We estimate the financial and real effects of a subsidy program on imported capital goods recently implemented in China. We identify ffrms that have access to the subsidy program by combining data on catalogues of eligible products periodically released by the government and product-level import data. Our findings demonstrate that following the implementation of the program, eligible firms experience an increase in borrowing and gain access to loans at lower interest rates compared to non-eligible firms. This improved financial situation enables them to expand their fixed-asset investments, increase total output, and enhance their export performance. The expansion of production capacity also leads to improved investment efffciency and greater profitability. Further analysis reveals that the effects of the policy are particularly pronounced for non-state-owned enterprises and small firms in relatively competitive industries. This finding suggests that these firms face ex-ante financial constraints, and their marginal rate of return to capital is large.

This work explored the changes in production decision-making trends of Chinese steel enterprises under the influence of the carbon border adjustment mechanism. First, using evolutionary game theory, the interactive mechanism of complex production strategies among steel enterprises considering the carbon border adjustment mechanism was studied, including the impact of government subsidy coefficients, additional profits and carbon tax prices on enterprise decisionmaking.Second, the influence of key parameters on the dynamic evolutionary process was analysed. On this basis, the empirical simulation method was used to verify the game model and the main conclusions. Finally, the sensitivity analysis of the selected parameters was determined using Matlab software. The results showed that additional profits from green investment, government subsidy coefficients, input-output values and carbon tax prices had a higher impact on the evolution of enterprise production strategies. The results of this study provide a decision-making basis for the selection of future production methods for steel enterprises.

We examine communication of political connections in corporate China, and show that politically inclined positive words—words in connotation of political sentiment—serve as a distinct and effective signaling device for corporate political connections. Using a large sample of corporate news, we find that news’ political sentiment, instead of orthodox political measures such as occurrences of political nouns and political entities, reflects executives’ political connections for private enterprises, and is related to rent-seeking benefits in government subsidy, tax refund, financing constraints and political risk. Our results demonstrate that political sentiment is an effective way to decode subtle corporate political connections in modern China’s “Mind Politics” environment that infiltrates into private corporations.

Based on the matching data of China’s industrial enterprise database and enterprise patent database, this study investigates the effect and mechanism of government subsidy policy on the innovation performance of Chinese enterprises using the panel data matching and multi-period difference-in-difference model. Results show that the incentive effect of government subsidy policy on enterprises’ innovation performance is dominant, thus improving the innovation performance of Chinese manufacturing enterprises. However, the promotion effect on lowquality innovation is greater than that on high-quality innovation. Moreover, the government subsidy policy affects the innovation performance of enterprises by stimulating enterprises to increase their R&D investment, increasing the spending on rent-seeking and taking on more social responsibility. The government subsidy policy significantly affects the innovation performance of non-state-owned enterprises, small and medium-sized enterprises, and technology-intensive industries. The impact of government subsidizing policies varies regionally. The policy effect on enterprise innovation performance is significant in the eastern and central regions but not in the western and northeast regions.

We examine communication of political connections in corporate China, and show that politically inclined positive words—words in connotation of political sentiment—serve as a distinct and effective signaling device for corporate political connections. Using a large sample of corporate news, we find that news’ political sentiment, instead of orthodox political measures such as occurrences of political nouns and political entities, reflects executives’ political connections for private enterprises, and is related to rent-seeking benefits in government subsidy, tax refund, financing constraints and political risk. Our results demonstrate that political sentiment is an effective way to decode subtle corporate political connections in modern China’s “Mind Politics” environment that infiltrates into private corporations.

We examine communication of political connections in corporate China, and show that politically inclined positive words—words in connotation of political sentiment—serve as a distinct and effective signaling device for corporate political connections. Using a large sample of corporate news, we find that news’ political sentiment, instead of orthodox political measures such as occurrences of political nouns and political entities, reflects executives’ political connections for private enterprises, and is related to rent-seeking benefits in government subsidy, tax refund, financing constraints and political risk. Our results demonstrate that political sentiment is an effective way to decode subtle corporate political connections in modern China’s “Mind Politics” environment that infiltrates into private corporations.

Using proprietary data of all high-tech incubators in China, we study a new approach by government to implement industrial policy through market intermediaries instead of directly allocating resources. Exploiting a highly localized industrial policy that targets different “strategic emerging industries” across provinces, we find that the incubators in policy-targeted industries receive higher government subsidy after the policy relative to their peers in other industries. Moreover, we find evidence that government subsidy to high-tech incubators increases the incubated startups’ innovation activity. Privately owned incubators in targeted industries, relative to their state-owned peers, receive less government subsidy, although they utilize government subsidy much more efficiently than do their state-owned peers.

This study develops an intertemporal model to investigate the causal relationship between government subsidies and employment and employs firm-level panel data to procure an estimation of the elasticities of government subsidies concerning employment, which is approximately 0.7 percent. To address endogeneity issues, we construct a novel Bartik shift-share instrumental variable for government subsidies. In heterogeneity analysis, our study discloses that government subsidies create a plethora of jobs, most predominately for individuals with advanced degrees, such as masters or doctorate. Additionally, our article identifies the top five industries that are most influenced by the effects of government subsidies.

We investigate a prevalent yet overlooked form of corporate social responsibility (CSR) activities, i.e., government-launched CSR. Contrary to the conventional view that mandatory CSR destroys firm value, we document a positive market reaction to governmentlaunched CSR activities that aim to alleviate poverty. Analyses of operating performance and firm value confirm the positive impact. Further analyses suggest that while governmentlaunched CSR intervenes the operation of the firm by reducing the operating efficiency, firms enjoy higher operating margin, take more market share and save selling expense and labor cost by engaging their operations with the poverty-stricken areas. Participating firms are also rewarded more government subsidy. We further find that government-launched CSR activities achieve the stated objective of poverty relief. However, it also crowds out the firms' investment in other CSR activities. Overall, the evidence indicates that government-launched CSR has economy-wide implications than the traditional CSR.