Total Factor Productivity Of Enterprises Research Articles

Effect of Chinese pilots carbon emission trading scheme on enterprises' total factor productivity: The moderating role of government participation and carbon trading market efficiency

Based on the tightening regulation of carbon emissions, China has launched the pilot carbon emission trading scheme (CETS) since 2013. There is growing empirical evidence of the actual effect of CETS to promote enterprises' productivity which is characterized by total factor productivity (TFP). However, most studies ignored the further analysis of influence mechanisms. This paper aims to explore the impact of CETS on the TFP of enterprises and discuss the mediating role of government participation and carbon trading market efficiency. Using data from A-share listed enterprises from CETS-covered enterprises, this paper employed a combination of the propensity score matching (PSM) and difference-in-differences (DID) strategies and found that the CETS has a statistically significant positive impact on the TFP of enterprises, and the positive effect has been maintained for six years since its inception. The moderation analysis indicated that: (1) two dimensions of government participation in terms of the market incentive and government supervision significantly moderate the positive impact of CETS on TFP of enterprises; (2) two dimensions of carbon trading market efficiency in terms of the market scale and liquidity significantly moderates the positive impact of CETS on TFP of enterprises. In light of Chinese pilots CETS policy, the study highlights the important moderating roles of government participation and high carbon trading market efficiency on enterprise's TFP.

Non-Financial Enterprise Financialization, Product Market Competition, and Total Factor Productivity of Enterprises

At present, two big challenges have struck China’s economic development: economic containment “from the real to the virtual” and accomplishment in the goal of high-quality economic development. Taking China’s A-share public manufacturing enterprises from 2007 to 2020 as samples, this paper empirically analyzes the relationships among product market competition, non-financial enterprise financialization, and total factor productivity of enterprises. It is found that non-financial enterprise financialization significantly lowers down the total factor productivity of enterprises, that is, the total factor productivity of enterprises will drop by 1.7% as the non-financial enterprise financialization rises by 1 SD every time. After external regulation effects of product market competition are further taken into account, the furious product market competition, on the whole, mitigates the negative influences of non-financial enterprise financialization on total factor productivity of enterprises by strengthening the role of non-financial enterprise financialization as a “reservoir” and abating the “crowding-out” effect. Therefore, competition promotion policies combined with funds moving “from the virtual to the real” could more effectively elevate the enterprise productivity.

The Impact of the Upgrading of High-tech Zones on the Total Factor Productivity of Enterprises: Evidence from Guasi-natural Experiments

Abstract High-tech Zones are widely regarded as an effective mechanism to promote innovation and development of industrial clusters and new ventures. As a change in the external institutional environment, the upgrading of Provincial High-tech Zones promotes the ‘metabolism’ of enterprises in the High-tech Zones. This paper regards the upgrading of Provincial High-tech Zones as an external policy impact, constructs a quasi-natural experiment to evaluate the micro-policy effect of upgrading the Provincial High-tech Zones to the National High-tech Zones. Based on the data of enterprises in High-tech zones from 2005 to 2014, this paper uses Propensity Score Matching and Difference-in-Difference methods to analyze the impact of the upgrading of Provincial High-tech Zones on the total factor productivity of enterprises and explores the mechanism of action between the two through the mediation effect model. The results show that the upgrading of Provincial High-tech Zones distorted the total factor productivity of enterprises. Besides, compared with state-owned enterprises, the upgrading of Provincial Hightech Zones has a greater impact on the total factor productivity of non-state-owned enterprises. From the perspective of the intensity of government intervention, the higher the intensity of local government intervention, the greater the distortion effect. Further analysis shows that this distortion effect comes from adverse selection and moral hazard caused by information asymmetry between government and enterprises. The research results of this paper provide a realistic basis for the development of enterprises located in the newly upgraded National High-tech Zones. JEL classification numbers: D24 R58. Keywords: Upgrading of Provincial High-Tech Zones,Total Factor Productivity of Enterprises, Propensity Matching Score (PSM), Difference in Difference Method (DID).

