US President George W. Bush, in an effort to restore public confidence in the financial market, signed into law on July 30 the Public Company Accounting Reform and Investor Protection Act. The law allows for stiffer p...US President George W. Bush, in an effort to restore public confidence in the financial market, signed into law on July 30 the Public Company Accounting Reform and Investor Protection Act. The law allows for stiffer penalties to be imposed on anyone caught committing corporate and/or accounting fraud.展开更多
Foreign firms face enormous obstacles in attracting investors and analysts when issuing securities in the United States.We use US-listed Chinese firms as our research sample and find that firms that hire top executive...Foreign firms face enormous obstacles in attracting investors and analysts when issuing securities in the United States.We use US-listed Chinese firms as our research sample and find that firms that hire top executives(i.e.,Chief Executive Officer[CEO]or Chief Financial Officer[CFO]) with work experience in the US or educational qualifications from the US attract more US institutional investors and analysts.Further,we find that CFOs' US experience dominates the results.Corroborating our results,we further find that firms with US-experienced CFOs are more likely to hold conference calls and voluntarily issue management forecasts,which suggests that CFOs with a US background are better at communicating with US investors and analysts and acting in alignment with US norms compared with Chinese CFOs.Collectively,our results suggest that hiring a CFO with a US background could facilitate cross-listed foreign firms to lower US investors' and analysts' information disadvantage.展开更多
This paper re-examines the driving factors behind the upgrading of China s export sophistication.Based on county-level minimum wages and firm-level export data for 2000-2013,this paper finds that the labor cost shocks...This paper re-examines the driving factors behind the upgrading of China s export sophistication.Based on county-level minimum wages and firm-level export data for 2000-2013,this paper finds that the labor cost shocks caused by rising minimum wages have a significant positive impact on Chinese firms'export sophistication.Channel tests show that the positive effect of rising minimum wages on firms'export sophistication derives from the exit of less sophisticated products and the reallocation of the relative share of surviving products,rather than introducing new highly sophisticated products.Heterogeneity analysis reveals that rising minimum wages have a greater impact on export sophistication for low-wage firms,domestic firms,and labor-intensive firms.This paper has implications for developing countries regarding the transition from a low-cost labor trade model to a sophistication-driven trade model.展开更多
This study tries to investigate how firms adjust their leverage policy across the firm’s life cycle.For this purpose the study uses an extensive set of data of 867 A listed Chinese non-financial firms over a 19-year ...This study tries to investigate how firms adjust their leverage policy across the firm’s life cycle.For this purpose the study uses an extensive set of data of 867 A listed Chinese non-financial firms over a 19-year years period(1996-2014).The study employs Arellano-Bover/Blundell-Bond dynamic panel data model to estimate adjustment rate of leverage and its determinants in three different life stages of Chinese firms.We find that adjustment rate of leverage varies for different life stages.In accordance with trade off theory of capital structure this study reports a low-high-low pattern of leverage across growth,maturity and decline stage of firms’life respectively.For total leverage,dynamic panel data reports highest adjustment rate for growing firms,followed by mature firms and firms in declining stage of their life.Both short term and long term leverage report similar pattern of leverage’s adjustment rate across the three stages of life cycle.The study provides useful insight in a unique market setting of Chinese financial markets.展开更多
Given the unique market setting and institutional environment of China,this study tries to investigate targeting behavior of Chinese firms towards leverage and the determinants of leverage policy in China at various l...Given the unique market setting and institutional environment of China,this study tries to investigate targeting behavior of Chinese firms towards leverage and the determinants of leverage policy in China at various levels.For this purpose,we use an extensive set of data of 760 firms over a period from 2001 to 2013.To investigate the adjustment behavior towards target leverage policy,this study uses the GMM(Generalized Method of Moments)models of Arellano and Bover(1995)/Blundell and Bond(2000)to estimate the adjustment behavior and adjustment speed towards a target level of leverage.The study finds that Chinese firms have a target level of leverage and try to adjust to their target.We find that adjustment rate of Chinese state-owned enterprises is higher than Chinese non-state-owned enterprises,indicating an aggressive leverage policy for SOEs(state-owned enterprises).Further,we find that some firm-level factors like firm size and growth opportunities have significant and positive effect on firms leverage.Profitability and firm liquidity is found to have a negative relationship with firm leverage.At country level,GDP is found to have positive impact of firm leverage policy.The negative relationship of lending rate with leverage shows that firms in China reduce debt financing when lending rates in the market increase.All these findings indicate significant policy implications for Chinese firms.At adjustment level,regulatory bodies should ensure that all firms are at ease while raising their debt and thus avoid a pecking order in lending policy.At industry level,institutions should try to curtail industry concentration to provide an equal ground of debt issuing to the firms.展开更多
