Despite widespread optimism among regulators and market practitioners about corporate asset-backed securitization (ABS), its relationship with firm performance remains unclear. This study examines the association between corporate ABS and firm performance in China using a novel look-through approach to identify actual originators of ABS transactions. We document an inverted U-shaped relationship between corporate ABS scale and firm performance. Firm performance is positively associated with ABS issuance at low-to-moderate levels, but this association turns negative when issuance becomes excessive. Heterogeneity analyses show that this nonlinear relationship varies across ownership types and firm sizes and is more pronounced among non-state-owned and larger firms. Multiple analyses suggest that corporate ABS issuance in China functions less as pure risk transfer and more as debt-like financing, and the leverage-channel analysis further provides corroborative evidence that leverage helps explain the inverted U-shaped relationship between ABS issuance and firm performance. These findings advance our understanding of the relationship between corporate ABS and firm performance in China and offer practical implications for firms and regulators.

This study examines whether crackdown on political corruption in China affects future stock price crashes. Using data from corruption-related prosecutions, we find that firms under prosecuted official jurisdictions experience a significant decrease in crash risk after the crackdown. Cross-sectional tests show that results are more pronounced for firms with higher political dependence on governments and for firms with worse information environment. Moreover, channel tests provide direct evidence that crackdown decreases crash risk by reducing political risk and bad news hoarding. Overall, our study offers novel evidence on how crackdown on corruption benefits firms.