Non-state-owned Enterprises Research Articles

The Financing Efficiency of China’s Industrial Listed Enterprises Based on the Dynamic–Network SBM Model

Industry is an important force in China’s economic development; however, with the transformation and upgrading of the industrial structure, a large number of resources have flowed to the tertiary industry, and the funding problem has become one of the main disadvantages restricting China’s industrial enterprises’ sustainable development. This paper aims to point out the problems and improvement directions of financing efficiency of China’s industrial listed enterprises. Based on the two-stage dynamic network SBM (DNSBM) model, this paper evaluates the financing efficiency of 450 of China’s industrial listed enterprises from 2011 to 2017. The results show that: (1) the overall financing efficiency of China’s industrial listed enterprises is low, the funds are not used effectively, and there is great room for improvement; (2) the overall financing efficiency of state-owned enterprises (SOEs) is lower than that of non-state-owned enterprises (NSOEs), the average fund raising efficiency of SOEs is greater than the fund using efficiency, but the opposite is true for NSOEs; (3) the overall financing efficiency of the main-board-listed enterprises is the lowest, and that of the growth enterprise market (GEM) is the highest, the most obvious gap is in the second stage of fund using, but this gap is gradually narrowing; and (4) the overall financing efficiency of China’s industrial enterprises has obvious regional characteristics, the fund raising efficiency value in each region is not much different, while the fund using is significantly different. To improve financing efficiency, enterprises must improve their financing channels, choose the best financing method, maintain a reasonable debt-financing ratio, improve management level and profitability, increase enterprise value, enhance the debt-paying ability, and attract more capital at a low cost. In addition, the government should also provide corresponding financing support policies for different types of enterprises.

Political connections and corporate carbon emission: New evidence from Chinese industrial firms

The promotion of green and sustainable development is an important global issue. We investigate the relationship between firm political connections (PCF) and carbon emissions of industrial enterprises (FCE), by employing the dynamic GMM method based on a panel dataset of Chinese industrial firms from 2008 to 2020, and exploring the mechanism involved. The results show that PCF has a promoting effect on FCE. Second, the moderating mechanism analysis demonstrates that the mitigation effect is better in the command-and-control environmental regulation (CCI) than in the market-based environmental regulation (MBI). Third, heterogeneous analysis proves that environmental pollution by state-owned enterprises with political relations (SOEs) is lower, as compared with that by non-state-owned enterprises (NSOEs); in addition, the PCF still retains an obvious function in facilitating the FCE in the Midwest region with a low degree of marketisation. Further analysis shows that PCF has an asymmetric correlation with FCE at different quantiles. This study provides a theoretical basis for using political connections to achieve carbon neutrality goals and carbon peaks, and enriches the theoretical research on the green development of enterprises.

The impact of green credit policies on debt financing for heavily polluting enterprises

On October 16, 2022, in the report of the 20th National Congress of the Communist Party of China, China’s dual carbon goal was once again emphasized, and China would actively and steadily promote carbon peaking and carbon neutrality. This paper selects the heavy polluting enterprises of A-share listed companies(2007-2021) as the research samples, using the non-heavy polluting enterprises as the control group, and applying the double difference model to explore the effect of green credit policy on the debt financing scale and debt financing cost of heavy polluting enterprises. Empirical tests show that, on the one hand, the promulgation of the Green Credit Guidelines significantly reduces the financing scale of heavily polluting enterprises and increases the financing cost of their liabilities. On the other hand, compared with non-stateowned enterprises, the green credit policy has a greater impact on the financing cost of state-owned enterprises’ liabilities.

The Impact of Corporate Digitalization on Cross-border Mergers and Acquisitions Performance in Chinese Listed Companies

Under the influence of the “going out” strategy and the Belt and Road Initiative, China has been accelerating its process of globalization. Based on a sample of 123 cross-border mergers and acquisitions (M&A) cases launched by Chinese listed companies from 2012 to 2019, this paper empirically studied the impact of corporate digitalization on cross-border M&A performance. The regression results showed that corporate digitalization promoted both short-term and long-term cross-border M&A performance, especially when the acquiring company was a high-tech company. In non-stateowned enterprises (non-SOEs), corporate digitalization promoted short-term cross-border M&A performance more significantly, while in SOEs the positive impact was more significant on long-term cross-border M&A performance. Furthermore, internal control quality strengthened the role of corporate digitalization on short-term performance of the acquiring company after cross-border M&A, while it negatively moderated the correlation between corporate digitalization and long-term performance of the acquiring company after cross-border M&A. This study provided some implications for firms on how to promote their cross-border M&A performance and references for the government’s innovation encouragement policy and the “going out” strategy.

