Pub Date : 2026-01-01Epub Date: 2025-11-20DOI: 10.1016/j.chieco.2025.102600
Juhui Chen , Junfei Bai , Xi Lu , Yinghui Ma , Meng Zhou
Text-based pesticide labels have been widely proven to be dysfunctional in guiding and educating farmers on the proper use of pesticides in many developing countries. The existing studies, however, fail to explore more economically effective approaches for activating label information content. In this study, through a well-designed lab-in-the-field experiment, we propose and empirically verify that an audiovisual label affixed with a QR code encoded with a pesticide operation video can significantly reduce the overuse of pesticides by approximately 15% on average and improve dosage accuracy. Audiovisual labels not only decrease pesticide use among farmers already using labels but also encourage more farmers to follow label instructions, broadening the reduction in pesticide usage. The stronger effects are observed among farmers who distrust retailers but trust labels, as well as among those with relatively higher levels of education, suggesting that trust and education jointly shape the effectiveness of audiovisual labels.
{"title":"Audiovisual pesticide label: A digital expert to promote accurate pesticide use","authors":"Juhui Chen , Junfei Bai , Xi Lu , Yinghui Ma , Meng Zhou","doi":"10.1016/j.chieco.2025.102600","DOIUrl":"10.1016/j.chieco.2025.102600","url":null,"abstract":"<div><div>Text-based pesticide labels have been widely proven to be dysfunctional in guiding and educating farmers on the proper use of pesticides in many developing countries. The existing studies, however, fail to explore more economically effective approaches for activating label information content. In this study, through a well-designed lab-in-the-field experiment, we propose and empirically verify that an audiovisual label affixed with a QR code encoded with a pesticide operation video can significantly reduce the overuse of pesticides by approximately 15% on average and improve dosage accuracy. Audiovisual labels not only decrease pesticide use among farmers already using labels but also encourage more farmers to follow label instructions, broadening the reduction in pesticide usage. The stronger effects are observed among farmers who distrust retailers but trust labels, as well as among those with relatively higher levels of education, suggesting that trust and education jointly shape the effectiveness of audiovisual labels.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102600"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145617081","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 : 2026-01-01Epub Date: 2025-11-20DOI: 10.1016/j.chieco.2025.102603
Han Li , Yuan Gao
This paper examines the impact of transnational digital infrastructure on international scientific collaboration. Based on data of Chinese researchers' collaborative papers from 2010 to 2023, we analyzed the impact of the operation of Asia-Africa-Europe-1 (AAE-1) submarine cable on research partnerships between China and the connected countries. The findings show that the AAE-1 cable has significantly boosted collaborative research activities. It not only facilitated the establishment of novel scientific collaborations but also enhanced the productivity of existing partnerships. Additionally, the enhanced connectivity led to an expansion in the size of research teams and a measurable increase in the citation impact of collaborative publications. The effects on collaboration were most pronounced for universities, collaborations in technology-related fields, and countries with historically lower publication outputs and less international bandwidth. These results highlight the pivotal role of high-quality digital infrastructure in fostering global scientific collaboration, especially in integrating developing countries and peripheral research communities into the global scientific ecosystem.
{"title":"Transnational digital infrastructure and scientific collaboration: Evidence from the Asia Africa Europe-1 (AAE-1) submarine cable","authors":"Han Li , Yuan Gao","doi":"10.1016/j.chieco.2025.102603","DOIUrl":"10.1016/j.chieco.2025.102603","url":null,"abstract":"<div><div>This paper examines the impact of transnational digital infrastructure on international scientific collaboration. Based on data of Chinese researchers' collaborative papers from 2010 to 2023, we analyzed the impact of the operation of Asia-Africa-Europe-1 (AAE-1) submarine cable on research partnerships between China and the connected countries. The findings show that the AAE-1 cable has significantly boosted collaborative research activities. It not only facilitated the establishment of novel scientific collaborations but also enhanced the productivity of existing partnerships. Additionally, the enhanced connectivity led to an expansion in the size of research teams and a measurable increase in the citation impact of collaborative publications. The effects on collaboration were most pronounced for universities, collaborations in technology-related fields, and countries with historically lower publication outputs and less international bandwidth. These results highlight the pivotal role of high-quality digital infrastructure in fostering global scientific collaboration, especially in integrating developing countries and peripheral research communities into the global scientific ecosystem.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"95 ","pages":"Article 102603"},"PeriodicalIF":5.5,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145594641","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 : 2026-01-01Epub Date: 2025-12-25DOI: 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}
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":"2026-01-01","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}
Pub Date : 2026-01-01Epub 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":"2026-01-01","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}
Pub Date : 2025-12-01Epub Date: 2025-07-30DOI: 10.1016/j.chieco.2025.102519
Zhi Su, Chen Zhao, Ying Li, Zhimeng Sun
China’s newly revised Company Law (2024) expands the regulatory scope in Chapter 7 from solely state-owned to all state-funded enterprises and aims to optimize their governance through various measures. This shapes the reform trajectory of equity structures in State-Owned Enterprises (SOEs), offering SOEs—typically viewed as weaker innovators—an opportunity to keep pace in the era of Artificial Intelligence (AI). Against this backdrop, we investigate the role of equity diversification in shaping SOEs’ AI innovation performance. Using the patent and equity structure data of Chinese listed SOEs during 2007–2023, we find that a 1% increase in equity diversification is associated with a 0.05% boost in AI patent applications filed by SOEs in the next year. This positive effect is achieved through: (i) reducing managerial short-termism and encouraging long-term strategic investments, (ii) directing managerial attention to emerging technologies like AI, and (iii) facilitating external learning and improving innovation efficiency. SOEs in the growth or maturity stage, operating in high-tech or competitive industries, and characterized by financial adequacy and commercial orientations benefit more from equity diversification. Additionally, this benefit is limited to AI innovation output, without affecting its quality or traditional innovation.
