Manufacturing Sector In China Research Articles

Environmental regulation and manufacturing employment: Evidence from China's Eleventh Five-Year Plan

This paper employs a difference-in-difference-in-differences (DDD) identification strategy to investigate the impact of environmental regulation on employment in the manufacturing sector in China, using the country's Eleventh Five-Year Plan (FYP) as a quasi-experiment. Our results indicate that the 11th FYP had a significant negative impact on firm employment, with every 10% increase in SO2 reduction targets resulting in a 3.1% decrease in employment for firms in high-pollution industries. This corresponds to a reduction of approximately 9 people per firm. Our findings indicate that firms primarily reduce SO2 emissions by reducing production levels and transitioning to cleaner energy sources. Additionally, we show that political promotion incentives played a role in driving the decline in employment. Heterogeneous tests reveal that the impact was more significant for private firms, SMEs and trade-exposed firms.

Just go green

Goal: This study explores the connection between green innovation components and the competitive advantage of the manufacturing sector in China through the mediating role of green organizational culture and the moderating role of access to finance. Methodology: A self-administered survey with 310 respondents was used to collect data from the industrial sector. Data were examined using SmartPLS, and a bootstrapping method was used. Results: The findings demonstrated that the suggested moderated mediation model was accepted because the associations between the constructs were statistically significant. The mediating effect of green organizational culture and the moderating effect of access to finance were performed. The results showed that the proposed moderated mediation model was accepted because the relationships between the constructs were statistically significant. The results of the data analysis supported a positive relationship between green innovation and competitive advantage as well as a mediating effect of green organizational culture. Limitations: The study is limited to the Chinese economy; hence future studies can replicate these results on developing and developed economies. Furthermore, large sample size, different industrial sector and more advance analysis techniques can also be used in future studies. Practical Implications: The study has practical implication of green innovation and green organizational culture in enhancing competitive advantage in the Chinese manufacturing sector, considering access to finance. Originality / Value: This study contributes to the current vain of literature by examining the noval connection between competitive advantage and green innovation components of manufacturing sector in China through the mediating role of green organizational culture and the moderating role of access to finance.

A Conceptual Development of Digital Trade Adoption among Manufacturing Companies in China: A Technology Acceptance Model Approach

The proliferation of digital technologies has brought about transformative changes in various sectors, including manufacturing. In the context of China, a prominent manufacturing hub, the adoption of digital trade practices has emerged as a critical determinant of competitiveness and sustainability for manufacturing companies. This paper proposes a conceptual framework for understanding the factors influencing the adoption of digital trade among manufacturing firms in China, employing the Technology Acceptance Model (TAM) as a theoretical lens. Drawing upon extant literature and empirical insights, this conceptual paper identifies key constructs within the TAM framework, such as perceived usefulness, perceived ease of use, attitude toward digital trade, and behavioral intention, and adapts them to the specific context of digital trade adoption in the Chinese manufacturing sector. It explores how factors such as organizational readiness, technological infrastructure, government policies, and cultural factors influence the perceived usefulness and ease of use of digital trade platforms among manufacturing companies in China. Moreover, this paper extends the traditional TAM model by incorporating additional constructs such as trust in technology, perceived risk, and organizational innovativeness, which are deemed essential in understanding the complexities of digital trade adoption in a rapidly evolving technological landscape. It underscores the significance of trust-building mechanisms, risk mitigation strategies, and organizational culture in facilitating the successful implementation of digital trade initiatives within manufacturing enterprises in China. The proposed conceptual framework contributes to both theoretical and practical understandings of digital trade adoption by elucidating the interplay between technological factors, organizational dynamics, and contextual influences within the Chinese manufacturing context. By offering insights into the determinants of digital trade adoption and the mechanisms for enhancing acceptance and utilization of digital trade platforms, this paper aims to inform policymakers, industry practitioners, and scholars engaged in the promotion and facilitation of digital transformation within the manufacturing sector in China and beyond.

