Chinese Manufacturing Companies Research Articles

What Is Necessary for Digital Transformation of Large Manufacturing Companies? A Necessary Condition Analysis

Digital transformation is of significant importance to the sustainable development of manufacturing companies and the construction of the digital economy. However, this major change is often hindered by numerous complex antecedents. What are the key factors in the digital transformation of manufacturing companies, and what is their relative importance? Accordingly, this paper identifies the key factors for digital transformation in large manufacturing companies from the “Ability–Motivation–Opportunity” (AMO) perspective. This study uses a necessary condition analysis (NCA) to conduct a necessity causality study on data collected from 67 listed Chinese manufacturing companies between 2016 and 2020. The results show that the digital transformation of large manufacturing companies is influenced by four necessary conditions: managerial myopia, industry concentration (very large effect), dynamic capabilities, and industrial digitalization (large effect). Managerial myopia and industry concentration have a negative necessary impact on digital transformation. The types of conditions and the level of bottlenecks required at different stages of digital transformation vary significantly. This study reveals the necessary causal relationships between organizational abilities, motivation, external opportunities, and digital transformation, providing empirical evidence to promote the digital transformation practices of manufacturing companies.

Meeting Stakeholder Needs: Who Should Managers Pay Close Attention To? Evidence from Listed Chinese Manufacturing Companies

Meeting Stakeholder Needs: Who Should Managers Pay Close Attention To? Evidence from Listed Chinese Manufacturing Companies

Shanghai oil futures prices and firms' investment decisions: Evidence from Chinese manufacturing firms

International crude oil futures prices play a key role in market pricing, price discovery, and reshaping the market order. As the world's largest importer of crude oil, China urgently needs to establish contracts based on Asian supply and demand to mitigate currency risk for refiners and consumers. Against the backdrop of the launch of yuan-denominated crude oil futures by the Shanghai International Energy Exchange (INE) on March 26, 2018, this paper examines the impact of crude oil futures prices on the investment scale of Chinese manufacturing companies based on data from listed manufacturing companies in China from 2016Q1 to 2021Q3. The study finds that increases in international crude oil futures prices suppress the investment scale of Chinese manufacturing enterprises, while price volatility has a promoting effect. The listing of Shanghai crude oil futures has a negative shock effect on the impact of international crude oil futures prices on the investment scale of Chinese manufacturing enterprises. Additionally, increases in operational leverage amplify the negative impact of international crude oil futures prices on the investment scale of enterprises and weaken the positive impact of changes in international crude oil futures prices on the investment scale. Furthermore, among large manufacturing enterprises, volatility and increases in international crude oil futures prices suppress their investment scale; whereas in small and micro manufacturing enterprises, price increases and volatility significantly boost their investment scale. This paper provides empirical evidence and policy implications for fully leveraging Shanghai crude oil futures to optimize corporate investment decisions and support the sustainable development of enterprises.

CEO's early‐life famine experience and tunneling: Evidence from China

AbstractThe Great Chinese Famine is considered one of the most traumatic events recorded in human history and has a long‐lasting influence on the survivors' behaviors. Previous studies have linked the CEOs' early‐life experiences to corporate decisions and managerial behaviors, but does experience affect corporate governance? We investigate the impact of the CEO's early‐life famine experience on tunneling using a data set consisting of 11,573 firm‐year observations from the Chinese manufacturing companies publishing A‐shares on the main board from 2006 to 2016. We find that companies run by CEOs who experienced the Great Chinese Famine (1959–1961) in their early life are less likely to collude with controlling shareholders to expropriate minority shareholders than those who did not suffer the hardships of famine. We further make mediation tests to confirm two channels: risk aversion and empathy for poverty. The overall findings align with the view of imprinting theory: CEOs' experiences of adverse events in their early life have a lasting impact on their later‐life behaviors.

