Chinese Industrial Enterprises Research Articles

Can Transport Infrastructure Improve Enterprise Energy Efficiency? Evidence From China

As an advanced social development capital, transportation plays a vital role in promoting regional development. Concurrently, the business activities of enterprises intimately relate to these transportation services. Utilizing road construction to improve the energy efficiency of enterprises, therefore, becomes a critical way to promote the transformation of the economy from high-speed development to high-quality development. Existing studies primarily focus on the impact of transport infrastructure on productivity, while few papers focus on the impact mechanism of transport infrastructure on energy efficiency. To delve deeper into the internal relationship between transportation and regional economic development, this paper explores the effect of transport infrastructure on energy utilization efficiency at the enterprise level. Based on the environmental pollution data of Chinese industrial enterprises from 2001 to 2011, this paper analyzes the impact of transport infrastructure on enterprises’ energy efficiency and verifies the impact mechanism. The results show that the construction and improvement of urban road facilities can significantly improve firm energy utilization efficiency. Compared to low-energy consumption sectors, the impact of transportation infrastructure on the energy efficiency of high-energy consumption industry enterprises is notably more pronounced. A closer examination of the impact mechanism revealed that both industrial agglomeration and the cost effect are pivotal mechanisms through which transportation infrastructure affects enterprise energy efficiency. JEL Classification: D21, L91, Q40, Q51

The productivity spillover effect of foreign divestment: Evidence from Chinese industrial enterprises

Foreign divestment in China is garnering increasing social attention. This study investigates the productivity spillover effects of foreign divestment based on Chinese industrial enterprise data from 2000 to 2007. Our findings indicate that foreign divestment negatively impacts the total factor productivity (TFP) of incumbent enterprises, especially through backward linkages. We examine potential mechanisms based on the characteristics of divested and incumbent enterprises. The closure of foreign-invested enterprise disrupts industrial connections, whereas the sale of foreign equity to domestic shareholders strengthens local industrial linkages, thus presenting an opposite effect. Hong Kong, Macau, and Taiwan (HMT)-invested enterprises tend to local sourcing, leading to divestment effects through backward linkages. Conversely, non-HMT enterprises, with a higher capability to provide differentiated intermediate goods, primarily exhibit forward linkage effects. Further analysis reveals that incumbent enterprises with lower technological capabilities are more dependent on their foreign suppliers and customers. Domestic non-state-owned enterprises and those in regions with lower economic development or marketization levels also have less stable input-output relationships. As a result, these enterprises are more susceptible to the vertical spillover effects of foreign divestment.

Technology transfer and global value chain upgrading of manufacturing firms: evidence from China

Breaking through the predicament of "low-end lock-in" and achieving the upgrading of enterprises within the global value chain (GVC) is a critical issue in the study of internationalization strategies for enterprises in emerging economies. This paper uses China, a quintessential representative of such economies, as a case to explore how technology transfer can facilitate the upgrading of enterprises' GVCs. This research aims to reshape the international strategic positioning of Chinese enterprises by promoting the integration and development of technology transfer and the GVC. Utilizing patent data from Chinese manufacturing enterprises, as well as data from Chinese industrial enterprises and customs records from 2004 to 2014, this study empirically examines the relationship between technology transfer and the upgrading of enterprises' GVCs. Additionally, the moderating effect of industrial agglomeration is incorporated into the research framework.The findings reveal that both technology transfer in and technology transfer out significantly positively influence the upgrading of enterprises' GVCs, highlighting the crucial role of technological knowledge flow in enhancing enterprise positioning within the GVC. Furthermore, industrial agglomeration is shown to exert a positive moderating effect on GVC upgrading as a result of technology transfer out. This study provides valuable insights for policymakers, enterprise managers, and academics, enabling a more nuanced understanding of the pivotal role of technology transfer in reshaping GVCs. Consequently, it offers robust support for the internationalization strategies of Chinese enterprises.

Does distance from government hinder enterprises’ OFDI？Evidence from China

This study analyzes the impact of government–enterprise distance on the probability of outward foreign direct investment (OFDI) with matched data from Chinese prefecture-level municipal governments, the Chinese industrial enterprises database, and the directory of overseas investment enterprises. We determine that increased distance between the government and enterprises has a significant negative impact on the probability of enterprises’ OFDI. Mechanism analysis demonstrates that increased government–enterprise distance, which causes higher information search and relationship building costs, and decreased accessibility of public service, are the main reasons for this decline.

