Business In China Research Articles

China's business cycle forecasting: a machine learning approach

China's business cycle forecasting: a machine learning approach

Non-financial sustainability reporting and firm reputation. Evidence from Chinese listed companies

PurposeThis study highlights the influence of non-financial sustainability reporting and firm reputation (FR) on the China Stock Exchange. The study is based on the components of sustainability reporting that influence FR.Design/methodology/approachA simple ordinary least squares (OLS) regression model is initially run to test the hypotheses. Advanced econometric methods are used to detect the presence of heteroskedasticity. The study utilizes fixed-effect, two-stage least squares (2SLS) and two-step generalized method of moments (GMM) regression models to address endogeneity issues.FindingsFindings suggest that NFSR has a negative influence on FR. Conversely, environmental, social and governance (ESG) sustainability reporting exhibited positive associations with a FR in fixed-effect, 2SLS and GMM results.Research limitations/implicationsThis study has limitations, and data collection is restricted to the period from January 2018 to June 2023, limiting the scope of findings due to data constraints. Brand equity measurement is considered only one aspect of a company's activities, and other methods can also be considered for measuring brand equity. Another limitation is a standardized method for measuring NFSR. While this study used the Arianpoor and Salehi (2021) model to measure sustainability reporting in the Chinese market, future research could explore different methods.Practical implicationsThe findings of this study have important practical implications for corporate management, highlighting reputation challenges and the strategic importance of sustainability. Managers are encouraged to use NFSR strategically to enhance their reputation and corporate strategy.Social implicationsThe social implications highlight ownership and regulatory structures, promoting enhanced sustainability reporting in China's business culture. This insight informs policymakers, businesses and stakeholders regarding the importance of sustainability reporting, guiding decisions on corporate reputation and sustainability regulations.Originality/valueThe research indicates the importance of context-specific sustainability reporting for enhancing reputation. It provides insights into sustainability's impact on a company's reputation, promoting responsible practices for a sustainable global economy. To the best of the authors' knowledge, this is the first research that utilizes the NFSR frameworks and a sample of firms in China to discuss sustainability reporting with different guidelines.

Research On Management Quality of Starbucks in China's Business Expansion

This paper gives a general introduction of Starbucks including its scale in China, the changes of its sales in these years and use Five Forces Model to analyse the threats of Starbucks. From six aspects to show the potential risks of Starbucks. This essay also explores some problems Starbucks caused in expansion, leadership behaviour, personnel management, brand positioning. The main problems are the low-quality service, the ignoring of the individual management, bad performance of some workers and the broken end-up brand positioning respectively. The Maslows hierarchy of needs model is used to motivate the workers and solve the problems in expansion. The Multiple-Linkage model is divided into two parts to solve the rest problems.

The Key to China's Market - Negotiation

In the context of economic globalization, business negotiation has become increasingly important. When western business negotiators seek opportunities in the huge Chinese market, they often encounter setbacks in negotiations. This article starts from the perspective of universal cultural dimensions, and through the analysis of the characteristics of Chinese culture, to explore the cultural factors that affect China's business negotiations from the shallow to the deep, from the outside to the inside.

Business model innovation driven by corporate social responsibility in a digital innovation ecosystem: Evidence from Chinese manufacturers

AbstractThis study focuses on examining the relationship between corporate social responsibility (CSR) fulfillment and business model innovation (BMI) in the context of China's business environment. The research utilizes data from 1028 manufacturing firms in China and specifically explores the impact of CSR fulfillment on BMI within the digital innovation ecosystem. The findings indicate that both internal CSR (ICSR) and external CSR (ECSR) have a significant positive influence on BMI, with ECSR having a stronger effect. Additionally, the study reveals that value co‐creation (VCC) plays a mediating role in strengthening the relationship between CSR fulfillment and BMI. Furthermore, the study highlights that the positive association between CSR fulfillment and BMI is more prominent in firms with higher digital platform capability (DPC). Overall, this research provides valuable insights for manufacturers seeking to achieve BMI and sustainable development.

A U-shaped relationship between real financialization and financial risk: Evidence from a single threshold model

Financialization plays an important role in promoting economic development. This paper discusses the motivations and impacts of enterprises' financialization, and introduces the current state of China's economic development and the current state of China's business economy to deepen the understanding of economic trends. It also examines the impact of enterprises' financialization on financial risk using a threshold model. The results show a U-shaped relationship between entity enterprises' financialization and financial risk: financialization helps reduce financial risk when the level of financialization reaches 0.45%.

Impact of COVID-19 on China's business and economic conditions: the importance of quantile asymmetries.

