Does carbon mitigation depend on the force of government or the autonomy of enterprises? We should first distinguish the roles of green fiscal policy and corporate green investmentto test whether they can independently guide enterprises to reduce carbon emissions. Because a clear relationship will help resolve the embarrassment caused by their different goals. Then we use theoretical and empirical methods to analyze green fiscal policies and corporate green investment mechanisms, which have nonlinear impacts on carbon mitigation in mathematics. Furthermore, we have empirically verrified then in three effective paths: the promotion of green fiscal policies on green investment, the mediator of green investment in the influence of green fiscal policies on carbon mitigation and enterprises performance, and the difference in firm heterogeneity on green investment. The results show that green fiscal policies support enterprises in realizing carbon mitigation by pressure, stimulating green investment, and achieving Innovation Compensation. Carbon mitigation depends on the trigger of green fiscal policies and the catalysis of green investment. That means the green fiscal policy is an effective instrument for the government to stimulate green innovation only when they are vital in reducing carbon emissions. Finally, we can summarize the evolutionary process of carbon mitigate from mandatory green fiscal policies to independent green investment, which is helpful for green governance and low-carbon development of enterprises.

This paper investigates the drivers of hot money in China. It develops a model based on expectation-variance utility theory in the theoretical analysis section. The model considers a foreign investor who faces the question of how to distribute his wealth between foreign and domestic assets. The model’s analysis suggests that economic variations, such as expected domestic currency appreciation, rise in domestic asset return, drop in foreign asset return, domestic economic growth, decrease in domestic inflation, and rise in foreign asset risk will cause foreign investors to distribute more wealth in domestic assets. Therefore, hot money flows in, and vice versa. In the empirical analysis section, the paper estimates structural VAR models using data from 2000 to 2019 in China. The impulse response functions are consistent with the theoretical predictions: when there is a positive domestic inflation shock, hot money outflows increase (inflows decline) in the current period, but the response is not significant. When there is a positive domestic growth rate shock or positive domestic asset return rate shock, hot money inflows increase (outflows decline) in the current period, and the response reaches its peak in the next period. Furthermore, when there is a positive expected exchange rate shock, hot money outflows increase (inflows decline) in the current period. Of these drivers, the expected exchange rate has the largest impact on hot money, and the domestic growth rate has the most enduring effect.