Quasi-natural Experiment Research Articles

Government data opening and corporate cash holdings: Evidence from a quasi-natural experiment in China

We investigate whether government data opening reduces corporate cash holdings. Using the establishment of city-level open government data platforms in China as a quasi-natural experiment, we find that government data opening significantly reduces firms’ cash holdings. The effect is more pronounced when firm uncertainty is higher, when firms are more financially constrained, when firms are non-state-owned, when firms trade less in the internal market, and when there are fewer alternative information sources in a region. Overall, our evidence suggests that government data opening reduces environmental uncertainty and firms’ precautionary cash holdings.

Quenching thirst, easing debt: Improvement in water resource endowment alleviates local government debt risk

Water resources serve as a vital pillar sustaining both economic activities and daily life for residents. However, the uneven distribution of water resources across time and space has made water scarcity a bottleneck factor restricting the economic and social development of some regions. The implementation of the South-to-North Water Diversion project provides an excellent quasi-natural experiment for in-depth research on the effects and influence mechanism of cross-regional productive factor allocation on economic development. This study focuses on whether the water resource endowment improvement is reflected on the capital market. Based on the trading data of urban construction investment bonds from 2011 to 2016, we empirically examine how the South-to-North Water Diversion project affects the local government financing costs. The results indicate that the water diversion project significantly reduces the credit spread of urban construction investment bonds from the water-receiving areas. Further analysis reveals that the water diversion project improves the economic fundamentals and increases the land sales revenue of the water receiving cities, enhancing local governments' implicit guarantee ability for the financing platforms, thereby reducing the credit risks of urban construction investment bonds. This study not only enriches the research on the determinants of credit risk for urban construction investment bonds, but also provides empirical evidence from the capital market that the coordinated allocation of productive factors promotes regional balanced development. The conclusions imply that the government should actively advance the corresponding infrastructure construction and institutional arrangements to promote the flow and complementarity of economic elements between regions.

EXPRESS: Individual Sellers’ Social Media Participation and Sales Performance in Peer-to-Peer Marketplaces: Evidence from a Quasi-Natural Experiment

Recent advancements in communication and social technologies have resulted in the growth of peer-to-peer (P2P) marketplaces, such as Xianyu and Poshmark. Individual sellers in these markets, most of whom are unbranded and lack credibility, often face immense challenges in building trust to facilitate P2P transactions. We consider the potential of sellers’ use of social media to establish trust and drive sales. Specifically, we address whether social media use benefits the sales performance of individual sellers, and how social media use affects customer retention and acquisition. We draw on social capital theory to explore the theoretical mechanisms by which social media participation may affect sales, hypothesizing that such participation enables the seller to accumulate social capital and develop trust. We empirically test this by exploiting a quasi-natural experiment wherein a large P2P marketplace for second-hand goods (Xianyu) unexpectedly removed its social media feature (Fishponds). We employ a difference-in-differences design, leveraging a proprietary dataset capturing social media participation and sales activities for individual sellers, covering more than 180,000 transactions over a multi-week period around the event. We find that sellers who initially participated in social media channels experienced a significant decline in sales after the shutdown, which is attributable to poorer customer retention and acquisition. We explore heterogeneity in the effects and find that the sellers who benefit most from social media participation are those with the most to gain from trust-building. An additional online controlled experiment provides further evidence of the trust-building mechanism. Our study implies individual sellers can harness social media to generate additional sales from existing and new customers. These insights are important, as they speak to the value of social media channels as drivers of trust in P2P marketplaces.

Can peer review accolade awards motivate reviewers? A large-scale quasi-natural experiment

Can peer review accolade awards motivate reviewers? A large-scale quasi-natural experiment

Do climate change policies affect labour market distortions? Empirical evidence from China's low-carbon city pilots

ABSTRACT To mitigate climate change while ensuring that the substantial benefits of a green economic transition are widely shared, the concept of a just transition has emerged as a pivotal element in climate strategies. Although the effectiveness of climate policies has been a subject of ongoing debate, the integration of just transition principles is often overlooked as a key component. This study employs China’s Low-Carbon City Pilot policy (LCCP) as a quasi-natural experiment and uses a time-varying difference-in-differences (DID) methodology to assess the impact of LCCP on wage distortions within firms. Using data from listed companies between 2006 and 2022, our analysis shows that the low-carbon policy itself may be a source of inequity, disproportionately benefiting capital at the expense of labour, thus exacerbating wage distortions and preventing labour from receiving fair compensation. This inequity undermines the principles of a just transition, as the allocation of policy resources tends to favour large firms, enhancing their pricing power and diminishing labour market flexibility. The economic outcomes of LCCP are mixed: while it accelerates the growth of capital share, it also leads to an unequal distribution between capital and labour. Furthermore, our exploration of the role of export trade in mitigating these distortions reveals that exports actually widen the disparity in wage distortions. Our study underscores the urgent need to prioritize equity in climate policies and improve labour allocation efficiency within climate action frameworks. We aim to provide decision-making support for the design and implementation of more equitable low-carbon policies in developing countries.