Broadband infrastructure expansion and labour income share: micro-evidence from Chinese industrial enterprises

ABSTRACT This study investigates the impact of broadband infrastructure on the labour share. We exploit the implementation of the ‘Broadband China Strategy’ (BCS) as an exogenous policy shock and use the staggered difference-in-differences framework with a panel dataset of Chinese industrial enterprises spanning 2011–2015. We find that the BCS leads to a significant reduction in the labour income share of firms in pilot cities compared with those in non-pilot cities, which remains robust after conducting various robustness checks. Rising market power and deepening capital are the two mechanisms underlying this effect. While our further analysis underscores significantly positive impact of broadband infrastructure on firm productivity and skilled labour structure, they do not highlight an elevated skill premium tied to broadband infrastructure. Heterogeneity analysis reveals that the effects are more pronounced among larger firms, industries with higher concentrations, and cities with higher innovation capacities. Overall, this study augments the existing literature on the firm-level determinants of labour share, providing a micro-level assessment of the labour market implications of broadband infrastructure.

Does carbon emission trading scheme improve corporate green mergers and acquisitions? Evidence from Chinese industrial enterprises

Does carbon emission trading scheme improve corporate green mergers and acquisitions? Evidence from Chinese industrial enterprises

Assessment of Green Innovation Efficiency in Chinese Industrial Enterprises Based on an Improved Relational Two-Stage DEA Approach: Regional Disparities and Convergence Analysis

Industrial enterprises are characterized by significant energy consumption and high emissions. Therefore, the implementation of green innovation by these enterprises is beneficial for promoting sustainable economic development and safeguarding the ecological environment. In this study, a relational two-stage DEA model containing shared inputs and undesired outputs is constructed to evaluate and decompose the green innovation efficiency (GIE) of Chinese industrial enterprises across 30 provinces from 2012 to 2021. Since the objective function of this model is nonlinear, a heuristic search method is employed for its resolution. On the basis of efficiency evaluation, the Gini coefficient, kernel density estimation, and convergence analysis are further employed to investigate the regional disparities and convergence properties in the two-stage efficiency of green innovation. Our findings are as follows: (1) The average GIE of Chinese industrial enterprises demonstrates a fluctuating upward trajectory, with significant regional disparities observed between provinces. (2) Regional disparities in R&D efficiency (RDE) and achievement conversion efficiency (ACE) have diminished in all regions. Super-variable density and interregional differences serve as the primary sources of regional disparities in RDE and ACE, respectively. (3) The presence of absolute and conditional convergence in RDE and ACE is observed across all regions. To improve the GIE of Chinese industrial enterprises, it is imperative to emphasize the heterogeneous impact of economic levels, industrial structure, and the degree of openness across various regions and stages of green innovation.

Can rising urban house prices actually limit the outward FDI by firms in a home country? A story from China

We investigate the effects of rising urban house prices on manufacturing firms’ decisions on outward foreign direct investment (outward FDI) in a home country. By utilizing the panel data of Chinese industrial enterprises in 2005–2013, our estimates suggest that, for every 210 manufacturing firms or 13 listed companies in China, one firm will forgo outward FDI when house prices double. As a result, there could have been 95 percent more manufacturing firms or 70 percent more listed firms conducting outward FDI if house prices remained unchanged during the study period. To address potential endogeneity issues, we exploit a fixed-effects instrumental variable model, a difference-in-differences strategy, and housing discontinuities at provincial borders among neighboring city/county pairs. To elucidate potential mechanisms, we employ the “Olley and Pakes” covariance to assess resource allocation efficiency and observe its negative correlation with house prices. Furthermore, we delve into the impact of house prices and resource allocation efficiency on TFP, and find that house prices and TFP are negatively correlated, while resource allocation efficiency and TFP are positively correlated. Finally, heterogeneity analyses reveal that rising house prices exert a stronger negative influence on outward FDI entry for firms that are less productive, larger, domestically-owned, more closely linked to the real estate industry, labor-intensive, and in industries with higher levels of outward FDI participation. These results underscore the fact that rising house prices could exacerbate resource misallocation, leading to a decline in enterprise TFP and subsequently reducing their outward FDI.

