What explains Chinese private entrepreneurs' charitable behaviors?—A story of dynamic reciprocal relationship between firms and the government

This paper studies Chinese private entrepreneurs' charitable behaviors by exploring the dynamic reciprocal relationship between private firms and local governments. By using three waves of a nationwide survey of private firms in 2002, 2004 and 2006 from China, we provide robust evidence that Chinese private entrepreneurs with access to preferential loans from state-owned banks when their businesses first started are more likely to participate in donation and anti-poverty programs organized by the government, and the effects of such loans are more pronounced for small firms and firms in regulated industries. Furthermore, we find that this reciprocal relationship between local governments and private entrepreneurs is a personal relationship rather than an institutional relationship, which declines in importance in areas with better legal institutions and in regions with change of local leadership. Finally, there is evidence that Chinese private entrepreneurs' charitable behaviors are also motivated by political returns and other individual characteristics.     

Entrepreneurs' work experiences and the growth of Chinese private firms during the transition towards a market economy

This work sheds some light on the influence that entrepreneurs' previous work experiences exerted on the growth performance of Chinese private firms after the privatization reform in the early 2000s. Focusing on a representative and large sample of private firms, the analysis finds evidence of an inferior performance of the companies run by entrepreneurs with past top management experience in state-owned companies, while the superior performance of the companies run by entrepreneurs with prior technical experience. The study investigates specific theory-driven mechanisms through which different experiences impact firm performance, including time allocation and R&D management strategy. Upper echelon theory and imprinting effects appear relevant, and local institutions, political and economic uncertainty, and entrepreneurs' self-perception act as moderating factors. We deal with potential endogeneity issues with propensity score matching and two-stage least squares regression. These findings provide novel evidence on underexplored aspects of the ongoing privatization process in China and other economies in transition.     

Do local firms employ political activities to respond to political uncertainty?

Using hand-collected data in China from 2001 to 2019, we examine how political uncertainty affects corporate political activities, including corporate corruption and corporate charitable donations, and whether the anti-corruption campaign moderates the relationship between political uncertainty and corporate political activities. First, we find that when city government officials change, local firms significantly increase corporate charitable donations while reducing corporate corruption. Second, the anti-corruption campaign strengthens the effects of political uncertainty on corporate political activities. Third, our results also show that political uncertainty has stronger effects 1) when new government officials come from external appointments, and 2) when former government officials experience abnormal turnover. In addition, the effects of political uncertainty on corporate charitable donations are stronger in non-state-owned enterprises and firms belonging to regulated industries. Finally, political uncertainty increases firms’ government subsidies through corporate political activities. It’s clear that political activities have mediating effects.     

A springboard into politics: Do Chinese entrepreneurs benefit from joining the government-controlled business associations?

Business associations in authoritarian regimes behave systematically different from their counterparts in democratic regimes. Using a unique dataset of Chinese private firms, this paper examines the impacts of joining the most prominent business association in China, the All-China Federation of Industry and Commerce (ACFIC) which was initiated and strongly controlled by the government. We find that ACFIC members have much higher chances to obtain formal political identities, that is, the deputy of People's Congress (PC) or the People's Political Consultative Conference (PPCC). However, ACFIC membership itself cannot help entrepreneurs acquire scarce resources that are controlled by the government. Rather, ACFIC members bear heavier tax burdens and make more informal payments to government officials. These findings suggest that the ACFIC act as a springboard into politics, rather than an effective collective action committee that can bring common benefits to its members or protect members from government predation.     

