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}
Pub Date : 2025-12-31DOI: 10.1016/j.chieco.2025.102649
Zijun Cheng , Michael Beichen Huang , Chaoqun Li , Yongwei Ye
This paper investigates the distributional effects of judicial FinTech on corporate financing, leveraging China’s staggered adoption of Online Judicial Auctions (OJAs). While the reform successfully enhances creditor protection–boosting auction volumes, prices, and reducing defaults–its benefits accrue unequally. Using a difference-in-differences design with multiple firm-level datasets, we find that listed firms and large firms in the National Tax Survey dataset significantly increase their leverage, whereas small and medium enterprises (SMEs) experience negligible changes in debt, investment, or employment. This heterogeneity is systematically graded by firm size. The credit expansion for large firms is not met by an increase in aggregate bank lending, revealing a short-run inelasticity of credit supply. Consequently, the surge in demand triggers a reallocation of the existing credit pool, crowding out smaller firms, which subsequently face higher borrowing costs. Our findings demonstrate that even efficiency-enhancing judicial reforms can have redistributive consequences, underscoring the critical role of general equilibrium forces and the need for complementary policies to support SMEs.
{"title":"The distributive effects of online judicial auctions on corporate credit","authors":"Zijun Cheng , Michael Beichen Huang , Chaoqun Li , Yongwei Ye","doi":"10.1016/j.chieco.2025.102649","DOIUrl":"10.1016/j.chieco.2025.102649","url":null,"abstract":"<div><div>This paper investigates the distributional effects of judicial FinTech on corporate financing, leveraging China’s staggered adoption of Online Judicial Auctions (OJAs). While the reform successfully enhances creditor protection–boosting auction volumes, prices, and reducing defaults–its benefits accrue unequally. Using a difference-in-differences design with multiple firm-level datasets, we find that listed firms and large firms in the National Tax Survey dataset significantly increase their leverage, whereas small and medium enterprises (SMEs) experience negligible changes in debt, investment, or employment. This heterogeneity is systematically graded by firm size. The credit expansion for large firms is not met by an increase in aggregate bank lending, revealing a short-run inelasticity of credit supply. Consequently, the surge in demand triggers a reallocation of the existing credit pool, crowding out smaller firms, which subsequently face higher borrowing costs. Our findings demonstrate that even efficiency-enhancing judicial reforms can have redistributive consequences, underscoring the critical role of general equilibrium forces and the need for complementary policies to support SMEs.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"96 ","pages":"Article 102649"},"PeriodicalIF":5.5,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145904031","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 : 2025-12-23DOI: 10.1016/j.chieco.2025.102645
Wenkai Sun , Wenjing Wang , Siyuan Tang , Zhong Zhao
As an important means for firms' burden-lightening and market stimulation, tax reduction is especially crucial for small and medium-sized enterprises (SMEs). This paper examines the wage effects of firm-level tax reduction. Firms' effective tax burden reduction enhanced firm-level surplus as their profitability improved and financial constraints loosened, leading to employees' wages rising, and those having stronger bargaining power benefit more from tax reductions. The difference in substitution costs give high-income employees and employees in management and technical positions stronger bargaining power than others. Therefore, the impact of tax reduction on wages has a Matthew effect and tends to exacerbate inequalities within a firm.
{"title":"Tax reduction, wage bargaining, and income equality: Evidence from China's SMEs","authors":"Wenkai Sun , Wenjing Wang , Siyuan Tang , Zhong Zhao","doi":"10.1016/j.chieco.2025.102645","DOIUrl":"10.1016/j.chieco.2025.102645","url":null,"abstract":"<div><div>As an important means for firms' burden-lightening and market stimulation, tax reduction is especially crucial for small and medium-sized enterprises (SMEs). This paper examines the wage effects of firm-level tax reduction. Firms' effective tax burden reduction enhanced firm-level surplus as their profitability improved and financial constraints loosened, leading to employees' wages rising, and those having stronger bargaining power benefit more from tax reductions. The difference in substitution costs give high-income employees and employees in management and technical positions stronger bargaining power than others. Therefore, the impact of tax reduction on wages has a Matthew effect and tends to exacerbate inequalities within a firm.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102645"},"PeriodicalIF":5.5,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145839895","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 : 2025-12-22DOI: 10.1016/j.chieco.2025.102644
Jiali Tang , Duo Xu , Hongqiao Fu
While the “death of distance” hypothesis predicts diminishing geographic frictions, offline connectivity continues to shape online transactions, as seen in e-commerce and online healthcare. This study exploits China's High-Speed Rail (HSR) introduction as a natural experiment to identify how improved physical accessibility affects the demand for online medical consultations. Using approximately 18 million consultation records from a major Chinese online healthcare platform and a difference-in-differences (DID) design, we find that the HSR introduction increases online consultation volume by 12.09 %. The effect is driven predominantly by cross-city consultations directed to online doctors based in provincial capitals and top medical hubs (e.g., Beijing, Shanghai, and Guangzhou). The impact is particularly pronounced among younger patients, residents in the western region, and medical departments who are more likely to require subsequent in-person hospital visits. Our mechanism analysis shows that the HSR introduction stimulates offline appointment bookings via the platform, especially cross-city appointments and those following online medical consultations. This pattern is consistent with online-offline complementarity, whereby lower expected travel costs for in-person follow-ups encourage patients to initiate online medical consultations. These findings suggest that an integrated online-offline healthcare approach may be more effective than internet-centered solutions in addressing healthcare accessibility and inequality issues.
