Pub Date : 2026-01-12DOI: 10.1016/j.chieco.2026.102651
Wei Tang , Yuan Wang , Haiqi Wei
This paper investigates the impact of FDI liberalization on allocative efficiency in host countries. Using China’s 2002 FDI deregulation as a policy experiment, we show that growth impacts of FDI in a policy-distorted economy is primarily driven by between-firm resource reallocation rather than within-firm productivity improvements. Domestic firms with higher pre-reform marginal revenue products of capital (MRPK) receive greater capital inflows and exhibit subsequent declines in MRPK. We emphasize the role of FDI reform in reducing ownership-related distortions: it accelerated the exit of state capital. These results highlight that the pro-competitive effects of openness policies can act as external catalysts to mitigate domestic policy-induced distortions.
{"title":"FDI In, SOE Out: Understanding the reallocation effects of FDI liberalization in China","authors":"Wei Tang , Yuan Wang , Haiqi Wei","doi":"10.1016/j.chieco.2026.102651","DOIUrl":"10.1016/j.chieco.2026.102651","url":null,"abstract":"<div><div>This paper investigates the impact of FDI liberalization on allocative efficiency in host countries. Using China’s 2002 FDI deregulation as a policy experiment, we show that growth impacts of FDI in a policy-distorted economy is primarily driven by between-firm resource reallocation rather than within-firm productivity improvements. Domestic firms with higher pre-reform marginal revenue products of capital (MRPK) receive greater capital inflows and exhibit subsequent declines in MRPK. We emphasize the role of FDI reform in reducing ownership-related distortions: it accelerated the exit of state capital. These results highlight that the pro-competitive effects of openness policies can act as external catalysts to mitigate domestic policy-induced distortions.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"96 ","pages":"Article 102651"},"PeriodicalIF":5.5,"publicationDate":"2026-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145980358","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-03DOI: 10.1016/j.chieco.2025.102648
Xingjian Zhang , Yi Zhang , Yingjie Fu , Feichi Lu
This study examines the impact of bank internationalization on the efficiency of outward foreign direct investment (OFDI). Using a large dataset of OFDI for 1035 Chinese firms across 136 host economies from 2013 to 2023, we find that the presence of Chinese banks in a host economy significantly improves Chinese firms’ investment efficiency there. This finding is robust to addressing endogeneity with instrumental variables and a series of robustness checks. Mechanism analysis identifies two channels: the credit channel, which lowers borrowing costs and improves loan utilization efficiency, and the information channel, which reduces institutional unfamiliarity and mitigates discrimination. Moreover, its impact varies with host economy characteristics, banking service features, and firm-specific factors. These findings provide important policy insights for emerging economies, highlighting the need to promote greater banking internationalization to improve the global competitiveness of their multinational firms.
{"title":"The impact of bank internationalization on the efficiency of Chinese outward foreign direct investment","authors":"Xingjian Zhang , Yi Zhang , Yingjie Fu , Feichi Lu","doi":"10.1016/j.chieco.2025.102648","DOIUrl":"10.1016/j.chieco.2025.102648","url":null,"abstract":"<div><div>This study examines the impact of bank internationalization on the efficiency of outward foreign direct investment (OFDI). Using a large dataset of OFDI for 1035 Chinese firms across 136 host economies from 2013 to 2023, we find that the presence of Chinese banks in a host economy significantly improves Chinese firms’ investment efficiency there. This finding is robust to addressing endogeneity with instrumental variables and a series of robustness checks. Mechanism analysis identifies two channels: the credit channel, which lowers borrowing costs and improves loan utilization efficiency, and the information channel, which reduces institutional unfamiliarity and mitigates discrimination. Moreover, its impact varies with host economy characteristics, banking service features, and firm-specific factors. These findings provide important policy insights for emerging economies, highlighting the need to promote greater banking internationalization to improve the global competitiveness of their multinational firms.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"96 ","pages":"Article 102648"},"PeriodicalIF":5.5,"publicationDate":"2026-01-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145941251","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-02DOI: 10.1016/j.chieco.2025.102650
Xiaoting Zheng , Jiayu Wen , Xun Wu
Public–Private Partnerships (PPPs) in essential infrastructure face persistent tensions between commercial viability and public service obligations, leading to widespread challenges in implementation and sustainability. In contrast, Government-Linked Companies (GLCs)—corporations with significant state ownership operating under market principles—have emerged as alternative social capital participants within China's PPP framework, offering a hybrid approach that combines state backing with market-based operations. This study applies principal–agent theory and analyzes a panel dataset of Chinese water utilities for 2000–2016 to assess how a GLC-involved hybrid governance structure influences financial and operational performance. The findings indicate that GLC involvement significantly enhances financial outcomes, increasing revenue by 9.2 % and profit by 98.6 %, while improving operational efficiency through strategic workforce management. These effects are particularly pronounced in regions with annual precipitation below 800 mm and in provinces with higher marketization indices, suggesting that GLCs are most effective where market institutions are stronger. By demonstrating how GLCs mitigate the governance challenges that have hindered traditional PPPs, this study highlights their potential as a sustainable infrastructure model that balances financial sustainability with public service commitments.