Green technology progress and total factor productivity of resource-based enterprises: A perspective of technical compensation of environmental regulation

• Green technology progress promotes the total factor productivity of enterprises. • Environmental regulation promotes the green technology progress of enterprises. • The improvement of unit labor productivity is an influencing mechanism. • The push of external pressure is an influencing mechanism. The implementation of Industry 4.0 has had an important impact on the value creation of the manufacturing industry, but there are few studies on its driving mechanisms and effect on total factor productivity. In this study, green technology progress is selected as an important representation of Industry 4.0, and samples of China's A-share resource-based enterprises from 2004 to 2018 are used to examine the relationship between environmental regulation, green technology progress, and total factor productivity to explore the role of social, environmental, and technological factors in manufacturing development. The findings show that green technology progress significantly promotes the total factor productivity of enterprises through the improvement of unit labor productivity and that environmental regulation “forces” the green technology progress of enterprises through external pressure. These conclusions remain valid after replacing the explained variables and measuring methods. The results of heterogeneity analysis show that when an enterprise has strong financial and human resource bases, the “forcing” effect of environmental regulation on green technology progress is more significant.

The Impact of Carbon Emissions Trading on Exporters’ High-Quality Development -- Evidence from Chinese Listed Companies

In this paper, we test whether the carbon emissions trading system can generate the “Porter effect” and thus affect the total factor productivity of enterprises in a quasi-natural experiment based on the carbon emissions trading policy piloted in China since 2011. Using the data of listed companies with export business in Shanghai and Shenzhen stock markets from 2008 to 2019, an asymptotic double difference model is used to test the effect of the carbon emissions trading policy by comparing the total factor productivity levels of exporting enterprises before and after the implementation of the policy. It is found that the implementation of carbon emissions trading policy contributes to the high-quality development of exporting firms, and the findings still hold after a series of robustness tests such as mitigating endogeneity and overcoming the selectivity bias of the sample.

Does OFDI Promote High-Quality Development of Enterprises? Evidence from China

Whether foreign direct investment can promote enterprise productivity and high-quality development has not yet reached a consensus in academic circles. By using the samples of A-share listed companies in China from 2008-2019, this paper adopts Propensity Score Matching (PSM)—Multi-temporal Difference-in-Differences (DID) to examine empirically whether corporate OFDI contributes to the high-quality development of enterprises from the perspective of total factor productivity. The study finds that OFDI significantly improves the total factor productivity of enterprises. It has more effect on state-owned enterprises than on private enterprises, and more effect on enterprises in western regions than on those in eastern and central regions. However, the promotion effect is not present in non-central policy-supported manufacturing enterprises. Technological innovation, exploratory innovation, and exploitative innovation mediate the relationship between OFDI and enterprise high-quality development. This paper provides empirical evidence for how to better promote enterprise innovation strategy and high-quality development under the “dual circulation” development pattern.

Does mandatory CSR disclosure affect enterprise total factor productivity?

Corporate social responsibility (CSR) reports are important carriers of enterprises non-financial information disclosure, which are inextricably related to the production efficiency and performance of enterprises. The objective of this paper is discovering the causal effect of the CSR mandatory disclosure policy and the total factor productivity (TFP) of enterprises. This paper uses the sharp regression discontinuity design based on the micro data of the enterprises to study the impact by taking China's mandatory disclosure policy in 2008 as a quasi-natural experiment. This paper makes some contribution to the impact of mandatory CSR disclosure on enterprise TFP and the mechanism and heterogeneity of this impact. The research draws the following conclusions: First, the CSR mandatory disclosure can significantly improve the TFP of enterprises on the whole, and this effect has the characteristics of long-term and dynamic decline. Second, the mechanism of mandatory disclosure of CSR on TFP is through the mediating effect of R&D and innovation expenditures. Third, the heterogeneity of the impact of CSR mandatory disclosure on TFP is reflected in two aspects: industry and equity nature differences. These conclusions are strongly correlated with the contingent decision-making behaviour of enterprises and give some ideas to the policy makers.