{"title":"Does high-speed rail development impact online healthcare demand? Evidence from a large medical platform in China","authors":"Jiali Tang , Duo Xu , Hongqiao Fu","doi":"10.1016/j.chieco.2025.102644","DOIUrl":"10.1016/j.chieco.2025.102644","url":null,"abstract":"<div><div>While the “death of distance” hypothesis predicts diminishing geographic frictions, offline connectivity continues to shape online transactions, as seen in e-commerce and online healthcare. This study exploits China's High-Speed Rail (HSR) introduction as a natural experiment to identify how improved physical accessibility affects the demand for online medical consultations. Using approximately 18 million consultation records from a major Chinese online healthcare platform and a difference-in-differences (DID) design, we find that the HSR introduction increases online consultation volume by 12.09 %. The effect is driven predominantly by cross-city consultations directed to online doctors based in provincial capitals and top medical hubs (e.g., Beijing, Shanghai, and Guangzhou). The impact is particularly pronounced among younger patients, residents in the western region, and medical departments who are more likely to require subsequent in-person hospital visits. Our mechanism analysis shows that the HSR introduction stimulates offline appointment bookings via the platform, especially cross-city appointments and those following online medical consultations. This pattern is consistent with online-offline complementarity, whereby lower expected travel costs for in-person follow-ups encourage patients to initiate online medical consultations. These findings suggest that an integrated online-offline healthcare approach may be more effective than internet-centered solutions in addressing healthcare accessibility and inequality issues.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102644"},"PeriodicalIF":5.5,"publicationDate":"2025-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145839894","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 : 2025-12-22DOI: 10.1016/j.chieco.2025.102641
Chunfeng Zhang , Xiaoyan Lei , Yutong Chen
Separated supply of medical and elderly care in China have been worrying issues especially in the aging era as medical needs and elderly care needs often interplay with each other among aged people. Utilizing panel data from CLHLS and a difference-in-differences identification strategy, this article examines China's 2016 nationwide pilot on integration of medical care and elderly care (IMEC) at city level. Results reveal that medical and elderly care integration significantly decreases one-year mortality of the elderly people. Further mechanism analysis shows that the IMEC policy likely benefits older adults through enhanced health outcomes, and extended delivery of medical care and elderly care. Our study emphasizes the critical importance of the integration of medical and elderly care for addressing the multifaceted needs of the aging population, providing a foundation for informed policy decisions and future interventions.
{"title":"Integration of medical care and elderly care: Chinese experience and outcomes of older adults","authors":"Chunfeng Zhang , Xiaoyan Lei , Yutong Chen","doi":"10.1016/j.chieco.2025.102641","DOIUrl":"10.1016/j.chieco.2025.102641","url":null,"abstract":"<div><div>Separated supply of medical and elderly care in China have been worrying issues especially in the aging era as medical needs and elderly care needs often interplay with each other among aged people. Utilizing panel data from CLHLS and a difference-in-differences identification strategy, this article examines China's 2016 nationwide pilot on integration of medical care and elderly care (IMEC) at city level. Results reveal that medical and elderly care integration significantly decreases one-year mortality of the elderly people. Further mechanism analysis shows that the IMEC policy likely benefits older adults through enhanced health outcomes, and extended delivery of medical care and elderly care. Our study emphasizes the critical importance of the integration of medical and elderly care for addressing the multifaceted needs of the aging population, providing a foundation for informed policy decisions and future interventions.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"96 ","pages":"Article 102641"},"PeriodicalIF":5.5,"publicationDate":"2025-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145904105","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 : 2025-12-18DOI: 10.1016/j.chieco.2025.102640
Chang Hong Li , Min Qiang Zhao
This paper investigates the spillover effects of fertility policy on employment, a largely unexplored area in the literature. Using China's 2013 selective two-child policy as a quasi-natural experiment and a difference-in-differences approach with census data, we find that the policy significantly increased the employment probability of all women, not just those directly eligible. This employment effect was stronger in regions with a higher proportion of eligible couples. Furthermore, the positive employment impact extended to unmarried women and men. We identify two key mechanisms: (1) an employment spillover, where the policy-induced increase in births spurred net entry of firms in fertility-related sectors, and (2) a fertility spillover, where peer effects appeared to amplify the initial birth shock among the broader population. Our findings demonstrate that fertility policies can have substantial indirect effects on the broader labor market, moving beyond the traditionally studied direct impact on mothers.