Will Green Innovation Bring about the Financial Spillover Effect? Evidence from China’s High-Carbon Listed Companies

Is there a spillover effect from enterprises’ green innovation activities that promotes the coordinated development of the economy and the environment? Very few studies examine the impact of green innovation on corporate performance. Based on the data from Chinese listed firms in high-carbon industries from 2000 to 2021, this paper finds that green innovation has a significant promotion effect on enterprise performance, and the degree of regional intellectual property protection and enterprises’ financial resource base positively regulate the relationship between green innovation and enterprise performance. Further heterogeneity analysis shows that high-quality green innovation can better promote improvements in enterprise performance. In nonstate-owned enterprises, the spillover effect of such high-quality green innovation is more significant than that in state-owned enterprises. Meanwhile, the heterogeneity of the corporate governance level also affects the relationship between green innovation and enterprise performance. Green innovation has played a more significant role in promoting company performance in companies with high equity ratios. Finally, this paper proposes that companies should completely utilize their resource advantages to carry out high-quality green innovation practices to realize the coordinated development of the economy and the environment. This study provides empirical evidence and policy implications for accelerating the high-quality, sustainable development of enterprises.

How Environmental Regulation Affects Green Investment of Heavily Polluting Enterprises: Evidence from Steel and Chemical Industries in China

Environmental protection is the top priority in the development process of all countries in the world, which directly affects public health. In response to growing environmental challenges, the government is implementing increasingly stringent industry supervision and environmental regulations. However, the impact of environmental regulation on investment has not formed a unified conclusion, and few studies have discussed this effect at the micro-enterprise level. This paper uses multiple regression analyses to investigate the effect of environmental regulation on green investments of heavily polluting enterprises in China. Using the data of listed companies in the steel and chemical industries of the Shanghai Stock Exchange and Shenzhen Stock Exchange, we find that the increasing intensity of government environmental regulation will inhibit green investments of heavily polluting enterprises. This paper further classifies the property rights of these enterprises and discusses the role of regional environmental quality. From the perspective of property rights, increased government environmental supervision will inhibit green investments of state-owned enterprises (SOEs) and promote green investments of non-state-owned enterprises (NSOEs). From the perspective of the environmental quality of the region where the company is located, government environmental regulation will inhibit green investments of heavily polluting companies, regardless of the regional environmental quality. This paper not only provides new empirical evidence about the steel and chemical industries for Porter’s hypothesis, but also compensates for the lack of research on the impact of environmental regulation on corporate green investment at the micro-level.

Does board diversity reduce the probability of financial distress? Evidence from Chinese firms.

This paper empirically investigates the impact of cognitive board diversity in education, expertise, and tenure facets on financial distress likelihood in the emerging economy of China. This study examines how this relationship varies across State-Owned Enterprises (SOEs) and Non-State-Owned Enterprises (NSOEs). Paper argues that the Chinese stock market, as a typical emerging market, is an excellent laboratory for studying the impact of board diversity on the probability of financial distress. Its underdeveloped financial system and inadequate investor protection leave firms unprotected from financial hardship. A sample of 12,366 observations from 1,374 firms from 2010 to 2018 shows that cognitive diversity qualities are positively linked with Z-score, implying that directors with different educational backgrounds, financial skills, and tenures can assist in reducing the probability of financial distress. Cognitive board diversity reduces the likelihood of financial distress in SOEs and NSOEs. However, tenure diversity is insignificant in all cases. Furthermore, the robustness model “two-step system Generalized Methods of Moments (GMM)” demonstrated a positive association between educational diversity, financial expertise, and financial distress scores. The results have significant implications for researchers, managers, investors, regulators, and policymakers.

Energy effects of non-energy policies: Minimum wage standard and enterprise energy efficiency in China

Improving energy efficiency is one of the core goals of energy policy, but non-energy policies also play a role that cannot be ignored. To explore the energy effects of nonenergy policies on the production sector, this paper studies the effect of minimum wage on the energy efficiency of enterprises based on China's 2000–2009 minimum wage data and industrial enterprise microdata. We find that the minimum wage standard significantly improves the energy efficiency of enterprises. This conclusion holds after addressing a series of endogeneity concerns. The channel analyses verify that the minimum wage standard strengthens the allocation of the fixed assets of enterprises, improves innovation ability, and thus promotes energy efficiency. Furthermore, the energy efficiency improvements due to the minimum wage standard are more prominent in nonstate-owned enterprises, enterprises with few financing constraints and labour-intensive enterprises. Additionally, energy efficiency improvement helps alleviate the adverse impact of industrial enterprises on the ecological environment. The research conclusion of this paper shows that the government can optimize the allocation of resources through administrative ways and promote the efficient use of energy and the recovery of green industries.