Capital market liberalization and corporate debt maturity structure: evidence from the Shanghai-Shenzhen-Hong Kong Stock connect

PurposeThis paper takes the Shanghai-Shenzhen-Hong Kong Stock Connect as a quasi-natural experiment and investigates the impact of capital market liberalization on the corporate debt maturity structure. It also aims to provide some policy implications for corporate debt financing and further liberalization of the capital market in China.Design/methodology/approachEmploying the exogenous event of Shanghai-Shenzhen-Hong Kong Stock Connect and using the data of Chinese A-share firms from 2010 to 2020, this study constructs a difference-in-differences model to examine the relationship between capital market liberalization and corporate debt maturity structure. To validate the results, this study performed several robustness tests, including the parallel test, the placebo test, the Heckman two-stage regression and the propensity score matching.FindingsThis paper finds that capital market liberalization has significantly increased the proportion of long-term debt of target firms. Further analyses suggest that the impact of capital market liberalization on the debt maturity structure is more pronounced for firms with lower management ownership and non-Big 4 audit. Channel tests show that capital market liberalization improves firms’ information environment and curbs self-interested management behavior.Originality/valueThis research provides empirical evidence for the consequences of capital market liberalization and enriches the literature on the determinants of corporate debt maturity structure. Further this study makes a reference for regulators and financial institutions to improve corporate financing through the governance role of capital market liberalization.

The impact of information infrastructure on firm market value: evidence from Chinese listed firms

ABSTRACT Based on the data of Chinese listed companies from 2010 to 2017, we empirically study the impact of information infrastructure on firm market value. Using the construction of 4 G base stations since 2014 as a quasi-natural experiment, we prove that information infrastructure significantly increases firms’ market value through the continuous difference-in-differences method. Heterogeneity analysis shows that the policy effect is more pronounced for large firms, non-state-owned firms, and firms in high-competitive industries. The underlying mechanism is that information infrastructure can promote digital transformation of firms, enhance firms’ level of innovation and production efficiency. Our study provides new perspectives and policy implications on how information infrastructure development can enhance firms’ market value.

Research on the impact of the digital economy on haze pollution: evidence from prefecture-level cities in China

Lately, the ongoing issue of haze pollution in multiple cities across China has had a profound impact on the residents’ wellbeing and overall health. The urgent necessity to address haze pollution is undeniable. Meanwhile, the rapidly evolving digital economy has sprung up as a pivotal driver for China’s economic growth, providing innovative approach to tackle haze pollution. This research explores the impact of the digital economy on haze pollution through utilizing the big data pilot zone as a quasi-natural experiment. Panel data from 280 prefecture-level cities in China is adopted, covering the period from 2011 through 2020. This analysis incorporates various models, namely, difference-in-differences model (DID), mediation effect model, and difference-in-differences spatial Durbin model. The findings highlight the substantial contributions of digital economy in alleviating haze pollution. Furthermore, these findings hold true even after a series of rigorous robustness checks. The constraint influence of the digital economy on haze pollution is particularly prominent in metropolitan areas, cities with elevated administrative levels, primary environmental protection cities, as well as economically developed cities. Financial development and technological innovation serve as important mechanisms through which the digital economy suppresses haze pollution. After accounting for spatial factors, the digital economy exhibits consequential spillover effects, leading to substantial inhibition of haze pollution in surrounding cities as well as locally. The novel aspects of this paper are as follows: Firstly, it regards the establishment of big data experimental zones as the exogenous policy shock of digital economy and employs a multi period DID model to evaluate the impact of the digital economy on haze pollution. Secondly, it explores the transmission pathways through which the digital economy affects haze pollution from the perspectives of financial development and technological innovation. Thirdly, it investigates the heterogeneous characteristics of the impact of the digital economy on haze pollution. Fourthly, it examines the spatial spillover effects of the digital economy on haze pollution from the perspective of spatial econometrics.