Aiming at the deficiency of exterminating measures of Chinese firm safety management, a simulation model of Chinese firm's safety management capability based on the organizational learning theory, in which the simula...Aiming at the deficiency of exterminating measures of Chinese firm safety management, a simulation model of Chinese firm's safety management capability based on the organizational learning theory, in which the simulation method of system dynamics is utilized. The level variable and rate variable are designed based on the practical situation and change situation of corresponding variables of firm's safety management ca- pability. Simulation firms are built with accident case groups of the oil industry, chemical industry, machine industry, coal mining industry, and weapon industry. Through analyzing the simulation result, the growth law of Chinese firm's safety management capability is obtained as follows: the accumulating and the coupling of safety knowledge should be emphasized at the same time; the balance of learning behavior of individual, group and organization should be considered together; different types of Chinese firm should take different safety policies according to their practical situations.展开更多
The study aims to investigate how relying on short-term debt may help Chinese listed firms to make efficient investment decisions and reduce overinvestment problem for low-growth firms.The study uses a large set of pa...The study aims to investigate how relying on short-term debt may help Chinese listed firms to make efficient investment decisions and reduce overinvestment problem for low-growth firms.The study uses a large set of panel data of nonfinancial Chinese listed firms over the period 2007–2017 and,using the robust twostage generalized method of moments,which is robust to unobserved heterogeneity of individual firms and addresses endogeneity issues.Findings show a positive relationship between growth and investment;this association is enhanced by leverage,especially for high-growth firms.This supports the view that short-term debt helps Chinese firms to make optimal use of leverage and therefore make better investment decisions.Furthermore,the results reveal that leverage plays a disciplining and monitoring role to reduce overinvestment incentive for low-growth firms.Overall,the study suggests that shareholders should consider short-term debt to mitigate the debt overhang problem and restrict the opportunistic behavior of managers,which can lead to efficient investment decisions.It also provides foreign investors insights about capital structure in China,and how it can help them make better investment decisions.展开更多
Using data from the 2012 China Enterprise Survey conducted by the World Bank, this study examines the determinants of intangible investment by private manufacturing firms and its impacts on firms 'productivity in Chi...Using data from the 2012 China Enterprise Survey conducted by the World Bank, this study examines the determinants of intangible investment by private manufacturing firms and its impacts on firms 'productivity in China, thus shedding light on the recent development of intangibles in one of the largest emerging economies in the world. Higher human capital, larger firm size and better institutional quality are found to increase the propensity and the amount of intangible investment, yet fiercer market competition generally decreases both the propensity and the amount invested in intangibles. We provide evidence that the disaggregated components of intangibles are positively correlated with firm productivity and there is complementarity between software and organization investment. Implications for policies to enhance investment in intangibles are identified from the empirical results.展开更多
At a time when China encourages its firms to go overseas,especially to countries and regions involved in its"Belt and Road Initiative",and sets up a favorable domestic environment for innovation and entrepre...At a time when China encourages its firms to go overseas,especially to countries and regions involved in its"Belt and Road Initiative",and sets up a favorable domestic environment for innovation and entrepreneurship,this paper is a first trial looking along both the two dimensions to test whether Chinese firms’operating performance changes after cross-border merger and acquisition(CBM&A)activities,using entrepreneurial orientation(EO)as a moderating factor.The paper combines data from Chinese listed firms’annual reports,Chinese stock market financial statements database and the Zephyr database from 2001 to 2015 to examine how acquirers’operating performance