Chinese Manufacturing Firms Research Articles

The Impact of Trade Policy Uncertainty on the Domestic Technological Content of Export Products : Evidence from Chinese Manufacturing Firms

The Impact of Trade Policy Uncertainty on the Domestic Technological Content of Export Products : Evidence from Chinese Manufacturing Firms

Environmental management and its effect on innovation and export performance: Empirical research in Chinese manufacturing companies

This study investigates the role of Chinese manufacturing firms in implementing Environmental Management Systems (EMS) to understand how these practices impact export performance and the mediating and moderating effects of innovation. Using structural equation modeling on data from 226 Chinese manufacturing businesses, our findings indicate that EMS indirectly enhances export performance through innovation. This research provides significant contributions to general management by integrating EMS and innovation within the strategic framework of manufacturing firms, offering insights for enhancing competitive advantage and sustainability in global markets. The findings also present practical implications for managers to leverage EMS and innovation for improved business outcomes and sustainable practices.

Board diversity and firm performance in Chinese manufacturing firms: Moderating role of CEO duality

This study explores the relationship between board diversity and firm performance, with a focus on the moderating role of CEO duality in Chinese manufacturing firms. This study applies panel fixed-effect regression models for the period 2008–2022, and findings show that board diversity is positively associated with firm performance, and CEO duality negatively moderates the relationship. However, the findings also show that a highly diversified board can minimize the negative effect of CEO duality and increase the firm’s performance. Furthermore, the findings broaden the understanding of board attributes, showing that the education index is more evident among other board attributes for firm performance. This study verifies its results using the two-step system generalized method of moments approach and different board attributes in robust tests. The findings suggest that strategic efforts to promote board diversity may increase the board’s monitoring function and control managerial opportunism, ultimately improving firm performance in the Chinese business landscape. JEL CLASSIFICATIONS: G30; G34; L25

The impact of economic policy uncertainty on corporate environmental information disclosure: the moderating role of media attention and financing constraints

Economic policy uncertainty (EPU) is a major source of risk that could affect corporate environmental behaviors. We investigated the impact of EPU on environmental information disclosure by using 15,308 firm-year observations from 2,316 Chinese manufacturing firms between 2010 and 2020. Our study shows that EPU can be an incentive for firms to disclose environmental information. This finding supports the voluntary disclosure theory that firms are prone to disclose more environmental efforts in times of high EPU. Furthermore, the results show that the positive relationship between EPU and corporate environmental information disclosure can be positively moderated by media attention and financing constraints. Firms in competitive industries and heavily polluting industries provided better environmental information disclosure when facing uncertainty. Our results provide implications that managers should emphasize the quality of disclosure and use environmental information disclosure as a key strategy to deal with EPU.

Protectionism or let go? Evidence from IT investment in Chinese manufacturing firms

ABSTRACT From a global perspective, economic and trade disputes between countries are gradually increasing. Under the influence of the COVID-19 epidemic and war, the competition among the countries has become more intense. Lower trade barrier for economic cooperation or trade protection is becoming a concerned topic for governments and researchers around the world. This study uses the IT investment data from Chinese manufacturing enterprises from 2015 to 2022 to test the impact of international competition on technological development under environmental heterogeneity. The research results show that the external environment has an important impact on the technology performance of enterprises. After the COVID-19 epidemic, the IT investment performance of enterprises shows a “productivity paradox” situation. Further research shows that reducing tariffs and introducing international competition will be conducive to the development and utilization of IT by enterprises, which is supported in different market environments. This study verified that lowering trade barriers and introducing international competition to achieve win–win cooperation is still an important method for economic and firm development.

Digital transformation whitewashing and financing constraints

This study investigates the drivers and consequences of digital transformation whitewashing (DTW) among Chinese manufacturing firms from 2010 to 2021. We find that financing constraints have a robust and significant positive impact on DTW, an effect that is more pronounced for firms located in provinces with lower marketization or operating in industries with lower levels of monopoly. Regarding economic consequences, our results indicate that DTW fails to alleviate external financing constraints, instead causing firms to increasingly rely on internal financing.

