The influence of external economic policy fluctuation on enterprise productivity: Based on Chinese listed enterprises
Abstract
Drawing upon a comprehensive dataset encompassing Chinese publicly traded enterprises across the two-decade span from 2000 to 2020, this article analyzes the effects of external economic policy variations on the productivity of Chinese enterprises. The consequences show that when facing the aggravation of external variations in economic policy, enterprises prefer to enhance total factor productivity and labor productivity to reduce the risk caused by the expansion of external uncertainty. Moreover, the greater the degree of internationalization of an enterprise, the higher its vulnerability to variations in external economic policies. The mechanism test shows that for enterprises that only participate in domestic circulation, external economic policy fluctuations improve productivity by affecting the operating environment; however, when enterprises join in the dual circulation, the fluctuations will promote productivity by affecting the scale of enterprises’ overseas business instead.
First published online 6 November 2024
Keyword : external economic policy fluctuation, enterprise productivity, dual circulation, operating environment, overseas business
How to Cite
Jia, S., Gao, X., Zhu, X., Xu, J., & Liu, Y. (2024). The influence of external economic policy fluctuation on enterprise productivity: Based on Chinese listed enterprises. Technological and Economic Development of Economy, 1-25. https://doi.org/10.3846/tede.2024.22410
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Brandt, L., van Biesebroeck, J., & Zhang, Y. F. (2012). Creative accounting or innovative destruction? Firm-level productivity growth in Chinese manufacturing. Journal of Development Economics, 97(2), 339–351. https://doi.org/10.1016/j.jdeveco.2011.02.002
Cheng, J. L. C., & Kesner, I. F. (1997). Organizational slack and response to environmental shifts: The impact of resource allocation patterns. Journal of Management, 23(1), 1–18. https://doi.org/10.1177/014920639702300101
Cao, X., Qin, K. L., & Li, C. Y. (2019). Financing constraints, environmental uncertainty, and the effectiveness of diversification strategy. Finance & Economics, 11, 67–79.
CSMAR. (n.d.). Open data [Database]. China Stock Market & Accounting Research Database. Retrieved March 11, 2023, from https://data.csmar.com/
De Loecker, J. (2007). Do exports generate higher productivity? Evidence from Slovenia. Journal of International Economics, 73(1), 69–98. https://doi.org/10.1016/j.jinteco.2007.03.003
Deng, C., Ye, X. H., & Pan, P. (2020). Policy uncertainty, bank risk-taking, and enterprise transformation and upgrading. Hunan Social Sciences, 4, 114–122.
Economic Policy Uncertainty Index. (n.d.). Monthly UK Economic Policy Uncertainty Index. Retrieved March 23, 2023, from https://www.policyuncertainty.com/
Fan, X., Chen, Y., & Zhang, Q. L. (2020). Economic policy uncertainty, government implicit guarantees and corporate innovation sustainability. Journal of Management, 17(9), 1347–1354. https://doi.org/10.3969/j.issn.1672-884x.2020.09.009
Gollin, D., Lagakos, D., & Waugh, M. E. (2014). The agricultural productivity gap. The Quarterly Journal of Economics, 129(2), 939–993. https://doi.org/10.1093/qje/qjt056
Ghosh, D., & Olsen, L. (2009). Environmental uncertainty and managers’ use of discretionary accruals. Accounting Organizations & Society, 34(2), 188–205. https://doi.org/10.1016/j.aos.2008.07.001https://doi.org/10.1016/j.aos.2008.07.001
Huo, Y., Liu, B. R., & Wei, T. (2020). External uncertainty and enterprise innovation: An examination based on the mediating effect model of corporate financialization. Communication of Finance and Accounting, 16, 28–33.
Jin, L. (2021). Research on uncertainty environment and enterprise performance. Cooperative Economy & Science, 8, 114–115.
Lu, X. D., & Lian, Y. J. (2012). Estimation of the total factor productivity of industrial enterprise in China: 1999–2007. China Economic Quarterly, 2, 541–558.