China has remained a growth engine for the global economy for thelast several years. In this study, we assess the impact of COVID-19 on China's business and economic conditions; employing the quantile-on-quantile (QQ) regression and the quantile causality approaches. These econometrics batteries suit our research postulation, as they are capable to delineate underlying asymmetries across the whole distribution, based on which we can infer whether the response of China's business and economic conditions towardsCOVID-19 is heterogenous or homogenous. Utilizing the novel business and economic conditions measures, we observed that COVID-19 had initially disrupted both business and economic conditions in China. However, they showcased recovery over time. Our in-depth analysis allowed us to infer that the effect of COVID-19 on China's business and economic conditions is heterogeneous across different quantiles, and there is reliable evidence of asymmetry. The outcomes of quantile causality in mean and variance corroborate our primary estimations. These findings educate policymakers, companies, and other stakeholders to understand the nuances of China's business and economic conditions vis-a-vis COVID-19 in the short-run and as time elapsed.

English as a Business Lingua Franca: The Use of English in China's Business World

English as a Business Lingua Franca: The Use of English in China's Business World

The Effect of Presentation-Assimilation-Discussion (PAD) Class Model on Chinese Undergraduates’ Business English Writing Performance

As China's economy and society keep expanding, the significance of business English in worldwide communication remains progressively crucial. Ensuring that China's business English talent training meets global standards is a priority. It has, therefore, become crucial and time-consuming to figure out how to help Chinese students enhance their business English writing skills. Zhang Xuexin, a Chinese professor at Fudan University, proposed the PAD (Presentation-Assimilation-Discussion) Class Model. Since it was presented, many academics and educators have supported it. This study involved 50 undergraduates from a Chinese university, including 25 in the experimental and control classes respectively. The 12-week teaching experiment was followed by interviews with a few students from the experimental class to investigate the influence of the PAD Class Model on the overall score and sub scores of Chinese students' business English writing, as well as the acceptability of the PAD Class Model. Through the analysis of the pre- and post-tests by SPSS, the results indicate that the utilization of PAD Class Model can substantially raise the overall score and the sub scores of content, language, appropriateness, grammar, and organization for undergraduate business English writing. Furthermore, by assessing the interview findings of the experimental class, compared to the conventional teaching model, PAD Class Model serves a more conspicuous role in boosting students' interest in Business English writing, and PAD Class Model is universally accepted by students.

Structural news shock, financial market uncertainty and China's business fluctuations

This paper investigates whether and how financial uncertainty affects economic activity and business fluctuations, especially effects which occur through expectations. First, we find that China's business fluctuations are significantly affected by the anticipated uncertainty, while unanticipated uncertainty is limited. Second, short-term anticipated uncertainty shocks have the greatest impact on business fluctuations, followed by long-term shocks and medium-term anticipated uncertainty shocks. All the anticipated uncertainty shocks have a “smiling curve” character. Third, anticipated uncertainty, in the short term, suppresses economic growth, while it has the opposite effect in the long term, indicating that agents' behavior changes from overreaction to rational choice. Fourth, the major driving force of China's business fluctuations has gradually shifted from monetary policy to expectation management, which has reduced the policy costs of the monetary authority. It also shows that uncertainty, especially anticipated uncertainty, will play an increasingly important role in future business fluctuations.

Tax cuts and firms’ R&D capital efficiency

This paper explores the causality between tax cuts and firms’ R&D capital efficiency using China's Business Tax reform as an exogenous shock. Our difference-in-differences (DID) estimation documents that the reform significantly improves firms’ R&D capital efficiency, and the result remains robust under a series of tests. We contend that the increased cashflows after the reform, the subsequent R&D investments, and the hiring of R&D personnel are the plausible mechanisms at work. The result is more pronounced for firms bounded by stringent financial constraint, firms with lower technology intensity, firms undergoing fiercer competition and firms facing higher level of marketization.

Consumption–investment comovement and the dynamic impact of monetary policy uncertainty in China

China's consumption weakly or negatively correlates with investment. We argue that monetary policy uncertainty (MPU) shock might partly explain this negative comovement. An identified shock to MPU in the structural vector autoregression (SVAR) model raises consumption but lowers investment and output, and the heavy industry sector suffers more adverse impacts than the light industry. We develop a multisector dynamic stochastic general equilibrium model to capture negative comovement by incorporating collateral constraints and real balance. The simulation responses replicate the empirical results, indicating that an increase in MPU reduces the attractiveness of loans (risky assets) and encourages agents to hold more liquidity and increase consumption. The liquidity premium is key to generating negative comovement, even in the absence of sticky prices, and differences in credit constraints or capital share could enhance negative comovement. Our findings have broad implications for China's business cycles and the theory of MPU.

