Enterprise Investment Research Articles

Agglomeration externalities or network externalities? Explaining productivity in Chinese urban regions

ABSTRACT This paper explores the relative importance of agglomeration externalities and network externalities in explaining regional productivity through the lens of a polycentric development framework specific to China. Using enterprise investment data, a spatial econometric model and an instrumental variables strategy, we find that both externalities are important in explaining regional productivity. There are no interaction effects between agglomeration and network externalities, with the latter being more prominent in urban regions with higher levels of polycentricity. Compared to agglomeration externalities, which are geographically confined, network externalities can generate spatial spillovers.

How might the implementation of a Sustainability Policy influencethe resilience of economic growth A Case of EU Taxonomy for SustainableActivities in Germany, Spain, and Italy

This paper examines how Sustainability Policy influences the resilience of economic growth in Germany, Spain, and Italy. By analyzing the Gross Domestic Product from 20217 to 2022, this paper finds that the three countries experienced economic growth after the pandemic. However, they have economic growth resilience of due to the amount of green investment in small and medium enterprises. The more enterprises and investments in the country, the more economic strength there is to resist the challenges of COVID-19 while contributing to the economic recovery. Interestingly, the analysis finds that policy synergies are linked to the strength of economic growth. This study emphasizes that governments need to align their policies with the EU Taxonomy to ensure their economic growth is both resilient and sustainable.

The Impact of Digital Finance on the Efficiency of Urban Green Economy

Digital finance is a new financing model for small and medium-sized enterprises and individuals. In recent years, with the rapid development of big data, cloud service technology, and artificial intelligence (AI) technology, it has to some extent promoted the efficient development of urban green economy. From the perspective of applying digital finance to urban enterprises and individual consumers, this study explores the important role of digital finance in enterprise investment and financing services, industrial structure upgrading, technological innovation, and the promotion of personal credit, consumption patterns, job employment, and environmental participation activities. Based on this, the impact of digital finance on the operation and efficiency improvement of urban green economy is obtained, and the problems of inadequate digital transformation and low coordination level in different industries of the city's economy are solved.

How Does AI Affect the Pay Gap Within Firms: Mechanism Analysis Based on Personnel Structure and Corporate Investment

ABSTRACTThis study examines how AI impacts the internal pay gap within enterprises. Using data from listed companies in China and a panel data two‐way fixed effect model, findings reveal that AI widens pay gap, with executives in AI‐applied companies earning 0.327 times more than average employees. AI increases executive pay while hindering employee salary growth, especially in nonmanufacturing and private firms. Labor substitution AI reduces employee compensation growth, whereas labor enhancement AI boosts executive pay without affecting employee compensation. AI also influences personnel structure and enterprise investment in fixed assets and R&D, highlighting its “job substitution effect” and “productivity effect”.

The accountability system for operation and investment and audit quality of state-owned enterprises

Based on the accountability system for illegal operation and investment of state-owned enterprises (SOEs), this paper uses A-share listed companies in China from 2013 to 2021 as a research sample to empirically test the impact of operation and investment accountability on the audit quality of firms. The results show that after the implementation of the accountability system, the audit quality of SOEs is significantly improved, and the results hold after a series of robustness checks. Mechanism tests suggest that reducing misconducts of managers, inhibiting earnings management and improving the quality of internal control can explain the effects of operation and investment accountability. Heterogeneity analyses suggest that the positive effect of operation and investment accountability on the audit quality of SOEs is more pronounced for firms in poor business environment, with low level of digital transformation and low degree of mixed-ownership reform. Further tests on economic consequence suggest that operation and investment accountability increase economic value added of state-owned assets by improving the effectiveness of auditing supervision. This paper extends the stream of literature on SOEs' auditing from the perspective of accountability, and provides practical implications on improving the quality of government monitoring measures and promoting the update of governance capacity and governance system.

Commission

This overview highlights: (i) the Commission’s published report on the future of European competitiveness, (ii) a presentation of the planned structure of the new College of Commissioners and (iii) the State aid decision on approval of the prolongation of the enterprise investment scheme and venture capital trust scheme in Northern Ireland.