Research on the Impact of Global Economic Policy Uncertainty on Manufacturing: Evidence from China, the United States, and the European Union

Events such as COVID-19 and the Russia–Ukraine conflict have significantly increased the uncertainty and volatility of global economic policies. In the context of economic globalization, the key question we investigate is whether global economic policy uncertainty will have different impacts on the manufacturing of the three major economies in China, the United States, and Europe Union. This study employs the time-varying parameter vector autoregressive (TVP-VAR) model to examine how global economic policy uncertainty (GEPU) affected manufacturing from March 2008 to March 2023. The empirical results show that the effects of GEPU are time varying; its short-term effects on Chinese manufacturing are slightly greater than its medium- and long-term effects, whereas its medium- and long-term effects on manufacturing in the United States (US) and European Union (EU) are significantly greater than its short-term effects. The impact of European debt crisis, the China–US trade war and Russia–Ukraine conflict on EU manufacturing is higher than that of China and the US, and the impact of the COVID-19 pandemic on China’s manufacturing is much smaller than that of the US and the EU; thus, Chinese manufacturing has a greater capacity for risk mitigation than US and EU manufacturing. This study not only provides a new perspective on the study of global economic policy uncertainty; it also provides new empirical evidence on how global economic policy uncertainty affects the manufacturing sector in China, the US and Europe and provides policymakers with guidance for decision making.

The effect of firms’ environmentally sustainable practices on economic performance

Companies are pressured by stakeholders to protect the environment while improving their economic performance. This study aims to further explore the impact of environmentally sustainable practices (ESP) on firm performance (FP), by considering the effects of green employee integration (GEI), environmental sustainability (ES), and employee environmental orientation (EEO). To test the set of hypotheses defined for this article, a closed-ended questionnaire survey was conducted with employees working in the manufacturing sector in China. Data from 325 employees were analysed using SmartPLS 4 software. The results demonstrate that environmentally sustainable practices (ESP) have a direct and significant influence on GEI, ES, and FP. In addition, GEI has a significant direct impact on ES and FP, and ES has a direct impact on FP. This research also demonstrated the partial mediation of GEI and ES and the moderation of EEO on the ESP–FP relationship. This research advances the scope of the ability, motivation, and opportunity theory and the social identity theory. Results suggest that managers should adopt, implement, and promote green practices, as this leads to involving employees in activities that can lessen adverse impacts on society and improve firm’s economic performance, including in terms of reputation and profits.

The impact of environmental regulation on capacity utilization of China’s manufacturing industry: An empirical research based on the sector level

Under the pressures of environmental pollution and overcapacity, environmental regulation is adopted by the Chinese government to reduce excess capacity of China’s manufacturing industry. Sector-level empirical research on the impact of environmental regulation on overcapacity is necessary since both of them are highly variable among different manufacturing sectors. Based on the panel data from 2001 to 2010, capacity utilization and its two factors, namely technical efficiency and equipment utilization, of 28 manufacturing sectors in China have been calculated using data envelopment analysis (DEA). The results of empirical tests indicate that environmental regulation has a significant impact on equipment utilization rather than on technical efficiency, leading to an overall negative effect on capacity utilization. In addition, the impact of environmental regulation on capacity utilization shows sector heterogeneity when the manufacturing sectors are classified according to the degree of overcapacity or pollution. To be specific, environmental regulation is not an effective means of reducing excess capacity of mild-pollution sectors and severe-overcapacity sectors. Capacity utilization of moderate- and severe-pollution sectors can be increased by combining environmental regulation and other policies to stimulate technical innovation. Excess capacity of mild- and moderate-overcapacity sectors can be reduced by environmental regulation; meanwhile, policy guidance on promoting technical innovation should also be provided to mild-overcapacity sectors. Therefore, it is crucial to formulate differentiated policies and maintain a reasonable range of intensity in the process of reducing overcapacity by means of environmental regulation.

Competitive Green Supply Chain Transformation with Dynamic Capabilities—An Exploratory Case Study of Chinese Electronics Industry

Extant studies identify different strategic approaches for businesses to integrate environment management (EM) into corporate supply chain management (SCM) to create different competitive market advantages. With increasing market uncertainties, stakeholder complexities, constraints of resources, companies nowadays are required to develop more context-specific solutions for mitigating sustainability risk and improving market performance in supply chain sustainability practices. To address the challenges faced by businesses, this study aims to explore how a company adapts green supply chain strategies for a competitive transformation. Specifically, we aim to identify different green supply chain capabilities that form hybrid choices of green solutions for a company to leverage an adaptive green shift. Through an extensive literature review, this study proposes a conceptual framework for exploration which is based on a qualitative in-depth case study in the electronics industry—one of the most polluting manufacturing sectors in China. The findings show that supply chain characteristics play a significant role in the selection of different green SCM solutions by businesses. We find different hybrid choices of strategic decisions are being made by the case company operating with high-volume and high-value supply chains respectively. High-volume supply chains adopt both operational pollution and waste control strategies and incremental green product strategies to balance cost of operational change and develop a competitive eco-efficient market expansion. In contrast, high-value supply chains adopt radical green product innovation strategies and operational waste prevention strategies to balance cost of product innovation and build operational efficiency to expand in a competitive eco-differentiation market. A mix of dynamic capabilities involved in different supply chain green transformations are also identified.

