Robert Lucas's vision of global convergence emphasized the diffusion of modern knowledge and industrial capability from frontier economies to latecomers. Once modern growth had emerged somewhere,poorer countries could grow rapidly by adopting technologies,organizational forms,and production methods already developed at the frontier. Under this benchmark,world income differences would eventually narrow as more countries joined the process of modern economic growth.

This paper argues that the Lucasian mechanism remains fundamentally correct but incomplete because it treats the international diffusion environment as exogenous. The central distinction introduced here is between income convergence and  power convergence.

Standard growth theory focuses primarily on relative per capita income. Yet international order responds not only to living standards,but also to aggregate economic scale. For a populous follower,aggregate power can converge long before income converges. If a follower has four times the population of the frontier country,aggregate parity emerges when its per capita income is only one quarter of the frontier level. Such an economy may still view itself as developing in terms of domestic productivity and living standards,while simultaneously becoming systemically consequential from the perspective of the frontier country.

This arithmetic changes the political economy of diffusion. When a large follower is still relatively small in aggregate terms,openness is mutually beneficial:it expands markets,deepens specialization,strengthens supply chains,and reinforces a frontier-centered international order. However,as the follower's aggregate scale rises,the same openness increasingly generates strategic costs for the frontier country. Trade,foreign investment,scientific collaboration,technology transfer,financial integration,and production networks may accelerate the rise of a potential systemic rival.

The paper therefore endogenizes the openness of the international diffusion environment. Rather than treating diffusion as a fixed background condition,the framework models openness as a strategic choice made by a forward-looking frontier country. As the follower approaches aggregate-power parity,the frontier country rationally reduces openness,especially in strategically sensitive sectors. The result is what the paper calls endogenous diffusion congestion:the very success of catch-up weakens the openness of the international order that made catch-up possible.

The mechanism produces several broader implications.

First,the congestion generated by a large follower spills over to other developing economies. Smaller followers may not themselves pose strategic threats,but they depend on the same frontier-centered channels of diffusion. As openness contracts in response to the rise of a large follower,these countries inherit a more restricted global learning environment.

Second,the rise of a large follower may simultaneously create alternative channels of diffusion. A large follower that has recently industrialized can become an “intermediate frontier”, supplying development-relevant technologies,infrastructure,manufacturing systems,and organizational capabilities to poorer economies. The future of global convergence may therefore depend not only on whether the old frontier-centered order remains open,but also on whether multiple diffusion systems can coexist and remain interoperable.

Third,the paper argues that the world economy is likely moving away from frictionless globalization toward a world of selective openness. Globalization does not necessarily disappear; rather,openness becomes differentiated across sectors,technologies,and political relationships. Some channels remain open,while others become increasingly restricted,politicized,or fragmented.

The framework contributes to three strands of  literatures simultaneously. It extends the growth and convergence literature by making the diffusion parameter endogenous to international order. It contributes to international political economy by formalizing how aggregate-power convergence alters the incentives of leading states to sustain openness. It also contributes to the fragmentation literature by explaining why restrictions emerge specifically when large followers approach systemic significance.

The paper's broader implication is that the central challenge of the twenty-first century is no longer simply how to achieve convergence,but how to govern convergence once it becomes systemically consequential. The future of global development will depend not only on domestic absorptive capacity,but also on whether the international system can preserve broad channels of knowledge diffusion under conditions of growing aggregate-power competition.

As technological progress accelerates and China's demographic structure shifts,human capital has taken on an increasingly central role in economic and social development. Over the past decade,a large number of Chinese cities have followed the relaxation of hukou restrictions with sizable talent attraction policies of their own. This paper provides a systematic study of the resulting talent competition among Chinese cities through the lens of talent subsidy policies,documenting its historical development,its temporal and spatial stylized facts,and the strategic competitive interaction among local governments. We first conduct a comprehensive collection of talent policy documents issued by prefecture-level cities nationwide and construct a city-level talent subsidy index covering the period 2008 to 2019. We find that talent attraction policies across Chinese cities exhibit a pronounced pattern of episodic,phased acceleration over time,a clear east-to-west declining gradient in space,and a significant inverted U relationship with the level of local economic development. We further document a significant peer effect in policymaking at the prefecture level:a city's talent subsidy intensity responds positively to the policies of its potential competitor cities. This finding provides empirical support for the promotion tournament theory of strategic interaction among Chinese local governments. The paper closes with a systematic review of the literature on the effects of talent attraction policies and a discussion of directions for future research.