The Impact of High-Standard Scenic Areas Construction on County-Level Carbon Emissions and Its Spatial Spillover Effects: Evidence from a Quasi-Natural Experiment

This study investigated for the first time the tourism–carbon emissions nexus based on the destination construction perspective, using the China’s national scenic areas (CNSA) construction as a vehicle for concretization. A multi-source county panel dataset of 29,628 samples was constructed. The staggered Difference-in-Differences (DID) model and spatial DID model were further formulated. The findings show that: (1) the CNSA resulted in a 0.1024% reduction in carbon emission intensity (CEI) in treatment counties relative to non-treatment counties, and although the effect exhibits a delay, it persists and intensifies over time; (2) our heterogeneity results indicate that the inhibiting effect is significantly more pronounced in the western, eastern, and county subsamples; and (3) the spatial DID analysis reveals that the CNSA exerts a negative spatial spillover effect on CEI. This work enhances comprehension of the tourism–carbon emissions nexus, with implications for advancing regional carbon emission reduction policy strategies.

Does government digitalisation alleviate corporate environmental violation? Evidence from a quasi-natural experiment in China

ABSTRACT Despite the importance of the government forces in environmental governance, it remains unclear whether government digitalisation, an important governmental transition triggered by the integration of digital technologies into regulatory process, can alleviate corporate environmental violations. Drawing on institutional theory, we propose that government digitalisation has a negative relationship with corporate environmental violation, while this negative relationship depends on the regulative, normative and cognitive factors that shape the institutional environments. We test these ideas by examining the response of publicly listed firms to the reform of digital government in China. Our findings contribute to the understanding of institutional theory on environmental governance by highlighting the positive role of government digitalisation and provide important practical implications.

Can China’s national comprehensive medical reform increase medical resources and reduce healthcare burden: evidence from Chinese provinces

ObjectivesChina’s national comprehensive medical reform (NCMR) is an important attempt in the reform of healthcare system, and quantitative evaluation of its effect is of great significance for continuously deepening medical reform, grasping the reform direction, and building a healthy China. Therefore, focusing on medical resources and medical burden, this study aims to systematically explore the policy effectiveness and the provincial heterogeneity of NCMR, as well as the potential influencing factors.MethodsUtilizing the collected multi-period panel data of 31 provinces in mainland China in 2006–2021, we regarded the release of the two batches of pilot provinces in NCMR as a quasi-natural experiment and comprehensively adopted a Staggered difference-in-differences (DID) model and Synthetic Control Method (SCM), combined with word frequency statistics and grouping regression analysis.ResultsNCMR can effectively increase the number of licensed physicians by 12.6% and reduce the per capita medical expense for in-patients by 7.2% in the pilot provinces. Furthermore, the NCMR policy effect in different pilot provinces shows various characteristics, and only Jiangsu, Zhejiang, and Chongqing achieve both the growth of medical resources and the reduction of medical expenditure. Meanwhile, word frequency statistics are conducted based on related policy descriptions and news reports on the official websites, so as to summarize the specific policy means in the three provinces, and provide a reference for other provinces to practice the healthcare reforms. Besides, extensibility analysis shows that the effect of NCMR is affected by the population aging and health status. Groups with low degree of population aging (low-AG)/high population health status (high-HE) performed a more obvious reform effect.ConclusionThis study provides beneficial policy implications for increasing medical resources, reducing medical burden, and promoting medical reform process.

Has digital infrastructure accelerated enterprises' specialization? Evidence from China

PurposeThis paper intends to explore the impact and mechanism of digital infrastructure development on enterprises vertical specialization. The following questions are discussed: (1) What is the impact of digital infrastructure on enterprise vertical specialization? (2) If the digital infrastructure serves to raise the level of vertical specialization of enterprises, does the impact differ depending on the level of city, industry and enterprise?Design/methodology/approachThe research employs the “Broadband China” strategy as a quasi-natural experiment for digital infrastructure development, with a multi-period difference-in-difference model constructed to test the research hypothesis. The study examined data from Chinese A-share enterprises listed between 2007 and 2019.FindingsThe study’s findings indicate that the construction of digital infrastructure significantly increases firms' vertical specialization. According to the mechanism analysis, digital infrastructure can increase vertical specialization by lowering market transaction costs. This study employs group regressions in terms of cities, industries and companies to gain a better understanding of the heterogeneity of this effect. The results indicate that digital infrastructure contributes more significantly to higher levels of vertical specialization among enterprises in areas with higher levels of innovation and entrepreneurship as well as in eastern and central cities, service industries, and mature firms.Research limitations/implicationsThere are two shortcomings to this study that warrant investigating further. The first limitation is the mechanism. This study simply looked at the mechanism between variables in terms of transaction costs, using existing theories. As the level of technology continues to improve, the process of digital infrastructure’s impact on vertical specialization requires greater investigation. Another weakness of this study is its country-specific focus. The effect of digital infrastructure on vertical specialization differs by country, reflecting disparities in economic growth. Further discussion of cross-national comparative studies is required.Originality/valueThe study’s marginal contributions are largely represented in the two aspects listed below: (1) This paper includes a comprehensive theoretical study of the influence of digital infrastructure development on vertical specialization, focusing on transaction costs. This provides a theoretical foundation for the empirical study presented in this paper; (2) this study fills the gap in earlier research in this field, and the findings broaden research findings in areas such as digital infrastructure development and vertical specialization.

