Chinese Industrial Enterprises Research Articles

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.

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.

Research on the impact of industrial innovation determinants in China

ABSTRACT China's industries have been positioned at lower and mid-range of the global industrial chain. On the basis of the latest China Economic Census, the effects of external technology acquisition and internal research and development (R&D) efforts on the innovation performance of Chinese industrial enterprises are examined. The results demonstrate that the levels of R&D intensity, patent output and innovation capability of Chinese industrial enterprises are still very low. Independent R&D has become the most vital source of technological innovation. External technology acquisition significantly inhibits the impact of internal R&D on patent production. In addition, the critical role of independent R&D in the innovation performance of Chinese industrial enterprises is confirmed. This study is of theoretical value and practical significance for promoting the industrial innovation advantages, accelerating the implementation of the innovation-driven development strategy and upgrading industrial structure.

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.

Global value chain embeddedness, technology spillover and enterprise innovation

Innovation is the first driving force for high-quality economic development, and the global value chain (GVC) with intermediate goods as the carrier is an essential channel for international technology spillovers. This paper conducts a comprehensive examination of the impact of GVC embeddedness on enterprise innovation from the perspective of two-way embedding. An empirical test using the UIBE GVC Indicators data, Chinese Industrial Enterprise data, China Customs data, and enterprise patent data shows that GVC embeddedness significantly promotes enterprise innovation. The effect of backward embeddedness is greater than that of forward embeddedness. However, the innovation effect of GVC embeddedness is heterogeneous due to different innovation types, embeddedness depths, ownership, trade patterns, and locations of enterprises. Meanwhile, the technology spillovers are an essential channel for GVC embeddedness to promote enterprise innovation. By uncovering the role mechanism of GVC embeddedness in influencing enterprise innovation from the perspective of technology spillovers, this paper offers a new way of thinking to fully unleash the innovation effect of GVC embeddedness.

Environmental taxes, environmental outsourcing, and pollution abatement: Evidence from Chinese industrial sewage discharge enterprises

Polluting enterprises purchase technologies, goods, or services from external enterprises to mitigate pollution, which is called environmental outsourcing. This paper examines the effect of environmental taxes (ETs) on pollution abatement when environmental outsourcing is prevalent. We build a novel enterprise-level panel dataset for 2011–2018 and employ staggered difference-in-differences (DID) estimators to investigate the heterogeneous responses of in-house and outsourced abatement enterprises to the environmental tax increments. Our research demonstrates that imposing environmental taxes for pollution control has a significant positive effect. However, the environmental taxes have failed to successfully transmit their impacts on the changes in compliance costs of polluting enterprises through pollution treatment fees in the end-of-pipe treatment process. It has been demonstrated that environmental outsourcing seriously dilutes and even hinders the efficacy of environmental taxes in reducing water pollution. These findings shed fresh insight on the relationship between environmental policies and outsourcing services and highlight the necessity of incorporating environmental outsourcing into the design of environmental policies.

Has Artificial Intelligence Promoted Manufacturing Servitization: Evidence from Chinese Enterprises

Artificial intelligence, as a novel form of infrastructure with both generality and knowledge spillover characteristics, plays a crucial role in facilitating the profound integration of the manufacturing and service industries, and achieving economic transformation. This paper empirically investigates the impacts of artificial intelligence on the process of manufacturing servitization, utilizing merged data from the OECD-ICIOT (Organization for Economic Co-operation and Development, Intercountry Input-Output Tables) industry data, the Chinese industrial enterprise database, and the customs trade database. The empirical findings of this research demonstrate that artificial intelligence has significant and positive effects on manufacturing servitization. These positive effects primarily occur through two channels: enhancing total factor productivity and optimizing the labor skill structure. Furthermore, this study examines the variations in the impact of artificial intelligence on the transformation of embedded services and blended services. The analysis reveals that artificial intelligence significantly promotes the transformation of embedded services, while its impact on the transformation of blended services is comparatively less pronounced.

Financial Distress Early Warning for Chinese Enterprises from a Systemic Risk Perspective: Based on the Adaptive Weighted XGBoost-Bagging Model

This paper aims to tackle the problem of low accuracy in predicting financial distress in Chinese industrial enterprises, attributable to data imbalance and insufficient information. It utilizes annual data on systemic risk indicators and financial metrics of Chinese industrial enterprises listed on the China’s A-share market between 2008 and 2022 to construct the adaptive weighted XGBoost-Bagging model for corporate financial distress prediction. Empirical findings demonstrate that systemic risk indicators possess predictive potential independent of traditional financial information, rendering them valuable non-financial early warning indicators for China’s industrial sector; moreover, they help to enhance the predictive accuracy of various comparative models. The adaptive weighted XGBoost-Bagging model incorporating systemic risk indicators effectively addresses challenges arising from data imbalance and information scarcity, significantly improving the accuracy of financial distress prediction in Chinese industrial enterprises under the 2015 Chinese stock market crash, the Sino-US trade friction, and the COVID-19 epidemic; as such, it can be used as an efficient risk early warning tool for China’s industrial sector.