The widely cited starting point of this talent competition is Wuhan's February 2017 program to “retain one million university graduates in five years,” which set off the so-called “talent war” among cities. By December 2019,virtually every prefecture-level city in China had issued some form of talent policy,with more than 85% offering specific talent attraction measures. As eligibility thresholds were gradually lowered from advanced degree holders to ordinary undergraduates,the talent war increasingly took on the character of a broader labor competition,especially against the backdrop of falling fertility. Existing research has largely treated these city-level policies as exogenous shocks to study their effects on local outcomes such as innovation and industrial upgrading. The literature has paid much less attention to the policies themselves:their content,scope,and intensity. Existing measurement strategies rely mainly on binary indicators of policy adoption,counts of policy documents,or subjective text-coding scores,none of which adequately capture the substantive variation in incentive intensity across cities and over time. This paper addresses that gap.

The first contribution is empirical. The paper constructs what is,to our knowledge,the most comprehensive panel dataset of city-level talent attraction policies in China,covering 297 prefecture-level cities from 2008 to 2019 and drawing on more than three thousand policy documents collected through systematic multi-channel search. The constructed talent subsidy index incorporates subsidy type,the educational threshold of eligible recipients,and the conditional restrictions attached to disbursement,providing a substantially richer measure than has previously been available. Using this dataset,the paper documents three sets of stylized facts. First,the temporal pattern is one of episodic acceleration rather than gradual diffusion. Fewer than twenty cities per year introduced subsidy policies before 2015. The number of new adopters roughly doubled to forty in 2017 and peaked at fifty-four in 2018. Coverage simultaneously expanded down the education ladder,from doctoral holders toward ordinary undergraduates. Second,the spatial pattern shows a clear east-to-west intensity gradient,with eastern provinces such as Jiangsu and Zhejiang having adopted subsidy policies well before the 2017 wave. By the end of 2019,doctoral-level subsidies covered 252 cities,equivalent to 85% of the sample,while undergraduate-level coverage stood at only 51% and remained concentrated in the east. Third,subsidy intensity exhibits an inverted U relationship with city-level GDP per capita:cities at intermediate levels of economic development offer the most generous subsidies,while both the poorest and the most developed cities are less aggressive.

The second contribution is to identify the mechanism behind the rapid escalation of the talent war. The paper attributes it to strategic interaction among local governments operating within China's promotion tournament system. Under fiscal decentralization and politically managed cadre promotion,prefecture officials face strong incentives to compete on outcomes that are rewarded in cadre evaluation,and the 2016 Guideline explicitly incorporated talent work into that evaluation framework. The implication is that high-profile policy moves by a focal city,such as Wuhan in 2017,exert horizontal pressure on neighboring and peer-tier cities to respond in kind,both to protect their local human capital stock from being drawn away and to avoid falling behind in the promotion tournament. The paper tests this mechanism empirically and finds a significant peer effect:a city's subsidy intensity responds positively to the policies of same-tier cities in neighboring provinces. Heterogeneity analysis shows the effect is stronger in ordinary prefecture cities,in eastern regions,in the post-2016 period,and in cities led by younger party secretaries.

The Chinese government proposed  improving the basic old-age insurance system and the mechanisms for setting and adjusting benefits to ensure the long-term balance of basic old-age insurance funds. The government also called for faster development of a multi-tiered, multi-pillar old-age insurance system. However, there is a significant gap between the actual situation and the strategic goals. The basic old-age insurance fund for enterprise employees has a large gap and heavily relies on fiscal subsidies. The development of the three pillars of old-age insurance is extremely unbalanced. Basic old-age insurance is “Pillar I Dominance”. The increasing gap in the basic old-age insurance fund for enterprise employees is closely related to the calculation method of pension benefits.

The original intention of the transitional benefits in the basic old-age insurance for enterprise employees is to compensate for the lack of pension benefits corresponding to the deemed contribution years of “middle-participants”, ensuring a reasonable and smooth transition of pension benefits. The calculation of basic benefits includes both the actual contribution years and the deemed payment years of any participant. The calculation of individual account accumulated balance only includes the actual payment years and does not include the deemed payment years. In theory, the individual account benefits corresponding to the deemed payment years should be compensated. However, the current calculation method for the transitional benefits resembles that of the foundational benefits, and the current individual account benefits for “middle-participants” do not include the pension benefits corresponding to deemed contribution years. 