How does ownership structure affect corporate environmental responsibility? Evidence from the manufacturing sector in China

Corporate environmental responsibility (CER) has strong positive externalities that affect the environment. State-owned enterprises (SOEs) are more likely to devote their resources to CER-related activities to meet the expectations of their ultimate controlling owner (the government). However, previous studies neither explain the transmission mechanism of government ownership on CER nor analyze the differences in such effect between government ownership and non-government ownership (including foreign and private ownership). Therefore, this research discusses the heterogeneous impact of ownership structure on the CER of Chinese manufacturing firms. Results show that government ownership positively influences CER, with the effect being stronger for central government ownership than for local government ownership. Meanwhile, compared with private ownership, foreign ownership has a stronger positive effect on CER. However, the effect of foreign ownership is weaker than that of government ownership on CER. Furthermore, a larger separation of ownership and control inhibits the CER of SOEs yet facilitates that of foreign firms.

The new coal champion of the world: The political economy of Chinese overseas development finance for coal-fired power plants

This study aims to explain why China has become a new coal champion of the world. From 2006 to 2019, our new data set shows that China has financed 14 percent of the newly installed coal fired power plants across 17 countries around the world. We deploy a ‘push and pull’ analytical model and combine both qualitative and quantitative analysis to examine the political economy of Chinese overseas finance for coal. Our analysis shows that the globalization of Chinese official development finance for coal-fired power is a function of both the pull by the demand from the 17 countries, which have turned to the Chinese policy banks for financial backing to build coal-fired power plants, and the push by the coal-fired power equipment manufacturing sector in China and the central government in Beijing, which have been confronted with a set of structural challenges following the 2007–2008 global financial crisis. Our findings carry some worrisome policy implications for the global effort to reduce CO2 emissions resulting from coal burning in the electric sector. Without changes on the demand side, and a profound re-alignment of forces within China, Chinese development finance for coal-fired power may prove relatively resilient.

Interprovincial Trade Barrier for Intermediate Goods and Firm Innovation: Evidence from China

I examine the impact of interprovincial trade barrier for intermediate goods on firm innovation in the manufacturing sector in China over the 2003-2013 period. In particular, I construct a theoretical framework for innovation decisions of multiproduct manufacturing firms with price rigidity and contend that a decrease in interprovincial trade barrier for intermediate goods would increase firm-level R&D intensities in the short term due to price rigidity, but such effect would fade in the long term. I also make use of a structural gravity model to quantify interprovincial trade barrier for intermediate goods for each Chinese province in each year between 1998 and 2017. Then, taking advantage of a series of reduced-form regressions, I show that a decrease in interprovincial trade barrier for intermediate goods could indeed encourage firm innovation. Numerically, firm-level R&D expenditures would increase by approximately 28% in response to a one standard deviation decrease in interprovincial trade barrier for intermediate goods. I correct for endogeneity using a dummy indicating whether a provincial number one leader is locally or non-locally promoted. My findings are robust to this correction. Finally, I explore the heterogeneity and find that the magnitude of the effect exerted by a decrease in interprovincial trade barrier for intermediate goods increases in ex ante firm-level R&D effort and decreases in the level of market competition in the province.

The double effects of female executives' participation on corporate sustainable competitive advantage through unethical environmental behavior and proactive environmental strategy

AbstractBased on the upper echelons theory, ecofeminist theory, and natural resource‐based theory (NRBV), this study has constructed a relational model between female executives' participation, unethical environmental behavior, proactive environmental strategy, and corporate sustainable competitive advantage. The samples include a total of 496 female executives from listed 524 companies in the manufacturing sector in China, and multiple regression methods are used for the analysis. The study showed that female executives' participation had double positive effects on corporate sustainable competitive advantage, which included both the inhibiting effect on unethical environmental behavior and the stimulating effect on proactive environmental strategies. The study also explored the boundary conditions of “conservative” and “proactive” behaviors from the internal and external perspectives of enterprises. But it was shown that the effect would not be further improved when both moderation effects of environmental stakeholder pressure and environmental leadership were higher at the same time. As enterprises' behaviors should match with their capability range, radical behaviors might run counter to their desires.