The Impact of Financial Reporting on Investment Decision of Small and Medium Enterprises in Nigeria: A Case Study of Small and Medium Enterprises in Delta State, Nigeria

This study examines the impact of financial reporting on investment of small and Medium Enterprises in Delta State, Nigeria. The study employed descriptive survey research design. A sample of 398 SMEs was employed for the study using simple random technique. Data collected was analyzed using correlation and chi-square technique. The results show that SMEs in Delta State do not use financial reporting in their decision making process. Besides, most of them do not even have adequate knowledge of financial reporting. The study therefore recommends that managers of SMEs should be trained on the use and preparation of financial reports by the various SMEs to enable them be able to use financial reports in their decision making process.

The Impact of R&D Investment on The Financialization of Enterprises —— Take The Manufacturing Industry as An Example

In recent years, the excessive investment of entity enterprises leads to the phenomenon of enterprise financialization, which makes the development of entity enterprises fall into a vicious circle. How to restrain the excessive financialization trend of enterprises and promote the high-quality development of real enterprises has become an urgent problem to be solved. Based on the financial data of listed companies in A-share manufacturing industry from 2008 to 2022, this paper studies the possible inhibitory effect of enterprise R&D investment on finalized investment from the perspective of asset allocation and market competition. The results show that R&D investment is significantly negatively correlated with the level of enterprise financialization, that is, R&D investment can restrain enterprise financialization to a certain extent. Further research shows that increasing cash holding and increasing market power are two intermediary paths for R&D investment to restrain the financialization of enterprises.

Enhancing enterprise investment efficiency through artificial intelligence: The role of accounting information transparency

In the post-COVID-19 era, with global economic recovery as a critical goal, the rapid development of artificial intelligence (AI) has emerged as a key driver of economic growth and transformation. AI not only acts as a powerful catalyst for economic development but also significantly impacts enterprise investment efficiency (EIE). This paper explores the influence of AI on EIE, with a focus on the role of accounting information transparency. Using data from Shanghai and Shenzhen A-share listed enterprises between 2010 and 2021, the findings demonstrate that AI development significantly enhances EIE. These results are confirmed through robustness tests, including variable substitution, and addressing endogeneity and sample limitations. Mechanism analysis reveals that AI improves EIE by increasing the transparency of accounting information. Additionally, heterogeneity analysis shows that AI has a greater impact on the investment efficiency of high-tech and technology-intensive enterprises, non-state-owned enterprises, and those located in highly urbanised areas, such as ‘Broadband China’ pilot cities. This paper examines how AI development affects EIE through the lens of enterprise accounting information transparency, offering actionable insights for enhancing accounting disclosures and serving as a valuable resource for enterprises navigating the technological transformation of the modern era.

ФОРМУВАННЯ ФІНАНСОВО-ІНВЕСТИЦІЙНОГО ПОТЕНЦІАЛУ ПІДПРИЄМСТВА З ПОЗИЦІЇ СТРАТЕГІЧНОГО ПІДХОДУ

The article analyzes approaches to the concepts of "financial potential" and "investment potential", reveals their content and features. Based on the results of a critical analysis of scientific sources, it is justified that the financial and investment potential of the enterprise must be considered as a single definition, which is determined by a set of general characteristics. Based on the conducted research, the author's definition of the concept of "financial and investment potential" of an enterprise is proposed. The financial and investment potential of an enterprise is the ability of an enterprise to accumulate a set of internal and external financial and investment resources, to use them as efficiently as possible for the purpose of obtaining economic benefits, to ensure strategic and tactical development goals. It has been proven that the financial and investment potential of a business entity has a number of varieties. The classification features of the financial and investment potential of the business entity are singled out, namely: according to the time required to achieve a certain value of the financial and investment potential of the business; depending on the degree of realization of the financial and investment potential of the business entity; depending on the method of obtaining information necessary for assessing the financial and investment potential of the business entity; on the basis of the expected results of the realization of the financial and investment potential of the enterprise. The classification of factors affecting the financial and investment potential of a business entity is generalized. The sequence of development and implementation of the strategy for the formation of the financial and investment potential of the enterprise is proposed. It determines the priority directions of development, the sources of investment resources and the sequence of stages of realization of long-term financial and investment goals, which ensure the overall development of the enterprise's activities in the future. The formation of the financial and investment potential of the enterprise in the strategic perspective is aimed at restoring the stable state of enterprises, including as a result of investment. And it includes the effect of the joint action of financial and investment resources, combining current and strategic goals with the possibility of attracting internal and external sources for financial support of the enterprise's investment activities.