Based on the basic old-age insurance system for enterprise employees, we construct actuarial models for transitional benefits. We also develop an actuarial model for the individual account benefits corresponding to the deemed contribution years of “middle-participants”, and evaluate the payment gap and fiscal burden caused by the deviation of the current transitional benefits calculation method from its original intention. We calculate the expenditure of the transitional benefits and individual account benefits corresponding to the deemed contribution years of retired “middle-participants” from 2006 to 2024. Comparing the expenditure of the transitional benefits and that of the individual account benefit corresponding to the deemed contribution years gives the transitional benefit overpayment. We also compare the transitional benefit overpayment with the fiscal subsidies. 

Based on the calculation and comparison mentioned above, we find that from 2006 to 2024, the current transitional benefit expenditure was significantly larger than the individual account benefit expenditure corresponding to the deemed contribution years, with the former's annual growth rate of 16.78%  far higher than the latter's 12.93%. This has led to an annual expansion of the transitional benefit overpayment. During this period, the average annual growth rate of the transitional benefit overpayment was 17.67%, and the corresponding average annual growth rate of fiscal subsidies was 12.93%. The transitional benefit overpayment is an important reason for increasing the fiscal burden.

To avoid introducing significant model risks by reverse estimating historical missing data, we conduct robustness tests by setting traditional fixed values for the salary growth rate, compliance rate and seniority salary growth rate. Multi-scenario robustness tests consistently validate that the scale of current transitional benefit expenditure is still significantly higher than that of individual account benefit expenditure corresponding to the deemed contribution years under various economic assumptions. This means that the conclusions of this paper demonstrate strong robustness.

If the transitional benefit overpayment was transferred to the second and third pillar old-age insurance, it can significantly increase their scale. This can make the three-pillar structure of old-age insurance more coordinated and reasonable. Sensitivity analyses reveal that the transitional benefit overpayment varies in the same direction as the benefit growth rate, compliance rate, seniority salary growth rate, contribution continuity rate, and transition coefficient, and in the opposite direction as the salary growth rate and bookkeeping interest rate. The factors, ranked by degree of influence from strong to weak are, in order, the contribution continuity rate, the seniority salary growth rate, the compliance rate, the benefit growth rate, the salary growth rate, the bookkeeping interest rate, and the transition coefficient.

The current calculation method's deviating from the intention has widened the payment gap of the basic old-age insurance. To narrow the payment gap, alleviate the fiscal burden, solve the difficult problem of basic old-age insurance “Pillar I Dominance”, and strengthen the second and third pillars of old-age insurance, the Chinese government can take the following measures:Replacing the current transitional benefits with the individual account benefits corresponding to the deemed contribution years; transferring the overpayment of transitional benefits into the second and third pillars to develop the two pillars of the old-age insurance system; and raising the contribution continuity rate and compliance rate  to strengthen the second and third pillars and improve the multi-pillar old-age insurance system. 

The innovation of this paper is primarily reflected in three aspects:Firstly, it reveals how the current transitional benefit calculation method deviates from its original design, leading to a deficit in the basic old-age insurance fund for enterprise employees and an increased fiscal burden. Secondly, it confirms the scientific and rational basis for using the individual account benefits corresponding to deemed contribution years as the transitional benefits. Finally, it integrates the study of the original intention of transitional benefits with solving the difficult problem of basic old-age insurance “Pillar I Dominance”. 

The word“entrepreneur”originated in French and refers to an individual who possesses an adventurous spirit and is responsible for the operation or management of an organization. In this context,scientifically and reasonably quantifying  entrepreneurship has become a key link in policy design and theoretical research. Existing discussions in the academic community include two branches. One focuses on the innovation dimension,often using a single or a few indicators,which is simple but difficult to fully reflect its rich connotations; the other builds a multi-dimensional system,incorporating elements such as risk-taking,management,learning,and social responsibility on the basis of innovation and entrepreneurial spirit,which is more in line with the diverse real-life roles of entrepreneurs.