Transitioning to a green economy in China: The environmental and economic impacts of green credit.

Economic green transition is the change of economic development mode under environmental constraints; this process will generate huge demand for credit financing. Understanding the connection between credit allocation and environmental performance is crucial for the coordinated development of the economy and environment. Utilizing the Chinese Industrial Enterprises Database, I constructed a city-level green credit index and compiled panel data from 2006 to 2013 for 282 selected cities in China. A spatial model was employed to explore the influence of green credit on the economic green transition. The findings reveal a positive relationship between green credit and economic green transition during the study period. Green credit not only enhances local green total factor productivity but also exerts beneficial impacts on adjacent areas though demonstration effects. Additionally, the reallocation of credit resources and the innovation of clean technologies are identified as key mechanisms through which green credit fosters a greener economy. However, the study also finds that the impact of green credit is moderated by factors such as a high reliance on natural resources, the underdevelopment of market intermediaries, and excessive governmental intervention, which can undermine its effectiveness. Furthermore, the efficacy of green credit exhibits regional heterogeneity; it has a significant positive impact in the eastern regions of China, while its influence appears to be non-significantly positive in the central and western regions. This study enriches the research on the macroeconomic impacts of green credit, offering practical evidence and theoretical support for the implementation of green credit policies by local governments in China.

Economic growth target and patent quality: the heterogeneous effects of knowledge stock

ABSTRACT Using the Chinese industrial enterprise database and enterprise patent database, we investigate the influence of economic growth targets on patent quality, gauged via the knowledge breadth approach. Our findings reveal: (i) Economic growth targets significantly diminish patent quality, a conclusion that remains robust through multiple sensitivity analyses. (ii) Several underlying mechanisms drive this impact, including reduced allocations for education and science, as well as amplified market segmentation. (iii) The effect demonstrates heterogeneity based on knowledge stock, represented by firm age and export activities. Notably, for firms with substantial knowledge stock, the negative impact on patent quality becomes less pronounced. Our research sheds light on the nuanced ramifications of performance target management and elucidates key determinants of patent quality.

Auditing leading officials: Unintended consequences of government audit reform on corporate green innovation

How does a major government audit reform targeting leading officials in China affect corporate green innovation (GI)? Existing studies inadequately examine the relationship between the end-of-tenure audit of natural resource assets (EANRA) and corporate GI performance. Employing a difference-in-difference-in-differences approach and utilizing data from Chinese industrial enterprises spanning 2008 to 2020, we identify that EANRA significantly hinders corporate GI, particularly for large enterprises, those operating in less competitive industries, and those located in the eastern and central regions. This effect is more pronounced in cities with newly appointed and outgoing leading officials, short-tenure mayors, and stricter environmental regulation intensity. The crowding-out effect occurs as EANRA inhibits corporate GI by reducing innovation inputs and imposing cost constraints. However, the EANRA effect can be mitigated by internal controls and media coverage. Our findings highlight the unintended consequences of government audit reform for GI in developing countries like China.

Does Artificial Intelligence Improve Export Technical Complexity Upgrade of Manufacturing Enterprises? Evidence from China

Export technical complexity is an effective indicator to measure the upgrading of a country’s trade structure and high-quality development of trade. This study examines the impact of artificial intelligence on the export technical complexity upgrading of Chinese manufacturing enterprises at the enterprise and industry levels. It analyses matched data from the China Customs and Chinese Industrial Enterprises databases from 2000 to 2015. The results show that artificial intelligence promotes the upgrading of export technical complexity in Chinese manufacturing enterprises. The impact of artificial intelligence on upgrading export technical complexity is dynamic, showing an “inverted U-shape.” Heterogeneity test results indicate that artificial intelligence has a greater effect on export technical complexity upgrading if it features high-tech complexity, or the enterprises are local or in the eastern region of China. The mechanism results indicate that artificial intelligence significantly promotes labor productivity and innovation to upgrade China’s manufacturing enterprises’ export technical complexity. Finally, industry-level analysis shows that the application intensity of artificial intelligence substantially affects the average export technical complexity upgrades of Chinese manufacturing enterprises through spillover effects and resource reallocation effects. These findings promote upgrading export technical complexity at the enterprise and industry levels.