Comparison of misallocation between the Chinese thermal power and hydropower electricity industries

This study investigates the efficiency of resource allocation in China's electricity industry. Using a plant-level dataset configured from the thermal and hydroelectric generation sources, we find resource misallocation in both types of electric generation sources. By further decomposing the source of misallocation, we reveal that compared with the hydropower industry, the thermal power industry suffered more from output distortions that reflect the staggering output prices of power plants. The 22.5%–38.3% thermal power total factor productivity gain occurred in both state- and nonstate-owned enterprises, resulting from the hypothetical energy structure improvement case, which also serves to assert the impact of the energy transition.

The impact of green credit policy on enterprises' financing behavior: Evidence from Chinese heavily-polluting listed companies

The enterprise's financing response to the green credit policy is of great significance. It is related to whether green finance can successfully accelerate enterprises' technological upgrading and transformation. Based on Propensity Score Matching-Difference in Difference (PSM-DID) model, this paper studies the impact of green credit policy on financing behavior of the heavily-polluting listed companies in China from 2008 to 2020. The results show that the illiquid debt financing behavior of heavily-polluting enterprises has a clear downward trend since China's "Green Credit Guidelines" were implemented, while liquid debt and commercial credit, as alternative financing methods for enterprises, have increased significantly. Through further analysis, we found that state-owned enterprises (SOE) are more affected by green credit policy than non-state-owned enterprises (NSOE), and companies in regions with a lower green development index are more affected by green credit policy than companies in higher green developing regions. Although China's green credit policy has a certain inhibitory effect on the illiquid debts financing behavior of heavily-polluting enterprises, it has failed to allocate the capital flow effectively due to the firm-level alternative financing response to the green credit policy. From the managerial significance of the policy, the signal guidance of green finance needs to be strengthened for enterprises. • Explore the impact on financing behavior of green credit policy. • Green credit policy is effective in reducing the illiquid debt of heavily-polluting enterprises. • Green credit policy has led to an increase in alternative financing for enterprises. • Explore the impact of green credit policies on different green development index regions.

With trust we innovate: Evidence from corporate R&D expenditure

We examine the impact of social trust on corporate R&D expenditure. Using a large sample of 1811 Chinese firms during 2007–2018, we show that social trust significantly promotes corporate R&D expenditure. Firms located in higher social trust regions invest 6.16 % (4.17 %) more in R&D1 (R&D2) than those located in lower social trust regions. This result is robust to a battery of robustness checks and endogeneity corrections using the instrumental variable approach, and is more pronounced for non-state owned enterprises (non-SOEs), small firms, firms with low cash flow, firms with weak corporate governance, and firms located in regions with lower marketization index. We further find that, social trust is positively associated with higher innovation output as measured by patents. Overall, we highlight the important role played by social trust in encouraging corporate R&D expenditure and enhancing innovation.

Controlling shareholder expropriation and labor investment efficiency

In this paper, we find that severer controlling shareholder expropriation is associated with higher deviations of labor investment from the level justified by economic fundamentals, i.e., lower labor investment efficiency. Under the pyramid-like ownership structure, this relation is more pronounced for non-state owned enterprises (non-SOEs) under higher expropriation risk (with more intermediate layers) and state-owned enterprises (SOEs) subject to stronger government intervention (with fewer intermediate layers). Moreover, the main effect is largely driven by either over-firing in non-SOEs or under-firing in both non-SOEs and SOEs. Overall, this paper reveals a specific channel through which controlling-minority shareholder conflicts reduce real economic efficiency.

