Firm Performance In China Research Articles

The Impact of ESG Performance on the Financial Performance of Chinese High-Tech and Internet Industry Firms

This study aims to explore the impact of Environmental, Social, and Governance (ESG) performance on the financial performance of firms in China’s high-tech and internet industries. Using annual data from 100 companies spanning from 2015 to 2022, a fixed effects model is applied for empirical analysis. The study finds that overall ESG performance has a significant positive impact on firms' return on assets (ROA) and net profit margin (NPM), with the governance (G) and social (S) dimensions showing particularly strong effects. While the environmental (E) dimension has a weaker short-term impact on financial performance, its long-term benefits are undeniable. Firm size and market share also have significant positive effects on financial performance. The results suggest that optimizing governance structures and actively fulfilling social responsibilities can enhance financial performance, while long-term investments in environmental responsibility should be integrated into corporate strategies. Overall, the findings provide empirical evidence for companies in formulating ESG strategies and offer specific policy recommendations for the sustainable development of China’s high-tech and internet industries.

Regional cultural inclusiveness and firm performance in China

As society continues to develop, a growing body of research is focusing on how informal institutions, such as culture, influence corporate behavior and economic outcomes. The aim of this study is to explore the impact of cultural inclusiveness, as a non-formal institution, on firm performance. Using Chinese A-share listed firms as our sample, we employ econometric methods to analyze the relationship between cultural inclusiveness and firm performance. Our findings reveal that cultural inclusiveness enhances firm performance, particularly evident in regions with higher levels of cultural inclusiveness, where firms tend to exhibit higher return on equity. To address concerns of endogeneity, instrumental variable regression using regional topographical changes is employed. Mechanism testing indicates that cultural inclusiveness primarily improves firm performance by reducing financial constraints and optimizing employee structure. Additionally, the study finds that cultural inclusiveness has a more pronounced impact on firms with higher corporate social responsibility (CSR) performance as well as those with greater investment in research and development (R&D). This study provides a comprehensive empirical explanation of how cultural inclusiveness influences the sustainable operation of businesses.

Intellectual Property Rights and Firm Performance in China from the Perspective of Firm Heterogeneity

Intellectual Property Rights and Firm Performance in China from the Perspective of Firm Heterogeneity

The Influences of Multi-Level Environmental Regulations on Firm Performance in China

Abstract A multi-level perspective of how environmental regulations affect firm performance receives less attention. By document analysis and semi-structured interviews, this study examines the influences of environmental regulations from the central government, the local governments, and the corporate on firm performance with a case study based on a state-owned enterprise named SINOPEC Yangzi Petrochemical Company (SYPC) in China. The findings show that the regulations from different levels exert distinct but interconnected influences on performance of SYPC. The guiding concepts from the central government, the prescriptive standards from the local governments, and the performance management systems from the SINOPEC headquarters incentivize SYPC to innovate green technology. Technical upgrade, good relations with the government, and popularity in the public due to the implementation of regulations improve economic performance of SYPC, though which is not the priority of the company. SYPC actively implements environmental policies but also acts as a part of the strategy of SINOPEC circumventing regulations.

The impacts of different environmental regulations on firm’s performance in China based on R&D investment, environmental innovation and non-environmental innovation

ABSTRACT Emission standard, as a kind of mandatory environmental regulation, stipulates the emission standard of pollutants. The emission trading system (ETS) is regarded as a typical market-based environmental regulation. This study examines the impacts of mandatory environmental regulation (SO2 emission standard) and market-based environmental regulation (SO2 ETS) on firm performance in China. Listed firms in China are selected as research samples and a difference-in-differences (DID) model is employed as an assessment method. The results indicate that mandatory environmental regulation only has a significantly positive impact on environmental performance. However, the ETS improves environmental performance and economic performance simultaneously. This study further explores the effect mechanisms between two environmental regulations and firm performance that R&D investment, environmental innovation and non-environmental innovation are selected as different effect mechanisms. There are no impacts of mandatory environmental regulation on R&D investment and environmental innovation. However, it finds that the ETS can effectively decrease the crowding-out effect of R&D and thus trigger environmental innovation of the firm. According to heterogeneity analysis, the effect of market-based environmental regulation is significant in those regions with higher intensity of environmental regulation. It does not find significant effects of mandatory environmental regulation and market-based environmental regulation in regions with lower regulatory intensity.