公司创业投资与企业控制权配置： 基于技术契合视角

控制权配置是创业企业治理的核心问题,公司创业投资母公司与被投资企业间的技术契合水平是影响创业企业控制权配置的重要因素。基于不完全契约理论,文章构建公司创业投资者与企业家不同控制权收益影响下创业企业控制权配置数理模型,分析技术契合水平对创业企业两类控制权配置的作用机理,并提出研究假设。文章运用公司创业投资支持的97 家上市企业3 年非 平衡面板数据,通过随机效应模型检验我国公司创业投资母公司与被投资企业间技术契合水平对创业企业两类控制权配置的影响。结果表明,当公司创业投资者战略收益较小、创业企业家私人收益较大时,双方技术契合度与公司创业投资者获得的剩余控制权呈非线性倒U 型关系;当公司创业投资者战略收益较大,创业企业家私人收益较小时,双方技术契合度与公司创业投资者获得的剩余控制权呈非线性U 型关系;公司创业投资者获得的特定控制权与双方技术契合度正相关。     

非生产性努力、政府规制与私营经济发展

本文认为,地方政府的规制水平不同,使得不同地区私营企业家的非生产性努力程度有差异;在企业家能够自由流动的条件下,规制条件好的地区会对企业家产生集聚效应,促使地区私营经济快速发展;私营企业家的集聚使私营经济的力量得到壮大,更能影响政府的政策和规制条件,因此经济朝着优均衡的状态发展;如果地区私营经济向地方政府寻租,造成偏私性资源配置,那么私营经济发展就会走向劣均衡。     

Officials' Foreign Experience and Firms' Exports: Evidence from China

This study examines how the foreign experience of local officials affects firms' exports in China. Using a matched sample from 2000 to 2012, we found that the foreign experience of municipal Party secretaries had a significant impact on the promotion of firms' exports, especially for private firms. This positive impact was more pronounced when officials went abroad at a younger age, stayed abroad for a longer period, returned to China for a longer time, and had greater promotion incentives. We found that officials' foreign experience helped to mitigate the negative impact of institutional distance and provided firms with better access to export subsidies, both of which could promote exporting. There was also a complementary effect when officials and executives both had foreign experience. Overall, our study provides some insights into the economic outcomes of officials' foreign experience and sheds light on the export performance of Chinese firms.     

Political connections,corporate innovation and entrepreneurship: Evidence from the China Employer-Employee Survey (CEES)

In this paper, we attempt to reconcile the mixed effects of political connections on corporate innovation. Using the China Employer-Employee Survey (CEES), we find political connections contribute to innovative activities for those firms with innovative entrepreneurs but impedes innovative activities for those without innovative entrepreneurs. After solving the endogeneity problems and correcting the sample selection bias, the baseline results do not change much. Moreover, we find political connections can help firms obtain economic benefits such as tax preference and government subsidies which, however, are utilized by firms to increase fixed asset investment. But such positive effect of political connections on fixed asset investment greatly reduces when the firm's entrepreneur has a strong spirit of innovation. These results provide a reasonable explanation for the change in the direction of the effect of political connections on corporate innovation. This paper succeeds in reconciling the mixed effects of political connections on corporate innovation by taking the entrepreneur's innovative spirit into account.     

区域市场的行政整合与经济增长

随着城市化进程的推进,行政区划调整逐渐成为区域经济整合的一种重要方式。现有文献多从财政分权和官员晋升竞争等角度解释我国区域发展,较少分析行政整合对地区发展的作用和影响。本文以2003年广东佛山"撤市建区"行政区划调整作为案例,采用合成控制法进行了实证分析,评估了行政整合对地区发展的重要影响。本文的发现表明地区内部行政区划调整能够实现市场整合,优化内部资源配置,加快地方经济增长。这为我国地级层面近年出现的"撤市建区"行政区划调整现象提供了一个经济学上的解释。     

Bureaucratic integration and regional specialization in China

Fiscal decentralization introduced as part of China's economic reform since 1979 has unleashed strong incentives for China's local governments to pursue economic development, but the same incentives have also led to local protectionist policies inhibiting the process of regional specialization. This paper focuses on the constraints or freedom with which local governments can implement their protectionist policies. Using a panel data of 29 China's regions over the time period of 1985–1997, we find that China's political system of bureaucratic integration (specifically, concurrent appointment of local government officials in the central government) imposes constraints on the local governments from practicing protectionism. We also find that the effectiveness of local protectionist policies is limited by market competition, specifically, competition from foreign-invested firms operating in China and foreign imports. Our results on the role of local protectionism remain robust to controls for the regional variations in the size of the economy and the stage of economic development.     