However,existing research still needs improvement in two aspects: Firstly,it pays insufficient attention to the “soft” dimensions such as values and social responsibility inherent in entrepreneurial spirit,making it difficult to fully reflect the connotations of entrepreneurial spirit; Secondly,it is still weak in combining with the policy orientation and development characteristics of the new era in China,especially lacking in reflecting major strategic backgrounds such as common prosperity and high-quality development. This easily leads to insufficient adaptability in evaluating Chinese entrepreneurial spirit and makes it difficult to accurately capture the evolution of entrepreneurial behavior and spirit traits driven by policies. It can be seen that although scholars at home and abroad have gradually deepened their research on entrepreneurial spirit in recent years,there is still a lack of a scientific and reasonable indicator system for quantifying and evaluating Chinese entrepreneurial spirit.

In this regard,this study takes the five aspects of Chinese entrepreneurial spirit in the new era (patriotism,innovation,integrity and law-abiding,social responsibility,and international perspective) as the first-level indicators. This study establishes an evaluation index system for Chinese entrepreneurial spirit,covering 11 secondary indicators and 12 evaluation contents. Based on this index system,the entrepreneurial spirit of nearly 3500 enterprises in the Shanghai and Shenzhen stock markets from 2012 to 2024 was quantitatively evaluated,and the differences in entrepreneurial spirit among six types of enterprise nature,12 major industries,and 31 provincial administrative regions were compared. The results show: ①From 2012 to 2021,the entrepreneurial spirit of Chinese listed companies fluctuated and rose overall,reaching a peak in 2021. This upward trend has laid a solid foundation for entrepreneurial spirit; although it declined somewhat from 2022 to 2024,this was a strategic adjustment by enterprises in a high-risk environment. In the long term,with economic recovery and the implementation of policies,entrepreneurial spirit is expected to gradually recover and focus more on quality improvement. ② At the provincial level,the total scores of eastern coastal provinces continue to lead,while some provinces in the central and western regions have outstanding performance in social responsibility and patriotism. ③ At the industry level,technology-intensive industries have obvious advantages in innovation and international perspective,while basic and public service industries are more stable in integrity and law-abiding and social responsibility. ④At the enterprise nature level,state-owned enterprises and foreign-funded enterprises lead in the overall score,while private enterprises are active in the innovation dimension. Furthermore,the results of the panel data regression analysis we employed indicate that entrepreneurial spirit has a significant positive predictive effect on the performance of enterprises,thereby further verifying the effectiveness of this assessment system.Based on this,this study has proposed policy suggestions for promoting the entrepreneurial spirit in the new era from aspects such as overall recommendations,cultivating patriotism,stimulating innovation spirit,practicing integrity and law-abiding,undertaking social responsibilities,and expanding international perspectives. It has also pointed out the future research directions.

The main contributions of this study can be summarized into three aspects: Firstly,it has constructed an authoritative and characteristic evaluation system from a single dimension to multiple dimensions. Previous studies mostly focused on the innovation or entrepreneurship dimension and used a single indicator to measure entrepreneurial spirit,ignoring its multi-level social and cultural connotations. However,this study innovatively introduced five core dimensions and constructed a multi-dimensional quantitative assessment system. This system takes into account both economic performance and social value,thereby presenting the era connotations and social characteristics of Chinese entrepreneurial spirit more systematically. Theoretically,this system provides a more comprehensive perspective,helping the academic community to deeply explore the connotations of entrepreneurial spirit,and enabling more precise measurement and analysis in line with China's national conditions and policy environment. In terms of application value,this system can help the government and all sectors of society better identify and cultivate entrepreneurs,and promote Chinese enterprises to gain an advantage in global competition. Secondly,a scientific and reasonable indicator weight and assessment method have been established. The determination of the weights of primary indicators and the secondary indicators has consolidated the consensus of academia,industry and policy,forming a comprehensive and precise measurement system. Thirdly,the assessment results are sustainable and easily accessible. The original data sources are stable,the assessment process is replicable,the results can be verified,and it supports annual updates and free public disclosure,providing reliable data support for related research and decision-making.

As intellectual property (IP) conflicts have  become an increasingly integral component of international economic competition,Chinese enterprises have been confronted with a growing number of overseas IP disputes in the process of “going global”. Meanwhile,as China deepens its integration into the global innovation network,overseas patenting has drawn widespread attention as a critical channel for enhancing both national and firm-level IP strategic capabilities. Overseas patent applications not only help firms protect technological innovations and safeguard their interests in international markets,but also constitute an important foundation for improving China's position in global value chains and  in international innovation competition. Despite the increasing relevance of this issue,existing studies have paid limited attention to the relationship between overseas IP disputes and Chinese firms' overseas patenting behavior,and systematic micro-level empirical evidence remains scarce. 

