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The authors develop a novel forecast combination approach based on the order statistics of individual predictability from panel data forecasts. To this end, the authors define the notion of forecast depth, which provides a ranking among different forecasts based on their normalized forecast errors during the training period. The forecast combination is in the form of a depth-weighted trimmed mean. The authors derive the limiting distribution of the depth-weighted forecast combination, based on which the authors can readily construct prediction intervals. Using this novel forecast combination, the authors predict the national level of new COVID-19 cases in the United States and compare it with other approaches including the ensemble forecast from the Centers for Disease Control and Prevention (CDC). The authors find that the depth-weighted forecast combination yields more accurate and robust predictions compared with other popular forecast combinations and reports much narrower prediction intervals.

This chapter outlines the philosophic underpinnings of the self-management paradigm developed over the past three decades by China’s Haier Group, a global leader in white goods. The successful transformation of Haier from a small resource-poor firm to a dominant global giant is often attributed to the self-management culture established in the company by its legendary leader Zhang Ruimin. This management paradigm is a function of the humbleness displayed by Mr. Zhang Ruimin and rooted in his strong belief in the traditional Chinese philosophy of I-Ching and Daoism. We show how the hexagram of Qian (“qian”: humbleness, modesty) from I-Ching is linked to Mr. Zhang’s humble approach and analyze how the six parts of the hexagram of Qian are related to the six development stages of the Haier Group. These insights are used to give some thoughts to the leadership challenge associated with the creation of a dynamic and responsive global organization.

Purpose: This study investigates how couple similarity in various aspects affects their life satisfaction and how these impacts vary across educational groups among the young married couples in Shanghai.

Methodology: This study employs the pooled data from three waves of the Fudan Yangtze River Delta Social Transformation Survey which sampled Shanghai youths born between 1980 and 1989, the first single-child generation. Couple similarity is evaluated through the comparison in age, hukou status, education, and income quartile between the husband and wife. Ordered logistic regression model is applied to assess the impacts of couple similarity on life satisfaction.

Findings: Marriage hypergamy in age, education, and income barely have any impacts on couples’ life satisfaction, while hukou comparison, as an important indication of social stratification in Shanghai, is strongly associated with life satisfaction. The couple in which husband holds the urban hukou and wife rural hukou as well as the couple in which both partners hold the urban hukou are significantly happier than those in which both partners hold the rural hukou. Such a positive impact is partially explained by the higher husband’s decision-making power in male-advantaged families. Moreover, husband’s urban hukou status is especially important for those without college education, but not for those with college education.

Values: This chapter highlights the importance of hukou hypergamy in life satisfaction for married couples, in particular, lower-educated couples in Shanghai. These findings reveal an implicit but persistent preference for male-dominated family model, where husbands retain a higher decision-making power that, in turn, promotes life satisfaction for both partners.

This paper investigates CEO turnover and the usefulness of relative performance evaluation (RPE) as a management incentive in an emerging economy lacking market-based competition.

In a sample of China’s listed state-owned enterprises (SOEs) from the period 2001 to 2005, we manually collect the data where a CEO has gone after being removed by reading the annual reports of the firms and searching the major news and business publications, and run OLS regressions to examine how various incentives provided by different CEO turnovers such as promotion, demotion, and rotation affect the firm performance.

We find that 41% of departing CEOs in SOEs is being promoted. The promotion is positively associated with preceding firm performance relative to peers in the same region and this association is more significant than that between the promotion and firm’s specific performance. Furthermore, the promotion outperforms other incentive schemes such as CEO demotions by 5–8% in terms of subsequent Tobin’s q in three years. These consequences persist in undeveloped regions where there are fewer firms listed on the stock market, a lower stock market capitalization, or a higher regional Herfindahl–Hirschman Index ( HHI ).

The findings imply that promotion based on RPE provides an important incentive by creating competitions.

In this chapter, we analyzed the effects of internationalization on innovation, productivity, and firm performance among multinational pharmaceutical companies as representatives of a global knowledge-based industry. The empirical analysis used multiple stepwise regressions based on a sample of 149 firms headquartered in Europe and the US. The results indicate that innovation outcomes are positively correlated to the number of foreign subsidiaries (scope internationalization), whereas surprisingly, formal research and development (R&D) does not seem to directly influence innovation. This suggests that the firms benefit from local overseas subsidiaries to create and implement new innovative offerings. The number of foreign subsidiaries has a U-shaped relationship to patent productivity suggesting that firms can gain advantages by locating cost-intensive activities in low-cost countries and critical tasks in advanced market locations. Firm performance has a U-shaped relationship to sales abroad (scale internationalization) and the relationship is further enhanced by a high focus on R&D. This suggests that sales abroad enable scale economies, where R&D improves quality and relevance of products and thereby boosts performance. Finally, to validate the findings we conducted two semi-structured interviews with representative industry experts and gained further insights for an extended interpretation of results.

The goal of this paper is to investigate the relationship between government control and firm value in China.

Government might extract social or political benefits from a state-controlled firm, thus decreases firm value. However, government’s monitoring on firm management reduces managers’ agency problem, which increases firm value. We first build a game-theoretic model to prove the existence of optimal government control given these two roles of government, and we then employ the OLS regression method to test the theory predictions using the length of intermediate ownership chains connecting the listed state-owned enterprises to their ultimate controllers as the measure of government control.

We find that firm values first increase then decrease as government control weakens. Moreover, we find that government usually retains a stronger control over state-owned enterprises than the optimal level. In addition, we show that government control can be further weakened in firms with good corporate governance mechanisms, which serve as a substitution of government monitoring.

Our results demonstrate that government control in China is still a necessary but costly mechanism to mitigate agency costs, especially when corporate governance system is underdeveloped.

We identify the substitution effect between government control and corporate governance using a unique measure of government control.

Greenhouse gas (GHG) emission has a detrimental impact on climate change. There is an increasing trend for firms to use disclosure to signal stakeholders about its environmental responsibilities and performance in dealing with climate change. China is one of the countries producing the most carbon emissions. Over the last decade, Chinese state-owned enterprises (SOEs) are becoming important players in international trade. However, the existing literature provides limited evidence on how Chinese SOEs influence GHG disclosure. Through the lens of stakeholder–agency theory, this chapter studies the top 300 listed firms to examine the relationship between Chinese SOEs and the likelihood of GHG disclosure. The result suggests a negative relationship between Chinese SOEs and the likelihood of GHG disclosure. This could be explained as a consequence of the managers' political self-interests, economic and policy-oriented decision-making process and the power differentials between the government and SOE managers. This research extends the GHG literature to Chinese SOEs context, providing direct evidence on how state ownership impacts on GHG disclosure.

Corporate social responsibility (CSR) and corporate political activity (CPA) are two important components of firms’ nonmarket strategies, oriented toward shaping the firm’s political and social conditions. Although this is acknowledged in the literature, there are contradictory arguments and evidence, concerning, first, whether and under which conditions firms align their CPA and CSR activities, and second, what the impacts might be if they do align these activities. In light of this, this chapter draws from earlier reviews of nonmarket strategies, to explore the factors at multiple levels, macro and micro, that may drive a firm’s alignment of CPA and CSR. In doing so, we draw from management research to identify the macro- and micro-level factors that shape CPA and CSR alignment as CSR and CPA alignment research mostly focuses on outcomes rather than identifying the drivers of alignment. We develop a general model that integrates the macro- and micro-level discussions to make suggestions about where future research needs to go to increase understanding of when corporations will combine their CPA and CSR efforts and the merits of these efforts.