Determinants of lean manufacturing adoption by Chinese manufacturers

Purpose This study aims to analyze the determinants influencing Chinese manufacturing companies in implementing lean manufacturing (LM). Design/methodology/approach The determinants to be explored in this study consist of technological, organizational and environmental (TOE) dimensions. A questionnaire survey was conducted on Chinese manufacturing companies, and 208 samples were analyzed. Findings The findings show that the relative advantage of LM and organizational support have significantly positive effects on Chinese manufacturing firms’ adoption of LM. The complexity of LM, quality of human resources, organizational readiness, customer pressure, international situation, governmental support and environmental uncertainty do not have significant effects. Originality/value This paper contributes to the literature by using the TOE model to explore the factors influencing LM adoption in the Chinese manufacturing industry.

Transforming environmental leadership into environmental performance: The mediating role of green intellectual capital

AbstractAccording to upper echelon theory, this research seeks to explore how environmental leadership (EL) influences environmental performance through green intellectual capital (GIC), while also considering environmental climate as a moderator. We analyze the data from 317 Chinese manufacturing companies in two waves to test these hypotheses. The findings suggest that EL positively affects environmental performance via green structural capital and green relational capital (GRC). Moreover, environmental climate strengthens the impacts of EL on green human capital and GRC. This research enriches the existing literature on EL and GIC by revealing the vital roles of EL in promoting environmental performance and GIC, as well as explaining the mechanism between these relationships.

Can green finance reduce corporate carbon risk?

This study analyzes data from Chinese A-share market-listed manufacturing companies between 2009 and 2021. Our results underscore the effectiveness of green finance in mitigating corporate carbon risk, supported by robustness tests. Risk reduction is particularly pronounced for firms under stringent environmental regulations and those receiving greater media attention. Our findings indicate that green finance alleviates financial constraints, reduces carbon risk, and boosts firm value. This study deepens the understanding of the interplay between green finance and corporate carbon risk, offering valuable insights for companies aiming to reduce emissions, sustain economic performance, and manage carbon-related risks effectively.

EXECUTIVE TEAM FAULT LINES AND GREEN INNOVATION PERFORMANCE OF ENTERPRISES - A PERSPECTIVE OF RISK UNDERTAKING

Environmental pollution and ecological degradation are increasingly becoming urgent global issues, drawing widespread attention. Against this backdrop, how businesses can balance economic benefits with environmental protection to ensure sustainable development has become a pressing issue to address. Green innovation, representing a synergistic blend of "innovation-driven" and "green development," can simultaneously meet the requirements for economic growth and ecological environmental protection. In the process of driving green innovation, the executive team plays a crucial role. As the heart of corporate decision-making and execution, the internal differentiation within the executive team, including physiological fault lines based on gender and age as well as task-related fault lines based on education, function, and tenure, affects the team's collaboration and decision-making efficiency, thereby influencing the implementation and outcomes of green innovation. Green innovation projects often entail high risk, difficulty, and long return cycles. 
 When making green innovation decisions, a company's insufficient risk-taking capacity may limit its investment and attempts at green innovation. This study, grounded in upper echelon theory and other theoretical frameworks, selects Chinese manufacturing companies listed from 2015 to 2022 as research subjects. From the perspective of corporate risk-taking, it delves into how physiological and task-related fault lines within the executive team affect green innovation performance by influencing the company's capacity for risk-taking. The research findings indicate that rational configuration and effective risk management by the executive team are crucial for promoting green innovation within a company, offering theoretical and practical guidance for achieving sustainable development.

Empirical Determinants of Research and Development (R&D) Investment in Chinese Manufacturing Companies

Background and Aim: As manufacturing enters the fourth industrial revolution, R&D investments help in converting new ideas into innovative products and services. Manufacturing firms rely on R&D projects to improve product quality, increase productivity, reduce waste, and enhance operational efficiency. This study examined the empirical determinants of Research and Development (R&D) investment in Chinese manufacturing companies. Materials and Methods: Data was obtained from the Oriana database, which keeps updated records regarding R&D investments across Southeast Asia. The database provides information about key R&D drivers and resources that companies are willing to invest as percentages of their revenues. A systematic analysis of data was used to identify the key determinants and their impact on R&D decisions and intensity. The FE model equations were used for calculating correlational relationships among variables. Results: The study found that key determinants associated with R&D decisions and intensity include firm size, market power, demand-pull, technology opportunity, and appropriability. Technology opportunity and demand-pull had the strongest influence on R&D decisions and intensity. Firm size also showed a significant influence on research intensity and development decisions. However, market power showed limited impact on both R&D decisions and intensity. Conclusion: Technology opportunity and demand-pull are the key determinants of Research and Development (R&D) investment in Chinese manufacturing companies.