Against this backdrop,this paper incorporates overseas IP disputes and firms' overseas patent applications into a unified analytical framework and conducts an integrated investigation from both theoretical and empirical perspectives. The contributions of this paper are threefold. First,by viewing overseas IP disputes as an external shock,this study extends the literature on firms' strategic overseas patenting behavior. Second,drawing on micro-level enterprise survey data,it provides empirical evidence on the impact of overseas IP disputes on firm behavior. Third,through multidimensional heterogeneity analyses,it uncovers how these effects vary across firms with different characteristics and external institutional environments.

The theoretical analysis indicates that overseas intellectual property disputes promote firms' overseas patent applications mainly through two channels:by intensifying competitive pressure in international markets,which induces firms to strategically strengthen patenting efforts in order to enhance core competitiveness and build patent barriers,and by heightening firms' awareness of intellectual property protection,thereby shifting their behavior from passive defense to proactive overseas patent strategies aimed at deterring imitation and infringement and strengthening their competitive position in global markets. In addition,the mechanism analysis shows that,in response to increased legal risks and the need to safeguard technological innovation,firms tend to raise R&D investment,which further reinforces their incentives to apply for patents abroad.

The empirical results show that experiencing overseas intellectual property disputes significantly enhances Chinese firms' strategic orientation toward overseas patenting and promotes their willingness to apply for patents abroad. To address potential endogeneity concerns,this study employs propensity score matching to improve sample comparability and reduce selection bias,and further uses the proportion of overseas IP disputes among other firms in the same industry and the number of foreign direct investment contract projects at the city level in 2015 as instrumental variables to mitigate omitted variable bias and reverse causality. A series of robustness checks—including additional control variables,alternative Probit and OLS specifications,and different fixed-effects settings—consistently support the robustness of the main findings. The mechanism tests further verify that increased R&D investment constitutes an important channel through which overseas intellectual property disputes promote firms' overseas patent applications. Heterogeneity analyses indicate that the positive effects are more pronounced among firms with export activities,firms in the mature stage of development,firms located in cities with higher levels of intellectual property governance,and firms situated in cities designated as nodes under the Belt and Road Initiative.

Based on the theoretical analysis and empirical findings,this paper derives several implications at both the firm and policy levels. At the firm level,enterprises should strengthen their strategic orientation toward overseas patenting and respond to overseas intellectual property disputes in a rational and flexible manner by making effective use of diversified dispute resolution mechanisms. At the policy level,governments should further improve early-warning and response mechanisms for overseas intellectual property risks,and adopt differentiated approaches across firms and regions to help transform the external pressure arising from overseas intellectual property disputes into an internal driving force for enhancing firms' overseas intellectual property capabilities.

This study examines how non-state-owned strategic investors (NSIs) influence state-owned enterprises' (SOEs) propensity to undertake high-tech mergers and acquisitions (M&As) by reshaping the operation of dynamic capabilities. Existing studies mainly explain the role of NSIs from the perspectives of resource provision and governance improvement. However,these perspectives cannot fully explain why firms with similar resources and governance structures make different strategic choices under technological uncertainty. To address this gap,this study adopts the dynamic capabilities framework,which emphasizes firms' abilities to sense opportunities,seize them through strategic commitment,and reconfigure resources in changing environments.

Within this framework,high-tech M&As are conceptualized not as routine resource acquisition activities,but as strategic manifestations of dynamic capability deployment. Specifically,they represent the point at which firms transform opportunity recognition into irreversible strategic commitment while simultaneously initiating resource reconfiguration. Thus,the decision to undertake high-tech M&As reflects firms' ability to operationalize dynamic capabilities at critical strategic stages rather than merely their resource endowments.

Building on Wang and Ahmed (2007),this study further decomposes dynamic capabilities into absorptive capacity,adaptive capacity,and innovative capacity,which correspond respectively to the sensing,seizing,and reconfiguring stages. Absorptive capacity reflects firms' ability to identify and assimilate external technological knowledge; adaptive capacity captures the ability to adjust strategic commitments and resource allocation under uncertainty; and innovative capacity denotes firms' capability to reorganize and recombine resources in anticipation of new technological paradigms. These capacities are treated as dynamic processes rather than static capability stocks.

