We examine the economic impact of platform marketing on mutual funds and fund families in China. The growth of platform marketing encourages funds to enhance performance by improving managerial skills rather than increasing risk-taking, and inspires fund families to induce more frequent fee reductions and stronger product innovation. Enhanced competitiveness and expanded investment demand lead to greater market share and higher profitability. Platform marketing intensity from funds in other families and the same type of funds generates more pronounced economic effects. Our findings reveal how distribution platforms contribute to incentive-aligned market mechanisms in the wealth management industry.

Traditional negotiation trading dominates the electronic limit order book (LOB) of the X-Bond platform in the Chinese government bond market. Using a unique dataset, we conduct the first systematic study of the X-Bond’s role. We find that: (1) trades via LOB are notably more cost effective than via negotiation, with cost differences influenced by factors such as trader groups, bond types, trade sizes, and on-/off-the-run status; (2) electronic trading reduces the costs of negotiation trades through increased liquidity, an information channel, and a liquidity’s externality; and (3) due to the absence of an interdealer market, the X-Bond platform primarily serves as a liquidity source of last resort for managing inventory risk.