{"title":"Equity diversification as a catalyst for Artificial Intelligence innovation: Evidence from Chinese state-owned enterprises","authors":"Zhi Su, Chen Zhao, Ying Li, Zhimeng Sun","doi":"10.1016/j.chieco.2025.102519","DOIUrl":"10.1016/j.chieco.2025.102519","url":null,"abstract":"<div><div>China’s newly revised Company Law (2024) expands the regulatory scope in Chapter 7 from solely state-owned to all state-funded enterprises and aims to optimize their governance through various measures. This shapes the reform trajectory of equity structures in State-Owned Enterprises (SOEs), offering SOEs—typically viewed as weaker innovators—an opportunity to keep pace in the era of Artificial Intelligence (AI). Against this backdrop, we investigate the role of equity diversification in shaping SOEs’ AI innovation performance. Using the patent and equity structure data of Chinese listed SOEs during 2007–2023, we find that a 1% increase in equity diversification is associated with a 0.05% boost in AI patent applications filed by SOEs in the next year. This positive effect is achieved through: (i) reducing managerial short-termism and encouraging long-term strategic investments, (ii) directing managerial attention to emerging technologies like AI, and (iii) facilitating external learning and improving innovation efficiency. SOEs in the growth or maturity stage, operating in high-tech or competitive industries, and characterized by financial adequacy and commercial orientations benefit more from equity diversification. Additionally, this benefit is limited to AI innovation output, without affecting its quality or traditional innovation.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102519"},"PeriodicalIF":5.5,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144772502","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}
We examine the effect of founder control on breakthrough innovation among Chinese high-tech firms from 2008 to 2022. We measure founder control by the equity held by founders actively involved in governance and identify breakthrough innovation with Sentence-BERT (SBERT) embeddings of patent texts. We find a strong positive association between founder control and future breakthrough innovation. Using unexpected founder departures as an instrument, our identification strategy establishes a robust causal relationship. The underlying mechanisms include talent investment, internal discipline, strategic reorientation, and technological resilience. The effect is heterogeneous across founding team's size, internal structure, attributes, and tenure. Our results support a structural view of founder governance where concentrated control serves as an engine for corporate innovation.
{"title":"Founder control and breakthrough innovation: Evidence from high-tech firms in China","authors":"Zi-Qi Zhang , Bao-Jun Tang , Zhi Su , Yongji Zhang","doi":"10.1016/j.chieco.2025.102572","DOIUrl":"10.1016/j.chieco.2025.102572","url":null,"abstract":"<div><div>We examine the effect of founder control on breakthrough innovation among Chinese high-tech firms from 2008 to 2022. We measure founder control by the equity held by founders actively involved in governance and identify breakthrough innovation with Sentence-BERT (SBERT) embeddings of patent texts. We find a strong positive association between founder control and future breakthrough innovation. Using unexpected founder departures as an instrument, our identification strategy establishes a robust causal relationship. The underlying mechanisms include talent investment, internal discipline, strategic reorientation, and technological resilience. The effect is heterogeneous across founding team's size, internal structure, attributes, and tenure. Our results support a structural view of founder governance where concentrated control serves as an engine for corporate innovation.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102572"},"PeriodicalIF":5.5,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145415944","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 : 2025-12-01Epub Date: 2025-07-19DOI: 10.1016/j.chieco.2025.102509
Yongming Luo, Liqiu Zhao
This paper investigates the long-term direct and spillover effects of an early childhood immunization program. By exploiting quasi-experimental variation from a national immunization program targeting children under the age of one in China, we apply a difference-in-differences approach to estimate its long-term impact. Using data from the China Family Panel Studies, we find significant long-term health benefits among children born during or after the program's implementation. Moreover, we observe educational spillover benefits for older siblings of age-eligible children, particularly when the older siblings are male or were younger at the time of the eligible child's birth. These spillover effects diminish as the number of siblings in the household increases. Our findings suggest that the presence of an age-eligible child influences their siblings' outcomes, in part, through intrahousehold resource allocation.