Remote markets as shelters for local distortions: Evidence from China

We study how the presence of state-owned enterprises (SOEs) distorts private firms' decision on interprovincial sales in China. Using data from World Bank Investment Climate Survey and Annual Survey of Manufacturing Firms in China, we find evidence that the prevalence of SOEs in a city-industry where private firms reside will affect these firms' decision on the allocation of sales between interprovincial markets versus adjacent market. The direction of the effect on private firms, however, depends crucially on the private firms' access to credit. Specifically, the prevalence of SOEs leads to a higher propensity to sell to remote markets for firms with adequate financial access, whereas the opposite is true for firms who are credit constrained. We build a parsimonious model which links political/market distortion, market access, and credit constraint to explain these patterns, and argue that remote markets can serve as shelters for local distortions resulted from SOEs presence for some private firms.     

金融官员与地方政府隐性债务风险：抑制还是提升——来自289个地级市的经验证据

文章基于2009-2018年289个地级市数据样本，结合"烙印理论"，考察了金融官员对地方政府隐性债务风险的具体效应及其作用机理。研究发现，相对于非金融官员，金融官员能显著地抑制地方政府隐性债务风险，表现为"治理效应"。进一步研究表明，巡视未覆盖地区、地区金融生态环境越佳和制度环境越好时，金融官员抑制地方政府隐性债务风险效果越明显。文章实证分析了官员的金融经历对地方隐性债务风险的作用机理及具体效应，有效地诠释了"金融副省长现象"，为金融干部队伍建设和金融监管提供理论解释与经验证据支持，也为现阶段防范化解重大风险攻坚战提供了启示。     

地方官员变更对企业投资影响的空间范围——基于政企联盟重建的逻辑分析

文章运用政企联盟重建这一理论对政企双方行为进行分析，完整的解释了我国官员变更对企业投资影响所呈现出的区域、层级及所有制特征，利用2003-2012年沪深两市上市企业面板数据进行了实证研究。结果表明：（1）官员变更对企业投资的影响呈现区域性、层级性特征。省委书记变更省委书记变更不会对全省的企业投资产生显著影响，但导致省会城市的企业投资明显减少，对省会城市影响高于非省会城市影响；市委书记变更对市区企业投资影响显著高于对县区企业影响。（2）省委书记与国有企业建立的紧密联盟会突破本地性特征，延伸到外地，而省委书记与民营企业建立的默契联盟则具有明显的本地性。文章研究丰富了官员变更对企业投资影响的相关文献。     

On corporate philanthropy of private firms and trade credit financing in China

This paper examines the impact of corporate philanthropy on trade credit financing for listed private firms in China viewed from the heterogeneous perceptions of credit suppliers. A positive relationship is found between corporate philanthropy and trade credit financing, suggesting that in general firms donating more can obtain more trade credits. However, this relationship is significant only for those firms with positive free cash flows and no political connections. It is striking to find that such a relationship does not exist when firms have negative free cash flows or political connections. Moreover, the relationship between corporate philanthropy and trade credits is affected by the local social trust environment. A good social trust environment is amicable for firms to use corporate philanthropy in obtaining trade credits. The research findings have important policy implications. This paper makes valuable contributions to the current literature through highlighting the importance of supplier heterogeneous perceptions towards corporate philanthropy as well as the effect of the local trust environment on the effectiveness of philanthropy in trade credit financing of the Chinese listed private firms.     

地方官员、捕蝇纸效应与公共服务支出的关系——一项有关公共服务型政府建设的研究

在我国,地方政府是公共服务提供的主导者,而地万官员在公共服务中扮演重要角色.文章构建了1997-2010年我国省级领导与其省份公共服务提供相匹配的数据,从个人微观层面考察这些官员群体(尤其是政府行政首长)对公共服务提供的情况.研究结果表明:省级官员建设公共服务型政府的愿望并不强烈,并且存在“捕蝇纸效应”;官员的公共服务支出与他们的晋升相关性低;东部地区公共服务支出比例明显低于广大的中西部地区;官员的流动有利于公共服务的提供.因此,创造公共服务的“竞争性市场”,并增强政策的可信承诺;进行税制改革,增加地方财力;增强社会问责,强化地方官员的约束.     

