Search results

The aim of this study is to investigate the impact of local political uncertainty on the asymmetric cost behavior (i.e. cost stickiness) for listed firms in China.

In this study, the authors manually collect the turnover data of prefecture-city officials as a measure of exogenous fluctuations in political uncertainty and obtain firm-level financial information from the China Stock Market Accounting Research (CSMAR) database. To perform the analysis, the authors augment the traditional cost stickiness model by including the interaction terms of the prefecture-city official turnover, and firm-level and prefecture-city level control variables.

The authors find that political turnover leads to a higher degree of cost stickiness, implying that firms retain slack resources when political uncertainty is high. Moreover, the effect of political turnover on cost stickiness is more pronounced for firms residing in regions with weaker institutional environments, and firms that are privately owned and with smaller size. The authors further provide evidence that policy uncertainty and the threat of losing political connection are two underlying channels. Overall, this study documents that the local political process is an important channel that influences corporate operational decisions.

This study provides the first piece of evidence on the relation between political uncertainty and cost stickiness at the local government level. Moreover, the authors propose and demonstrate two underlying channels through which political uncertainty affects firms' asymmetric cost behavior.

Due to environmental externalities, micro-enterprises with profit-seeking features do not develop sufficient motivation for environmental governance. In a fiscally decentralized system, local environmental protection authorities perform environmental supervision, and the intensity of the regulations that they implement has an important influence on corporate environmental governance. Based on the promotion tournament framework, this paper aims to discuss the driving mechanism of corporate environmental governance using turnover of environmental protection department directors (EPDDs) as an indicator.

Using samples of A-share companies listed on the Shanghai and Shenzhen exchanges from 2007 to 2014, this paper examines the impact of EPDD turnover on corporate environmental governance and its underlying mechanism.

The results show that corporate environmental governance exhibits a political periodicity that changes with the turnover of the EPDD, and the periodicity remains after controlling for the influence of changes in provincial party secretary and governor. Internal mechanisms analysis indicates that, without financial independence, local environmental protection departments rely on increasing sewage charges, not environmental protection subsidies, to promote corporate environmental governance. Further, considering heterogeneity among officials, it finds that the younger a new EPDD is, the more pronounced the periodicity of corporate environmental governance. However, there is no significant difference between in-system and out-system turnover.

In general, this paper describes the mechanisms of corporate environmental governance from the perspective of political economics, and the results have implications for the potential improvement of the government’s environmental supervision functions and the development of ecological civilization in China.

The political influence on the determinants of capital structure has been under-researched for a long time. Taking the turnover of secretary of municipal committee as a political factor in China, this paper studies the effect of local government officials' turnover on firm's capital structure.

Starting with all A-shares listed firms in the Shanghai and Shenzhen Stock Exchanges from 2001 to 2018, this paper implements the OLS estimation, staggered difference-in-difference approach to investigate the effects of political turnover on the choice of capital structure.

The results show that, driven by government officials' turnover, firms will significantly reduce their leverage. When comparing between formal finance (bank loans) and informal finance (payables), the reduction of capital structure is mainly driven by banks, not by suppliers. Furthermore, two possible channels have been investigated. First, the reduction effects are mainly driven by the SOEs when classifying the types of corporate ownership into SOEs and non-SOEs. Second, the reduction effects exist in areas with the more intense government intervention when considering the heterogeneity of the development of institutional environment in provinces.

This paper first contributes to the literature on the determinants of corporate choice on capital structure. Second, this paper enriches the studies on the economic consequences of local government officials' turnover.

This paper aims to identify and evaluate the limitations related to Xin et al. (2022). The discussant also provide suggestions for future research along this line.

In this discussion, the discussant will attempt to identify the main limitations and provide suggestions for future improvement. This written discussion focuses on three main points. First, the discussant will focus on the incremental contribution. Second, the discussant will discuss some remaining issues with the empirical design and propose suggestions for further improvement. Lastly, the discussant will go over the underlying reasons behind the documented results.

Xin et al. (2022) investigate the original and important question of whether local leadership turnover leads to lower financial leverage.

Xin et al. (2022) contribute to the research line of the economic impact of political uncertainty by investigating the turnover year effect of local top leadership in the Chinese setting. Future research can improve our understanding by investigating the underlying mechanisms behind the documented results.

