Does the Clean Air Action Really Affect Labor Demand in China?

How to balance resources, environment, and economic growth to achieve sustainable development is a challenge for developing countries. In 2013, China implemented a high-stringency environmental regulation—the Clean Air Action, which has effectively controlled air pollution. To explore the economic cost of environmental regulation, this paper investigates the policy effect on employment in the industrial sector. However, there are still controversies about whether environmental regulations impact employment. Based on the city-level data and firm-level data, this study applied a quasi-natural experiment for policy evaluation and used the mediating effect model for mechanism analysis. The difference-in-difference estimation results show that environmental regulation has a significant impact on employment. The mechanism analysis verifies that output adjustment, capital input, and green innovation are the main channels, by which environmental regulation distresses employment. The findings of this paper could be extended to other countries at a similar stage of development.

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Purpose The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs. Design/methodology/approach Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018. Findings The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions. Originality/value This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.

Low-carbon governance, fiscal decentralization and sulfur dioxide emissions: Evidence from a quasi-experiment with Chinese heavy pollution enterprises

This paper investigates the effects of enterprise environmental governance under low-carbon pilot policies in China with a difference in differences (DID) design. In examining the development of these policies, we focus on exploring their effects on sulfur dioxide emissions of heavily polluting enterprises based on prefectural city- and firm-level data from 2003-2014. Overall, the policies significantly increased enterprise SO2 emissions, and the underlying reason being that investments in CO2 control crowded out investment in SO2 control in enterprises in low-carbon pilot regions. We also find that the implementation of low-carbon pilot policies resulted in greater SO2 emissions from state-owned enterprises and enterprises in western regions than from non-state-owned enterprises and those in eastern regions. It is further found that fiscal decentralization and the associated mediating effect of market segmentation promote enterprises' CO2 control and inhibit their SO2 control. This study helps us re-examine the overall environmental effects of low-carbon policies and has implications for the revision and improvement of environmental governance policies in developing countries.

Audit partner workload, gender and audit quality

PurposeThe paper aims to investigate the relation between the auditor's workload (LogAPW) and audit quality. Further, it explores whether the presence of a female audit partner (hereafter FEM) influences the LogAPW effect on audit quality.Design/methodology/approachA dataset of 1,629 firm-year observations from 181 companies listed in the NASDAQ OMX Stockholm for the years 2010–2018 has been analyzed. The testable hypotheses have been tested using least squares regressions clustered at the Swedish public-listed companies (client-firm) level.FindingsThe research findings first indicate that overburdened audit partners (APS) are associated with lower-quality audits, consistent with the “busyness hypothesis.” Nevertheless, the adverse association turns to be positive for FEMs, supporting the thesis that FEMs have more tendency, as compared to their male counterparts, to preserve their partnership's position in the public-audit firms. Collectively, these results seem sound, as the results hold unchanged after controlling for the endogeneity concerns and provide the same conclusion for a host of additional measures for both the client-firms' discretionary accruals and the LogAPW.Research limitations/implicationsEven though a lower magnitude of the client-firms' discretionary accruals corresponds to a lower-opportunistic behavior of managers, the research is limited to by which lower values of earnings management reflect a better-quality financial reporting. Given that the empirical analysis has been confined to the Swedish Corporation, the regression results might not be generalizable for other countries with different contextual features.Practical implicationsThe study might participate to the ongoing debate about the introduction of more women to the public-audit firms' elite positions (e.g. partnership) by providing evidence for the favorable female auditor effect on the quality of the client-firms' financial reporting.Originality/valueThe regression results provide a preliminary evidence on how does the presence of a FEM mitigate the inverse relation between the LogAPW and audit quality, which is an issue that has not been examined before.

Does Green Credit Policy Move the Industrial Firms Toward a Greener Future? Evidence From a Quasi-Natural Experiment in China

How to utilize financial instrument to deal with environmental issues has been a focal topic. Taking the introduction of green credit program as a “quasi-natural experiment,” the propensity score matching and difference-in-difference approach (PSM-DID) are used to investigate the impact of the green credit policy implemented by Chinese government on firm-level industrial pollutant emissions. The estimation results indicate that the green credit policy significantly reduces corporate sulfur dioxide emissions. Heterogeneity analysis shows this impact is more pronounced for large-scale enterprises and enterprises located in the eastern region. The estimated mediation models reveal that after the implementation of the green credit policy, reduction in sulfur dioxide emissions can be attribute to the increased environmental investment and improved energy consumption intensity. Moreover, the green credit policy is also significantly effective in mitigating the discharge of other common industrial pollutants. Our findings highlight the importance of green credit policies in achieving greener industrial production and more sustainable economic development.

The effect of effectuation and causation approach on entrepreneurial orientation in the presence of leader dominance and self-efficacy

Purpose Entrepreneurial orientation (EO) has witnessed a daunting rise in firm-level practices; to some extent, it has been augmented by the factors such as globalization and technological shift. The wide variety of literature has explained the importance of EO for firm performance. However, it has not yet been explored at a firm-level the approaches of causation and effectuation through the prism of leader traits such as leader dominance and self-efficacy as administrative ability and EO as strategic manoeuvring with strategic decisions obliged as a spin of firms. Design/methodology/approach The authors used the quantitative method to analyse the proposed relationships. For this reason, the authors targeted the Chinese firms to collect the data through the semi-structured survey from December 2020 to March 2021 and contributed to the literature by investigating 480 valid responses of leaders from Chinese firms. Findings The findings support the incorporated view of causation and effectuation on EO, which serve as vital strategic manoeuvring along with leader traits for firm stability and growth. Practical implications This study assists the decision-makers (including the top management team, Chief Financial Officer and Chief Executive Officer choose the particular approach (effectual or causal) to create the new venture/new product/new process or scale up the existing firm on another level for optimal benefits by considering their existing resources. Originality/value EO is a unidirectional process with three dimensions: innovativeness, proactiveness and risk-taking that could directly favour the firm by considering the well-known approaches (effectuation and causation) in crisis circumstances (like Covid-19). These approaches help the executives enhance their firm’s performance and maintain its sustainability and stability in crisis conditions by effectively using the available resources within its boundaries.