Transportation Infrastructure Construction and High-Quality Development of Enterprises: Evidence from the Quasi-Natural Experiment of High-Speed Railway Opening in China

High-quality development of the economy is an important guarantee for economic and business sustainability, and the construction of transportation infrastructure is an important channel to achieving high-quality development. Thus, we take the opening of China’s high-speed railway (HSR) as a quasi-natural experiment and use the difference-in-difference model to explore the impact and mechanism of HSR on firms’ high-quality development. By using the total factor productivity of enterprises as the proxy for high-quality development, the empirical results show that: (1) the opening of the HSR can significantly promote high-quality development of enterprises; (2) the quality of information disclosure plays a mediating role in such relationships; and (3) the impact of HSR on enterprises’ high-quality development is more significant for enterprises that are located in cities with better business environments. Overall, this research indicates that local infrastructure construction is an important factor to achieve high-quality development of enterprises as well as economic sustainability that cannot be ignored, and this conclusion will be helpful for corporate managers in enhancing the quality of information disclosure, as well as for local governments to attach more importance to optimizing business environments to achieve high-quality development and economic sustainability.

Institutional Joint Ownership and Enterprise Total Factor Productivity

The total factor productivity of enterprises is the core index to measure the performance of micro-enterprises, and it is one of the key indicators to measure the high-quality development of economy. Based on the 2007-2019 A-share listed company, this paper explores the impact of institutional joint ownership on the total factor productivity of enterprises from the three dimensions of whether there is institutional joint ownership, the degree of association with the industry and the proportion of institutional joint ownership. The study finds that institutional joint ownership can improve the total factor productivity of enterprises, and the higher the degree of connection and shareholdings, the more conducive to improving the total factor productivity of enterprises. Institutional joint ownership promotes enterprise R&D investment, reduces agency costs, and plays a governance role in the capital market. In state-owned enterprises and enterprises with higher levels of internal governance, institutional joint ownership can enhance the total factor productivity of enterprises more significantly. All results are still true after the robustness tests such as tool variables and placebo tests. From the perspective of institutional joint ownership, this paper discusses the impact of this emerging ownership model on corporate governance and the total factor productivity of enterprises, which is of great significance to the healthy development of capital market and the promotion of high-quality economic development. Compared with general institutional investors, institutional joint ownership can make up for the shortage of single institutional investors’ shareholdings, and the industry synergy, supervision and governance effect brought about by its information advantage and management experience will also affect the business development of enterprises, which can effectively improve the total factor productivity of enterprises in the process of maximizing benefits. Based on this, listed companies should realize that institutional joint ownership can play an active role in improving the total factor productivity of enterprises, and actively introduce and support the participation of mutual institutional investors in corporate governance. The regulatory authorities should attach importance to and guide the active participation of mutual institutional investors in the capital market, give full play to the advantages of joint institutional investors’ shareholdings, ensure the sustainability of institutional joint ownership, create a favorable investment environment, gradually improve the level of joint institutional investors’ shareholdings, strengthen supervision and performance appraisal, further standardize the market, guide institutional joint ownership to play a role in the new round of mixed ownership reform of state-owned enterprises, and stimulate the development vitality of state-owned enterprises. With the help of this emerging ownership model in the capital market, we can construct a long-term mechanism to improve the total factor productivity, build a high-quality, high-efficiency and high-level capital market, and help China’s economic transformation and upgrading.

Administrative approval reform and the quality of economic development

Can administrative approval reform become an effective reform to improve the quality of economic development? Total factor productivity is the key measure of the quality of economic development. In this paper, we studied the influence of administrative approval reform on total factor productivity of enterprises theoretically and empirically. We found that administrative approval reform has promoted the improvement of the total factor productivity of enterprises overall. The reduction of institutional transaction costs and the increase in the threat of enterprise entry are important mechanisms for administrative approval reform to affect enterprise productivity. In addition, the decomposition results of the overall productivity growth of cities show that administrative approval reform mainly promotes the growth of total factor productivity of incumbent enterprises.