The effects of corporate social responsibility on innovation and performance of firms in China: a structural equation model analysis

PurposeThis study aims to analyze and discuss the impact of corporate social responsibility (CSR) on firms’ performance, as well as to examine the interplay between CSR and the economy, society and innovation.Design/methodology/approachThis paper collects data from 420 manufacturing firms across various geographical regions in China. By using a structural equation model, the paper investigates the impact of CSR on enterprise innovation, customer management capability, market competitiveness (MC) and firm financial performance.FindingsThe findings demonstrate that CSR performance positively contributes to enhancing the level of enterprise innovation, as well as customer management capability and market competitiveness. Furthermore, it assists enterprises in improving market competitiveness and elevating customer management capabilities. Thus, CSR can have a positive effect on the firm financial performance.Originality/valueThe outcomes presented in this paper offer valuable evidence regarding the influence of implementing CSR on different aspects of enterprise performance and innovation. Moreover, it provides practical recommendations for enterprises seeking to transition towards low-carbon practices and upgrade their manufacturing industry.

A predictive study on the impact of board characteristics on firm performance of Chinese listed companies based on machine learning methods

Purpose This study aims to examine the impact of board characteristics on firm performance while also exploring the influential mechanisms that help Chinese listed companies establish effective boards of directors and strengthen their corporate governance mechanisms. Design/methodology/approach This paper uses machine learning methods to investigate the predictive ability of the board of directors' characteristics on firm performance based on the data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges in China during 2008–2021. This study further analyzes board characteristics with relatively strong predictive ability and their predictive models on firm performance. Findings The results show that nonlinear machine learning methods are more effective than traditional linear models in analyzing the impact of board characteristics on Chinese firm performance. Among the series characteristics of the board of directors, the contribution ratio in prediction from directors compensation, director shareholding ratio, the average age of directors and directors' educational level are significant, and these characteristics have a roughly nonlinear correlation to the prediction of firm performance; the improvement of the predictive ability of board characteristics on firm performance in state-owned enterprises in China performs better than that in private enterprises. Practical implications The findings of this study provide valuable suggestions for enriching the theory of board governance, strengthening board construction and optimizing the effectiveness of board governance. Furthermore, these impacts can serve as a valuable reference for board construction and selection, aiding in the rational selection of boards to establish an efficient and high-performing board of directors. Originality/value The study findings unequivocally demonstrate the superiority of nonlinear machine learning approaches over traditional linear models in examining the relationship between board characteristics and firm performance in China. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. The study reveals that the predictive performance of board attributes is generally more robust for state-owned enterprises in China in comparison to their counterparts in the private sector.

Factors affecting the green investment and assessing sustainable performance of firms in China.

In the process of development, global economies are prioritizing environmental protection and firms are also recognizing the importance of minimizing environmental impact during production along with maximization of profits through green investments. It is vivid that green investments are vital for environmental preservation. So this paper contributes to literature by investigating the role of internal and external factors affecting the decision making of Chinese firms regarding adoption of green investments and impact of green investments on environmental, social, and economic performance of firms. The data is collected from directors/senior managers of the firms. We received 463 valid responses from listed companies with Shenzhen, Beijing, and Shanghai Stock Exchange. The "structural equation modeling" with "maximum likelihood estimation" is employed for empirical analysis. The empirical findings reveal that adaptation to climate change and its mitigation is the most important driver of green investment. Moreover, green investment positively contributes to enhancing the social, economic, and environmental performances of Chinese firms. Based on the findings of the study, green investment should be adopted as a corporate strategy by firms for profit maximization, competitive advantage, and improvement in social well-being without compromising the environment. Policy makers can promote green investment by offering policy instruments such as tax incentives, guaranteed credits, grants, and investor education. Training courses may be offered to raise environmental awareness among firms and the general public.