The impact of intellectual capital on SMEs’ performance in China

PurposeThe purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components in high-tech and non-high-tech small and medium-sized enterprises (SMEs) operating in China’s manufacturing sector, and to examine the relationship between IC and the performance of high-tech and non-high-tech SMEs.Design/methodology/approachThe study uses the data of 116 high-tech SMEs and 380 non-high-tech SMEs listed on the Shenzhen stock exchanges during 2012–2016. The modified value added intellectual coefficient (MVAIC) model is used incorporating four components, namely, capital employed, human capital, structural capital and relational capital. Finally, multiple regression analysis is utilized to test the proposed research hypotheses.FindingsThe findings of this paper reveal that there is significant difference in MVAIC between high-tech and non-high-tech SMEs. The results further indicate a positive relationship between IC and financial performance of high-tech and non-high-tech SMEs. Specifically, IC is positively associated with firms’ earnings, profitability and operating efficiency. Additionally, capital employed efficiency, human capital efficiency and structural capital efficiency are found to be the most influential value drivers for the performance of two types of SMEs while relational capital efficiency possesses less importance.Practical implicationsThis paper will provide a valuable framework for executives, managers and policy makers in managing IC within the Chinese context.Originality/valueTo the best knowledge of the authors, this is the first empirical study that has been conducted on high-tech and non-high-tech SMEs in the manufacturing sector in China.

Do Transportation Infrastructure Investments Reduce Inventory Levels in the Manufacturing Sector in China?

Based on provincial panel data observed over the 2005–2014 period, we analyze the impacts of transportation infrastructure investments on inventory levels in China’s manufacturing sector. Our results indicate that transportation infrastructure investments do not reduce inventory levels in the manufacturing sector in China. This conclusion is different from the results in the previous literature, which demonstrate positive effects of transportation investments on reducing inventory levels. The difference can be partly explained by the ongoing inland shift of industry and geographic market expansion in China, which lead to longer transportation distances and longer lead times from suppliers to customers. We also find that road investments have spatial spillover effects overall, and the impacts of different types of road investments differ significantly from each other. Railway investments, however, do not have spatial spillover effects. Finally, we present several policy implications of transportation infrastructure investments, inland shifts of industry, and geographic market expansion.

Heterogeneity and asymmetric effects in energy resources allocation of the manufacturing sectors in China

Using the trans-log cost function and elasticity model, this paper pioneered the analysis of the elasticity and characteristics of the substitution between energy consumption and capital in China's manufacturing industry between 1995 and 2014. Firstly, the research revealed significant differences in the magnitude and direction of the substitution between coal, electricity, petroleum, and capital, thus demonstrating heterogeneity in the substitution. Secondly, the analysis, based on the Morishima Elasticity of Substitution (MES) model showed that: 1) depending on what triggers changes in factor prices, the manufacturing sector shows a reverse asymmetry whereby capital substituted energy and energy complemented capital 2) a significant asymmetry exists in the direction and magnitude of substitution in capital- and labor-intensive sectors. This asymmetric effect indicates that China can attain overall energy conservation and apply energy-saving technologies in the manufacturing industry by implementing the substitution of capital for energy. However, the differences with regards to the forms of energy consumption among sectors, as well as the heterogeneity and asymmetry in capital–energy substitution should be considered in research on energy policies for the manufacturing industry. This should also involve the integration of energy sources to ensure that such policies are targeted and effective.

Energy-intensive manufacturing sectors in China: policy priorities for achieving climate mitigation and energy conservation targets

ABSTRACTIn this study, a long-range energy alternative planning (LEAP) model was built to evaluate the relative priority of three kinds of policies expected to be implemented for the energy-intensive manufacturing sectors (EIMS) in China to achieve CO2 mitigation and energy conservation targets. These policies encourage (1) the use of more electricity instead of coal; (2) the continuous improvement of energy efficiency; and (3) a shift to other less energy-demanding sectors. The results indicate that the policy of shifting economic activity from the EIMS to other sectors is most helpful for China to achieve its targets of mitigating CO2 emissions and conserving energy. Encouraging the EIMS to use more electricity can help China to achieve a higher proportion of non-fossil-fuel based energy in its overall primary energy consumption. No single policy will allow China to achieve all the targets, emphasizing the need for an integrated policy design that combines all types of policies.Key policy insightsThe policy of encouraging a shift to less energy intensive industries should receive the highest priority in aiming to peak China's energy-related CO2 emissions as early as possible, and lower overall CO2 emissions, coal consumption and primary energy consumption in the long run.Encouraging a shift to electricity should go hand-in-hand with greater energy efficiency, otherwise such a policy cannot help China significantly reduce energy-related CO2 emissions.Encouraging the EIMS to use more electricity should receive the highest priority in helping China achieve a higher proportion of non-fossil-fuel based energy in its overall primary energy consumption.