Li, F. (2021). Dual circulations of domestic and international economy: Theoretical framework and Chinese practice. Journal of Finance and Economics, 47, 4–18.
Li, K., Guo, Z., & Chen, Q. (2021). The effect of economic policy uncertainty on enterprise total factor productivity Based on financial mismatch: Evidence from China. Pacific-Basin Finance Journal, 68, Article 101613. https://doi.org/10.1016/j.pacfin.2021.101613
Li, Z. F., Chen, J. J., Lian, Y. J., & Li, M. J. (2022). Economic policy uncertainty and the use of short-term debt for long-term purposes by enterprises. Journal of Management World, 38(1), 77–89.
Lin, Z. G., Zheng, J., & Bu, J. S. (2015). Environment uncertainty, internal control and audit fees. Finance Research, 71(3), 433–440.
Liu, G. C., Duan, Y. Z., & Liu, Y. Y. (2019). Economic policy uncertainty, asset reversibility, and real investment: Evidence from China. Economic Research Journal, (8), 30–56.
Liu, X. Z., Li, P. Y., & Zhou, H. M. (2023). Does the optimization of the business environment enhance firms’ total factor productivity? Empirical evidence from China’s a-share listed companies. Investment Research, 42(10), 62–78.
Martino, R. (2015). Convergence and growth. Labour productivity dynamics in the European Union. Journal of Macroeconomics, 46, 186–200. https://doi.org/10.1016/j.jmacro.2015.09.005
National Bureau of Statistics of China. (n.d.). China Financial Statistical Yearbook. Retrieved March 16, 2023, from https://www.stats.gov.cn/english/Statisticaldata/yearbook/
Peng, Y. C., Han, X., & Li, J. J. (2018). Economic policy uncertainty and corporate financialization. China Industrial Economics, (1), 137–155.
Qiao, Z. X., Huo, X. X., & Zhang, B. W. (2018). The impact of agricultural labor aging on productivity of labor-intensive agricultural products – An empirical analysis based on 745 apple farmer households of Shaanxi and Gansu Province. Economic Survey, 35(5), 73–79.
Qian, X. F., & Fang, M. M. (2023). External demand uncertainty related to cross-border activities and firm export quality: A perspective based on demand-side quality enhancement costs. China Industrial Economics, (11), 100–117.
Qu, L. N., & Liu, J. T. (2021). The impact of government R&D subsidies on high-tech product exports under trade policy uncertainty. Economic Survey, 38(6), 63–72.
Sun, J., Shen, Y. T., & Hu H. Q. (2021). How to balance the domestic circulation against the international circulations in the new development paradigm – An empirical evidence from the perspective of network connectedness. Studies of International Finance,11, 13–22.
Shen, H. H., Yu, P., & Wu, L. S. (2012). State ownership, environment uncertainty and investment efficiency. Economic Research Journal, 47(7), 113–126.
Tan, X. F., & Zhang, W. J. (2017). An analysis of the channels through which economic policy uncertainty affects corporate investment. The Journal of World Economy, 40(12), 3–26.
Tang, D. D., Liu, X. L., Ni, H. F., Yang, Y. W., Huang, Q. H., & Zhang, X. J. (2020). The changing global economic landscape and China’s potential growth rate and high-quality development in the post-epidemic era. Economic Reserch Journal, (8), 4–23.
Wang, W., Xie, Y. M., & Na, P. J. (2016). A study on the relationship between the degree of internationalization and performance of enterprises from the perspective of efficiency regulation. Soft Science, 30(6), 75–78.
Wen, Z., & Ye, B. (2014). Analyses of mediating effects: The development of methods and models. Advances in Psychological Science, 22(5), 731–745. https://doi.org/10.3724/SP.J.1042.2014.00731
Wind Economic Database. (n.d.). Open data [Database]. Retrieved March 22, 2023, from https://www.wind.com.cn/portal/zh/EDB/index.html
Yang, Z., Ling, H. C., & Chen, J. (2021). External uncertainty, corporate social responsibility, and enterprise technological innovation. Studies in Science of Science, 39(3), 544–555.