Celebrity CEOs, digital transformation and firm performance in China: the moderating role of controlling shareholders and institutional investors.

business leaders' social status significantly impacts companies' strategic direction and performance. Digital transformation, an important tool for companies to enhance competitiveness and resilience, plays an important role in the relationship between executive background and firm performance. To investigate the impact of celebrity chief executive officers (CEO) on firm performance through digital transformation. Using data from companies listed on the main boards of the Shanghai and Shenzhen Stock Exchanges between 2017 and 2021, this study explored the relationship between celebrity CEOs, digital transformation, and firm performance. Celebrity CEOs significantly enhanced a firm's digital transformation. However, this effect weakened when controlling shareholders and institutional investors held more shares. Additionally, the study showed that celebrity CEOs can improve firm performance through digital transformation. These findings were robust across a range of sensitivity analyses. This study contributes to understanding celebrity CEOs' decision-making motivations and economic impacts from a psychological perspective while also providing valuable insights for driving digital transformation within companies.

Analysis of the Relationship Between Senior Female Leadership and Enterprise Performance in China

With the continuous development of Chinese society, under the policy of rejuvenating the country through science and education, more and more women have stepped into the workplace and participated in all aspects of senior leadership. Understanding how female leadership attributes affect business success can encourage more female employees to take up leadership roles. This essay intends to investigate the connection between firm performance in China and senior female leadership. Emphasis on Chinese background, this paper is trying to find out the difference between China and abroad and to find out the reason for those differences. According to related articles published at home and abroad. This paper uses keyword search when selecting papers. In addition, two keywords female leadership and corporate performance were searched. The findings indicate that, after 19 years, the effect of female leadership on business performance is primarily positive. This specific impact on corporate performance is related to the flexible management characteristic of female leadership.

Linking Supply Chain Collaboration, Collaborative Advantage, and Firm Performance in China: The Moderating Role of Government Subsidies

Supply chain collaboration is acknowledged for its benefits, but realizing these advantages can be challenging. The role of government subsidies in supply chain collaboration, collaborative advantage, and firm performance remains unclear. In this study, we explored how supply chain collaboration can enhance firm performance and the roles of collaborative advantage and government subsidies in that process. Firstly, we reviewed the related literature and proposed our hypotheses. Secondly, we formulated an innovative theoretical framework and issued our questionnaire after a pilot study. After collecting and evaluating the sample data, we utilized structural equation modeling to comprehensively examine those relationships in a supply chain, unlike the previous studies on trust, firm size, etc. Lastly, in the context of government interventions, this study addresses the question: “To what extent do government subsidies influence the relationships among supply chain collaboration, collaborative advantage, and firm performance?” Our findings indicate that supply chain collaboration is fundamental in shaping collaborative advantage and firm performance, while collaborative advantage is crucial in enhancing firm performance. Additionally, government support in the form of subsidies acts as a catalyst, further enhancing the positive outcomes of supply chain collaboration and ultimately benefiting firm performance. This research underscores the strategic significance of supply chain collaboration and government subsidies in promoting overall business success. By illuminating the roles of collaborative advantage and government subsidies in this context, this study contributes to a deeper understanding of the dynamic capability involved in achieving improved firm performance through effective supply chain collaboration.

The impacts of digital transformation on firm performance in China: the moderating role of supply chain concentration

ABSTRACT In the era of Industry 4.0, digital transformation has become a key driver of corporate development. Despite its profound significance, there is a dearth of research examining its underlying influencing mechanisms. To fill this gap, this study investigates the impact of firms’ digital transformation on firm performance and explores the moderating role of supply chain concentration using a sample of Chinese listed firms from 2011 to 2021. Drawing on transaction cost and knowledge-based theories, digital technologies boost efficiency and flexibility, reduce transaction costs, and enable the leveraging of a diverse resource pool, which ultimately leads to improved performance among supply chain participants. The results indicate a positive contribution of digital transformation to firm performance in China. Notably, the relationship is moderated by supply chain concentration, with digital transformation exerting a more significant effect on firm performance in companies with low customer concentration and high supplier concentration.