Against the background of actively promoting the reform of mixed ownership in China, this study regards government ownership in private sector enterprises (PSEs) as an important political connection mechanism and examines private holding listed companies in high-polluting industries that sold China A-shares from 2012 to 2019.

Using regression models such as Tobit and negative binomial estimation, the research empirically examines the impact of government ownership in PSEs on the corporate fulfillment of their environmental responsibilities.

Government ownership can effectively promote PSEs to fulfill their environmental responsibilities. Government ownership, as a corporate-level political connection mechanism, enables the government to provide firms with more environmental protection subsidies and environmental tax incentives, encouraging firms to fulfill their environmental responsibilities. When considering the policy risks faced by PSEs, government ownership effectively reduces the impact of policy uncertainty on firms’ fulfillment of environmental responsibilities. Additionally, verifying the economic development level of the city in which the firm is located makes the positive impact of government ownership on fulfillment of environmental responsibilities of PSEs in regions with lower economic development levels more significant.

Unlike existing studies that generally use the personal political identity of entrepreneurs to measure the political connections of PSEs, this study regards government ownership in PSEs as an important political connection mechanism. It provides a useful reference for China to formulate environmental protection policies for PSEs.

Previous studies have mostly discussed the impact of environmental policy on enterprise innovation, but the discussion on how turbulence in environmental policy may affect firms' green innovation has been insufficient. This paper explores the effect of environmental policy uncertainty on corporate green innovation in the turnover of environmental protection officials (EPOT) context.

The authors manually collected the data on the EPOT of 280 Chinese prefecture-level cities, and used the Poisson regression model to conduct empirical analyses based on the panel data of 1472 Chinese listed manufacturing firms from 2008 to 2017.

The results show that environmental policy uncertainty leads firms to reduce their green patent applications only for green invention patent applications. Such an effect is more pronounced in non-state-owned enterprises (non-SOEs). In addition, when the new directors of the Ecology and Environmental Bureau take office through promotions or are no more than 55 years old, the negative effect is more obvious, but there is no significant difference regardless of whether new directors have worked in environmental protection departments.

First, this paper supplements the research on the antecedents of corporate green innovation from the perspective of environmental policy uncertainty and extends the applications of real options theory. Second, this paper expands the research on the government–business relationship from the EPOT perspective.

This study aims to explore the effect of the home country institutional environment on firms’ outward foreign direct investment (OFDI) and how it is affected by institutional environment differences across home country subregions. Drawing on transaction cost theory, this paper examined the relationship between the Belt and Road Initiative (BRI) and Chinese firms’ OFDI, as well as the moderating roles of local government officials’ career horizons and state ownership.

A sample of 5,018 Chinese firm-year observations with foreign investment activities was used over 11 years to estimate a panel-feasible generalized least square regression model.

The results show that the BRI improves Chinese firms’ OFDI in countries along the BRI route. Furthermore, this positive relationship is weaker for firms where provincial officials have longer career horizons and is stronger for state-owned enterprises (SOEs) compared to non-SOEs.

The findings confirm the positive effect of home country institutional environment on firms’ OFDI. Furthermore, the multiple government perspective offers new insight into the effects of the home country’s institutional environment on OFDI.

High-speed railway (HSR) substantially affects tourism development, but this impact remains somewhat controversial. This study aims to explore the HSR–tourism nexus from the perspective of Chinese local governance. In the context of promotion tournament model in China, this study attempts to explain such controversy by including local leaders.

Based on a data set from 25 cities in China’s Yangtze River Delta region during 2005–2019, this study uses a panel data regression model to examine local leaders’ moderating role in the HSR–tourism nexus.

The tenure of local leaders has a significant moderating role in the impact of HSR implementation on tourism development. Furthermore, a shorter leaders’ tenure strengthens the boost to tourism development from HSR service.

This paper enriches theoretical framework of leaders’ tournament theory. In addition, this study provides a new perspective to understand the HSR–tourism nexus better. This study identifies the moderating role of local leaders in the HSR–tourism nexus and expands the mechanism research of HSR–tourism nexus, which helps to explain the controversy of the HSR–tourism nexus.