The effect of economic policy uncertainty on enterprise total factor productivity based on financial mismatch: Evidence from China

This study investigates the influence of economic policy uncertainty on total factor productivity (TFP) of enterprises. We find that economic policy uncertainty is significantly and negatively related to the TFP growth of enterprises in China. By distinguishing the nature of enterprise property rights and the scale of enterprises, we find that the reduction of the TFP growth of enterprises is more significant in non-state-owned enterprises and large-scale enterprises. Our analysis shows that economic policy uncertainty will reduce the TFP growth of enterprises by aggravating financial mismatch.

Trans-provincial Basin Horizontal Ecological Compensation and Enterprise Total Factor Productivity

China takes the horizontal ecological compensation policy as an important measure for sharing the results of green development in economically backward areas. On the basis of environmental protection, China realizes economic development and benefits the people’s livelihood, so as to accomplish “lucid waters and lush mountains are invaluable assets”. Trans-provincial basin horizontal ecological compensation is a significant exploration of China to take a market-oriented way to control cross-border water pollution, and is another institutional innovation in the process of ecological civilization construction. However, there are few studies on the impact of horizontal compensation on the total factor productivity of enterprises.In this paper, the trans-provincial horizontal ecological compensation of Xin’anjiang River Basin signed by Anhui Province and Zhejiang Province in 2011 is regarded as a natural experiment. It takes the database of Chinese industrial enterprises from 2008 to 2013 as the research sample, and uses the System GMM method to calculate total factor productivity. According to the scope of policy implementation, the enterprises located in the policy compensation area（Huangshan City）are selected as the experimental group, and the DID method is used to study the impact of trans-provincial horizontal ecological compensation on the total factor productivity of enterprises in Xin’anjiang River Basin. It is found that, the implementation of the policy significantly improves the total factor productivity of enterprises through tax relief, government subsidies, labor productivity improvement and capital deepening, and the effect is sustainable. The results of age heterogeneity show that only when enterprises enter a relatively stable period, can the policy significantly improve the total factor productivity of enterprises. The results of industry heterogeneity show that when enterprises are in labor-intensive and technology-intensive industries, the implementation of the policy is conducive to the improvement of total factor productivity, but it hinders the total factor productivity of enterprises in capital-intensive industries. This paper puts forward suggestions from three aspects: （1）Continue to promote the implementation of trans-provincial basin horizontal ecological compensation policy steadily.（2）Strengthen the supervision of ecological environment compensation funds flowing into enterprises.（3）According to the age and industry of enterprises, the policy of differentiated support and supervision should be implemented to avoid the “one-size-fits-all”.The marginal contributions of this paper are as follows: （1）In terms of research content, there are few studies on the effect of horizontal ecological compensation on total factor productivity at home and abroad. This paper analyzes the implementation mechanism of ecological compensation, and further studies the implementation of basin horizontal ecological compensation through four kinds of mechanisms for the total factor productivity of enterprises.（2）In terms of data method, this paper uses the relatively new Chinese industrial enterprise database for empirical analysis, while the DID method can effectively reduce the endogenous problem and improve the reliability and robustness of empirical regression results.

Innovation, external technological environment and the total factor productivity of enterprises

AbstractIn this paper, we study the impact of endogenous innovation and the external technological environment on total factor productivity. We first develop an endogenous growth model and derive a testable empirical model. We then estimate the empirical model based on the World Bank’s worldwide enterprise survey data for 119 countries spanning 2007–2017. Our results suggest that: (i) enterprises’ R&D activity increases their total factor productivity; (ii) a higher level of external technology weakens the impact of the R&D activity on total factor productivity; and (iii) enterprises located in low‐ and middle‐income countries often lack continuous innovation.

Does central environmental inspection improves enterprise total factor productivity? The mediating effect of management efficiency and technological innovation.