SOEs often face ownership-specific institutional constraints that hinder the operation of dynamic capabilities. Administrative governance structures,multiple policy objectives,and soft budget constraints reinforce organizational inertia and path dependence,limiting firms' ability to conduct distant search,form forward-looking commitments,and proactively reconfigure resources. Consequently,SOEs are less likely to initiate high-tech M&As despite increasing pressure for technological and industrial upgrading.

Against this backdrop,the introduction of NSIs provides an important external mechanism for alleviating these constraints. First,in the sensing stage,NSIs embedded in industrial and technological networks expand firms' information channels and cognitive boundaries,thereby enhancing absorptive capacity and improving the identification of emerging technological opportunities. Second,in the seizing stage,NSIs introduce market-oriented decision-making logic and risk-sharing mechanisms through governance participation,mitigating administrative rigidities and excessive risk aversion and thereby strengthening adaptive capacity. Third,in the reconfiguring stage,NSIs facilitate forward-looking adjustments in organizational structure,technological positioning,and resource allocation,enhancing innovative capacity and improving firms' readiness to integrate external technological assets. Overall,NSIs do not merely increase resources or improve governance efficiency; rather,they systematically optimize the operation of dynamic capabilities and reduce the uncertainty associated with high-tech M&As.

The study further distinguishes between industry-related and supply-chain-related NSIs. Compared with industry-related investors,supply-chain NSIs are more deeply embedded in complementary technological and industrial networks,enabling them to exert stronger effects on opportunity recognition,strategic commitment,and resource reconfiguration. Consequently,supply-chain NSIs are more effective in promoting high-tech M&As.

Using a sample of Chinese listed SOEs from 2008 to 2022,the empirical results show that the introduction of NSIs significantly increases the likelihood of high-tech M&As,especially for supply-chain-oriented investors. Mechanism tests indicate that this effect operates through improvements in absorptive,adaptive,and innovative capacities. Heterogeneity analyses further reveal that the effect is more pronounced in high-tech industries,regulated sectors,and non-western regions of China. Additional analyses show that high-tech M&As improve R&D intensity,firm growth,and regional marketization,thereby enhancing firms' innovation capability and competitiveness.

This study contributes to the literature in three ways. First,it extends dynamic capabilities theory from post hoc performance explanations to ex ante strategic decision-making by linking capability processes to strategic choices. Second,it reconceptualizes the role of NSIs as mechanisms that reshape capability operation processes rather than merely providing resources or improving governance. Third,it provides new insights into SOE reform by showing how external strategic investors alleviate institutional constraints and facilitate capability upgrading under technological uncertainty.

China's registration-based IPO reform adopted a scientific path. The strategy was “piloting first, reforming new sectors before existing ones, and rolling out gradually.” It started as a pilot on the STAR Market. The reform is now fully implemented. This process has deepened steadily. The STAR Market adopts a market-oriented pricing mechanism. It determines the issue price through inquiry. It also uses a sponsoring and underwriting mechanism for issuance management. Regulatory authorities no longer directly audit IPO quality. Information authenticity relies heavily on intermediary supervision. This includes internal controls by issuers and due diligence by sponsors. To consolidate intermediary responsibilities, the STAR Market innovatively introduced the co-investment system. This rule requires sponsors to use their own funds to subscribe to listed companies' shares. The co-investment ratio is between 2% and 5%. It also has a 24-month lock-up period. However, existing literature mainly studies this system from specific aspects. These include investor sentiment, underwriter reputation, and  willingness to co-invest. Theoretical discussions still mostly view sponsors through a “single identity”. Previous studies evaluate the policy primarily from a “buyer” perspective. They fail to comprehensively consider the sponsor's simultaneous role as a securities “seller”. This single-perspective limitation provides a new starting point for our study. It leads to our core research question. Can the co-investment system drive IPO pricing toward fair value under the registration-based regime? Under this system, sponsors take on an additional role as stock “buyers”. As “buyers”, they have strong motives to lower IPO prices. A lower price reduces initial investment costs and lowers the risk of falling below the issue price. Furthermore, it offers potential investment gains from a post-IPO price surge. As “sellers”, they have strong motives to raise IPO prices. A higher price secures higher underwriting fees and maximizes current profits. The dual role creates a complex dual agency problem. It forces underwriters to balance between raising and lowering prices. They do this to find an equilibrium of interests.