Extracting business cycles with three filters: A comparative study and application in the case of China

AbstractThis paper aims to evaluate the performances of the wavelet, Hodrick–Prescott (HP), and Baxter–King (BK) filters in extracting cyclical information and to use an appropriate method to analyze China's business cycles. First, we use a second‐order autoregression (AR (2)) and random walk, based on Monte Carlo simulation experiments, to generate the data‐generating processes (DGPs) with different frequency characteristics. Second, the HP, BK, and wavelet filters are applied to extract the cyclical components of the respective DGPs. Third, the filtering abilities of the three methods are statistically compared. The results show the following: (1) Under the condition that the DGP is low frequency (long cycle) and trend dominated, the filtering performance of the three methods will remain unsatisfactory. (2) If the DGP is high frequency (short cycle), all three methods can serve as effective methods regardless of whether they are trend dominated or cycle dominated. However, it can be seen that the BK and wavelet filters present better performance than the HP filter. (3) In other cases, better filtering performances can be observed in the wavelet. Finally, the three methods are applied to estimate China's business cycles. In conclusion, this paper argues that the wavelet can effectively replace HP and BK filters to extract cyclical components.

The driving forces of China's business cycles: Evidence from an estimated DSGE model with housing and banking

We study the approximate sources of China's business cycles in an estimated dynamic stochastic general equilibrium (DSGE) model with housing and banking. The model replicates well the volatility and cyclicality of key macroeconomic variables observed in the past two decades in China. A host of shock decomposition exercises demonstrate that, among the shocks being considered, both financial and housing shocks are driving China's business cycles, accounting for a particularly large fraction of the variance in most macroeconomic and financial variables at the business cycle frequencies. In particular, the capital quality, housing demand, and loan-to-value shocks display prominent contributions to the business cycle fluctuations. Moreover, there exists substantial interactions between the banking and housing sectors in China, where the collateral constraint and the financial constraint amplify with each other. The results shed new light in the understanding of China's business cycles, and may serve as a useful benchmark for future quantitative analyses of China's macroeconomic fluctuations using DSGE frameworks.

Entry Cost, Competition, and Innovation: The Case of China's Business Registration Reform

Entry Cost, Competition, and Innovation: The Case of China's Business Registration Reform

The Chinese business system and itsauthoriliberaleconomic model

AbstractChina's position as one of the most powerful nations in the world is undisputed. However, in an evolving landscape, China's utilization of a path‐dependent business system may hinder the ability of the country's institutions to undergo necessary change, which will have important implications for international business literature. Through business system theory, empirical evidence, and a mixed methods approach, we discuss China's business system explaining how the system may impair sustainable growth and the transformation required by a less dependent industrial society. Our research suggests that the Chinese business system is still very arrested due to its recent past, and the Chinese Communist Party has only partial interest in improving some of the most important bases for the development of modern enterprises, even if fostering a somewhat liberal economic approach. Since similar political (authoritarian) and economic (liberal) approaches are found elsewhere, we theorize on what we called anauthoriliberaleconomic approach.

The Emergence of Mafia-like Business Systems in China

AbstractA large body of literature on state–business relations in China has examined the political role of capitalists and collusion between the state and the private sector. This paper contributes to that literature and understanding of the internal differentiation among China's business elites by documenting the emergence of a particular kind of large, non-state business group that we argue is more akin to a mafia system than any standard definition of a firm. Drawing on large-N descriptive data as well as deep ethnographic and documentary research, we argue that mafia-like business systems share organizational principles (plunder and obfuscation) and means of growth and survival (relations of mutual endangerment and manipulation of the financial system). Understanding the particular moral economy that underlies mafia-like business systems and their interactions with the state challenges methodological foundations of research on China's political economy and helps to explain recent conflict between high-profile business people and the state.

Analysis and Reflection on the Current Situation of China's Business Administration under the New Economic Situation

Analysis and Reflection on the Current Situation of China's Business Administration under the New Economic Situation

Impacts of deregulation reform on PM2.5 concentrations: A case study of business registration reform in China

In contrast to the surge of attention to China's business registration reform per se, the environmental externalities of the reform have been somewhat neglected by mainstream academics. Adopting the difference-in-differences method alongside propensity-score matching, and utilizing the panel data of 283 cities in China from 2000 to 2013, this paper investigates the impacts of the deregulation reform on PM2.5 concentrations. The results indicate that the business registration reform has contributed to PM2.5 air pollution, with above-average impacts in central areas, but insignificant effects in western China. Furthermore, the treatment effects are stronger in cities with larger entry of small and medium enterprises and greater pressure to achieve targets for local GDP growth. Aiming to draw public attention to the problems arising from the reform, our study advocates necessary environmental regulations on business registration, which lends support to the theoretical view of “public interest” rather than “public choice”.

The Main Problems of China's Business Integrity and Its Solutions

In the development of China''s market economy, the problem of business integrity causes wide public concern. The main problems of China''s business integrity are that the high cost of business integrity makes it difficult to form an incentive mechanism for integrity management, the lack of honesty in government affairs has an enormous impact on business integrity and integrity management is made difficult by the social psychology of mutual distrust. To improve the current situation of China''s business integrity, it is necessary to enhance the contract spirits of business operators, intensify the legal punishment of business dishonesty, and establish and improve the social credit system.