharing. The development of blockchain technology provides new solutions to these problems, especially in terms of improving information sharing efficiency, enhancing transparency and security. Therefore, this article explores the application and compatibility of blockchain in supply chain finance by building a supply chain financial information sharing system based on blockchain. By analyzing typical scenarios and business processes, it is proven that this system can effectively improve the efficiency of supply chain financial operations, reduce transaction costs, and enhance overall trust. The results not only provide a new technical path for the practice of supply chain finance, but also provide a theoretical reference for the construction of the supply chain finance system under the new development pattern.

Accessibility of government support for small businesses and awareness of it by small enterprises

The article analyzes the availability of participation in government support programs for small businesses. The state assesses the importance of organizing support measures for small and medium–sized enterprises from the point of view of their significant social and economic role for the country. The article presents the division of state assistance into programs at the federal, regional, sectoral and municipal levels. Areas of state support are classified into material, informational, organizational and monetary areas. The most common barriers to expanding business activities have been identified, including difficulties in finding investors and additional financing, length of bureaucratic procedures, difficulties with counterparties, lack of highly qualified personnel, and lack of commonality in support programs. For a more detailed consideration of the issue, a structure for preparing a state support project has been built. Statistical information is provided on the awareness of entrepreneurs about support measures, among which the most well–known were digital services for business and a moratorium on inspections. It is proposed to involve public associations of entrepreneurs in the discussion and creation of support projects with the development of an appropriate legal framework for such discussions. A conclusion is drawn about the most significant problems of access to government support and a way to solve them is proposed.