Regulation and corruption in transitional China

This paper addresses the relationship between institutional change, regulation, and corruption by examining two possible positive effects of government discretion on growth in transitional economies, such as China. Firstly, economic reform depends on the support of those who have economic power. Allowing government departments and officials to divert resources and to be involved in private businesses make them a driving force for reform by giving up some of their power to the market. Secondly, because there existed large amounts of inefficient or out-of-date regulations in transitional economies, certain types of government discretion can actually circumvent inefficient policies and regulations and thus support growth. They enable people to break the status quo when regulations are lagging behind the reform. Although China had many laws and regulations which did not particularly promote growth, positive effects of government discretionary behaviour may have offset the negative effects of these laws and regulations on growth.     

Real estate prices and firm borrowings: Micro evidence from China

Real estate price appreciation can lessen firm's financial constraint by increasing its collateral value. This paper studies this channel by utilizing a large firm-level dataset during the 2000–2007 period on Chinese firms. In contrast to Wu, Gyourko, and Deng (2015) that collateral channel effect in China does not exist either for firms overall or for private firms, we provide empirical evidence on the presence of collateral channel effect and show the effect is significant for private firms but not significant for state owned enterprises, whose behavior is more of political based. Further analysis shows that firms significantly change their debt structures in response to real estate price shocks.     

地方官员异质性与公共服务供给绩效

本文在一个具有微观基础的一般均衡宏观模型中考察了地方政府的公共服务供给行为。地方政府官员负有提供生产性公共品与非生产性公共品的责任,生产性公共品增进经济产出效率,而非生产性公共品直接增进居民效用。地方政府官员在提供两类公共品的效率与能力上具有异质性,这导致了地区之间的经济增长及公共服务供给绩效上的差异。这意味着,中央可以通过优化官员和地区之间的匹配,促进地方经济发展和居民福利改善。     

Rent seeking,federal mandates,and the quality of public education

Summary and Conclusions This paper has examined two opposing hypotheses purported to explain the imposition of mandates on lower level governmental activities. These hypotheses were labeled the spillovers and rent-seeking arguments. The first argument implied that consumers benefit from the intervention, while the latter one suggests that mandates increase the rents of the bureaucrats-producers. Evidence relating to the provision of public education was found to be more consistent with the rent-seeking thesis.Overall, the conclusions emerging from this study complement prevous works concerning the collusive nature of interactions between government regulators and private firms. There, the firms often use government to achieve what proves to be too costly via the market. There is no reason to believe that things would differ with regard to collusion between local units of government and those at higher levels. Given that bureaucrats, like all other individuals, are utility-maximizers, they too have an incentive to use government to increase their rents. Educational mandates appear to have served this role.     

Redefining and Containing Systemic Risk

Official definitions of systemic risk leave out the role of government officials in generating it. Policymakers’ support of creative forms of risk-taking and their proclivity for absorbing losses in crisis situations encourage opportunistic firms to foster and exploit incentive conflicts within the supervisory sector. To restore faith in the diligence, competence, and integrity of officials responsible for managing the financial safety net, reforms need to rework incentives in the government and financial sectors. The goal should be to align the incentives of private risk managers, accountants, credit-rating firms, and government supervisors with those of ordinary taxpayers. This article describes a series of complementary ways of advancing toward this goal. The most important steps would be to measure regulatory performance in terms of its effect on the loss exposures that the safety net passes through to taxpayers and to require institutions that benefit from the net to produce information that would support this effort. This entails estimating the explicit and implicit safety-net benefits individual institutions receive and issuing extended-liability securities whose prices would improve the accuracy of these estimates.