changes after CBM&A activities using EO as a moderating factor.In order to test whether the results are affected by the stock market,this paper also defines abnormal return on equity(ROE)to detect abnormal operating performance.After these,the paper divides the sample into separate industry groups to see whether results will change.The results obtained for the whole sample show that the performance of Chinese listed firms is fluctuant after CBM&As within the sample years.It increases one year after the acquisition but drops two years later and then follows an increasing trend again.The moderating factor of EO is not significant for the sample as a whole.However,after dividing the sample into separate industry groups,it becomes clear that different industries have their own characteristics.EO helps Chinese listed firms to adjust to the post-acquisition situation and even to improve their performance to some extent in the metal mining industry and the business services industry.When ROE is substituted with abnormal ROE,the results do not change much.展开更多
Foreign direct investment (FDI) ownership decision is one of the most researched topics in the international business literature. However, little is known about the extent to which this knowledge can be applied to e...Foreign direct investment (FDI) ownership decision is one of the most researched topics in the international business literature. However, little is known about the extent to which this knowledge can be applied to emerging-economy multinationals. Building on the institutional, transaction cost and resource-based view perspectives, this paper analyzes the determining factors of FD! mode choice between wholly-owned subsidiary (WOS) and joint venture (JV) by Chinese firms. Based on a sample of 139 outward FDI decisions made by large Chinese firms between 2002 and 2009, our results show certain characteristics that differ from the conventional wisdom of the multinational enterprise (MNE). A host country's political risk and cultural distance do not affect FDI ownership decisions of Chinese MNEs, while firm size is negatively related with WOS. However, from a more conventional point of view, technological intensity of the industry is positively associated with WOS.展开更多
In the transition from "made in China" to "invented in China," what is the motivation of Chinese firms in applying for patents? Why do some firms bypass patents? How is patenting developing within Chinese firms...In the transition from "made in China" to "invented in China," what is the motivation of Chinese firms in applying for patents? Why do some firms bypass patents? How is patenting developing within Chinese firms? This paper attempts to answer these questions using data of Chinese firms in the Yangtze River Delta region. Results indicate that, for product innovation, obtaining the lead time for market entry is of top priority in innovation protection, followed by confidentiality and patent protection. As for process innovation, confidentiality ranks first, followed by patent protection and obtaining the lead time. There is a significant and positive relationship between prior experience of patent licensing and possibility of future patent licensing. Firms with painful patent litigation experience tend to avoid it in the future. It is also found that there are great differences in patent behaviors between Chinese enterprises and their foreign counterparts.展开更多
Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities' technology firms and explores the effects of the firms' operating characteris...Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities' technology firms and explores the effects of the firms' operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. R&D inputs contributed significantly to the pre-tax profitability of Beijing firms, but bad no significant effect whatsoever on Shenzhen firms.展开更多
文摘US President George W. Bush, in an effort to restore public confidence in the financial market, signed into law on July 30 the Public Company Accounting Reform and Investor Protection Act. The law allows for stiffer penalties to be imposed on anyone caught committing corporate and/or accounting fraud.
基金the financial support from the National Natural Science Foundation of China(No.71272202)
文摘Foreign firms face enormous obstacles in attracting investors and analysts when issuing securities in the United States.We use US-listed Chinese firms as our research sample and find that firms that hire top executives(i.e.,Chief Executive Officer[CEO]or Chief Financial Officer[CFO]) with work experience in the US or educational qualifications from the US attract more US institutional investors and analysts.Further,we find that CFOs' US experience dominates the results.Corroborating our results,we further find that firms with US-experienced CFOs are more likely to hold conference calls and voluntarily issue management forecasts,which suggests that CFOs with a US background are better at communicating with US investors and analysts and acting in alignment with US norms compared with Chinese CFOs.Collectively,our results suggest that hiring a CFO with a US background could facilitate cross-listed foreign firms to lower US investors' and analysts' information disadvantage.
基金support from the National Social Science Foundation of China(No.18ZDA038).
