Risks

Against the backdrop of China’s innovation-driven development strategy, innovation diffusion is a key stage through which firm-level innovation outcomes generate broader economic value. However, this process is often constrained by financing pressure, information asymmetry, and uncertainty in external evaluation. This study examines whether and how bank–firm common ownership, as an ownership-based financial linkage between banks and firms, affects corporate innovation diffusion. Using data on Chinese A-share non-financial listed companies from 2010 to 2023, this paper finds that bank–firm common ownership significantly promotes corporate innovation diffusion. The results remain robust after alternative variable measurements, a higher identification threshold for bank–firm common ownership, lagged explanatory variables, instrumental-variable estimation and propensity score matching. Further mechanism tests show that bank–firm common ownership promotes innovation diffusion mainly through two risk-related channels: liquidity-risk buffering and information-risk reduction. First, it improves firms’ access to commercial credit financing, thereby strengthening their liquidity-risk buffering capacity and helping them withstand financing pressure during the innovation diffusion process. Second, it improves firms’ information disclosure, thereby reducing information asymmetry and external evaluation uncertainty surrounding innovation activities. Further analysis shows that the positive effect of bank–firm common ownership on innovation diffusion is more pronounced among state-owned enterprises and firms with stronger market positions. This study enriches the literature on financial linkages and corporate innovation diffusion, and provides evidence on how bank–firm ownership ties can support innovation diffusion through liquidity-risk buffering and information-risk reduction.

This paper studies an optimal consumption–investment problem in a multi-asset financial market where risky assets returns incorporate returns history. Preferences are modelled using Epstein–Zin recursive utility, allowing a separation between risk aversion and intertemporal substitution. Using the well-known martingale optimality principle and forward–backward stochastic differential equations (FBSDEs), we obtain explicit closed-form solutions for the optimal strategy and value function. A sensitivity analysis illustrates the dependence of optimal policies and value function on key parameters, including risk aversion, elasticity of intertemporal substitution (EIS), memory horizon, learning intensity, and wealth-history parameters. The findings provide new insights into the interaction between behavioural features and dynamic portfolio choice in a multi-asset setting.

This study addresses the critical question of when green investments pay off by investigating how firm size generates asymmetric threshold effects in the relationship between eco-innovation and corporate financial performance. While prior research reports mixed findings, most studies rely on linear specifications that overlook structural breaks across firm scales. Using a dynamic panel threshold regression model on a global sample of 383 non-financial firms (3830 firm-year observations) from 2013–2022, we endogenously identify divergent size thresholds for operational (ROA) and shareholder (ROE) performance. Our findings unveil a significant regime-switching dynamic: for ROA, the positive impact of eco-innovation is confined to firms below the 20.106 threshold, turning marginally negative at larger scales due to coordination and complexity costs. In striking contrast, for ROE, eco-innovation initially imposes a financial burden on smaller firms but becomes a significant value driver once the 21.497 ‘critical mass’ threshold is surpassed. These asymmetric thresholds reconcile prior contradictory evidence by demonstrating that financial outcomes are strictly regime-dependent. The study advances the Natural Resource-Based View by uncovering scale-dependent capability thresholds and provides size-contingent implications for managers and policymakers to mitigate the “liability of smallness” through targeted support and to maximize the financial viability of green transitions.