{"title":"Long-term direct and spillover effects of early childhood immunization","authors":"Yongming Luo, Liqiu Zhao","doi":"10.1016/j.chieco.2025.102509","DOIUrl":"10.1016/j.chieco.2025.102509","url":null,"abstract":"<div><div>This paper investigates the long-term direct and spillover effects of an early childhood immunization program. By exploiting quasi-experimental variation from a national immunization program targeting children under the age of one in China, we apply a difference-in-differences approach to estimate its long-term impact. Using data from the China Family Panel Studies, we find significant long-term health benefits among children born during or after the program's implementation. Moreover, we observe educational spillover benefits for older siblings of age-eligible children, particularly when the older siblings are male or were younger at the time of the eligible child's birth. These spillover effects diminish as the number of siblings in the household increases. Our findings suggest that the presence of an age-eligible child influences their siblings' outcomes, in part, through intrahousehold resource allocation.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102509"},"PeriodicalIF":5.2,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144686306","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 : 2025-12-01Epub Date: 2025-08-08DOI: 10.1016/j.chieco.2025.102532
Qun Bao , Rui Huang , Guoqin Pan , Laixun Zhao
Governments usually increase taxes or cut spending to tackle deficits. In contrast, local governments in China tend to increase suspicious uses of public funds under fiscal pressure, which is not well understood. Using the reduction of agricultural tax as a revenue shock, we find that greater fiscal pressure leads to higher questionable fund use by county governments. The suspicious activities are triggered by the motivation to reallocate resources, to fields that correlate with officials' own interests like stimulating local economic growth, pursuing personal promotion as well as grabbing resources before retirement.
{"title":"Inside job, Chinese style: Suspicious use of public funds under fiscal pressure","authors":"Qun Bao , Rui Huang , Guoqin Pan , Laixun Zhao","doi":"10.1016/j.chieco.2025.102532","DOIUrl":"10.1016/j.chieco.2025.102532","url":null,"abstract":"<div><div>Governments usually increase taxes or cut spending to tackle deficits. In contrast, local governments in China tend to increase suspicious uses of public funds under fiscal pressure, which is not well understood. Using the reduction of agricultural tax as a revenue shock, we find that greater fiscal pressure leads to higher questionable fund use by county governments. The suspicious activities are triggered by the motivation to reallocate resources, to fields that correlate with officials' own interests like stimulating local economic growth, pursuing personal promotion as well as grabbing resources before retirement.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102532"},"PeriodicalIF":5.5,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144879657","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 : 2025-12-01Epub Date: 2025-08-06DOI: 10.1016/j.chieco.2025.102529
Qiyangfan Feng , Ziyue Zhang
The absence of robust legal frameworks is a hallmark of developing nations, contributing to various moral hazard issues, including environmental degradation. In this paper, using the example of the introduction of the principle of piercing the corporate veil (PCV) in Chinese Company Law, we investigate how complementing the limited liability protection framework can improve firms' environmental performance. Employing a PSM-DID strategy, we find compelling evidence that the implementation of PCV leads to a significant reduction in pollution intensity and a decrease in the prevalence of highly polluting firms. In response to the pressure of joint and several liabilities resulting from PCV, firms adopt measures such as enhancing process controls and implementing end-of-pipe treatments to reduce emissions. Furthermore, business groups strategically adjust their production networks and internal factor markets to reduce the pollution emission intensity of their subsidiaries.
{"title":"Limited liability, piercing the corporate veil and pollution abatement: Evidence from China","authors":"Qiyangfan Feng , Ziyue Zhang","doi":"10.1016/j.chieco.2025.102529","DOIUrl":"10.1016/j.chieco.2025.102529","url":null,"abstract":"<div><div>The absence of robust legal frameworks is a hallmark of developing nations, contributing to various moral hazard issues, including environmental degradation. In this paper, using the example of the introduction of the principle of piercing the corporate veil (PCV) in Chinese Company Law, we investigate how complementing the limited liability protection framework can improve firms' environmental performance. Employing a PSM-DID strategy, we find compelling evidence that the implementation of PCV leads to a significant reduction in pollution intensity and a decrease in the prevalence of highly polluting firms. In response to the pressure of joint and several liabilities resulting from PCV, firms adopt measures such as enhancing process controls and implementing end-of-pipe treatments to reduce emissions. Furthermore, business groups strategically adjust their production networks and internal factor markets to reduce the pollution emission intensity of their subsidiaries.</div></div>","PeriodicalId":48285,"journal":{"name":"中国经济评论","volume":"94 ","pages":"Article 102529"},"PeriodicalIF":5.5,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144827018","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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