How digital collaboration capability affects incremental and radical service innovation in manufacturing firms: the mediating role of organizational agility

PurposeDespite a growing number of manufacturing firms actively collaborating with ecosystem members aiming for advanced service solutions, it remains unclear how digital collaboration capability (DCC) affects incremental service innovation (ISI) and radical service innovation (RSI) in the context of ecosystems. Drawing on dynamic capabilities theory and resource orchestration theory, this study aims to investigate the impacts of DCC on ISI/RSI and examine the mediating role of organizational agility (OA).Design/methodology/approachIn this empirical paper, the authors obtained questionnaire data from 238 Chinese manufacturing firms embedded in the ecosystems. Then, the authors examined all the hypotheses through hierarchical regression analyses.FindingsThe empirical evidence indicates that DCC has a distinct effect on ISI and RSI. DCC positively affects ISI, whereas DCC shows an inverted U-shaped effect on RSI. In addition, OA mediates the positive effect of DCC on ISI within a certain range, whereas OA always mediates the inverted U-shaped effect of DCC on RSI.Originality/valueThis study enriches and extends existing research on DCC and service innovation by elucidating the heterogeneous effects of DCC on ISI/RSI and the complicated mediating role of OA. This study also has practical implications for manufacturing firms to revisit their collaboration capability and agility to boost ISI/RSI in the context of ecosystems.

Modeling the significance of corporate social responsibility on green capabilities and sustainability performance

This study examines the complex interplay among corporate social responsibility (CSR), green dynamic capabilities, green innovation capabilities, and organizations' economic, environmental, and social performance in the current era of innovation and sustainability. The proposed framework was tested using data from 634 medium- and large-sized Chinese manufacturing firms. Partial least squares structural equation modeling was employed to analyze the data. The findings demonstrate that CSR to external and internal stakeholders positively influences green dynamic capabilities. Meanwhile, CSR to external stakeholders and green dynamic capabilities are positively associated with green innovation capabilities, subsequently influencing the economic, environmental, and social performance of manufacturing firms. Moreover, the results reveal the mediating effect of green dynamic capabilities on the association between CSR and green innovation capabilities. Green innovation capabilities also mediate the association between CSR to external stakeholders and green dynamic capabilities on manufacturing organizations’ economic, environmental, and social performance. This study offers a novel exploration of the intricate interplay among CSR, green dynamic capabilities, green innovation capabilities, and organizational performance within manufacturing organizations. These findings provide valuable insights for managers and offer opportunities for further research that will ultimately contribute to a deeper understanding of the roles of sustainability and innovation in modern corporations.

A comparative study of the impact of LSSI4.0 implementation on the financial performance of Chinese manufacturing firms: an empirical analysis

Purpose This paper aims to investigate how implementing lean six sigma and Industry 4.0 (LSSI4.0) can influence a company’s financial performance and discusses the current trend involving LSSI4.0 in China. Design/methodology/approach For statistical analysis, financial data was sourced from the China Stock Market and Accounting Research database. Keywords used to assess the implementation status of LSSI4.0 were extracted from the 2007 to 2020 annual reports of A-share manufacturing companies. Regression analysis was applied to the quantitative analyses of 5,041 observational data points from 945A-share manufacturing companies in China. Findings LSSI4.0 implementation in the manufacturing industry boosts the firms’ financial performance. However, the former outperforms the latter in terms of long-term advantages. Meanwhile, incorporating lean six sigma (LSS) into Industry 4.0 (I4.0) can lead to long-term improved financial performance compared to solely implementing the I4.0. Research limitations/implications The findings possess limited international representativeness because all empirical data were derived from Chinese large manufacturing companies. In addition to return on assets and return on equity, financial performance can also be measured using other financial metrics, such as return on investment. In this study, only listed manufacturing companies were considered as research samples. Practical implications Top management must acknowledge the positive impact of LSSI4.0 on financial performance and prioritize implementing I4.0 based on LSS implementation. Originality/value Empirical results concerning the effectiveness of LSS implementation in enhancing financial performance are inconclusive, particularly in China. In addition, most studies collected data through surveys and interviews, so the representativeness of their outcomes is limited. Overall, this study evaluated the impact of LSSI4.0 implementation with large sample size.

Managing exploration and exploitation for innovation: the role of knowledge network embedding and knowledge diversity

ABSTRACT Drawing on paradox theory and contingency approaches, this study examines how knowledge network embedding and knowledge diversity affect the optimal balance between exploration and exploitation. By examining 12 years of panel data from 2009 to 2020 on Chinese advanced manufacturing firms, we found an inverted U-shaped relationship between the proportion of exploration and innovation performance. As the knowledge network embedding level increases, the optimal balance point shifts toward exploration. Conversely, as the level of knowledge diversity increases, the balance point shifts toward exploitation. We expand on current research underscoring the importance of a balanced approach to exploitation and exploration for enhancing innovation performance.