文摘This paper re-examines the driving factors behind the upgrading of China s export sophistication.Based on county-level minimum wages and firm-level export data for 2000-2013,this paper finds that the labor cost shocks caused by rising minimum wages have a significant positive impact on Chinese firms'export sophistication.Channel tests show that the positive effect of rising minimum wages on firms'export sophistication derives from the exit of less sophisticated products and the reallocation of the relative share of surviving products,rather than introducing new highly sophisticated products.Heterogeneity analysis reveals that rising minimum wages have a greater impact on export sophistication for low-wage firms,domestic firms,and labor-intensive firms.This paper has implications for developing countries regarding the transition from a low-cost labor trade model to a sophistication-driven trade model.
文摘This study tries to investigate how firms adjust their leverage policy across the firm’s life cycle.For this purpose the study uses an extensive set of data of 867 A listed Chinese non-financial firms over a 19-year years period(1996-2014).The study employs Arellano-Bover/Blundell-Bond dynamic panel data model to estimate adjustment rate of leverage and its determinants in three different life stages of Chinese firms.We find that adjustment rate of leverage varies for different life stages.In accordance with trade off theory of capital structure this study reports a low-high-low pattern of leverage across growth,maturity and decline stage of firms’life respectively.For total leverage,dynamic panel data reports highest adjustment rate for growing firms,followed by mature firms and firms in declining stage of their life.Both short term and long term leverage report similar pattern of leverage’s adjustment rate across the three stages of life cycle.The study provides useful insight in a unique market setting of Chinese financial markets.
文摘Given the unique market setting and institutional environment of China,this study tries to investigate targeting behavior of Chinese firms towards leverage and the determinants of leverage policy in China at various levels.For this purpose,we use an extensive set of data of 760 firms over a period from 2001 to 2013.To investigate the adjustment behavior towards target leverage policy,this study uses the GMM(Generalized Method of Moments)models of Arellano and Bover(1995)/Blundell and Bond(2000)to estimate the adjustment behavior and adjustment speed towards a target level of leverage.The study finds that Chinese firms have a target level of leverage and try to adjust to their target.We find that adjustment rate of Chinese state-owned enterprises is higher than Chinese non-state-owned enterprises,indicating an aggressive leverage policy for SOEs(state-owned enterprises).Further,we find that some firm-level factors like firm size and growth opportunities have significant and positive effect on firms leverage.Profitability and firm liquidity is found to have a negative relationship with firm leverage.At country level,GDP is found to have positive impact of firm leverage policy.The negative relationship of lending rate with leverage shows that firms in China reduce debt financing when lending rates in the market increase.All these findings indicate significant policy implications for Chinese firms.At adjustment level,regulatory bodies should ensure that all firms are at ease while raising their debt and thus avoid a pecking order in lending policy.At industry level,institutions should try to curtail industry concentration to provide an equal ground of debt issuing to the firms.
基金the National Social Science Foundation of China (07BJY080)
文摘Aiming at the deficiency of exterminating measures of Chinese firm safety management, a simulation model of Chinese firm's safety management capability based on the organizational learning theory, in which the simulation method of system dynamics is utilized. The level variable and rate variable are designed based on the practical situation and change situation of corresponding variables of firm's safety management ca- pability. Simulation firms are built with accident case groups of the oil industry, chemical industry, machine industry, coal mining industry, and weapon industry. Through analyzing the simulation result, the growth law of Chinese firm's safety management capability is obtained as follows: the accumulating and the coupling of safety knowledge should be emphasized at the same time; the balance of learning behavior of individual, group and organization should be considered together; different types of Chinese firm should take different safety policies according to their practical situations.
基金This article is supported by Liaoning provincial key project"Research on the development of digitalized rural inclusive financial service systems in Liaoning province"(Project number,LN2020Z03).