Estimation and Analysis of Carbon Emission Efficiency in Chinese Industry and Its Influencing Factors—Evidence from the Micro Level

A major goal of the “14th Five-Year Plan” phase is to promote the green transformation of industrial enterprises to address the ‘dual carbon’ challenge. Utilizing the China Industrial Enterprises Database and the Polluting Enterprises Database, this paper calculates the carbon emissions of Chinese industrial enterprises from 2001 to 2010 at the micro level. It presents an analysis of the heterogeneity of carbon emission efficiency (TPI) in industrial enterprises, as well as the factors influencing corporate TPI. This study finds that enterprises within a subdivided industry exhibit heterogeneous levels of TPI, with carbon emissions largely affected by the structure of energy consumption. The researchers suggest accelerating the transition of industrial enterprises to green technology and argue that carbon emission policies should shift from controlling direct total targets to strengthening market-oriented policy tools. Carbon reduction targets should be more stringent for enterprises with lower TPI, considering the heterogeneity among enterprises. To meet the challenges of emission reduction, industrial enterprises are encouraged to actively reform their energy consumption structure. Government policies should aim to reduce clean energy costs and encourage the use of clean energy by industrial enterprises.

Regional coordinated development and green transformation: Evidence from major national strategic zones

Major National Strategic Zones (MNSZ) play a crucial role in China's Regional coordinated development (RCD), and achieving a win-win situation between RCD and comprehensive green transformation is essential for promoting high-quality economic growth. This paper empirically investigates the green transformation effect and its underlying mechanism in MNSZ, utilizing data from Chinese industrial enterprises and pollution records, along with key variables from government work reports (GWR). The findings reveal an “inverted U” curve relationship between RCD and comprehensive green transformation, suggesting that green transformation is a phased outcome of the RCD strategy, with a less significant long-term effect in MNSZ. These results hold strong under various endogeneity, robustness, and externality tests. The mechanism analysis highlights that local governments can enhance the effectiveness of green transformation in MNSZ through human capital investment, financial market improvement, and policy adjustment. However, the time lag effect of policy adjustment after crossing the inflection point and the market's self-selection effect hinder comprehensive green transformation. To address these challenges, improving human resources and the capital market while reducing the welfare loss of policy adjustments will strengthen the long-term facilitation effect of green transformation. This study offers valuable empirical evidence for the optimal implementation of regional development strategies in China and other developing countries.

Service-oriented Transformation in Manufacturing and The Deepening of Corporate Value Chains

This paper examines the challenges and opportunities faced by China's manufacturing industry in the context of global value chain division and technological revolution. It explores the impact of manufacturing servitization on enterprise value chain advancement, aiming to address how this transformation affects climbing the enterprise value chain. Drawing on data from Chinese industrial enterprises between 2003 and 2013, this study employs micro-level empirical analysis using a two-way fixed effect regression model and 2SLS instrumental variable method to establish a causal relationship between manufacturing servitization and enterprise value chain advancement. The findings reveal that manufacturing servitization has a significant positive impact on climbing the enterprise value chain, particularly for technology-intensive, capital-intensive, and resource-intensive enterprises. By providing empirical evidence and policy implications for China's manufacturing industry transformation and upgrading efforts, this research enriches existing literature on both manufacturing servitization and value chain advancement.

The effect of government subsidies on firms’ innovation performance: does subsidy continuity matter?

ABSTRACT This study investigates the effects of government subsidies on firms’ innovation performance along with the role of subsidy continuity. Using data from Chinese industrial enterprise between 2002–2007 and 2011–2015 and considering firms’ historical records of receiving government subsidies, we divided the firms into different categories based on their recipience of subsidy continuity and checked for heterogeneous treatment effects among them. The results showed that subsidized firms invest more in R&D and demonstrate superior performance in TFP compared to non-subsidized firms. Furthermore, the stimulatory effects on R&D investment and TFP are more pronounced for firms that receive repeated and continuous government subsidies. In addition, the impact of subsidy continuity on innovation performance is more significant for non-state-owned firms, small firms, low-profit firms, and firms with fewer fixed assets. This may be because continuous subsidies can help firms overcome financing constraints, which in turn fosters innovation performance. Our findings contribute to the understanding of the diverse effects of government subsidies on firm innovation and provide insights into the possible channels for achieving such outcomes.