Whether Pension Program Stimulates the Consumption of Addictive Products: Evidence from China’s New Rural Pension Scheme

ABSTRACT Much attention has been paid to evaluating the policy effects of pension programs, but few studies have focused on possible inefficiencies stemming from their implementation. Drawing on a quasi-natural experiment associated with the adoption of China’s New Rural Pension Scheme (NRPS), this study explores the impact of the NRPS on food consumption among rural residents. A difference-in-differences (DID) analysis is performed using panel data from the 2009 and 2013 National Rural Fixed Observation survey. Results show that participation in the NRPS improves residents’ dietary quality by increasing the consumption of recommended foods and decreasing the consumption of non-recommended foods. However, the results also show that the NRPS is associated with increased consumption of addictive and unhealthy products, especially in households with lower average levels of education, poorer self-reported health, and older adults over age 60. Findings suggest that when examining the possible health effects of new pension policies, it is essential to account for potential increases in the intake of unhealthy and addictive products, such as cigarettes and alcohol.

Beautifying urban environment: Smart city construction and sustainable pollution control in China

Faced with the environmental pollution challenges brought by urbanization, smart city construction (SCC) offers a practical and viable pathway for environmental protection. This study treats China's SCC policy as a quasi-natural experiment, utilizing balanced panel data from 285 cities across the country spanning from 2003 to 2019. Through the multi-period Difference-in-Differences (DID) model, the influence of smart city initiatives on urban pollution emissions is systematically examined. Results demonstrate that SCC effectively control urban pollution emissions, leading to a 1.46% decrease in pollution levels in pilot cities. These findings are robust to various tests, including parallel trends analysis, placebo tests, Propensity Score Matching (PSM)-DID, alternative pollution calculation methods, pollution intensity adjustments, control for other policy interferences, and sample adjustments, alongside endogeneity tests using instrumental variables. SCC achieves pollution control through mechanisms that enhance urban technological innovation, facilitate industrial restructuring, and talent agglomeration and financial agglomeration. Heterogeneity analysis reveals a more pronounced impact in the eastern area, large cities, higher administrative levels, cities with superior digital infrastructure, and those with higher human capital levels and pollution severity. This research explores a practical approach towards achieving sustainable pollution control by optimizing technology, industrial structure, and human resources.

Does China’s innovation-driven policy affect enterprises’ import performance of intermediate goods?

Based on a theoretical analysis of the impact of the innovative city pilot policy on manufacturing enterprises’ import behavior of intermediate goods, this paper performs a quasi-natural experiment via a multi-period differences-in-differences (DID) model with China’s innovative city pilot policy as the object. This study systematically evaluates the impact of the innovative city pilot policy on importing intermediate goods by local manufacturing enterprises. The empirical results show that implementing the innovative city pilot policy significantly increases the quantity, variety and quality of intermediate goods imported by local manufacturing enterprises. These conclusions remain valid even after a series of robustness tests. Impact mechanism tests indicate that obtaining government subsidies, alleviating financing constraints and reducing institutional transaction costs are three important channels through which the innovative city pilot policy promotes the import of intermediate goods by manufacturing enterprises. Furthermore, additional research reveals that the impact of the innovative city pilot policy on intermediate goods imports exhibits significant heterogeneity in enterprise size, age, ownership and trade mode. This study’s findings provide a new perspective for evaluating and exploring the performance of the innovative city policy and China’s foreign trade transformation and upgrading.