Internal Drive or External Pull: Independent Innovation and Sustainable Growth of Chinese Agricultural Enterprises

The independent innovation of agricultural enterprises ensures national food security through enhancing food production efficiency and optimizing food nutritional quality. Independent innovation is an important way for the sustainable growth of agricultural enterprises. However, in this process, there are issues such as long cycles and high risks. Based on this, using the panel data of China’s listed agricultural enterprises from 2007 to 2021, this study empirically examined the impact of independent innovation on the sustainable growth of agricultural enterprises, as well as the moderating effects of internal drivers (digital transformation) and external pull factors (government subsidies) through a two-way fixed effects model. The findings are the following: (1) The impact of independent innovation on the sustainable growth of agricultural enterprises exhibits an “inverted U-pattern”. When the R&D investment of agricultural enterprises accounts for 77.85% of operating income, the sustainable growth ability of agricultural enterprises is the highest. (2) Compared with large agricultural enterprises, small and medium-sized agricultural enterprises reach the threshold of independent innovation ability later, and the incentive effect range of independent innovation is longer. (3) Independent innovation exerts a more significant “inverted U” effect on the sustainable growth of non-state-owned agricultural enterprises and agricultural enterprises in the mature stage, while its impact on the sustainable growth of state-owned agricultural enterprises and agricultural enterprises in the growth and decline stages is not significant. (4) Government subsidies can help enhance the positive impact of independent innovation on the sustainable growth of agricultural enterprises when it does not exceed the threshold but cannot alleviate the negative impact of independent innovation on the sustainable growth of agricultural enterprises when it exceeds the threshold; investment in digital transformation not only helps to enhance the positive impact of independent innovation on the sustainable growth of agricultural enterprises when it does not exceed the threshold but also helps to alleviate the negative impact of independent innovation on the sustainable growth of agricultural enterprises when it exceeds the threshold. The research results provide data support for agricultural enterprises to carry out innovation activities under internal drive and external pull. At the same time, it is of great significance for the national implementation of the strategy of storing food in technology and food security strategy.

Social credit improvement and enterprise investment

This research explores the effects of enhancing social credit on corporate investment, utilizing China's model city pilots for the Social Credit System Construction(SCSC) as a quasi-natural experiment. Our findings demonstrate that social credit improvement significantly increases enterprise investment levels, a conclusion supported by robustness tests. Mechanism analysis reveals that mitigating agency cost and enhancing debt financing are key factors driving increased corporate investment after the implementation of the SCSC. Heterogeneity results suggest that SCSC implementation is more effective for firms without political affiliations and with high institutional shareholding.

Responding to green finance with emission reduction and value-added: The role of enterprise environmental investment

Responding to China’s green finance policy with enterprise environmental investment (EEI) constitutes a crucial link in achieving environmental governance objectives, exerting crucial influence on the nation’s green transformation and high-quality development. Taking the pilot policy of China’s Green Finance Reform and Innovation Experimental Zone (GFRP) in 2017 as a quasi-natural experiment, this study systematically evaluates the effect of GFRP policy on the decisions of EEI and further explore whether the investments are used for passive end-of-pipe treatment (EOP) or positive source prevention (SP) by using firm-level data. The results indicate that GFRP policy can significantly promote EEI, and mainly reflected in SP, rather than EOP. Through potential mechanism analysis, it can be concluded that GFRP policy facilitates EEI by alleviating financial constraint, reducing agency cost, and enhancing environmental information disclosure. Heterogeneity analysis suggests that there exists asymmetry in policy effects, with greater impacts in high green finance development areas, low concentration industries and large-scale enterprises. Furthermore, micro-level performance consequences examination reveals that the enterprises’ decision to increase EEI under GFRP policy not only effectively realizes energy conservation and emission reduction but also contribute to facilitating enterprise value, to achieve green transformation. This study holds significant policy implications, providing empirical evidence to policymakers for the refinement and dissemination of green finance policy, and offering valuable insights for enterprise investment and management decisions.

