Top Management Team Diversity and International Expansion: Spanish Companies in China

This study investigates the relationship between diversity in the Top Management Team (TMT) of Spanish firms and the firms’ willingness to further expand in China, as a proxy for their international success. Data from Spanish companies with direct investment in China were collected through a questionnaire. Regression analyses were carried out to test the differential influences of multiple forms of TMT demographic diversity (age, gender, tenure, and functional experience). The moderating effect of conflict in an uncertain environment is also examined, as this offers potentially novel insights into the determinants of success in emerging countries. Results show that the effects of TMT diversity on international success are very much influenced by the perception of the conflict related to investment in a non-traditional market. The findings highlight the relevant negative role that conflict can exert in diverse TMTs in a growing developing economy.

Does Gold Still Shelter Inflation, and, if so, When? Evidence From Four Countries

This study investigates gold as a hedge or a safe haven against inflation in four countries. We propose two standard and quantile techniques in the volatility models, with a time-varying conditional variance of regression residuals based on TGARCH specifications. Gold exhibits considerable evidence of a strong hedge in the US and China. Nevertheless, gold provides shelter at different times and not consistently across countries. With regards to be a safe haven, gold retains its status as a key investment in China. On the other hand, gold only plays a minor role in the UK and India. These findings indicate that gold can secure Chinese investment during the high inflationary periods, while gold is a profitable asset to hold over a long period of time in the US. In contrast, UK and Indian investors should hold a well-diversified portfolio for sustainable return and protection from purchasing power loss.

Corruption News and Corporate Investment: Evidence from China

We examine whether corporate corruption scrutiny affects corporate investment in China. A corruption news index (CNI) containing firm-specific measures of corruption scrutiny was developed by tracking all articles in the press about corruption for all firms trading on the Shanghai and Shenzhen stock exchanges between 2000 and 2016. We found that a standard deviation increase in CNI is associated with a modest and short-lived decline in investment, ranging from 2 to 10 percent, with a stronger effect among SOEs. We explore two channels that can explain the CNI-investment effect: (i) a shift in the cost of external finance and (ii) a rise in political uncertainty connected with corporate corruption scrutiny. Our results indicate that CNI lowers the cost of external finance, pointing to a beneficial aspect of corruption cleanup. However, the effect of CNI on investment is amplified in the presence of provincial political turnover, providing support for the political uncertainty channel. The results also indicate that the negative effect of CNI on investment has significantly declined since 2013, supporting the proposition that the long-term benefits of corruption cleanup outweigh the short-term costs associated with policy uncertainty.

Taiwan-China economic ties will grow, despite tension

Significance Even as China's military intimidation of Taiwan reaches its highest level in decades, economic interaction continues expanding. During the first ten months of 2021, Taiwan’s exports to China reached a record high of USD154.68bn, or 42.5% of its total. Impacts Chinese sanctions on Taiwan will not have much impact on overall economic interaction. Beijing will encourage further economic integration, especially Taiwanese investment in China. Taiwanese firms will not terminate business with China, but will increase their investment in friendlier countries. China will remain Taiwan’s top economic partner.

Cost–Benefit Analysis of Pumped Hydroelectricity Storage Investment in China

In this study, the energy scenario in China was analyzed by retracing the trend of exponential population growth, gross domestic product (GDP), and electricity production and consumption. A forecast up to 2050 was made based on the history and forecasts of other field studies. It was possible to deduce data on pollutants in terms of CO2 equivalent (CO2-eq) emitted over time if there were no changes in the way energy was produced. Moreover, different scenarios were hypothesized for the use of pumped hydroelectricity storage plants, namely 4.5%, 6%, 8%, 11%, and 14% (percentage of electricity compared to requirements in 2050), to balance variable renewable energy sources and avoid curtailment, thereby reducing the use of energy produced by coal-fired plants. For this implementation, direct and indirect costs and benefits were considered, with interesting results obtained from an economic standpoint and very positive results from environmental, social, and territorial perspectives.