To answer this question, we select 571 companies listed on the STAR Market from July 2019 to May 2025 as our sample. We focus on the dual identity of sponsors as both “sellers” and “buyers”. We explore how this dual agency problem affects IPO pricing efficiency. In our research design, we adopt the perspective of a “rational economic agent”. We theoretically analyze the interest game under this dual role. We innovatively use the sponsors' initial net income to measure their equilibrium choice. This metric is the difference between underwriting fees and co-investment costs. We accurately measure pricing efficiency using the absolute log deviation between the first-day closing price and the average offline institutional bid. Based on this measure, we test its causal impact on IPO pricing efficiency.

Our research finds that the co-investment system exacerbates agency conflicts. However, the drive for profit maximization creates a dynamic equilibrium of internal constraints. This ultimately guides IPO valuation and pricing toward fair value. Specifically, a higher initial net income leads to higher IPO pricing efficiency. Sponsors face a contradiction of wanting both high and low prices. This contradiction weakens their opportunistic motives. It reduces non-market interference and makes IPO pricing more reasonable. In the mechanism tests, investor opinion divergence is the core transmission path. This manifests as a higher standard deviation of offline bids and a lower first-day turnover rate. A high initial net income prompts underwriters to transmit true information. This effectively breaks the false consensus of “collusive underpricing” among primary market institutions. It reasonably increases bid differences. Consequently, it compresses arbitrage space from the source. This guides secondary market expectations to converge and reduces the first-day turnover rate. Regarding heterogeneity, the enhancement effect is more significant in certain samples. These include firms with high lead underwriter reputation, high analyst attention, and low investor attention. This shows that reputation constraints and analyst supervision play a positive reinforcing role. Conversely, excessive irrational attention from retail investors creates “price pressure”. This hinders the improvement of pricing efficiency. In further research, we explore the market-oriented effects of IPO pricing. We confirm that the dual agency game can increase holding-period excess returns in the short term. However, this driving effect weakens over time due to complex market dynamics. Investors should beware of short-term overvaluation risks. These risks arise from “price support” behaviors by sponsors during the co-investment period.

Compared to existing research, our marginal contribution breaks the previous unidirectional evaluation framework. We use the sponsors' dual identity as a starting point. We comprehensively consider the impact of the dual agency role on IPO pricing efficiency. Additionally, we innovatively use initial net income as the key metric for interest trade-offs. We theoretically and empirically affirm the pricing fairness of sponsors under this special dual agency behavior. This provides a new theoretical perspective and empirical support for understanding the micro-governance utility of intermediaries under the reform. It greatly enriches the literature on the co-investment system and IPO pricing.

The U.S. financial regulation has long been characterized by a dual “state-federal” structure alongside a fragmented multi-agency regulatory framework at the federal level. Regulatory bodies have both divided and overlapping jurisdictions,which not only induce regulatory competition and arbitrage but also results in policy uncertainty,high market compliance costs,and inadequate investor protection. These systemic fragmentation issues have become even more pronounced in the regulation of digital assets:the Securities and Exchange Commission （SEC） and the Commodity Futures Trading Commission （CFTC） are engaged in a “turf war” over the classification of digital assets; states have created a “race to the bottom” through divergent licensing rules; and partisan polarization in Congress,combined with lobbying by interest groups,has repeatedly deadlocked federal legislation.

This paper focuses on a diachronic analysis of the power struggles and legislative processes among  federal regulators and Congress since 2015,particularly regarding jurisdictional divisions and asset classification in digital asset regulation. It examines the deep-rooted causes of the regulatory dilemmas facing innovative financial products under the path dependence of a fragmented system:the principles of separation of powers,bicameralism,and federalism enshrined in the U.S. Constitution inherently generate numerous “veto points” in the legislative process. These veto points significantly increase legislative costs and implementation difficulties,while also making it difficult to eradicate long-standing systemic flaws across sectors.

Concurrently,this paper briefly reviews the legislative processes in Japan,the EU,and the UK. A comparison with the U.S. not only deepens our understanding of the factors influencing institutional efficiency—specifically,how the interaction between “historical institutional legacy” and “realistic collective action capacity” shapes legislative performance—but also reveals the differential effects of path dependence and critical junctures in institutional change. This finding holds significant theoretical value for understanding the divergence in the global digital asset regulatory landscape: although technological change is global,institutional responses remain deeply constrained by each country's state structure,regulatory traditions,and politico-economic power configurations, resulting in a pluralistic regulatory ecosystem characterized by “same technology, different systems”.