Technology‑based small and medium‑sized enterprises (SMEs) in emerging economies often face severe financing constraints due to information asymmetry and insufficient collateral. To alleviate these constraints, China has introduced the investment–loan linkage risk compensation policy (ILLRCP), a financial policy innovation designed to encourage financial institutions to provide credit support to innovative firms. Using the National Tax Survey Database from 2008 to 2020, this study treats the implementation of ILLRCP as a quasi‑natural experiment and employs a difference‑in‑differences (DiD) approach to examine its impact on the growth of technology‑based SMEs. The results show that ILLRCP significantly promotes firm growth. Mechanism analyses show that the ILLRCP is associated with a higher proxy for firms’ bank borrowing, a lower proxy for credit financing costs, greater physical investment, and higher R&D expenditure. These intermediate-outcome results are consistent with the proposed transmission framework but do not constitute a formal mediation analysis. Heterogeneity analyses further reveal that the policy effect is stronger for smaller firms, privately owned enterprises, and firms with smaller employment sizes, as well as in regions with higher levels of financial development and better infrastructure conditions. Additional evidence shows that while the policy promotes firm growth, it is also associated with slower growth in wages and employment but higher average wages, leading to a decline in the labor income share. Overall, the findings provide new micro‑level evidence on how financial policy innovations promote SME growth while also generating distributional effects.
This study investigates the impact of the digital economy (DE) on corporate green innovation (GI) and identifies ownership concentration as a key transmission channel. Using panel data from 1213 A-share listed industrial firms, we employ mediation and panel threshold models to examine both mechanisms and nonlinearities. Results show that firms located in regions with higher levels of digital economy development exhibit significantly higher green innovation output, and this relationship remains robust after controlling for province-by-industry fixed effects. However, it no longer has statistically promoting effect as digital development deepens, indicating threshold effects. Heterogeneity analysis reveals stronger impacts for coastal firms and those in the growth stage of the corporate lifecycle. Overall, digitalization acts as an important driver of sustainable innovation, though its effectiveness depends on firm characteristics and development levels, offering important policy and managerial implications for corporate sustainability strategies.
Flexible employment represents an emerging approach to enhancing labour market flexibility and efficiency. This study examines the impact of labour outsourcing on audit fees and its underlying mechanisms using a sample of Shanghai and Shenzhen A-share listed companies from 2012 to 2023. The findings show that labour outsourcing raises audit fees. Mechanism tests show that labour outsourcing elevates audit fees through weakened internal control effectiveness, increased firm-level and auditor-level transaction costs. Further analysis reveals that the positive effect of labour outsourcing on audit fees is particularly pronounced among firms that outsource high-end business functions. Additionally, management teams’ legal expertise, auditor professional competence, and regional social trust levels all serve to attenuate the positive association between labour outsourcing and audit fees. Economic consequence analysis further demonstrates that auditors’ practice of levying higher fees for firms engaged in labour outsourcing arrangements effectively constrains earnings management behaviour. These findings confirm that accounting firms can effectively identify the potential risks that flexible employment arrangements, such as labour outsourcing, introduce to audit practice, leading to decisions to increase audit fees. The study provides implications for enterprises in evaluating the costs and benefits of labour outsourcing, strengthening internal control systems, promoting diverse management team backgrounds, improving auditor efficiency, and fostering regional integrity culture.
This paper analyzes the role of external debt dynamics in shaping the effectiveness of monetary policy in six Pacific Island Countries (PICs) over the period from 2000 to 2022. Using both panel regression and panel quantile regression techniques, we arrive at three key findings: (1) the interaction between external debt and the policy rate has an insignificant impact on inflation, indicating weak monetary policy effectiveness; (2) this ineffectiveness is primarily driven by a fragile monetary transmission mechanism; and (3) the transmission weakness is rooted in shallow financial development and weak institutional quality. These findings underscore the need for policymakers to strengthen domestic fundamentals, particularly financial sector development and institutional governance, while also pursuing prudent external debt management. Enhancing these structural conditions is essential to restoring the effectiveness of monetary policy transmission in PICs.