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

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

Does Confucian culture affect the efficiency of corporate green investments? Evidence from heavily polluting enterprises

ABSTRACT Against the backdrop of increasingly intensified conflicts between the development of heavily polluting enterprises and the resource environment, Confucian culture, which advocates environmental protection, has gradually penetrated into management decisions and has become an important tool for promoting green investment and transformation of enterprises. This study investigates the impact of Confucian culture on green investment efficiency using the SBM-DEA model and a multidimensional fixed-effects model (time, year, and region) with Chinese heavy polluting enterprises as a sample from 2016 to 2020. The findings of the study indicate that Confucian culture can enhance the efficiency of firms’ green investments. This is achieved by fostering human capital and managerial capabilities. This relationship is more pronounced among firms in regions with fewer environmental regulations and among state-owned enterprises. It is therefore recommended that heavily polluting enterprises, with the support of the government, should give play to the guiding role of Confucian culture and integrate the spirit of Confucianism into their operation and management. The results of this paper verify the effectiveness of Confucian culture, which is very important for accelerating the green development of heavy polluting enterprises and enriching and expanding related research.

ANALYSIS OF INVESTMENT ACTIVITIES IN THE AGRICULTURAL SECTOR OF UKRAINE: DETERMINATION OF FACTORS AND WAYS OF ITS ACTIVATION

The purpose of the article is to study the theoretical aspects of investment activity, analyse the current level of investment activity in the agricultural sector of Ukraine's economy and identify factors and methods of its increase. Methodology. The theoretical and methodological basis of the study is the fundamental principles of national economic management, investment activity and development of agricultural production entities. The research used the following scientific methods: axiomatic (to establish basic definitions that clarify the essence of the study), systematic (to identify components within the agricultural production sector), institutional (to construct the subject-object framework of the institutional environment for investment activity in agricultural production), correlation-regression analysis (to identify key predictors influencing investment activity in the agricultural sector), abstraction (to prioritise the stimulation of investment activity in agricultural production), and reproductive (to substantiate alternative strategies for attracting investment in agricultural enterprises). The results of the study show that diversification of investment sources and modernisation of technological infrastructure of agricultural production are important prerequisites for institutional reforms in the agricultural sector of the country. Increasing investment activity in agricultural enterprises can be achieved by creating a favourable investment climate. This includes government initiatives to create a transparent and stable regulatory framework, simplify bureaucratic processes, and ensure legal and financial stability. Another key aspect is to facilitate access to financial instruments such as low-interest loans, grants and subsidies to support the development of agricultural enterprises. The results of the study are presented in the form of tables, figures, graphs, diagrams and charts. Practical implications. Given the high level of integration of the domestic agricultural sector into the global food market, it is worth exploring the potential of using customs instruments to stimulate investment processes. Such instruments could include a zero VAT rate for investment agricultural goods and measures to prevent double taxation. Value / Оriginality. Investment activity in Ukraine can be intensified under the following conditions: ensuring financing for innovations; developing and implementing a system of measures to increase the investment activity of commercial banks; promoting the development of the stock market and venture capital; developing investment infrastructure; borrowing the best international experience in assessing the efficiency of business centres and business incubators; forming an investment and innovation culture in society, etc.

Research on the Game Strategy of Mutual Safety Risk Prevention and Control of Industrial Park Enterprises under Blockchain Technology

Systematic management of corporate safety risks in industrial parks has become a hot topic. And risk prevention and control mutual aid is a brand-new model in the risk and emergency management of the park. In the context of blockchain, how to incentivize enterprises to actively invest in safety risk prevention and control mutual aid has become a series of key issues facing government regulators. This paper innovatively combines Prospect Theory, Mental Accounting, and Evolutionary Game Theory to create a hypothetical model of limited rationality for the behavior of key stakeholders (core enterprises, supporting enterprises, and government regulatory departments) in mutual aid for safety risk prevention and control. Under the static prize punishment mechanism and dynamic punishment mechanism, the evolutionary stabilization strategy of stakeholders was analyzed, and numerical simulation analysis was performed through examples. The results show: (1) Mutual aid for risk prevention and control among park enterprises is influenced by various factors, including external and subjective elements, and evolves through complex evolutionary paths (e.g., reference points, value perception). (2) Government departments are increasingly implementing dynamic reward and punishment measures to address the shortcomings of static mechanisms. Government departments should dynamically adjust reward and punishment strategies, determine clearly the highest standards for rewards and punishments, and the combination of various incentives and penalties can significantly improve the effectiveness of investment decisions in mutual aid for safety risk prevention and control. (3) Continuously optimizing the design of reward and punishment mechanisms, integrating blockchain technology with management strategies to motivate enterprise participation, and leveraging participant feedback are strategies and recommendations that provide new insights for promoting active enterprise investment in mutual aid for safety risk prevention and control. The marginal contribution of this paper is to reveal the evolutionary pattern of mutual safety risk prevention and control behaviors of enterprises in chemical parks in the context of blockchain.