Labour market mobility, knowledge diffusion, and firm innovation: empirical evidence from Chinese industrial enterprise

ABSTRACT Economic growth thrives on innovation, which is a byproduct of efficient labour utilisation. Labour market mobility, fostering knowledge exchange, is crucial for inducing innovation in firms through labour. However, prior studies on this dynamic, mostly limited to developed economies, provide inconsistent conclusions. China, a crucial player in the developing world, has been insufficiently investigated. To address this gap, our study investigates this relationship using China as a model, providing insights valuable to other developing nations. The results indicate that increased labour mobility significantly promotes technological innovation in local firms, especially in areas that emphasize design and high-quality innovation. Importantly, the influence of labour mobility on innovation varies across administrative divisions, such as provinces, cities, and counties, leading to diverse effects on firm-level innovation. Furthermore, the impact of labour mobility is particularly significant in privately-owned enterprises and firms situated in the eastern region. The crucial role of knowledge diffusion, serving as a mediator through which labour mobility enhances firm innovation, is emphasized, highlighting its significance. In conclusion, this study effectively establishes how labour market mobility shapes firm innovation, offering practical policy directions for China’s urban talent strategies and innovation enhancement.

Minimum wage standard adjustment and employment: Heterogeneity effects on the human capital investment

Considerable debate has arisen around the potential effects of increasing the minimum wage on employment. This study aims to analyze the impact of changes in China's minimum wage standard on employment. The research utilises the canonical model method and constructs a regression model based on standard labor economics theory. The analysis is conducted using sample data from Chinese industrial enterprises between 2000 and 2007. Regression analysis is performed by categorizing enterprises based on their level of human capital investment. The findings indicate that minimum wage increases have a non-linear impact on employment, when seen from the standpoint of human capital investment. When the level of human capital investment is low, an increase in the minimum wage standard leads to a decrease in employment; when the level of human capital investment is high, an increase in the minimum wage standard leads to an increase in employment. According to the findings, the reason for this is that, investments in human capital can improve business profitability, increase worker marginal productivity, and increase labor demand. Similarly, the employment effect of a change in the minimum wage is positive in regions with high levels of human capital investment due to the externality effect of human capital. Adjustments to the minimum wage have a negative impact on employment in areas of the country with low levels of human capital investment. This demonstrates that changing the minimum wage does not result in a simple increase or decrease in total employment. The level of investment in human capital within the organization and the region is an important factor in determining the type and magnitude of the impact.

Does excess capacity strengthen firms' dependence on the polluting path? Evidence from Chinese iron and steel firms

AbstractThis paper studies the relationship between firms' excess capacity and their environmental behaviour by matching the environmental data of China's major iron and steel firms with the Chinese Industrial Enterprises database. The findings are as follows. (1) A firm's excess capacity leads to myopic decisions, and firms will pay more attention to short‐run economic benefits at the cost of long‐run environmental benefits, which strengthens their dependence on the polluting path. (2) The dependence is positively correlated with the transformation barriers, and either a higher innovation cost or a higher possibility of regulatory capture in local official governance would lead to greater dependence on the pollution path. (3) Mergers & acquisitions (M&As) may hopefully cut such dependency, but only cross‐provincial M&As led by central state‐owned enterprises (SOEs) can effectively alleviate the “pollution effect” of excess capacity, while intra‐provincial M&As led by local SOEs fail to achieve such a goal.

Research on the Influence and Spatial Effect of Carbon Trading Market on Green Innovation Efficiency of Industrial Enterprises

Based on the panel data of 30 provinces and cities in China from 2005 to 2020, a two-stage value chain model of green innovation of Chinese industrial enterprises is constructed and the green innovation efficiency of industrial enterprises is measured, in which coastal cities such as Guangdong, Beijing, and Shanghai have the highest innovation efficiency, and inland cities such as Ningxia, Inner Mongolia, and Gansu have the lowest efficiency. On this basis, a spatial double difference model is applied to reveal the effect of carbon trading market policies on urban green innovation efficiency and its spatio-temporal heterogeneity. The results show that the carbon trading market policy significantly affects the green innovation efficiency of industrial enterprises, and at the same time, the level of economic development, the level of foreign investment, and the industrial structure of each province and city also have a positive effect on the green innovation efficiency. There is also a spatial spillover effect of the carbon trading market policy, which not only has a significant incentive effect on the green innovation efficiency of the pilot cities, but also has a positive promotion effect on the green innovation efficiency of the neighboring cities. At the same time, the support of provincial and municipal governments significantly affects the spillover effect of carbon market policies.

Assessment of environmental concern for enterprise pollution reduction

Environmental regulation produces different effects in different regions. Public concern for the environment in different regions may affect the effectiveness of environmental regulation. Using the pollution emission data of the Chinese Industrial Enterprise Database and the Baidu Index, this paper uses econometric models to evaluate the effect of public environmental concern on enterprise pollution emissions. Results show that public environmental concern reduces enterprise emissions with a coefficient of -3.026. Further research shows that the negative relationship between public environmental concern and pollution emissions is significant for state-owned enterprises, longer-established enterprises, and enterprises in cities with high GDP, in populated areas, and in cities with a higher concentration of secondary industries. Through mechanism analysis, we found that the public can urge enterprises to reduce emissions through centralized treatment of wastewater, harmless treatment of garbage, and increasing green areas, and enterprises should take corresponding measures for different emissions. Finally, we present suggestions for pluralistic co-governance from the perspectives of the government, enterprises, and the media.