The impact of national land supervision system on urban low-carbon transformation: evidence from China

The land system is a crucial factor influencing urban low-carbon sustainable development. However, previous research has paid little attention to the effects and mechanisms of the national land supervision system (NLSS) on urban low-carbon transformation (ULCT). This study uses China’s routine land inspection as a quasi-natural experiment and examines the impact of NLSS on ULCT using panel data from 283 Chinese cities between 2005 and 2016. The study finds that NLSS significantly promotes ULCT, with a series of robustness checks supporting this conclusion, showing a 1.95% improvement in carbon emission performance in cities under supervision. NLSS mainly facilitates ULCT by improving land use efficiency, upgrading the structural of the service sector, and promoting technological progress. Compared to eastern cities, southern cities, large cities, and non-resource-based cities, NLSS more effectively promotes low-carbon transformation in central and western, northern, small- and medium-sized, and resource-based cities. Additionally, in contrast to cities with high environmental awareness, high marketization levels, high financial development levels, and high fiscal pressure, NLSS more strongly promotes ULCT in cities with lower levels of these factors. Furthermore, NLSS exhibits a significant positive spatial spillover effect in promoting ULCT. In advancing ULCT, NLSS can be synergized with smart city pilot policies and innovative city pilot policies but has not shown synergies with low-carbon city pilot policies.

Capital market liberalization and corporate environmental performance: Evidence from the Shanghai-Hong Kong Stock Connect.

The implementation of Shanghai-Hong Kong Stock Connect marks the maturity of China's capital market, and the effect of the implementation has been the focus of academic attention. Based on this quasi-natural experiment, We select 3248 samples of heavily polluting enterprises listed in China in 2010-2020 to examine the impact of capital market liberalization and on corporate environmental performance.The results show that capital market liberalization significantly improves the environmental performance of heavy polluting enterprises. The results of the heterogeneity analysis indicate that the positive effect varies across firms with different ownership and internal controls. Finally, mechanism analysis results find that capital market liberalization promotes the environmental performance of heavily polluting firms by increasing environmental assets,reducing stock price volatility,and improving the quality of information disclosure.

From transfer to transformation: how national technology transfer centers drive digital innovation

ABSTRACT Taking the construction of National Technology Transfer Centers (NTTCs) in selected cities as a quasi-natural experiment, this paper examines the impact of technology transfer on corporate digital innovation using the Random Forest approach. Analyzing a dataset of 35,119 firm-year observations in China from 2008 to 2021, we find that technology transfer promotes corporate digital innovation through technology spillover effects, co-innovation effects and market scale effects, with these impacts persist in the long term. Additionally, the positive effect of technology transfer on corporate digital innovation is contingent upon lower technology transfer costs and stronger technology acceptance capabilities within enterprises. Our findings suggest that policymakers should encourage technology transfer to enhance the technological resources available for corporate digital innovation.

Assessing the Effectiveness of Market-Oriented Environmental Policies on CO2 Emissions from Household Consumption: Evidence from a Quasi-Natural Experiment in Carbon Trading Pilots

Assessing the Effectiveness of Market-Oriented Environmental Policies on CO2 Emissions from Household Consumption: Evidence from a Quasi-Natural Experiment in Carbon Trading Pilots

Assessing the utility of low-emission pilot policies for facilitating pollution reduction and carbon mitigation: An empirical investigation using multi-temporal double difference analysis

Collaborative governance for pollution reduction and carbon mitigation can effectively resist the pressure brought about by ecological and environmental changes while reducing policy costs. To explore the “win-win” path of pollution reduction and carbon mitigation,” based on panel data from 286 cities in China from 2000 to 2021, this study regards the low-carbon city pilot policy (LCCP) as a quasi-natural experiment and explores its impact on urban carbon emissions and pm2.5 concentration. Multiple testing methods, including multi-temporal double difference, spatial autocorrelation, local cold and hot spot analysis, kernel density analysis, standard deviation ellipse, spatial Durbin model, and PSM-DID, were used to verify the credibility and scientificity of the research results. The results showed that (1) LCCP had a direct effect on reducing pollution and carbon emissions, reducing co2 emissions by 3% and pm2.5 by 2.9%, with a synergistic effect of 20.2%; (2) the synergistic effect of LCCP on pollution and carbon reduction was indirectly achieved through green finance, green technological innovation, and green transportation, with impacts of 3.6%, 5.5%, and 2.4% in eastern, central, and non-resource based cities, respectively; and (3) the spillover effect coefficient of LCCP on carbon emission reduction in surrounding cities was −0.040 and that on pm2.5 concentration was −1.232, which are significant at the 10% and 1% levels, respectively.