Does the effect of the annual year taboo exist? Empirical evidence from senior managers’ zodiac year and corporate inefficient investment

Based on the unique folk belief of the zodiac year, this study explores the effect of senior managers' zodiac year on corporate inefficient investment (CII) using data from Chinese A-share listed companies from 2006 to 2019. The study findings are as follows: (1) senior managers are more conservative and cautious in their zodiac year. Increasing risk aversion prevents blind investment and inhibits CII. (2) The restraining effect of the zodiac year on CII is more apparent in nonstate-owned enterprises, regions with low marketization levels, Central China, and Northeast China. This effect is attributed to the degree of superstitious belief of senior managers and becomes more pronounced with increasing age. The zodiac years of the Year of the Ox, Year of the Dragon, and Year of the Pig affect the Annual Year Taboo the most; meanwhile, the zodiac years of the CEO and the chairman exert a more significant effect than that of the vice-chairman. In addition, the restraining effect is only reflected in the zodiac year and draws a significantly negative market reaction. (3) The level of cash holdings is a potential channel for senior managers to improve corporate investment efficiency in managers’ zodiac year. By providing unique evidence from the Eastern cultural context, this study enriches the research literature on emerging market culture and business management.

Can Digital Transformation Promote Green Technology Innovation?

Using the index of the degree of digital transformation of enterprises constructed based on text analysis, and combining the data of Shanghai and Shenzhen A-share listed companies from 2007 to 2020, a panel data model was established to empirically study the impact of digital transformation on green technology innovation and the mechanism of action and to further analyze the impact of heterogeneity. The results show that digital transformation can significantly promote green technology innovation, and its internal mechanism is that digital transformation can improve the level of green technology innovation by alleviating financing constraints and attracting government subsidies. Compared with nonstate-owned enterprises and small and medium-sized enterprises, digital transformation plays a more significant role in promoting green technology innovation in state-owned enterprises and large-scale enterprises. Therefore, the government should regulate the market order and formulate reasonable financial policies to provide policy and financial support for enterprises to carry out digital transformation, mobilize the willingness of enterprises to carry out green technology innovation and improve the level of green technology innovation in China.

The impact of economic policy uncertainty on corporate social responsibility: A new evidence from food industry in China.

The ability of the food industry to practice a high degree of corporate social responsibility is related to whether national food safety can be effectively guaranteed. By taking the food enterprises in China’s A-share listed companies from 2009–2018, this paper probes into the influence of China’s macroeconomic policy uncertainty on corporate social responsibility, and depicts the differencent impact of enterprise’s practice of social responsibility under government association and market association, respectively. The results firstly show that, the uncertainty of economic policy has a negative effect on the social responsibility of food enterprises, with a regression coefficient of -0.013. Secondly, nonstate-owned enterprises are more vulnerable to macroeconomic fluctuations in the practice of social responsibility. Thirdly, in the case of greater economic policy uncertainty, enterprises with stronger market connections in the food industry tend to be more conservative in their CSR. The above research results not only verify the path of transmission of economic policy uncertainty to corporate social responsibility, but also provide important ideas and references for improving the level of corporate social responsibility in the food industry and ensuring food safety.

Can digital finance help increase the value of strategic emerging enterprises?

• Digital finance can promote the value of strategic emerging enterprises. • The promotion of the depth of the use of digital finance is more significant. • Mechanisms: "supplementary funds", "reducing risk" and "promoting innovation". • Administrative mandatory environmental regulation has a regulatory effect. This paper uses the data of A-share strategic emerging enterprises in Shanghai and Shenzhen Stock Exchanges from 2011 to 2018 to explore the impact of digital finance on the value of strategic emerging enterprises. It is found that the development of digital finance has a structural driving effect on the value of strategic emerging enterprises. It shows that the driving impact caused by the depth of use of digital finance is more evident than the coverage of digital finance. At the same time, it is more apparent in the low degree of marketization, nonstate-owned enterprises, and central and western regions, highlighting the inclusive characteristics of digital finance. Mechanistic research shows that digital finance can enhance the value of strategic emerging enterprises through three paths: supplementary funds, reducing risk, and promoting innovation, thereby realizing a sustainable society. In particular, the impact of administrative mandatory environmental regulations on digital finance and the importance of strategic emerging enterprises presents an inverted U-shaped relationship.