How does the interaction of digitalization and servitization contribute to manufacturing financial performance? The intermediary effect of manufacturing innovation performance

Digitalization and servitization are two crucial transition pathways for manufacturing firms, with their relationship explored by some existing studies. However, there is limited research on the mechanism of their interaction's effect on the firm financial performance. To address the gap, this paper draws on service-dominant logic, resource-based view and dynamic capabilities theory to establish a theoretical model. A sample of 567 Chinese manufacturing firms is selected, and a mediated moderation model is used to explore this mechanism. The findings indicate that the interaction between digitalization and servitization has a positive effect on the firm financial performance, with firm innovation performance partially mediating the relationship. Besides, heterogeneity analysis reveals that this interactive effect is mainly manifested in capital and technology-intensive manufacturing sectors. Therefore, this paper suggests managers in manufacturing firms promote the interaction between digitalization and servitization, leveraging their synergy to advance the sustainable long-term development of both the manufacturing firm and industry.

Unleashing Industry 4.0: Empowering corporate trade credit

Utilizing panel data from publicly listed Chinese manufacturing firms spanning 2013 to 2022, our research demonstrates a direct correlation between the adoption of Industry 4.0 technology and improvements in trade credit. Industry 4.0 also bolsters firms' total factor productivity and internal controls, thereby catalyzing the expansion of trade credit. Notably, this positive effect is accentuated in environments with favorable commercial credit conditions and a lower prevalence of alcohol consumption, particularly within firms guided by top management teams with a strong technological background and a commitment to social responsibility. Through these findings, our study illuminates the pivotal role of Industry 4.0 technology in shaping corporate trade credit dynamics.

Efficiency-centered vs novelty-centered: unpacking the impact of business model design on services in manufacturing firms

PurposeHow does business model design play a role in enabling manufacturing firms’ services? This study aims to investigate the impact of two distinct types of business model design, namely, efficiency-centered business model design (EBMD) and novelty-centered business model design (NBMD), and their effects in balanced and imbalanced configurations, on two types of services: product- and customer-oriented services.Design/methodology/approachUsing matched survey data of 390 top managers and objective performance data of 195 Chinese manufacturing firms, this study uses hierarchical regression, polynomial regression and response surface analysis to test the hypotheses.FindingsThe results show that while EBMD positively affects product-oriented services, NBMD positively affects customer-oriented services. Both types of services exert a significant influence on firm performance. Furthermore, the degree of product- and customer-oriented services increases with an increasing effort level with a balance between EBMD and NBMD. Asymmetrical, imbalanced configuration effects reveal that the degree of product-oriented services is higher when the EBMD effort exceeds the NBMD effort, and the degree of customer-oriented services is higher when the NBMD effort exceeds the EBMD effort.Originality/valueThis study enriches the understanding of designing business models to facilitate service growth in manufacturing firms, ultimately benefiting firm performance. In addition, exploring balanced and imbalanced configurations of EBMD and NBMD offers new insights into business model dual design research.

The Impact of Trade Credit on Global Value Chain Position: Evidence from Chinese Manufacturing Firms

ABSTRACT Conventional wisdom argues that a well functioning financial system is essential to foster economic growth and development. While its financial market is still underdeveloped, China has not only achieved great economic growth and speedy export growth, but also elevated its position as an exporter in the global value chain (GVC). This paper examines the impact of trade credit on the GVC positions of Chinese manufacturing enterprises. The empirical study finds that trade credit has a significant promotional effect on enterprises’ GVC positions, and the effect is more pronounced for private firms, firms with high market position, and firms in high-technology industries. The mechanism analysis shows that trade credit heightens the export quality of products and alleviates the financing constraints of enterprises, thus promoting their GVC positions. The findings have implications for Chinese manufacturing firms to exploit the role of trade credit in promoting their GVC positions and fostering new advantages in international competition.

How industrial robots affect employment: firm-level evidence from China

Using China’s Annual Survey of Industrial Firms (ASIF) and the China Customs Database (CCD) from 2000 to 2013, this study explores the impact of adopting industrial robots on the employment in Chinese manufacturing firms. We find a positive association between the adoption of industrial robots and the employment scale of China’s manufacturing enterprises. We also find evidence that the positive association is more pronounced in capital-intensive industries, non-state-owned firms, and firms in coastal areas. Mechanism test indicates that ‘scale expansion effects’ and ‘productivity effects’ are the main channels through which industrial robots promote employment growth. Further analysis indicates that the adoption of industrial robots did not have obvious industry spillover effects. Additionally, other labor market results demonstrate that the adoption of industrial robots significantly increases the average wage level of enterprises while decreasing their labor share. This study provides micro-level evidence revealing the impact of adopting industrial robots on employment in developing countries. It also provides important policy implications for countries worldwide seeking to promote automated production.

