Issue 1 (March)

This study investigates the effects of innovation reform on wealth inequality by analyzing China’s Comprehensive Innovation Reform Pilot Zones (CIRPZs). Employing a difference-in-differences methodology, we assess the impact of CIRPZs on urban wealth distribution among China’s prefecture-level cities. Our findings reveal a paradox: although CIRPZs are designed to stimulate economic growth and technological advancement, they inadvertently exacerbate wealth inequality. This outcome is confirmed through a series of rigorous robustness checks. We identify two key mechanisms driving this phenomenon: the virtual wealth effect, whereby technological progress disproportionately benefits tech-savvy individuals and firms, and wage stratification, leading to increased income disparities within innovative sectors. Additionally, we find that the impacts of CIRPZs vary across regions, with significant widening of wealth inequality observed in Beijing-Tianjin-Hebei, the middle reaches of the Yangtze River, and Chengdu-Chongqing, while a moderating effect is noted in the Central Plains. These insights emphasize the nuanced effectiveness of innovation reform policies and their implications for policymakers in developing economies. We advocate for policy frameworks that balance technological advancement with equitable economic outcomes, a crucial step for fostering sustainable and inclusive development.

In recent years, as global climate change intensifies and ESG investment concepts gain prominence, climate risk has become a crucial factor for investors and financial markets. Investigating how climate risk is priced in the Chinese capital market is both theoretically and practically important for promoting the sustainable development of China's capital markets and advancing green finance. This study employs natural language processing (NLP) to quantify the proportion of climate risk-related content in the annual reports of listed companies, creating an indicator to assess their climate risk level. The study uses climate risk of listed companies as the explanatory variable and annual stock returns as the dependent variable, applying a fixed-effects model to empirically examine the impact of climate risk on investment returns. The study finds that: first, the climate risk of listed companies shows a clear trend of change over time; second, there is a significant positive correlation between the climate risk of listed companies and investment returns.