The strong demand from the public to find new ways to both improve economy and protect nature has been evoked by "pollute first and control later", which is the previous Chinese mode of development. With the new round of central environmental inspection approaching, should the Chinese government continue to intensify its supervision? The policy effect of the first round of central environmental inspection in 2015 can be a good reference. Based on the data from 1498 listed companies during the period between 2014 and 2018, the Levinsohn-Petrin (LP) method was used to measure enterprises' total factor productivity. Also, a propensity score matching-difference in difference (PSM-DID) method was established to explore the impact of central environmental inspection on enterprises' total factor productivity and its impact mechanism. The results indicate that first, central environmental inspection improved the total factor productivity of enterprises by promoting management efficiency and technological innovation. Second, the mediating effect of management efficiency accounts for approximately 16.6% of the total effect, while the mediating effect of technological innovation accounts for only 7.7% of the total effect.

Financial Structure, Financing Constraint and Total Factor Productivity of Enterprises

Financial Structure, Financing Constraint and Total Factor Productivity of Enterprises

Development zone spillover effect: the externality of the gathering of manufacturing enterprises

Using the data of manufacturing enterprises from 2003 to 2013 and the data of the state-level economic and technological development zone and high-tech development zone from 2010 to 2012, this paper uses BD-DD dual robust identification strategy to analyse the impact mechanism of the overflow effect of the establishment of state-level development zones by accurately judging the geographical relationship between enterprises and development zones. The results show that the development zone has a significant spillover effect on the surrounding manufacturing enterprises, and the total factor productivity of enterprises within 1000m is about 9% higher than that of enterprises within 1000m from the boundary of the development zone and the existence of Marshall’s adjust theory is tested. Spillover effects have a range of 1000m on innovation, while human capital is only 500m, indicating that knowledge spillover effects established in development zones are the main source of gathering externality. From the different characteristics of manufacturing, high-tech or mature manufacturing enterprises are more affected by spillover effects, possibly because high-tech or mature enterprises and regional enterprises overlap more in factors of production or technology, it is more likely to form Marshall cluster externality.

Commercial Credit and Corporate Productivity

As an important form of informal finance, commercial credit is widely used among enterprises. Does commercial credit promote the total factor productivity of enterprises? According to the theoretical literature and the reality, using the large sample data of Chinese industrial enterprises, the paper empirically tests the impact of commercial credit on the productivity of enterprises from three aspects: the provision and acquisition of commercial credit and the net commercial credit. The study finds that the provision of commercial credit reduces the productivity level of enterprises; the acquisition of commercial credit fails to promote productivity; while the net commercial credit as a short-term financial buffer for enterprises can alleviate the financing constraints, faced by enterprises, especially private enterprises, which help to increase their productivity levels . In addition, the study found that the higher the marketization process in the region, the more favorable the commercial credit is to the improvement of the production efficiency of private enterprises.

Modernization of Tax Governance and Total Factor Productivity of Enterprises: Research Based on Quasi-natural Experiment of Tax Credit Rating