Monocentricity or polycentricity? The study on the enterprise environmental performance of urban spatial structure

Under the promotion of urban planning and land development policies, the urban spatial structure of China is undergoing a transformation towards polycentricity. The improvement of environmental performance during the process of urban spatial transformation is crucial for urban sustainable development. This paper uses high-resolution population grid data from LandScan for the years 2001–2019 to measure the urban spatial structure of Chinese cities. Then we match the Chinese Industrial Enterprise Database with the Chinese Industrial Enterprise Pollution Emission Database for the years 2001–2014. This paper empirically examines the impact and mechanisms of the polycentric spatial structure of Chinese cities on enterprise pollution reduction at the micro-level. The findings indicate that compared to monocentricity, polycentricity is more conducive to improving enterprise environmental performance. Mechanism tests demonstrate that the improvement in enterprise environmental performance resulting from polycentricity can be achieved through three channels: increasing urban population and density, mitigating urban environmental pollution, and promoting enterprise innovation ability. Heterogeneity analysis reveals that polycentricity is more beneficial for emission reduction among small enterprises, young enterprises and enterprises in regions with higher environmental regulations. This paper provides micro-level evidence and policy implications for further strengthening the aggregation effect of polycentricity and improving enterprise environmental performance in the future.

Corporate income tax reform and intra-industry resource reallocation

ABSTRACT Taxation is a crucial tool for government economic regulation and resource allocation. Our study, using data from the Chinese Industrial Enterprise Database from 1998 to 2010, highlights the significant role of corporate income tax reform in reducing resource misallocation in the industry. Employing the robust Difference-in-Differences method, we empirically confirm this effect. Our mechanism analysis reveals that the reform promotes increased competition among industry firms, resulting in enhanced resource allocation efficiency. These findings emphasize the vital role of tax policy in shaping resource allocation dynamics in Chinese market, underscoring its broader economic significance.

Digital disruption and energy efficiency: The impact of regional digitalization on China's industrial sector

Using the unique micro-data of industrial enterprises' Nitrogen oxides (NOx) and Sulfur oxides (SOx) emissions covering 58,725 enterprise-year observations, this paper investigates how digitalization affect energy efficiency. The empirical results show that regional digitalization can significantly promote the improvement of energy efficiency of industrial enterprises. Specifically, the result of PSM-DID method indicates that the impact of digitalization on energy efficiency is significantly enhanced by the “National innovative pilot cities” policy, while the dynamic result validates the continuity of industrial enterprises' energy efficiency. Moreover, regional digitalization has superior impact on enterprises within eastern region enterprises, the manufacturing sector, and with elevated liquidity and profitability levels. Finally, moderating effect suggests that technological innovation expand the positive impact of digitalization on enterprises’ energy efficiency. This study confirms regional digitalization can promote the energy efficiency of Chinese industrial enterprises, providing the policy suggestions to the energy transition in China.

Do environmental regulation policies increase urban boundary pollution? Micro evidence from Chinese industrial enterprises

Industrial organizations frequently opt to relocate their activities to regions bordering administrative boundaries, where regulatory oversight is comparatively lax, to hinder adherence to environmental regulations, which leads to boundary pollution concerns. Using a staggered DID model to Assess the influence of governmental environmental regulations on pollution at administrative boundaries using microdata obtained from Chinese industrial enterprises, this research employs the low-carbon city pilot policy as a quasi-experiment. The following are the study's findings: (1) The low-carbon city pilot policy increase boundary pollution levels by 1.3 % at the industrial enterprise level, supporting the pollution haven hypothesis. A series of robustness tests, including boundary enterprise identification and boundary distance calculations, are used to validate this result. (2) The low-carbon city pilot policy's boundary pollution effect has a fluctuating, wave-like spatial pattern. The pollution effect is most noticeable at about 10 km from the administrative boundary. (3) There is no evidence that the low-carbon city pilot policy's impact on industrial enterprises is consistent with the Porter hypothesis. (4) Environmental regulations are like a two-edged sword. According to data obtained from the branches of financial institutions, environmental regulations not only contribute to boundary pollution but also influence the development of the boundary area to some degree. This research provides original empirical findings from the standpoint of micro-level enterprises, substantiating the presence of boundary pollution as a result of environmental regulation evasion, providing policy recommendations for the development of environmental regulatory policies and the management of urban boundary pollution.