Firm Performance in China: An Analysis of the Interplay between Financial Leverage, Firm Liquidity, and Firm Size

Purpose: The aim of this research is to investigate the association between financial leverage, firm liquidity, and firm size with the performance of companies in China.
 Design/Methodology/Approach: The study adopted a quantitative approach and gathered secondary data from 2010 to 2022 from firms listed on the China Stock Exchange via the wind database. Using a fixed effect model, we empirically tested our hypotheses.
 Findings: The study's outcomes indicate that firm liquidity and firm size significantly affect a company's performance in China. Moreover, the study claims that financial leverage also plays a significant role in influencing firm performance.
 Conclusion: In conclusion, findings indicate the importance for corporate managers, policymakers, and investors to consider factors such as financial liquidity and firm size when making decisions related to firm performance, particularly in an emerging stock market.
 Implications/Originality/Values: These findings have important implications for corporate managers, policymakers, and investors. Corporate managers, investors, and policymakers should focus on policies that promote financial stability and economic growth. Overall, this study provides valuable insights into the factors that influence firm performance in China.

Corporate Governance and Firm Performance in China: A Comparative Case Study of China National Petroleum Corporation and Other Four Asian Corporations

The study examines the impact of corporate governance on China Petroleum Nation Corporation and compares it with other selected four firms within China and Asia region. The variable identified for measuring corporate performance in this study includes return on Assets, Board size, duality, and interdependence of the board members as of 2022. The impacts of corporate governance on the firms were established through collecting information from the companys annual reports. The data obtained from the reports have been used for descriptive and correlational analysis. From this study, it has been established that firms within Asia tend to use various elements of structure to determine their performance. The variables used in the analysis, such as duality, the board size, and the interdependence of the board members, had a significant positive relationship with the firms performance. The study concluded that company directors should balance critical corporate structure variables to attain high organizational performance. Proper corporate governance has a significant impact on the performance of a company.

The spatial impact of high-speed rail on firm performance: The role of proximity to urban cores

This paper examines the spatial impact of high-speed rail (HSR) connection on firm performance in China at the micro level using a unique administrative dataset. Connected firms benefit from agglomeration economies and improved market access, but the redistribution of production inputs towards urban cores may have a negative impact on firms in peripheral regions. If these opposing forces are both subject to spatial decay but at different rates, proximity to urban cores could play a crucial role in determining the overall effects of HSR connection on firms. We find that connected firms located farther from urban cores benefit the most, indicating a steeper spatial decay in the redistribution effect relative to the agglomeration effect. This research enhances our understanding of the micro-level spatial impact of HSR on regional development.

Is carbon emission trading a green blessing or a curse for firm performance in China? A quasi-experiment design and exploring the spatial spillover effect.

This paper conducts quasi-experiment design with Chinese listed companies microdata to investigate the effect and mechanism of corporate participation in carbon emission trading market on firm financial performance by using the staggered difference-in-differences method. We show that: a) corporate participation in carbon emission trading market can enhance firm financial performance; b) an increase in green innovation ability and a decrease in strategic choice variance both partially mediate the relationship between carbon emission trading and firm performance; c) executive background heterogeneity and external environmental uncertainty moderate the relationship between carbon emission trading and firm performance in different directions; d) our further study indicates that carbon emission trading pilot policy has a spatial spillover effect on firm financial performance in the neighboring provinces. Therefore, we recommend that the government and enterprises make an effort to further stimulate the vitality of corporate participation in carbon emission trading market.

Examining the Effect of CSR on Financial Performance in China: Agency Cost as Mediator

Purpose: The aim of this study is to examinethe relationship between CSR and corporate financial performance, mainly discussing the relationship between CSR and ROA, also use the agency cost as the mediating variable, using a sample of listed companies in China to conduct the study and provide relevant suggestions for the subsequent development of the company Theoretical framework: As for external social responsibility, the government, the media, the public and corporate governance should strengthen the reporting and monitoring of external social responsibility and establish a multi-governance monitoring system. Design/methodology/approach: Theresearcher used quantitative analysis to explore the relationship between the independent variable and the dependent variable, to reflect how the independent variable affect the dependent variable, and in turn, how to improve the financial performance of firms in China. Findings: The results showed that ccompanies should be restrained from fulfilling external social responsibility as a way of giving back to society without compensation, and should not aim to win the market through speculation or malicious collusion, otherwise it will hinder their long-term development and become a double-edged sword Research, Practical & Social implications: The study is based on heterogeneity and finds that internal social responsibility is conducive to enhancing employee motivation, maintaining the interests of shareholders and internal stakeholders such as suppliers and customers, thus providing a favourable internal environment for green technology innovation. In contrast, an excessive level of external social responsibility fulfilment can lead to companies making the maintenance of external social relations a corporate priority and viewing external social responsibility fulfilment as a tool for speculation to gain access to the market, so that in this way companies may neglect their development. Originality/value: The value of the study highlighted the economic agents, enterprises should actively fulfil their internal social responsibility and strengthen the maintenance of relationships with internal stakeholders such as employees, shareholders, suppliers and customers.