Monitoring and Analysis of Venture Capital and Corporate Fraud Based on Deep Learning

With the continuous expansion of global investment institutions, the development of the investment industry is gradually accelerating, but the risks behind the investment are also constantly increasing. Using the data of A-share companies in China's capital market from 2010 to 2019, this paper studies the impact of venture capital on corporate fraud. Empirical results show that venture capital holdings reduce the probability and frequency of corporate fraud. These findings remain robust after mitigating endogeneity using PSM, Heckman's two-step, one-step approach, suggesting a causal relationship between venture capital holdings and fraud reduction. Further research shows that the way venture capital holdings reduce corporate fraud is to suppress corporate fraud by improving the company's internal and external information environment. Furthermore, venture capital holdings play an important role in the governance of corporate disclosure fraud and operational fraud, but not in the governance of TMT fraud. In addition, the venture capital has better inhibitory effects on the supervision and governance of the fraud frequency of nonstate-owned enterprises compared with state-owned enterprises. The results of this research imply that venture capital shareholding plays an important role in preventing corporate fraud. This study contributes to the researches about the value-added role of venture capital and reveals the governance effect of venture capital on corporate fraud. Besides, it provides the theoretical evidence for capitals to better serve the real economy.

THE SHADOW BANKING BEHAVIOUR IN INTERNET OF THINGS: EVIDENCE FROM ECONOMY OPERATION MODE IN CHINA

With the acceleration of world economic integration and enterprise management globalization, the advent of Internet of things based on Internet and information technology has become inevitable. The Internet of things also brings about a cascading effect between firms’ shadow banking behaviour and bank connections. This study investigates the relationship between firms’ shadow banking behaviour and bank connections by analysing a sample of Chinese listed firms in Internet of things industry. The results show that bank connections eliminate information asymmetry between banks and firms, bank connections are positively related to firms’ long-term debt, and as long-term debt increases, firms’ shadow banking behaviour also increases. Furthermore, this finding shows very strong robustness, the empirical analysis provides sufficient evidence that firms’ shadow banking behaviour increased with bank connections in Internet of things industry. In addition, the evidence also shows that the tendency of shadow banking behaviour is more pronounced in non-state-owned enterprises (NSOEs) than state-owned enterprises (SOEs) by sub-sample sensitivity analysis.

Can the Leading Officials' Accountability Audit of Natural Resources policy stimulate Chinese heavy-polluting enterprises' green behavior?

Under the pressure of environmental crisis caused by production and economic development, a policy for Leading Officials' Accountability Audit of Natural Resources (LOAANR) was issued in 2014 to reduce the environmental risks and gain high-quality economy. Taking LOAANR policy as the research object, and based on 2011 to 2018 panel data from Chinese heavy-polluting enterprises, this paper employed a two-way fixed difference-in-differences (DID) model to explore the relationship between the LOAANR, environmental costs (ECs) and green innovation (GI). It was found that the implementation of the LOAANR significantly promoted enterprise GI, with the regulating impact mechanism, EC. GI efficiency was measured by continuous DID method. A heterogeneity analysis revealed that non-state-owned enterprises (NSOEs) were more eager to environmentally innovate. A corporate life cycle heterogeneity analysis of the GI policy effect found that the policy effect was negative in the decline stages. Compared with the eastern Chinese enterprises, enterprises in other regions were found to be more prone to positively adopting GI to maximize benefits in the face of the LOAANR. The policy was observed to have inhibited GI in central Chinese enterprises. It was also demonstrated that the policy effect has time and regional dynamic effect. Common trend, placebo, PSM-DID tests, and another robustness regressions were applied to support the conclusions. All the findings are expected to provide basic theoretical guidance for more environmental policies and high-quality production.

Environmental legitimacy pressure, political connection and impression management of carbon information disclosure

Using sample firms from eight energy-intensive industries included in the State Council of China’s Notice on the Pilot Work of Carbon Emission Trading from 2015 to 2019, this study examines the relationship between environmental legitimacy pressure and impression management of carbon information disclosure, and explores the moderating effect of political connection on this relationship. The baseline results show that environmental legitimacy pressure is positively associated with impression management of carbon information disclosure, and political connection moderates this relationship, that is, the positive association between environmental legitimacy pressure and impression management of carbon information disclosure in politically-connected firms is stronger than that in non-politically-connected firms. The results are robust to various sensitivity tests. Further analyses show that (i) the positive association between environmental legitimacy pressure and impression management of carbon information disclosure in non-state owned enterprises (non-SOEs) is stronger than that in SOEs, (ii) firms facing higher negative environmental legitimacy pressure have stronger motivation to conduct impression management of carbon information disclosure, (iii) firms facing environmental legitimacy pressure conduct both selective disclosure and expressive manipulation but they have stronger motivation to conduct expressive manipulation. This study extends the literature on impression management of carbon information disclosure. The findings in this study provide policy implications not only for China but also for countries with large carbon emission.