Effect of Precipitation on Location Choice of Foreign Direct Investment in China

This paper studies the effect of precipitation on the location of foreign direct investment (FDI) based on city-level data of China from 2003 to 2018. The results show that precipitation has a significant promoting effect on the regional agglomeration of FDI. This indicates that FDI location selection is more inclined to use the dilution ability of precipitation for pollution to reduce environmental costs, rather than relying solely on water resources. Further analysis shows that the preference of FDI enterprises on precipitation in the eastern region is significantly lower than that in the central and northeastern regions. This reflects the trend that FDI enterprises gradually shift to regions with a low degree of environmental regulation to reduce environmental costs. Therefore, the efforts made by economically developed cities to improve the regional ecological environment may be offset by the location adjustment of FDI enterprises, and precipitation has become an important stimulus for the location transfer of FDI enterprises.

Crowding in or crowding out? How local government debt influences corporate innovation for China

The pressure upon local governments to redeem their debt could affect government fiscal ability. It could consequently affect their fiscal policies on corporations, which might distort corporate innovation. Based on the data of Chinese Shanghai and Shenzhen A-share listed companies and the local government implicit short-term debt financed by local government financing vehicles (LGFVs) in 31 provinces, this paper shows that local government debt (LGD) negatively affects corporate R&D investment in China, thereby suggesting a strong crowding-out effect. The crowding-out effect is more pronounced when the firm is a non-state-owned enterprise (NSOE), the firm’s size is small, the firm’s age is young, or the firm is in the lower market competition. This paper provide evidence by interacting the terms that local government actions, such as consumption of fiscal resources, strengthening tax collection efforts, or consumption of credit resources, might partially account for the crowding-out effect. This study illustrates the innovation costs of local government debt.

Investor Activity in Chinese Financial Institutions: A Precursor to Economic Sustainability

One requirement for sustainable economic development is established, trusted, and utilized financial institutions to facilitate investment. The rapid development of financial markets in China, combined with the recency and magnitude of middle-class wealth, has resulted in a rapidly changing investment landscape, as well as changes in people’s investing activities. The extent to which economic growth is sustainable will depend, at least in part, on how financial institutions are perceived, as well as the extent to which they are utilized. The objective of this study was to examine the investment behaviors of individual investors as a way to ascertain the perceived level of trust and stability in the relatively recently developed financial institutions. The influence of market information acquisition on asset allocation and value investment in China was analyzed. This study used secondary data from a China securities corporation from previous research. The analyses utilized the general decision-making style test to assess respondents’ decision-making models and quantitative research methodology culminating in the use of correlation analysis. The results indicated that the acquisition of market information had a positive correlation with the number of assets and investment portfolios. Practical implications and suggestions for future research are provided. The results may be of interest to individual and institutional investors in China, as well as those with an interest in current trends in market information acquisition, asset allocation, and value investment in China.

Analyzing IKEA’s International Investment in China Based on the Theory of International Production Compromise

This study analyzes IKEA’s localized operation in China through the eclectic theory of international production. Firstly, the development history of IKEA is discussed along with its development in China. Secondly, IKEA’s direct investment in China is analyzed from the perspective of IKEA’s eclectic theory of direct investment in international production, the corporate ownership, internalization, and location advantages of the company, in addition to the challenges of IKEA’s investment and operation in China, hoping to enlighten the process of formulating overseas expansion strategies for foreign direct investment. This study aims to guide students to strengthen their skills in formulating and implementing strategies in regard to the international investment process of multinational companies. On the one hand, they can analyze the strategies used and challenges faced by IKEA in its international investment in China to stimulate their thinking on the international investment of Chinese enterprises; on the other hand, they can also strengthen their understanding of the international investment theory by analyzing IKEA’s international investment in China. This study hopes to enhance students’ understanding and application skills in regard to companies’ transnational operations.