文摘The study aims to investigate how relying on short-term debt may help Chinese listed firms to make efficient investment decisions and reduce overinvestment problem for low-growth firms.The study uses a large set of panel data of nonfinancial Chinese listed firms over the period 2007–2017 and,using the robust twostage generalized method of moments,which is robust to unobserved heterogeneity of individual firms and addresses endogeneity issues.Findings show a positive relationship between growth and investment;this association is enhanced by leverage,especially for high-growth firms.This supports the view that short-term debt helps Chinese firms to make optimal use of leverage and therefore make better investment decisions.Furthermore,the results reveal that leverage plays a disciplining and monitoring role to reduce overinvestment incentive for low-growth firms.Overall,the study suggests that shareholders should consider short-term debt to mitigate the debt overhang problem and restrict the opportunistic behavior of managers,which can lead to efficient investment decisions.It also provides foreign investors insights about capital structure in China,and how it can help them make better investment decisions.
文摘Using data from the 2012 China Enterprise Survey conducted by the World Bank, this study examines the determinants of intangible investment by private manufacturing firms and its impacts on firms 'productivity in China, thus shedding light on the recent development of intangibles in one of the largest emerging economies in the world. Higher human capital, larger firm size and better institutional quality are found to increase the propensity and the amount of intangible investment, yet fiercer market competition generally decreases both the propensity and the amount invested in intangibles. We provide evidence that the disaggregated components of intangibles are positively correlated with firm productivity and there is complementarity between software and organization investment. Implications for policies to enhance investment in intangibles are identified from the empirical results.
文摘At a time when China encourages its firms to go overseas,especially to countries and regions involved in its"Belt and Road Initiative",and sets up a favorable domestic environment for innovation and entrepreneurship,this paper is a first trial looking along both the two dimensions to test whether Chinese firms’operating performance changes after cross-border merger and acquisition(CBM&A)activities,using entrepreneurial orientation(EO)as a moderating factor.The paper combines data from Chinese listed firms’annual reports,Chinese stock market financial statements database and the Zephyr database from 2001 to 2015 to examine how acquirers’operating performance changes after CBM&A activities using EO as a moderating factor.In order to test whether the results are affected by the stock market,this paper also defines abnormal return on equity(ROE)to detect abnormal operating performance.After these,the paper divides the sample into separate industry groups to see whether results will change.The results obtained for the whole sample show that the performance of Chinese listed firms is fluctuant after CBM&As within the sample years.It increases one year after the acquisition but drops two years later and then follows an increasing trend again.The moderating factor of EO is not significant for the sample as a whole.However,after dividing the sample into separate industry groups,it becomes clear that different industries have their own characteristics.EO helps Chinese listed firms to adjust to the post-acquisition situation and even to improve their performance to some extent in the metal mining industry and the business services industry.When ROE is substituted with abnormal ROE,the results do not change much.
文摘Foreign direct investment (FDI) ownership decision is one of the most researched topics in the international business literature. However, little is known about the extent to which this knowledge can be applied to emerging-economy multinationals. Building on the institutional, transaction cost and resource-based view perspectives, this paper analyzes the determining factors of FD! mode choice between wholly-owned subsidiary (WOS) and joint venture (JV) by Chinese firms. Based on a sample of 139 outward FDI decisions made by large Chinese firms between 2002 and 2009, our results show certain characteristics that differ from the conventional wisdom of the multinational enterprise (MNE). A host country's political risk and cultural distance do not affect FDI ownership decisions of Chinese MNEs, while firm size is negatively related with WOS. However, from a more conventional point of view, technological intensity of the industry is positively associated with WOS.
文摘In the transition from "made in China" to "invented in China," what is the motivation of Chinese firms in applying for patents? Why do some firms bypass patents? How is patenting developing within Chinese firms? This paper attempts to answer these questions using data of Chinese firms in the Yangtze River Delta region. Results indicate that, for product innovation, obtaining the lead time for market entry is of top priority in innovation protection, followed by confidentiality and patent protection. As for process innovation, confidentiality ranks first, followed by patent protection and obtaining the lead time. There is a significant and positive relationship between prior experience of patent licensing and possibility of future patent licensing. Firms with painful patent litigation experience tend to avoid it in the future. It is also found that there are great differences in patent behaviors between Chinese enterprises and their foreign counterparts.
文摘Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities' technology firms and explores the effects of the firms' operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. R&D inputs contributed significantly to the pre-tax profitability of Beijing firms, but bad no significant effect whatsoever on Shenzhen firms.