Navigating ESG in the Artificial Intelligence Era: Evidence From AI Pilot Zones in China
Yujie Liu, Xinyi Shen
Abstract: Artificial intelligence is reshaping business models, but limited literature explores how ESG evolves in the AI era. This paper regards AI Pilot Zones in China as a quasi-natural experiment, and adopts the DID approach to investigate its impact on corporate ESG performance. Using the sample of Chinese A-share listed companies from 2016 to 2022, we find that the AI policy significantly enhances ESG performance. The AI policy improves ESG through promoting corporate AI applications, reducing information asymmetry, and easing financing constraints. Heterogeneity analyses indicate that the policy effects are more pronounced for firms in regions with high institutional quality, non-state-owned enterprises, and non-high-tech enterprises. Then, we provide evidence supporting the moderating roles of government AI focus and public attention. Finally, further analyses provide granular evidence of corporate environmental and social practices.
Effect of Climate Changes, Induced Risks, and Oil Price Appreciation on Energy Stock Returns in World Markets
Thomas C. Chiang
Abstract: This study examines the impact of climate policy uncertainty (CPU) on world energy stock returns. Evidence shows that a rise in CPU causes stocks to plummet in individual countries, regions, and the world energy stock markets. The negative effects are also exhibited in climate induced risks, the covariance between a change in CPU and equity market volatility (EMV) as well as the covariance between energy and environmental uncertainty and EMV on stock returns. Evidence shows the presence of negative relationships between oil prices and stock returns, except in Gulf Cooperation Council region and Kuwait, which are oil-exporting markets.
The “Zhang Xuefeng Effect”: Information Intervention and the College Admission Problem in China
Yutong Huo, Yun Wang
Abstract: Information regarding the quality of colleges and labor-market prospects of majors plays an important role in parents' and students' school-choice decisions, particularly when these decisions are crucially relevant to the students' long-run career choices and life earnings. This paper studies the impact of information intervention under the current college admission system in China, exploring how access to college-major–related information affects students' preferences, thus resulting in changes to school majors' score lines, students' welfare, and industrial productivity. We consider a setting where there are a finite set of students and a finite set of schools, each school offering two majors featuring high or low labor-market returns. We find that the score lines for high-return majors rise, while those for low-return majors fall, primarily due to changes in preferences among some “pivotal” students in the admission process. Moreover, a majority of students benefit from information intervention, though some students experience welfare deterioration, and the distribution of such benefits and losses depends on students' types of preferences. Without school-prioritized preferences, more students can benefit, and students with higher scores will benefit more. When all students' preferences are school-prioritized, students with different scores benefit almost equally from the information intervention. Our findings offer insights for upgrading information consulting services and designing career-oriented college majors for China's college admission problems.
How Does Digital Economy Drive the High-Quality Development of Regional Manufacturing?
Deyan Yang, Tingting Xiong
Abstract: Digital technologies promote economic progress. The digital economy drives the development of manufacturing. This paper explores the impact of the digital economy on the high-quality development of manufacturing using panel data from the Yangtze River Economic Belt in China. Employing the entropy method, we first measure the level of the digital economy and the high-quality development of manufacturing. Then, we divide the digital economy into three dimensions: the digital foundation, the digital application, and the digital innovation, and investigate how each dimension influences the high-quality development of manufacturing. Results show that: (1) Both the digital economy level and the high-quality development level of manufacturing exhibit steady growth, while the overall value of the Yangtze River Economic Belt stays low. (2) Three dimensions of the digital economy positively affect the high-quality development of manufacturing, with the most noticeable effect of the digital innovation, followed by the digital application and the digital foundation. (3) Threshold effect tests demonstrate that both the digital foundation and the digital application exhibit a double threshold effect on the high-quality development of the manufacturing, but the digital innovation has a single threshold effect. (4) Last but not the least, the digital foundation positively affects the high-quality development of the manufacturing in downstream and upstream regions, but less apparently influences midstream regions by the heterogeneity analysis. Additionally, both the digital application and the digital innovation have significant effects on the high-quality development of the manufacturing across all regions.
Navigating the Uncertainty: Unveiling the Impact of Trade Policy Uncertainty on GVC Ascent in Chinese Listed Companies
Shiyi Wu, Rui Niu
Abstract: This study is based on real options theory and uses a sample of Chinese listed companies from 2000 to 2016 to investigate the dynamic process and mechanisms by which trade policy uncertainty affects the upgrading of enterprises within the global value chain (GVC). The article finds that trade policy uncertainty has a positive forcing effect on enterprise GVC upgrading. In an environment of trade policy uncertainty, factors affecting enterprise upgrading in the GVC include both internal and external risks. Internal risks encompass the understanding of multinational strategies by executives and operational risks. External risks include the vulnerability of supply chains and dependence on cross-border profitability. The interaction effect reveals that correct internal decision-making and risk avoidance in transnational operations are far more important than dealing with external risks. Additionally, the positive impetus brought about by trade policy uncertainty is more pronounced in private enterprises, non-high-tech firms, and those with weaker financial constraints.
Always Be Prepared: Lessons Learned From Risk-Coping Strategies of Thai Households in the Wake of Two Major Economic Crises
Aeggarchat Sirisankanan, Papar Kananurak
Abstract: This paper aimed to comparatively examine the function of three risk-coping strategies, namely savings, borrowings, and work-hour adjustments, during two major economic crises in Thailand. Using the Socioeconomic Survey (SES) collected by the National Statistical Office (NSO) in Thailand, we examined data from the 1998 financial crisis and the 2021 COVID-19 outbreak. The empirical methods were the two-step estimation method and the income decomposition technique, with an emphasis on correcting an endogeneity problem with an instrumental variable approach. The results showed that risk-coping strategies respond more strongly to income shocks during crisis periods than in noncrisis periods. Borrowing was the most important risk-coping strategy, followed by work-hour adjustments employed by Thai households to smooth their consumption against transitory income shocks caused by unemployment in crisis and noncrisis periods. On the contrary, we found that Thai households are less prudent.