{"title":"Government linked companies (GLCs) and public private partnership (PPP) in the water sector in China: Political connection, utility performance and service quality","authors":"Xiaoting Zheng , Jiayu Wen , Xun Wu","doi":"10.1016/j.chieco.2025.102650","DOIUrl":"10.1016/j.chieco.2025.102650","url":null,"abstract":"<div><div>Public–Private Partnerships (PPPs) in essential infrastructure face persistent tensions between commercial viability and public service obligations, leading to widespread challenges in implementation and sustainability. In contrast, Government-Linked Companies (GLCs)—corporations with significant state ownership operating under market principles—have emerged as alternative social capital participants within China's PPP framework, offering a hybrid approach that combines state backing with market-based operations. This study applies principal–agent theory and analyzes a panel dataset of Chinese water utilities for 2000–2016 to assess how a GLC-involved hybrid governance structure influences financial and operational performance. The findings indicate that GLC involvement significantly enhances financial outcomes, increasing revenue by 9.2 % and profit by 98.6 %, while improving operational efficiency through strategic workforce management. These effects are particularly pronounced in regions with annual precipitation below 800 mm and in provinces with higher marketization indices, suggesting that GLCs are most effective where market institutions are stronger. By demonstrating how GLCs mitigate the governance challenges that have hindered traditional PPPs, this study highlights their potential as a sustainable infrastructure model that balances financial sustainability with public service commitments.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"96 ","pages":"Article 102650"},"PeriodicalIF":5.5,"publicationDate":"2026-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145941250","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102642
Yuanbo Liang , Jingyang Fu , Xiao Teng , Xi Qu
This study contributes to the literature on infrastructure and economic geography by exploring how improved shipping conditions influence regional development. Using a unique township-level dataset and leveraging the operation of the Three Gorges Dam (TGD) as a natural experiment, we show that enhanced waterborne transportation significantly promotes economic growth in port areas along the riverbanks. Mechanism analysis reveals that the TGD increased total freight volume by shifting freight composition toward waterborne transport, which induced water-transport-oriented industrial growth and generated larger gains for ports that initially had worse shipping conditions. Extension analysis shows that the regional economic hierarchy has strengthened after the operation of the TGD, suggesting that the reorganization of regional economic geography is likely associated with improvements in shipping endowments.
{"title":"Waterway infrastructure, shipping endowment and regional economic geography: Evidence from the operation of the three gorges dam","authors":"Yuanbo Liang , Jingyang Fu , Xiao Teng , Xi Qu","doi":"10.1016/j.chieco.2025.102642","DOIUrl":"10.1016/j.chieco.2025.102642","url":null,"abstract":"<div><div>This study contributes to the literature on infrastructure and economic geography by exploring how improved shipping conditions influence regional development. Using a unique township-level dataset and leveraging the operation of the Three Gorges Dam (TGD) as a natural experiment, we show that enhanced waterborne transportation significantly promotes economic growth in port areas along the riverbanks. Mechanism analysis reveals that the TGD increased total freight volume by shifting freight composition toward waterborne transport, which induced water-transport-oriented industrial growth and generated larger gains for ports that initially had worse shipping conditions. Extension analysis shows that the regional economic hierarchy has strengthened after the operation of the TGD, suggesting that the reorganization of regional economic geography is likely associated with improvements in shipping endowments.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102642"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102449
Jie Tang , Huiwen Li
This special issue adopts a multidisciplinary lens to examine the rapid transition of China's urban development from traditional industrial agglomeration to innovation convergence. Integrating New Economic Geography theory, spatial economics insights, and policy case studies, it offers a comprehensive overview of China's innovation-driven urbanization. The collection highlights how market-based price mechanisms, targeted government interventions, and cross-regional knowledge spillovers jointly shape emerging innovation clusters. It also surveys theoretical frontiers in the “age of innovation,” including the enduring role of geographic distance, the impacts of heterogeneity and complexity, the integration of endogenous growth frameworks, and the micro-mechanisms of knowledge creation and diffusion. Finally, the issue previews empirical contributions that analyze urban innovation patterns, cross-boundary collaboration, infrastructure-enabled division of labor, and the pressing challenges of equity, sustainability, and methodological development in the study of industrial clusters and urbanization.