Top management team resource-based faultline and corporate green innovation: empirical evidence from listed Chinese manufacturing companies

PurposeThis study aims to focus on the resource-based faultline of a top management team (TMT) and intends to investigate the impact of TMT resource-based faultline on corporate green innovation, by indicating the environmental management as a mediator and slack resources as a moderator to understand the relationship.Design/methodology/approachBased on the empirical data of Chinese listed manufacturing companies from 2008 to 2020, this study assesses the hypotheses using an OLS model with fixed effects of time and industry.FindingsThe results indicate that TMT resource-based faultline is significantly negatively correlated with corporate green innovation. The conclusion remains valid after endogeneity tests and robustness checks. Mechanism test shows that environmental management plays a mediating role in the association between TMT resource-based faultline and corporate green innovation. Moreover, slack resources diminish the negative association between TMT resource-based faultline and corporate green innovation.Originality/valueThe study not only expands the theoretical understanding of the deeper motivation of TMT faultline on corporate green innovation, but also provides a practical reference for optimizing the human resource allocation of the TMT and accelerating green transformation development.

Fuelling innovation with love: Unravelling the role of companionate love culture and Confucian work values in employees’ innovative behaviour

Purpose: Following social information processing (SIP) theory, this study enriches existing research on emotional culture and innovative behaviour by introducing the chain mediating role of perspective-taking and knowledge-sharing intentions and the moderating role of Confucian work values.Design/methodology/approach: We conducted a quantitative study using four-stage paired survey data. Data were collected from 392 employees and their corresponding supervisors in three Chinese manufacturing companies in November 2022. We chose these participants due to the significance of innovative behaviour in their roles. The surveys were anonymous and self-administered. We used SPSS20.2 and MPLUS 8.3 software to analyse the data and test our hypotheses.Findings/results: The data analysis results indicated that: (1) the companionate love culture had a positive effect on innovative behaviour, (2) perspective-taking and knowledge-sharing intentions mediated the positive impact of the companionate love culture on innovative behaviour, and (3) Confucian work values moderated the chain mediation path by weakening the positive impact of the companionate love culture on perspective-taking.Practical implications: To promote innovative behaviour in employees, a company could continuously manage the organisational companionate love culture.Originality/value: Drawing on the SIP theory, this paper developed a model clarifying how and when love can fuel innovation in the workplace. It’s interesting that employees with lower Confucian work values may benefit more from a companionate love culture, as they might need more external motivation to engage in perspective-taking and knowledge sharing.

Geographic Proximity And Firm Innovation: Evidence From The Chinese Manufacturing Industry

Innovation, competitive advantage, and firm performance are all positively affected by knowledge-sharing techniques. We consider the geographic proximity to research institutes as a proxy of the efficiency of knowledge sharing. We examine how and to what degree the practice of knowledge-sharing influences businesses' innovation using a sample of Chinese manufacturing companies chosen between 2009 and 2021. Thus, the relationship between corporate innovation and closeness to research institutions is investigated experimentally in this study. The decisive findings indicate that a company's ability to innovate is strongly impacted by its proximity to research institutions, which suggests that proximity may also lower coordination costs and enhance information flow efficiency. Additionally, this research reveals that institutions with a STEM (science, technology, engineering, and mathematics) concentration have a stronger correlation with information sharing and entrepreneurial innovation in the manufacturing sector. Furthermore, under similar conditions, the positive effect for non-SOEs and firms with lower R&D expenditures is more critical for firms close to research institutions. We find consistent evidence for a battery of robustness checks. Overall, the study provides insightful implications that university and research center clustering is advantageous for generating and exchanging necessary knowledge.