高速铁路（HSR）对旅游业的发展有很大的影响, 但这种影响仍有一定的争议性。本研究从中国地方治理的角度探讨了高铁-旅游之间的关系。在中国晋升锦标赛模式的背景下, 本研究试图通过将地方领导纳入其中来解释这种争论。

基于2005-2019年中国长江三角地区25个城市的数据集, 我们利用面板数据回归模型来研究地方官员在高铁-旅游关系中的调节作用。

地方官员的任期在高铁开通对旅游业发展的影响中起着重要的调节作用。此外, 较短的官员任期会加强高铁连通对旅游业发展的促进作用。

本文丰富了官员锦标赛理论的理论框架。此外, 我们的研究为更好地理解高铁与旅游的关系提供了一个新的视角。我们确定了地方领导人在高铁-旅游关系中的调节作用, 拓展了高铁-旅游关系的机制研究, 有助于解释高铁-旅游关系的争论。

El tren de alta velocidad (TAV) afecta sustancialmente al desarrollo del turismo, pero este impacto sigue siendo algo controvertido. Este estudio explora el nexo entre el TAV y el turismo desde la perspectiva de la gobernanza local china. En el contexto del modelo de torneo de promoción en China, este estudio intenta explicar dicha controversia incluyendo a los líderes locales.

Basándonos en un conjunto de datos de 25 ciudades de la región china del delta del río Yangtze durante el periodo 2005-2019, utilizamos un modelo de regresión de datos de panel para examinar el papel moderador de los líderes locales en el nexo entre el TAV y el turismo.

El mandato de los líderes locales tiene un papel moderador significativo en el impacto de la implementación del TAV en el desarrollo del turismo. Además, un mandato más corto de los líderes refuerza el impulso al desarrollo turístico del servicio de TAV.

Este trabajo enriquece el marco teórico de la teoría del torneo de líderes. Además, nuestro estudio proporciona una nueva perspectiva para entender mejor el nexo entre el TAV y el turismo. Identificamos el papel moderador de los líderes locales en el nexo TAV-Turismo y ampliamos la investigación del mecanismo de dicho nexo, lo que ayuda a explicar la controversia del nexo.

This study investigates the relationship between corporate social responsibility (CSR) and financial performance of the banking sector from the prospective of emerging countries.

This study obtained balance sheet and income statement data for 173 banks in 20 emerging countries from the Bankscope database from 2005–2018. The CSR-related data were taken from the Thomson Reuters ASSET4 database. Moreover, macroeconomic controls such as GDP per capita, inflation, and financial development are attained from the GFDD. The series of institutional quality indices (Political Stability, Rule of Law, Control of Corruption, Government Effectiveness, and Regulatory Quality) is obtained from the WGI. At the same time, national culture and bank regulation are attained from Hofstede Insights and Barth et al. (2013). We used the panel fixed-effects model in our baseline estimations, while 2SLS and GMM were applied to control for endogeneity.

The finding shows that CSR activities significantly improve bank performance, but the effect varies across the bank. Only environmentally friendly activities have shown a significant positive relationship with banking performance for CSR dimensions. However, the social and government dimensions did not significantly affect bank performance. Moreover, a sound institutional and regulatory environment and national norms play an important role in the nexus of CSR activities and bank performance.

This study provides empirical evidence that sheds light on CSR and bank performance in an emerging market context.

In recent years, growing concerns about the environment and climate change, poverty problems, growing inequality among societies, and tensions brought about by social injustice have increased the popularity of sustainability, which is considered a multidimensional concept, among scientists, decision-makers, academics, and companies. The perception of these different groups of sustainability issues and the tools they suggest/use for corporate sustainability implementations differ from each other. It can be difficult to look for and understand sustainability tools that are handled with different perspectives in many sources. In this chapter, the tools used in sustainability implementation are discussed with certain classifications – environmental management tools, sustainability reporting, and corporate social performance – and their relations with each other. In short, this study aims to present a holistic perspective to the sustainability (or of corporate sustainability) implementations carried out by companies trying to survive in a dynamic and complex economic environment. Accordingly, the literature was reviewed, and the concept of sustainability was explained, the reasons that push companies to sustainability implementations were evaluated, and sustainability implementations were detailed under environmental management tools, sustainability reporting, and corporate social performance.