{"title":"Spillover effects of fertility on married women's employment: Evidence from China","authors":"Chang Hong Li , Min Qiang Zhao","doi":"10.1016/j.chieco.2025.102640","DOIUrl":"10.1016/j.chieco.2025.102640","url":null,"abstract":"<div><div>This paper investigates the spillover effects of fertility policy on employment, a largely unexplored area in the literature. Using China's 2013 selective two-child policy as a quasi-natural experiment and a difference-in-differences approach with census data, we find that the policy significantly increased the employment probability of all women, not just those directly eligible. This employment effect was stronger in regions with a higher proportion of eligible couples. Furthermore, the positive employment impact extended to unmarried women and men. We identify two key mechanisms: (1) an employment spillover, where the policy-induced increase in births spurred net entry of firms in fertility-related sectors, and (2) a fertility spillover, where peer effects appeared to amplify the initial birth shock among the broader population. Our findings demonstrate that fertility policies can have substantial indirect effects on the broader labor market, moving beyond the traditionally studied direct impact on mothers.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102640"},"PeriodicalIF":5.5,"publicationDate":"2025-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145839892","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}
Small and medium-sized enterprises (SMEs) are crucial to China's economic development and the lifespan of SMEs matters both for entrepreneurs and policy makers. The Business Registry Database (BRD), China's most comprehensive firm-level administrative dataset, offers unique opportunities for analysis but lacks variables required by the official SME definition. We address this gap by introducing a new classification standard based on registered capital, setting the SME threshold at less than 32 million yuan—the first such approach in the literature. Using this definition, we examine firms registered between 2001 and 2013 and estimate SME's lifespan via the Kaplan–Meier method. Median lifespan is 10.67 years across all SMEs and 5.03 years among exited firms, providing the first large-scale benchmark for China. We then provide a comprehensive analysis of both regional and firm-level determinants of SME exit. Favorable regional environments significantly reduce exit risks, while firm-level characteristics—particularly smaller scale and state ownership—remain key sources of vulnerability. Our findings underscore the importance of both institutional and structural conditions in shaping firm survival. By establishing a workable SME definition for the BRD and identifying key regional and firm-level drivers of exit, this study provides a new empirical basis for research on China's private sector dynamics. Policy implications point to the need for a balanced approach: while market forces can spur competition, regional development policies and institutional support are critical for sustaining SME growth and longevity.
{"title":"The lifespan of small and medium-sized enterprises in China: Stylized facts and influencing factors","authors":"Songrui Liu , Xiaokun Yu , Wenkang Zhang , Zhongwen Zhang","doi":"10.1016/j.chieco.2025.102637","DOIUrl":"10.1016/j.chieco.2025.102637","url":null,"abstract":"<div><div>Small and medium-sized enterprises (SMEs) are crucial to China's economic development and the lifespan of SMEs matters both for entrepreneurs and policy makers. The Business Registry Database (BRD), China's most comprehensive firm-level administrative dataset, offers unique opportunities for analysis but lacks variables required by the official SME definition. We address this gap by introducing a new classification standard based on registered capital, setting the SME threshold at less than 32 million yuan—the first such approach in the literature. Using this definition, we examine firms registered between 2001 and 2013 and estimate SME's lifespan via the Kaplan–Meier method. Median lifespan is 10.67 years across all SMEs and 5.03 years among exited firms, providing the first large-scale benchmark for China. We then provide a comprehensive analysis of both regional and firm-level determinants of SME exit. Favorable regional environments significantly reduce exit risks, while firm-level characteristics—particularly smaller scale and state ownership—remain key sources of vulnerability. Our findings underscore the importance of both institutional and structural conditions in shaping firm survival. By establishing a workable SME definition for the BRD and identifying key regional and firm-level drivers of exit, this study provides a new empirical basis for research on China's private sector dynamics. Policy implications point to the need for a balanced approach: while market forces can spur competition, regional development policies and institutional support are critical for sustaining SME growth and longevity.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102637"},"PeriodicalIF":5.5,"publicationDate":"2025-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145839896","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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