In view of the dramatic fluctuation of international oil price over the past decade, oil price uncertainty has aroused widespread concern of academia and policymakers. This paper firstly studies how ...oil price uncertainty affects corporate leverage, using the financial statement data of Chinese listed companies from 2007 to 2019. The results show that the relationship between oil price uncertainty and corporate leverage is nonlinear, and displays a U shape. Short-term debt financing is more strongly affected. Further analysis indicates that oil price uncertainty could reduce corporate leverage through increasing trade credit and heightening financial distress risk. In addition, this paper finds that the adverse effects of oil price uncertainty on state-owned enterprises or enterprises located in a region of high marketization are more pronounced. Finally, the findings demonstrate that with the advance of refined oil pricing market-oriented reform, the impact of oil price uncertainty on corporate leverage has been enhanced.
•Estimate the impact of oil price uncertainty on corporate leverage and find a U-shaped relationship.•Identify the economics mechanisms through which oil price uncertainty affects corporate leverage.•Gauge the effects of ownership and marketization on the oil price uncertainty-leverage nexus.•Evaluate the impact of the market-oriented refined oil pricing reform on corporate leverage.•Evaluate the impact of the retail refined oil pricing market-oriented reform on corporate leverage.
Promoting technological innovations by environmental regulation is one of the essential means to achieve green transformation. This study investigates the effect of environmental regulation on ...technological innovations based on the provincial panel data of industrial sectors in China during the years 2005–2015. The two-way fixed-effect panel data model is used to investigate the marginal and heterogeneous impacts empirically. Results indicate a U-shaped relationship between environmental regulation and technological innovations. In the short-term, environmental regulation has an “offsetting effect” on the research and innovation capacity of China's industrial sector. However, with the deepening of environmental regulation, it forces the industry to reduce the cost of pollution control by improving technological innovation capacity, thus creating a “compensation effect”. Results also show that environmental regulation policies changed the location and industry selection of foreign capital, which weakened the positive effect of FDI on technological innovations, indicating the “pollution shelter” effect. From the perspective of different types of enterprises, due to the higher cost of energy conservation and emission reduction, environmental regulation is detrimental to the technological innovations of state-owned enterprises. In particular, we find that industries with a higher degree of market competition and higher human capital investment tend to have stronger technological innovation capabilities.
•There is a U-shaped relationship between environmental regulation and technological innovations.•FDI and market competition promotes technological innovations.•Environmental regulation has heterogeneous impacts on technological innovation.
RECASTING THE IRON RICE BOWL Berkowitz, Daniel; Ma, Hong; Nishioka, Shuichiro
The review of economics and statistics,
10/2017, Letnik:
99, Številka:
4
Journal Article
Recenzirano
Odprti dostop
Following the enactment of reforms in the mid-1990s, China’s state-owned enterprises (SOEs) became more profitable. Using theoretical insights from Azmat, Manning, and Van Reenen (2012) and ...Karabarbounis and Neiman (2014) and econometric methods in De Loecker and Warzynski (2012), this paper finds that SOE restructuring was nevertheless limited. This is because SOE profitability gains in part reflect that they were under less political pressure to hire excess labor and also their cost of capital fell and their capital-labor elasticity of substitution generally exceeded unity. Moreover, SOE productivity lagged that of foreign and private firms.
We develop and estimate a dynamic model of investment to investigate the impact of international oil price uncertainty on corporate investment expenditures in China's emerging and transition economy. ...We further examine whether state ownership affects the relationship between oil price uncertainty and corporate investment. Consistent with the model's prediction, the main finding is that oil price uncertainty exerts a negative impact on corporate investment expenditures. In addition, compared with state-owned listed companies, the negative influence of oil price uncertainty on corporate investment is more significant for non-state-owned listed companies. Our further analysis, using the market-oriented reform of refined oil pricing in 2008 as a quasi-natural event, shows the variation between the low-degree marketization period and the high-degree one in terms of the relationship between international oil price uncertainty, state ownership and corporate investment expenditures.
•The setting of China's emerging and transition economy is used.•A dynamic model of investment is developed and estimated.•Oil price uncertainty exerts a negative impact on corporate investment.•The negative impact is more significant for non-state-owned listed companies.•Different results are found between low- and high-degree marketization periods.
China's pilot carbon trading policy is expected to be both efficient and flexible in reducing carbon emissions through incentivising low-carbon innovation. This paper analyses the effects of this ...pilot policy on low-carbon innovation using a difference-in-difference model, based on a sample of selected enterprises and carrying out a series of robustness tests to corroborate the results. The analysis shows that the pilot carbon trading policy is predicted to have a significantly positive effect on the low-carbon innovation of enterprises that fall under its scope, notably by alleviating obstacles to the financing of low-carbon innovation. Furthermore, a heterogeneity analysis of enterprises' characteristics and carbon allowance allocation methods in different pilots indicates that the effect of the pilot carbon trading policy on enterprises' low-carbon innovation will be reflected mainly in enterprises in China's eastern provinces, and in state-owned enterprises. Compared with the grandfathering and historical intensity allocation methods, the findings of this study suggest that the extent of low-carbon innovation is significantly greater when the benchmarking method is used. The results of this paper offer some key insights into improving the policy design of a nationwide carbon trading market in China, as well as a reference point for other countries and regions, especially developing countries, in establishing a carbon trading market.