{"title":"China's urban agglomerations: Surging from industrial-led to innovation-driven","authors":"Jie Tang , Huiwen Li","doi":"10.1016/j.chieco.2025.102449","DOIUrl":"10.1016/j.chieco.2025.102449","url":null,"abstract":"<div><div>This special issue adopts a multidisciplinary lens to examine the rapid transition of China's urban development from traditional industrial agglomeration to innovation convergence. Integrating New Economic Geography theory, spatial economics insights, and policy case studies, it offers a comprehensive overview of China's innovation-driven urbanization. The collection highlights how market-based price mechanisms, targeted government interventions, and cross-regional knowledge spillovers jointly shape emerging innovation clusters. It also surveys theoretical frontiers in the “age of innovation,” including the enduring role of geographic distance, the impacts of heterogeneity and complexity, the integration of endogenous growth frameworks, and the micro-mechanisms of knowledge creation and diffusion. Finally, the issue previews empirical contributions that analyze urban innovation patterns, cross-boundary collaboration, infrastructure-enabled division of labor, and the pressing challenges of equity, sustainability, and methodological development in the study of industrial clusters and urbanization.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102449"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145925063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102639
Qilin Cao , Muxing Li , Wenke Wang , Xiaoke Wu
China's Company Law amendment emphasizes boards' fiduciary responsibilities and mandates corporate social responsibility, thereby positioning boards as the primary entities responsible for corporate ESG governance and establishing their oversight obligations. Utilizing data from Chinese A-share listed manufacturing companies between 2012 and 2023, this paper employs the entropy weighting method to construct an indicator system for measuring board ESG oversight. Based on this system, the empirical analysis reveals that robust board ESG oversight significantly facilitates corporate international expansion. The mitigation of financing constraints and the enhancement of supply chain resilience are identified as key mediating channels. Furthermore, green technology innovation, media attention, and government subsidies are found to exert significant positive moderating effects on the relationship. Heterogeneity analysis indicates that the aforementioned facilitating effect is more pronounced in non-state-owned enterprises, firms in regions with better legal environments, and those in provinces designated under the Belt and Road Initiative. Additionally, significant changes in this promoting effect were observed around the amendment of the Company Law and the onset of the Sino-US trade friction. This study provides important evidence for understanding the theoretical implications of board ESG oversight and its role in promoting corporate international expansion, while also yielding key insights for the enhancement of board governance and ESG practices.
{"title":"Can board ESG oversight promote corporate international expansion? Evidence from Chinese manufacturing firms","authors":"Qilin Cao , Muxing Li , Wenke Wang , Xiaoke Wu","doi":"10.1016/j.chieco.2025.102639","DOIUrl":"10.1016/j.chieco.2025.102639","url":null,"abstract":"<div><div>China's Company Law amendment emphasizes boards' fiduciary responsibilities and mandates corporate social responsibility, thereby positioning boards as the primary entities responsible for corporate ESG governance and establishing their oversight obligations. Utilizing data from Chinese A-share listed manufacturing companies between 2012 and 2023, this paper employs the entropy weighting method to construct an indicator system for measuring board ESG oversight. Based on this system, the empirical analysis reveals that robust board ESG oversight significantly facilitates corporate international expansion. The mitigation of financing constraints and the enhancement of supply chain resilience are identified as key mediating channels. Furthermore, green technology innovation, media attention, and government subsidies are found to exert significant positive moderating effects on the relationship. Heterogeneity analysis indicates that the aforementioned facilitating effect is more pronounced in non-state-owned enterprises, firms in regions with better legal environments, and those in provinces designated under the Belt and Road Initiative. Additionally, significant changes in this promoting effect were observed around the amendment of the Company Law and the onset of the Sino-US trade friction. This study provides important evidence for understanding the theoretical implications of board ESG oversight and its role in promoting corporate international expansion, while also yielding key insights for the enhancement of board governance and ESG practices.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102639"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102646
Shiyi Chen , Wenjie Liu , Huanhuan Wang
Motivated by China's broad air pollution and increasing outward investment during the 2010s, we establish that air pollution exposure with its labor erosion drives capital reallocation through outward M&A. We develop a theoretical framework proving that exposure increases outward M&A probability, with a higher technology seeking motive for advanced economies. Leveraging granular PM2.5 data and listed company records, we identify robust exposure effects at both broad and hyperlocal metrics validated by IV and spatial gradients. Crucially, pollution-exposed firms target developed economies for IP and green technologies, generate post-M&A foreign patents, and show amplified responses in labor-intensive sectors and asset-targeted transactions. Our findings reposition environmental constraints as catalysts for globalization through adaptive knowledge acquisition.