Tax revenue is the main way for the state to absorb fiscal revenue, and it also plays a fundamental, pillar and guarantee role in national governance. Therefore, the modernization of tax governance is an important part of the modernization of national governance system and governance capacity. The realization of this goal requires the tax department not only to levy taxes according to law under the legal principle, and provide financial guarantee for national governance, but also to take into account the tax service, improve the tax business environment, and inject vitality into the high-quality economic development. At present, China’s economy has changed from a high-speed growth stage to a high-quality development stage, and is in the critical period of transforming the development mode, optimizing the economic structure and transforming the growth momentum, so it is urgent to improve the total factor productivity. Combined with this realistic background, this paper aims to answer: Can the modernization of tax governance promote enterprises to improve the total factor productivity? This is an important issue.In 2014, the State Administration of Taxation issued“the Measures for the Administration of Tax Payment Credit（Trial）”, which carries out the investigation, rating and public release of the tax credit status of enterprises every year, and implements joint credit incentive measures based on the rating results, so as to promote the integrity and self-discipline of taxpayers and improve the compliance of tax law. In practice, the tax authorities promote the“bank-tax interaction”across the country, exchange“credit”for“credit”incentive measures to help enterprises develop. According to the statistics of the tax department, by the end of September 2019, banking financial institutions across the country have issued 1.069 million loans related to“bank-tax interaction”to trustworthy enterprises, involving a total of 1.57 trillion yuan of bank tax loans. As a new type of tax governance, the enterprise tax credit management measures effectively fit the modern tax governance concept, and provide rich materials and appropriate entry point for our research. This paper takes the disclosure of corporate tax credit rating data in 2015 as a quasi-natural experiment, and uses the PSM-DID method to empirically analyze the impact effect, heterogeneity performance and mechanism of tax governance modernization on the total factor productivity of enterprises.This paper finds that: The implementation of enterprise tax credit rating system significantly improves the total factor productivity of enterprises, and this effect is more obvious for non-state-owned enterprises and enterprises with greater financing constraints. Further analysis shows that the above positive effects are mainly achieved by alleviating the financing constraints of enterprises, improving investment efficiency and playing the role of corporate governance. This conclusion provides empirical evidence for understanding the micro effect of tax governance modernization, affirms its positive role in high-quality economic development, and provides policy reference for improving the existing tax governance measures. In the future, we should pay attention to the collaborative governance effect of flexible incentive collection and management measures, further improve the tax credit evaluation system, and build a tax collection and management system with the“Tax Collection and Management Law”as the guide, and the tax risk management and tax credit system construction as the two wings, so as to lay a scientific and strict system foundation for continuously improving the tax governance ability and building a modern tax governance system.

Empirical Research on the Influence of Export Market Diversification on Total Factor Productivity:Based on the Perspective of Trade Protection

This paper mainly explores the impact of export market diversification as an important measure to deal with trade friction on firms total factor productivity. Firstly, this article focuses on the theoretical analysis of the impact mechanism, including risk diversification, reversal effect and spillover effect. Based on the sample data of Chinese manufacturing export enterprises from 2000 to 2007, this paper conducts an empirical test on the relationship between export market diversification and total factor productivity. The result indicates that export market diversification has a significant positive effect on the total factor productivity of enterprises. After considering the endogenous problem, by controlling the fixed effects, using the two-stage least square method and changing the duration of the sample for robustness analysis, the results are still consistent. In addition, the role of diversification policy in total factor productivity presents heterogeneous characteristics in terms of different types of enterprise ownership, export intensity, industry competition, trade methods, and the development degree of exporting market. Accordingly, this paper puts forward corresponding policy recommendations.

Has the Construction of the Free Trade Zone Increased the Enterprise's Total Factor Productivity—Evidence from Generalized Synthetic Control

The Free Trade Zone(FTZ) is a new policy for China to open wider to the outside world. Reducing trade barriers and promoting high-quality enterprise development is an important part of the construction of the FTZ. This article takes the construction of the FTZ based on From 2004 to 2018 as a quasi-natural experiment. The study found that: (1) The policy evaluation results show that after controlling the time and individual effects, the construction of the FTZ plays a significant role in promoting TFP. (2) The construction of the FTZ can promote the improvement of TFP through innovation-driven effects and resource allocation adjustment effects. The analysis shows that patents and the return on assets play an intermediary role between the FTZ and TFP. (3) After considering the time and industry effects, the construction of the FTZ has a significant impact on the TFP growth in state-owned enterprises; the general synthetic control method was used to investigate 11 FTZ, and the construction of Shanghai free trade zone has the most significant effect on the promotion of TFP. The main innovation of this article is the establishment of the FTZ has carried out a policy effect evaluation on the promotion effect of TFP, and has conducted a robustness test using the multi-phase DID method. It has a guiding significance for improving the construction of FTZ and promoting the improvement of enterprise TFP.