Key policy insights
China's pilot carbon trading policy can promote low-carbon innovation.
Easing the financing constraints of enterprises can promote low-carbon innovation.
Compared with the grandfathering and historical intensity allocation methods, using the benchmarking method significantly improves the enterprises' low-carbon innovation.
We use institutional-related theories and a unique natural experiment that enables an exogenous test of the influence of controlling shareholders on managerial accountability to corporate fraud. In ...China, prior to the Split Share Structure Reform (SSSR), state shareholders held restricted shares that could not be traded. This restriction mitigated state-owned enterprise controlling shareholders' incentives to monitor managers. The data examined show the SSSR strengthens incentives of stateowned enterprise controlling shareholders to replace fraudulent management. Our findings support the view that economic incentives are important to promote corporate governance and deter fraud.
How does the COVID-19 affect SMEs’ financing in emerging markets? In this paper, we investigate the impact of the COVID-induced shock on Chinese SMEs’ line of credit (LOC) using deal-level data. As ...Hubei province was mostly affected, we employ a difference-in-differences approach with the propensity score matching (PSM-DID) and compare Hubei SMEs’ credit responses before and after the outbreak relative to those of non-Hubei SMEs. Our results suggest that Hubei SMEs’ credit demand reduced significantly compared to that of non-Hubei SMEs, and the adverse effects were more pronounced for the non-state-owned enterprises (non-SOEs) and the SMEs without prior bank relationships. Moreover, we show a negative impact on non-Hubei SMEs having supply chain relationships with Hubei province. Such effects rippled through the supply chain and exerted an intensified strike on the SMEs with Hubei customers. Finally, we find the state-owned banks eased the LOC to Hubei SMEs during the pandemic outbreak.
Plain English Summary
Chinese SMEs’ credit demand deteriorated after the COVID-19 outbreak, though supported by the state-owned banks. How does the COVID-19 affect SMEs’ financing in emerging markets? In this paper, we investigate the impact of the COVID-induced shock on Chinese SMEs’ line of credit (LOC) using deal-level data. As Hubei province was mostly affected, our results suggest that Hubei SMEs’ credit demand reduced significantly compared to that of non-Hubei SMEs, and the adverse effects were more pronounced for the non-state-owned enterprises (non-SOEs) and the SMEs without prior bank relationships. Moreover, we show a negative impact on non-Hubei SMEs having supply chain relationships with Hubei province. Such effects rippled through the supply chain and exerted an intensified strike on the SMEs with Hubei customers. Finally, we find the state-owned banks eased the LOC to Hubei SMEs during the pandemic outbreak. According to our study, government COVID-supportive policies should target the SME subgroups such as non-SOEs, firms that heavily rely on supply chain, and those without stable bank relationships.
Though State-Owned Multinational Enterprises (SOMNEs) make up around 15% of the world´s largest non-financial Multinational Enterprises (MNEs), little is known about why State-Owned Enterprises ...(SOEs) internationalize and how they behave once abroad. Whilst some scholars have claimed SOMNEs tend to behave as their private MNE counterparts, other scholars state SOMNEs transfer their "public mission" abroad. This article presents a novel, multi-dimensional framework designed to facilitate comparing the behaviour of SOEs and private enterprises abroad in the field of infrastructure.
China now has the second-largest number of Fortune Global 500 companies in the world. Most of the Chinese companies on the list are state-owned enterprises (SOEs) organized into massive corporate ...groups with a central government agency, known as SASAC, as their ultimate controlling shareholder. Despite these groups' importance to China's domestic economy and foreign investment strategy, many features of the SOE sector—particularly the organizational structure and governance characteristics of the SOE groups—remain a black box. Unpacking the black box requires moving away from the standard focus on agency costs in listed firms that predominates in the corporate governance literature. Instead, we examine the relational ecology in which the SOE groups exist, with a focus on institutionalized mechanisms linking the business groups with other organs of the party-state. We argue that through these linkages, Chinese managerial elites in the economy have assembled what Mancur Olson called an "encompassing organization"—a coalition whose members "own so much of the society that they have an important incentive to be actively concerned about how productive it is." Exposing the mechanisms of Chinese state capitalism in this way raises many questions for scholars and policymakers, the salience of which increases as the global interaction of Chinese firms expands. For example, is the rise of Chinese SOEs adequately explained by prevailing theories in the comparative corporate governance literature? How might the increased operation of Chinese SOEs in foreign markets change the institutional trajectory of corporate capitalism in China? Do the institutions of market and investment regulation in the United States adequately contemplate hybrid business-political actors like Chinese SOEs? By examining the organizational structure of SOEs, this Article provides a foundation for future research on a pivotal aspect of China's contemporary political economy.
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