The impact of local government debt expansion on exports: A study based on Chinese enterprise-level data

This article establishes a multi-sector general equilibrium mathematical model, using Cobb-Douglas production and utility functions, analyzing the dynamic transmission mechanism within and between infrastructure sector, other non-trade sector and trade sector under the impact of local government debt. Besides, with data related to local government debt in China and data from Chinese industrial enterprises, it examines, from empirical perspective, the impact and transmission mechanisms of local government debt expansion on enterprise exports. The research findings indicate that, firstly, the expansion of local government debt has a significant negative impact on enterprise exports, with a stronger focus on the quantity of exports. Secondly, local government debt creates a crowding-out effect on export industries by promoting the expansion of non-trade sectors, leading to an impact on corporate exports. Finally, the financial constraint effect is an important transmission mechanism through which local government debt affects corporate exports. These conclusions have significant practical implications for risk management and control of local government debt, financial management and driving economic growth through exports.

Research on the Industrial Transformation Pathways in China Under the Background of Dual Carbon Background

The industrial transformation is an important path for China to continuously advance towards the goals of carbon neutrality and peak carbon emissions. It is also an essential route for China's industries to move towards higher stages of development. The industrial transformation in China carries multiple significances, yet it is also confronted with various challenges. These include significant energy demands, insufficient levels of manufacturing capabilities, and economic disparities among different regions, all of which hinder the development of a low-carbon economy in China. To promote the transformation of Chinese industrial enterprises under the guidance of the new development philosophy, several key measures should be taken. Firstly, it is essential to establish a diversified energy supply system and vigorously develop the green energy industry. Secondly, efforts should be made to develop a green and low-carbon new industrial system while gradually phasing out industries with excess capacity. Thirdly, policies conducive to low-carbon transformation should be implemented, alongside the improvement and development of carbon financial markets and the strengthening of the role of technological innovation in driving industrial transformation and upgrading.

Analyzing the influence of environmental protection law amendments on financing efficiency in Chinese industrial enterprises: A retrospective examination

This study investigates the impact of the implementation of the Environmental Protection Law on financing efficiency in industrial enterprises. The PSM-DID analysis reveals statistically significant differences in financing efficiency between the treated and control groups, indicating a substantial impact of environmental protection policies on firms' environmental practices. The analysis of fixed effects indicates a complex relationship between environmental protection law changes and financing efficiency. By combining theoretical foundations with rigorous empirical analyses, the research sheds light on the intricate interplay between environmental protection laws, financing constraints, and the optimal utilization of financial resources.

The Government's fiscal and taxation policy effect on enterprise productivity: Policy choice and optimal allocation

Based on a thorough exploration of the mechanisms by which fiscal subsidies and tax incentives influence enterprise productivity, this research conducts an empirical analysis, leveraging a detailed micro-database of Chinese industrial enterprises spanning from 1998 to 2012, and applies a fixed-effect methodology to rigorously evaluate the effects of these fiscal and tax policies. The findings of this research indicate that: (1) On average, both fiscal subsidies and tax incentives help to increase the productivity of Chinese enterprises. Regarding the impact of individual policies, it is discerned that the stimulative influence of tax incentives surpasses that of fiscal subsidies in terms of promoting enterprise productivity. This conclusion is still valid after the robustness test. (2) By examining the heterogeneous characteristics of the city's administrative hierarchy, industry factor intensity, and enterprise ownership, it is found that the “productivity effect” of fiscal subsidies in municipalities is the largest, and the “productivity effect” of tax incentives in prefecture-level cities is the largest. The productivity of capital and labor-intensive enterprises benefits most from fiscal subsidies. There is little difference in the impact of tax incentives on the productivity of enterprises across various industries. Considering the aspect of enterprise ownership, it is observed that private enterprises leverage fiscal subsidies and tax incentives more effectively than state-owned enterprises to enhance their productivity. (3) There are synergy effects between fiscal subsidies and tax incentives in promoting enterprise productivity. The government can maximize corporate productivity by allocating tax incentives and fiscal subsidies at a ratio of 3.12:1.