The use of intellectual property right bundles and firm performance in China

Intellectual property rights (IPRs) have become increasingly important for firms in today’s knowledge-based economy, as evidenced by the strong growth in their use. The vital role of IPRs has motivated research into their association with firm performance. However, few firm-level studies have been conducted in developing countries. Moreover, empirical studies on the use of IPR bundles and their economic performance are scarce. To fill this gap, this study first illuminates how the joint use of different IPRs varies with firm characteristics, second, it analyses the association of such joint use with firm performance, based on a constructed large dataset that merges firm-level information from China’s Annual Survey of Industrial Enterprises with data on IPR filings from the China National Intellectual Property Administration. Results indicate that the joint use of different IPRs is strongly correlated with the industrial sector and firm size. Firms that use IPR bundles also have much greater economic performance than those that rely only on single types, indicating the existing complementarity between these rights. This study advances the understanding of the relationship between IPRs and firm performance and emphasises the complementary effect between different types of IPRs, demonstrating the significance of utilising various intellectual property mechanisms fully to increase firms’ competitive advantages.

Insights into guanxi and firm performance in China: an integrated lens of culture and guanxi

ABSTRACT Chinese guanxi may contribute to the explanation of the rapid growth of Chinese firms. This study uses drinking culture, regarded as a typical feature of guanxi-oriented culture, and political ties, regarded as indicating the cultural embeddedness of guanxi, to empirically examine the effects of cross-level interaction between guanxi-oriented regional culture and culturally embedded managers’ guanxi on firm performance in China. Based on the data of A-share listed companies from 2016 to 2019, multiple linear regression analysis is used to test hypotheses. The results show that guanxi improves firm financial performance but damage technological innovation. The context-specific research offers novel insights and contextualized knowledge to enrich and extend the understanding of how guanxi affects firm growth and contribute to the knowledge of Chinese social philosophy.

Intellectual capital and firm performance: the moderating effect of auditor characteristics

PurposeThis study aims to examine the impact of intellectual capital (IC) and its three components (human, structural and relational capital) on corporation performance in the Chinese transportation industry. In addition, this study also investigates auditor characteristics (both Big-N and non-Big-N auditors) as a moderating role to examine the relationship between IC and corporate performance.Design/methodology/approachThe data include 398 firm-year observations of transportation companies listed on the Shanghai and Shenzhen Stock Exchange from 2011 to 2020. Value-added intellectual coefficient (VAIC) model and its modified version (MVAIC) are applied to measure IC efficiency. Finally, the fixed effects regression analysis is used to mitigate the endogeneity issue. To investigate the moderating effect of auditor characteristics, the authors divide the samples based on the clients audited by Big-4 and non-Big-4 firms.FindingsThis study reveals that IC can enhance firm performance in China’s transportation sector. Overall, findings indicate that on the whole, IC has a positive and significant impact on corporation profitability and productivity. Human capital and physical and financial assets (capital employed) play highly important roles, but structural capital has no significant impact. The authors also found that auditor characteristics play an important moderating role in the connection between IC and corporate performance. For example, the positive association between IC and corporate performance is more pronounced when Big-4 auditors audit client firms. At the same time, the authors found a negative relationship between IC and firm performance when non-Big-4 auditors audit client firms.Practical implicationsManagers must understand that several components of IC have a total effect on corporate financial performance. Therefore, managers can dedicate more resources to such components based on the performance outcomes to emphasize their business strategies.Originality/valueThis study is the first empirical analysis of the impact of IC and its components on corporation performance in the transportation sector in China, an emerging market. Previous studies mainly focus on developed countries’ high technology and financial industries sectors but the impact of IC in transportation industry largely remains unknown. Thus, the present findings contribute to IC literature by revealing several underlying mechanisms by which the components of IC help achieve good firm performance.