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PurposeThis paper documents and links firm- and country-level outcomes to the United Nations Sustainable Development Goals (UNSDGs) by portraying how the Chinese economy has fared during the COVID-19 crisis. It does so by shedding light on the factors that determine the effectiveness of health policies implemented in China.Design/methodology/approachUnlike the prior literature, in which lagging performance measures are used, the authors use leading indicators with event study methodology to develop effectiveness scores and identify the determinants of effectiveness, including financial variables, firm infection, geographical location of the spread, travel bans, lockdown periods, policies of home quarantine, health innovations and other innovative measures undertaken by the Chinese authorities.FindingsThe detailed disaggregated results show many dimensions where abnormal returns are indeed associated with various health policies and that the effectiveness, influenced by firm size, profitability, firm infection and location. The results remain robust when the authors control for various event windows and models and provide evidence of a strong UNSDG link, which the authors draw up a list.Research limitations/implicationsApart from the quantitative analysis approach, future studies can complement and add further insights by utilizing qualitative research approaches.Practical implicationsThe results offers robust evidence for policy-makers and firm managers on how a crisis of such proportions and subsequent health policies is affecting different firms and why.Social implicationsThe study shows how COVID-19 health policies open a new dimension in terms of energy demand reduction and lower emissions, factors linking to the UNSDGs.Originality/valueThe study is the first to show detailed disaggregated results across many dimensions where abnormal returns are indeed associated with various health policies and that the effectiveness, influenced by firm size, profitability, firm infection and location.

We examine the impact of tunnelling on financial distress in Chinese stock markets, where the agency problem is common due to the weak legal system protecting minority shareholders' interests. Investigating the widespread financial distress among listed firms during the time period 1999–2015, we find that tunnelling is a determinant of financial distress–tunnelling not only leading to financial distress but also prohibiting distress recovery. Regulatory improvements aiming to reduce tunnelling behaviour contribute to the resolution of financial distress, but there is still room to improve. Our results show that state ownership has limited influence on firm operation before financial distress but tends to benefit recovery from periods of distress, which depicts the market economy mechanism in China. Our findings are robust to the potential endogeneity issue and various measures of financial distress.

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