{"title":"Air pollution, technology seeking and firms' cross-border M&A","authors":"Shiyi Chen , Wenjie Liu , Huanhuan Wang","doi":"10.1016/j.chieco.2025.102646","DOIUrl":"10.1016/j.chieco.2025.102646","url":null,"abstract":"<div><div>Motivated by China's broad air pollution and increasing outward investment during the 2010s, we establish that air pollution exposure with its labor erosion drives capital reallocation through outward M&A. We develop a theoretical framework proving that exposure increases outward M&A probability, with a higher technology seeking motive for advanced economies. Leveraging granular PM2.5 data and listed company records, we identify robust exposure effects at both broad and hyperlocal metrics validated by IV and spatial gradients. Crucially, pollution-exposed firms target developed economies for IP and green technologies, generate post-M&A foreign patents, and show amplified responses in labor-intensive sectors and asset-targeted transactions. Our findings reposition environmental constraints as catalysts for globalization through adaptive knowledge acquisition.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102646"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884413","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102643
Teng Huang , Cheryl Xiaoning Long
This paper provides novel empirical evidence that stricter patentability requirements improve patent quality based on a quasi-natural experiment-the third amendment to the Chinese Patent Law. The results from difference-in-differences estimation show invention patents meeting absolute novelty are more likely to be cited internationally, renewed, and invalidated less frequently than those with relative novelty. We identify three specific mechanisms through which the stricter patentability requirement exerts its impact on patent quality, including the screening-out effect, where stricter patent approval standards weed out low-quality applications during substantive examination, the self-selection effect, where stricter patentability requirements motivate applicants to select higher-quality inventions in response to the lower probability of patent approval, and the foreign-inflow effect, where the higher standards create more effective patent protection, which attracts more overseas applicants and higher-quality overseas technologies. These findings support the relationship between patentability standards and quality and have implications for patent law reforms in developing countries.
{"title":"Patent quality and patentability requirements: Evidence from the third amendment to the Chinese Patent Law","authors":"Teng Huang , Cheryl Xiaoning Long","doi":"10.1016/j.chieco.2025.102643","DOIUrl":"10.1016/j.chieco.2025.102643","url":null,"abstract":"<div><div>This paper provides novel empirical evidence that stricter patentability requirements improve patent quality based on a quasi-natural experiment-the third amendment to the Chinese Patent Law. The results from difference-in-differences estimation show invention patents meeting absolute novelty are more likely to be cited internationally, renewed, and invalidated less frequently than those with relative novelty. We identify three specific mechanisms through which the stricter patentability requirement exerts its impact on patent quality, including the screening-out effect, where stricter patent approval standards weed out low-quality applications during substantive examination, the self-selection effect, where stricter patentability requirements motivate applicants to select higher-quality inventions in response to the lower probability of patent approval, and the foreign-inflow effect, where the higher standards create more effective patent protection, which attracts more overseas applicants and higher-quality overseas technologies. These findings support the relationship between patentability standards and quality and have implications for patent law reforms in developing countries.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102643"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884415","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102638
Ruochen Dai , Yue Feng , Chengfang Liu , Langrui Li , Lina Zhang , Ketong Zhu
Employment formalization among small and medium-sized enterprises (SMEs) remains low in developing countries, which weakens job security and social protection. Despite policy efforts, many SMEs evade social insurance obligations, raising concerns about labor rights and economic stability. Using data on 2664 SMEs in the 2018 Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC), we document that 48.4 % of SMEs provide no social insurance, while 74.6 % cover only some employees. After controlling for firm characteristics as well as city and industry fixed effects, SMEs led by politically connected entrepreneurs have a 7.1-percentage-point higher probability of providing social insurance than those without such connections. This correlation likely stems from connected entrepreneurs' preferential access to formalization benefits—including formal credit and government procurement contracts—which collectively generate a political-connection premium that incentivizes compliance with labor regulations. These findings suggest that the uneven distribution of such benefits (concentrated among politically connected firms) contributes to the overall low formalization rates in China's SME sector, as most entrepreneurs lack access to these incentives. Moreover, the political-connection premium diminishes in regions with stronger financial inclusion and lower government intervention, suggesting that an improved business environment encourages broader formalization. These findings underscore the importance of policies that decouple formalization benefits from political connections to foster more inclusive labor protection and economic stability.