Generative AI usage and sustainable supply chain performance: A practice-based view

The emergence of generative AI presents numerous potential solutions to address challenges in sustainable supply chain management (SCM). However, not all firms can effectively master the methods of using generative AI and realize potential benefits. To address this dilemma, we adopt a practice-based view (PBV) to examine generative AI usage’s effect on sustainable supply chain performance (SSCP). Analyzing survey data from 213 Chinese manufacturing firms, we identify a positive relationship between generative AI usage and SSCP. Moreover, two types of sustainable supply chain practices—green supply chain collaboration (GSCC) and circular economy implementation (CEI)——emerge as serial mediators connecting this relationship. We contribute to existing AI-enabled SCM research by elucidating the potential mediation mechanisms underlying the link between generative AI usage and SSCP. We also offer insightful implications for firms adapting to new norms in global SCM.

How does data-driven supply chain analytics capability enhance supply chain agility in the digital era?

Supply chain analytics capability has recently gained more attention from both scholars and practitioners. Through the lens of information processing theory, this study examined how supply chain analytics capability impacts supply chain agility in the digital era with the associated adoption of digital technologies and platforms by companies. To obtain relevant data, a large-scale survey of Chinese manufacturing firms was conducted. Supply chain integration capability was evaluated as mediator and digital platform was evaluated as moderator. The results show that supply chain integration capability can mediate the effect of supply chain analytics capability on supply chain agility; moreover, supply chain analytics capability has a stronger impact on supply chain agility under a high level of digital platform adoption. These findings deepen the understanding of the role of supply chain analytics capability in supply chain management. This paper also provides managerial implications for enhancing supply chain agility in the digital era.

Bootstrap variable selection for corporate distress prediction: evidence from the Chinese manufacturing industry

ABSTRACT This study explores the corporate distress prediction of Chinese manufacturing firms over 2013–2018 by using a large number of financial predictors. We extend the bootstrap resampling procedure into corporate distress prediction, combining with the existing selection techniques such as best subset selection, forward stepwise selection, backward stepwise selection, and least absolute shrinkage and selection operator (LASSO). We provide empirical evidence of the advantage of LASSO in selecting key predictors. The models constructed by these four techniques all outperform the prominent two models in the literature. This study proves the effectiveness of combining the bootstrap resampling method with variable selection techniques to predict corporate distress.

Lights dim, exports down: Examining the trade effects of power shortages on Chinese manufacturing firms

While existing research extensively investigates the repercussions of demand shocks on export performance, limited attention has been given to understanding the trade implications of supply-side input shocks. Utilizing a city-level power shortage index and firm-level data from 2006 to 2014 for the Chinese manufacturing sector, we provide novel evidence of a significant negative impact of power shortages on export performance. This finding remains robust across alternative measurements and in addressing endogeneity concerns. Furthermore, we find that power shortages curtail firms' inventory and innovation activities, which are linked to export performance. Heterogeneity tests reveal insignificant impacts on state-owned firms, those in inland areas and high-energy-consuming industries as well. Additionally, our findings indicate that power shortages exclusively affect the intensive margins of exports rather than the extensive margins. This research offers valuable insights for policymakers and managers in devising strategies to mitigate the adverse effects of power shortages.

Probing the CSR-pro-environmental behavior linkage: Insights into green reputation and chief sustainability officer influence

This study aims to examine the impacts of internal and external corporate social responsibility (CSR) on managers’ pro-environmental behaviors with the mediating role of green reputation and moderating of chief sustainability officer (CSO). We acquired information from 609 managers working in various Chinese manufacturing firms using a standardized survey tool. Structural equation modelling (SEM) was performed to analyze data. Our major findings are as follows. First, both internal and external CSR influence the pro-environmental behaviors of managers through the mediation role of corporate green reputation. Second, the CSO significantly moderates the relationship between CSR actions and corporate green reputation. Our study contributes to the body of current knowledge by giving empirical evidence for the theoretical framework linking CSR, reputation, and pro-environmental behavior. The findings from this study offer managerial insights for businesses that deliberately want to promote environmentally friendly activities.