Key supplier involvement in IT-enabled operations: When does it lead to improved performance?

As firms continue to invest in IT resources and collaborate with key suppliers, many fail to benefit from these activities. Drawing on resource orchestration theory and the relational view of interfirm competitive advantage, we examine the contingent relationships among IT resources, key supplier involvement, and the focal firm's performance. Using a multi-informants dataset from the manufacturing sector in China, we find that supplier involvement mediates the positive effect of IT resources on the focal firm's performance only when there is a high level of mutual trust and when competitive intensity is low in the focal firm's environment. In a highly competitive environment, however, mutual trust dampens the positive effect of supplier involvement on the focal firm's performance, which reveals the “hidden costs” of interfirm trust. In contrast, the direct positive effect of IT resources on the focal firm's performance is amplified by mutual trust when competitive intensity is high, suggesting that the focal firm will fare better without supplier involvement under these conditions. Therefore, key supplier involvement in the focal firm's IT-enabled operations does not always lead to improved performance and its effect on performance is contingent on relational and environmental variables.

A health-based life cycle impact assessment (LCIA) for cement manufacturing: a comparative study of China and Canada

Life cycle impact assessment methodology was applied to the cement manufacturing sectors in China and Canada for comparative purposes. Primary air emissions of NOx, SO2, PM, and CO were evaluated in terms of intensity per tonne of Portland cement and in respect of their contribution to winter smog. The Eco-Indicator 99 impact category for respiratory effects on humans caused by inorganic substances was used as surrogate for winter smog. Impact was assessed in disability-adjusted life years (DALYs), and damage, normalization, and weighting factors followed the egalitarian perspective. Results indicate some ambiguity for emission intensities with China outperforming Canada in NOx and SO2 while underperforming in PM and CO. However, in terms of impact to human health, China was more than double that of Canada at 14.2 DALYs per tonne of Portland cement. Highlighted by energy-intensive and trade-exposed industry like cement, environmental performance, and emissions leakage (associated with offshoring production) can have serious ramifications on regional air quality. Modernization and innovation in combination with a strong regulatory framework needs to be implemented in both emerging markets and developed markets to minimize emissions leakage and pollution loading.

Measuring the R&D Performance of High-Tech Manufacturing Sectors in China: A Data Envelopment Analysis Application

Measuring the R&D Performance of High-Tech Manufacturing Sectors in China: A Data Envelopment Analysis Application

Assessing the environmental management efficiency of manufacturing sectors: evidence from emerging economies

Environmental management in the Chinese manufacturing industry has attracted global attention. Using environmental indicator data from 2001 to 2010 for this industry, we empirically examine its environmental management efficiency using Data Envelopment Analysis (DEA) and Hierarchical Clustering methods. Our findings reveal that the environmental management of the Chinese manufacturing industry has more DEA inefficiency than efficiency. Environmental management efficiency showed a significant decline before 2004, but rapid growth since 2007. Our findings also indicate that there is input redundancy and output insufficiency in the manufacturing industry's environmental management from 2002 to 2004. In addition, we found that most manufacturing sectors in China had consistently inefficient environmental management over the 10 years under study. Overall, our findings reveal that efficiency remains low. Thus, the manufacturing industry's environmental management needs to improve from the perspective of enterprises and government. We hope that our study paves the way for future research into improving the manufacturing industry's environmental management in emerging countries.

China wage inequality: the role of trade and technology

This article empirically investigates the impact of international trade and technical change on skill premia for a panel of 28 manufacturing sectors in China over the period 2002–2011. The results find that the effect of changes of the share of SOEs is twofold. First, the contraction of SOEs promoted productivity growth, and the promoting effect was skill-biased, which tended to increase the skill premia in China. Second, the drop of product prices resulting from falling SOEs share was more magnificent in skill-intensive industries, which helped to mitigate wage inequality through product prices. The accounted-for portion of price changes by productivity growth was skill-biased, significantly raising skill premia through product prices. However, the portion of price changes accounted for by foreign price was unskill-biased, and world price competition diminished the growing income disparity in China.