THE INFLUENCE OF FIRM KNOWLEDGE CHARACTERISTICS ON TECHNOLOGICAL INNOVATION: A MULTILEVEL NETWORK STRUCTURE PERSPECTIVE

This study describes collaboration between firms and different organizations as a process of knowledge sharing, integrating inter-organizational collaboration networks and knowledge networks into a unified framework. It analyzes the bilayer structure of collaborative innovation networks, namely, the firm-knowledge bipartite network. The study investigates the impact of firm knowledge characteristics (diversity and uniqueness) on breakthrough and incremental innovation within collaborative innovation networks. The research employs patent data from Chinese A-share high-tech manufacturing companies listed from 2000 to 2018 and verifies the related hypotheses using a negative binomial regression model. The results suggest that, within collaborative innovation networks, firm knowledge diversity has a negative impact on breakthrough innovation but a positive impact on incremental innovation. On the other hand, firm knowledge uniqueness plays a positive role in breakthrough innovation but a negative role in incremental innovation. This study extends the understanding of firm technological innovation by considering both breakthrough and incremental innovation as distinct behaviors, providing a new perspective on the mechanisms underlying different innovation behaviors. By adopting a multilevel network structure approach to collaborative innovation, it contributes to a deeper understanding of internal and external factors influencing firm innovation behavior and expands the application scope of social network analysis.

The effect of industrial robot adoption on firm value: Evidence from China

This study examines the effect of automated production technology on firm value. Examining evidence from listed Chinese manufacturing companies from 2012 to 2019, our findings show that industrial robot adoption increases firm value, and the effect is more pronounced in labor-intensive industries, private companies, and firms with executive shareholding. Possible mechanisms include operating performance improvement, effective tax rate reduction, net profit margin increase, and agency cost mitigation. This study contributes to a comprehensive evaluation of the overall impact of automation on firms and deepens the understanding of the productivity innovation drivers of firm value.

Does circular economy affect environmental performance? The mediating role of sustainable supply chain management: the case study in China.

Governments and professionals have recently tried to improve public environmental knowledge and laws in order to meet growing environmental concerns. As a result, most nations see corporate environmental initiatives like the circular economy and the green supply chain as important (GSCM) as the best ways to address environmental problems. As a result, this study tries to show how important GSCM and the circular economy are regarding the economy of China's relationship to environmental sustainability. This study uses the partial least square structural equation model (PLS-SEM) on data to obtain trustworthy results from 387 Chinese manufacturing companies. A favorable and statistically significant correlation between GSCM, environmental performance, and the circular economy was revealed using PLS-SEM analysis. To raise environmental standards, eco-friendly methods like buying and designing green items are widely regarded today. Imagine if manufacturing companies adopt green supply chain management, which would improve their economic performance and increase operational effectiveness. The secret to a successful corporation is having successful operations.

‘Truly a European company’: a Chinese auto maker’s strategies of Europeanization

ABSTRACT Research on international business presents ‘liability of foreignness’ as a key factor in a Multinational Enterprise’s (MNE’s) operations, but it has not addressed ‘foreignness’ as a complex and dynamic phenomenon. Adopting an identity work perspective, this article examines ‘foreignness’ as social construct, studying how a Chinese MNE manoeuvres the local economic and political contexts. We also shift the focus from ‘liability of foreignness’ to ‘liability of origin’, as elements associated with the home country can also implicate liability. We discuss the market entry of a private Chinese manufacturing company in Hungary and the Netherlands as a proxy for Europeanization, analysing regional and local strategies pursued by the company in organizing its business and representing its corporate identity when dealing with divergent European contexts.