{"title":"Why do Chinese SMEs avoid formal employment? Political connections and unequal access to formalization benefits1","authors":"Ruochen Dai , Yue Feng , Chengfang Liu , Langrui Li , Lina Zhang , Ketong Zhu","doi":"10.1016/j.chieco.2025.102638","DOIUrl":"10.1016/j.chieco.2025.102638","url":null,"abstract":"<div><div>Employment formalization among small and medium-sized enterprises (SMEs) remains low in developing countries, which weakens job security and social protection. Despite policy efforts, many SMEs evade social insurance obligations, raising concerns about labor rights and economic stability. Using data on 2664 SMEs in the 2018 Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC), we document that 48.4 % of SMEs provide no social insurance, while 74.6 % cover only some employees. After controlling for firm characteristics as well as city and industry fixed effects, SMEs led by politically connected entrepreneurs have a 7.1-percentage-point higher probability of providing social insurance than those without such connections. This correlation likely stems from connected entrepreneurs' preferential access to formalization benefits—including formal credit and government procurement contracts—which collectively generate a political-connection premium that incentivizes compliance with labor regulations. These findings suggest that the uneven distribution of such benefits (concentrated among politically connected firms) contributes to the overall low formalization rates in China's SME sector, as most entrepreneurs lack access to these incentives. Moreover, the political-connection premium diminishes in regions with stronger financial inclusion and lower government intervention, suggesting that an improved business environment encourages broader formalization. These findings underscore the importance of policies that decouple formalization benefits from political connections to foster more inclusive labor protection and economic stability.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102638"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884412","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01DOI: 10.1016/j.chieco.2025.102647
Qilin Mao , Chongyang Guo
To achieve carbon peaking and carbon neutrality goals, local governments in China are actively exploring sustainable economic growth models. Utilizing data from China's A-share listed companies in the new energy vehicle industry chain and local government work reports, we demonstrate that the difference in government environmental concern (GEC) between the parent firm city and the destination city significantly drives new energy enterprises (NEEs) to establish off-site subsidiaries. This effect operates through transcending administrative barriers, transmitting policy signals, and stimulating firms' strategic expansion. Further analysis reveals that the investment location choices of midstream and downstream NEEs are significantly influenced by the difference in GEC, whereas the investment decisions of upstream NEEs are not. Unlike previous studies that focus on the relationship between the location of highly polluting firms and pollution transfer, this paper specializes in NEEs and explores how environmental concern facilitates the high-quality development of emerging industries.
{"title":"The impact of environmental concern on cross-regional investment: Evidence from Chinese new energy enterprises","authors":"Qilin Mao , Chongyang Guo","doi":"10.1016/j.chieco.2025.102647","DOIUrl":"10.1016/j.chieco.2025.102647","url":null,"abstract":"<div><div>To achieve carbon peaking and carbon neutrality goals, local governments in China are actively exploring sustainable economic growth models. Utilizing data from China's A-share listed companies in the new energy vehicle industry chain and local government work reports, we demonstrate that the difference in government environmental concern (GEC) between the parent firm city and the destination city significantly drives new energy enterprises (NEEs) to establish off-site subsidiaries. This effect operates through transcending administrative barriers, transmitting policy signals, and stimulating firms' strategic expansion. Further analysis reveals that the investment location choices of midstream and downstream NEEs are significantly influenced by the difference in GEC, whereas the investment decisions of upstream NEEs are not. Unlike previous studies that focus on the relationship between the location of highly polluting firms and pollution transfer, this paper specializes in NEEs and explores how environmental concern facilitates the high-quality development of emerging industries.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102647"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145884411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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