Analysis of spatial-temporal evolution and investment model of industrial cross-regional investment network-taking the Pearl River Delta urban agglomeration as an example

Cross-regional investment behavior plays a pivotal role in enterprise development and regional economic growth. Nonetheless, existing investment network analyses often adopt a broad perspective, most studies tend to invest in network models and focus on a particular industry, and pay less attention to investment models in different industries. Therefore, this paper will combine the dual perspectives of space and network to observe the spatial and temporal evolution characteristics of enterprise investment and its investment model. Additionally, it delves into the unique features of investment networks within various industries at the district and county levels. The results show that enterprise investment agglomeration exhibits a development pattern characterized by points, bands, and surfaces, with a notable distance attenuation trend in investment distances. The overall structure of the industry investment network showcases characteristics of being multi-centered and multi-nodal. The investment models across different industries can be categorized into four distinct types. The research conclusion is of great significance to optimize multi-scale intercity investment, realize industrial gradient transfer and promote the coordinated development of industry.

Strategic planning: attracting investments in agro-industrial enterprises

Since agriculture is an important sector of the Russian economy, the problem of lack of capital in this industry is still relevant. The article shows that the effective functioning of agricultural enterprises in modern conditions of a dynamic and rapidly changing business environment in the long term depends on the development of new and more advanced approaches to investment planning. The problem of the study is related to the absence or imperfection of strategic management of investment policy at many enterprises in the agricultural sector, which leads to their difficult financial situation, slows down their development and reduces competitiveness. The main purpose of the presented research is to form proposals for improving the strategic planning model by developing and implementing investment strategies of enterprises of the agro-industrial complex (hereinafter referred to as AIC). In the course of the study, a review of domestic and foreign literature has been conducted reflecting the issues of the investment planning. Within the framework of the modern approach to the problem, the following research methods are used in the article: literature analysis, classification, comparative analysis, description, observation, and statistical method. Special attention in the methodology is paid to the digital transformation of the investment activity of the AIC in Russia and the world. The author substantiates that the modern strategy of attracting investments in the AIC enterprises should radically differ from previous approaches and be implemented with consideration to the development of the information technology market. It is necessary that this approach facilitates the transition of the Russian AIC to the formats of “Agriculture 4.0” and “Agriculture 5.0”.

Do regional tax incentive policies improve productivity?

The difficulty in transforming old industrial areas constitutes a significant factor contributing to regional development imbalances. Can regional tax incentives, as a crucial component of regional policies, polish the "rust belt" regions? This study leverages the inaugural Value-Added Tax (VAT) reform in China as an opportunity to explore the potential of regional tax incentives in achieving sustainable development in traditional industrial areas. Drawing upon a comprehensive industrial enterprise database, we employ a Propensity Score Matching-Difference in Differences (PSM-DID) approach to examine the efficacy of these tax incentives. Our findings reveal that: (1) Regional tax incentives primarily enhance firms productivity by stimulating investment in enterprises, yet they do not contribute to improved investment efficiency or spur innovation within firms. (2) Regional tax incentives have alleviated financing constraints for enterprises in old industrial bases, significantly enhancing the Total Factor Productivity (TFP) of firms with higher financing constraints. This policy has had an even stronger impact on improving the TFP of state-owned and monopolistic enterprises. (3) Regional tax incentives have impeded productivity growth by preventing the exit of low-efficiency firms and the entry of high-efficiency ones. These incentives also increased the likelihood of "zombie firms" forming and failed to promote endogenous economic growth in the Northeast region. Additionally, they have distorted the allocation of resources towards capital and technology-intensive industries in that area. In China's old industrial bases, regional tax incentives should be coordinated with market-oriented reforms; these regional tax incentive policies should also be further enriched.