Political ties and information technology: Untangling their impact on supply chain social responsibility and sustainable performance

Political ties and information technology (IT) are critical elements of a company's socio-technical system that can improve sustainability. This study empirically investigates how political ties and IT influence supply chain social responsibility and sustainable performance using survey data collected from 216 Chinese manufacturing companies. We conceptualize IT as a second-order construct that includes two first-order constructs (i.e., exploratory IT and exploitative IT) and sustainable performance as a second-order construct that includes three first-order constructs (i.e., economic performance, social performance and environmental performance). Supply chain social responsibility is conceptualized as environmental responsibility, philanthropic responsibility and supply chain partner responsibility, which is a second-order construct that includes four first-order constructs (i.e., supplier responsibility, customer responsibility, employee responsibility and investor responsibility). Our findings demonstrate that IT positively affects environmental, philanthropic, and supply chain partner responsibility and mediates political ties' impact on supply chain social responsibility. Besides, environmental responsibility positively affects philanthropic and supply chain partner responsibility. Furthermore, fulfilling environmental and supply chain partner responsibility improves sustainable performance. Our study not only enriches the empirical evidence on the antecedents of supply chain social responsibility and its impact on sustainable performance but also guides managers to allocate resources effectively and fulfil supply chain social responsibility.

Do More Innovations Mean Less Reliance on Labor?—Evidence from Listed Chinese Manufacturing Companies in the Final Stage of Industrialization

This paper examines the impact of technological innovation on the role of labor within listed manufacturing companies during China’s final stage of industrialization, from a factor input structure perspective. Leveraging a balanced panel dataset from 2012–2021, we find that the rising R&D intensity has increased companies’ labor intensity and therefore factually slowed down the falling trend of labor intensity. This is because through R&D, the companies have both raised the relative productivity of capital and the percentage of well-educated and technically skilled personnel. Consequently, our research suggests that concerns about technological innovation leading to unemployment or diminishing the standing of workers are unnecessary. While the rising trend of labor cost will sustain for a long time, the intensified R&D activities in Chinese manufacturing companies, thanks to the fast-rising level of education for the Chinese since the 1980s, hold the potential not only to further enhance their global competitiveness, but also alleviate the pressure of employment by creating of more jobs.

Who prefers regular dividends? The effect of inventory level and firm operating efficiency on dividends in an emerging market

Stable regular dividends can deliver the steady operation of a firm’s performance to its investors. When firms experience lower operation efficiency and more negative performance, they can affect their cash burden and lower the regular dividends. According to the cash conversion cycle theory, quicker inventory turnover could benefit the firm, and it is a significant signal of efficiency and high performance. In the real business environment, the expectation of future production, logistics and inflation can all affect managers’ decisions. This paper uses data from all Chinese manufacturing companies listed on the Shanghai and Shenzhen stock exchanges from 2017 to 2020 as a sample. The paper provides the empirical causality between inventory turnover, operating efficiency indicators, and dividend distribution, by applying the regression method to find the causality relationship between inventory as the efficiency indicator and the distribution of dividends. The findings indicate that inventory consideration can be complicated and experience the inverse U-shape relationship with dividend decisions. Further, state-owned enterprises (SOEs) have different considerations about operating efficiency. They prefer to pay stable regular dividends, even if they are under pressure on operating efficiency and suffer from large inventories. SOEs believe that following political guidance and meeting their social obligations is their prioritized mission.

Double-edged sword effect of servant leadership on employee creativity: Mediation–moderation analysis

Drawing on social information processing theory (SIPT), this study examines the mediating role of creative self-efficacy and follower dependency on the relationship between servant leadership and employee creativity, focusing on task uncertainty moderation. Data was collected from 338 employees in Chinese manufacturing companies (females = 62.1%, 21–40 years old = 91.1%, bachelor’s degree or above = 86.1%). The employees completed two waves of surveys two weeks apart. Findings from a structural equation model indicate that higher servant leadership was associated with higher employee creativity through creative self-efficacy. However, high servant leadership was associated with low employee creativity through follower dependency. Creative self-efficacy mediation between servant leadership and employee creativity was stronger than follower dependency. Task uncertainty strengthened the indirect effect of servant leadership on employee creativity via creative self-efficacy and follower dependency. From these findings, it appears that servant leadership has a double-edged sword effect on employee creativity.