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Research Question/IssueWe argue that findings regarding litigation risk in the United States are not applicable in the Chinese context because Chinese firms are more dependent on debt financing for their operations compared with US firms. Thus, we raise the following research questions to test potential differences: Is litigation risk associated with firm performance? Does effective internal control of governance improve the performance of lawsuit firms? Do financial analysts improve the performance of lawsuit firms? Does debt financing mediate the effect of litigation risk on firm performance?Research Findings/InsightsOur results indicate that litigation claims for large monetary amounts are negatively associated with firm performance, whereas internal governance and analyst following moderate the negative effects of litigation risk. We further examine the mediating effect of debt financing on the relationship between litigation risk and firm performance, finding that litigation risk is negatively associated with firm performance through excessive leverage, increased cost of debt, reduced bank borrowing, and trade credit.Theoretical/Academic ImplicationsBy empirically testing the mediation effect of debt financing, this study enhances the understanding of the underlying causes of the association between a firm's litigation risk and its performance.Practitioner/Policy ImplicationsThe findings will help firm managers to review litigation risks, better understand the economic mechanisms of litigation risk, and promote risk control to regulate their behaviors. We also find that financial analysts can correct the adverse effects of litigation risk; thus, we recommend that the financial analyst profession be further normalized.

This paper investigates the effect of the One Belt One Road (OBOR) initiative on China's outward foreign direct investment (OFDI) using a dataset of all host countries for the period of 2010-2015. The employed econometric technique combines a difference-in-differences estimator with matching techniques. The results show that China's OFDI in OBOR countries is about 40% higher than in non-OBOR countries. After the initiative, the OFDI from China increases by 46.2% in OBOR countries. However, after controlling for the heterogeneity across OBOR and non-OBOR countries using the matching approach, the significance of the increasing effect caused by the OBOR initiative disappears. We also find the OBOR initiative diminishes the resource-seeking motivation and improves the market-seeking motivation of China's OFDI. Our results cast doubts on the infrastructure-led and institution-based strategy of the OBOR initiative, but support the boosting effect of the OBOR initiative on institutional cooperation and cultural convergence. Thus, the OBOR initiative is a sustainable continuation and development of the long tradition of economic, institutional, and cultural convergence with the OBOR countries, rather than a temporary policy shock.

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This paper investigates the impact of the increase in service output on the demand for different categories of service occupations in the EU manufacturing sector. Furthermore, we investigate the impact of the global sourcing of producer services on the demand for different service occupations.Using fixed-effects models based on the manufacturing sector for 18 EU countries for the period 1995-2008, we find that the employment share of service occupations is significantly and positively related to the output share of producer services in manufacturing. In particular, the increase in the output share of services accounts for an average of 13 percent of the increase in the share of service occupations. When service occupations are disaggregated by different categories, we find that the output share of services is significantly and positively related to the share of managers, professionals, and technicians. In contrast, service occupations involving clerks, administrative support, and other office-related personnel do not benefit from increasing service revenues. Finally, professionals and technicians are complementary to intermediate producer services (either from domestic or foreign suppliers), while clerks do not benefit from the rise in intermediate service inputs in manufacturing.

Electronic banking (e-banking), facilitated by various Electronic Commerce (EC) technologies, has helped commercial banks to stay competitive through productivity gains, transaction cost reduction and customer service improvement. Despite its benefits, however, developing countries still lag behind developed countries in the adoption of e-banking. To address the lack of studies on e-banking adoption in developing countries, this paper explores factors impacting e-banking adoption in China, as an example of a developing country. Facing an intense competition from foreign-owned banks, Chinese domestic banks have recently been actively engaged in e-banking initiatives. A research framework developed based on technology-organizational-environmental framework is used to guide the study. The findings from this study involving one of the four state-owned banks complement the existing knowledge in this area to better understand the adoption and development of ebanking in China.

Social loafing has been defined as a phenomenon in which people exhibit a sizable decrease in individual effort when performing in groups as compared to when they perform alone, and has been regarded as a state variable. In this study, we instead conceptualized social loafing as a habitual response, given that many people have been found to be susceptible to social loafing in group tasks. We developed the self-reported Social Loafing Tendency Questionnaire (SLTQ) to measure individual variations in social loafing. In Study 1, the reliability and validity of the SLTQ were established in a sample of college students. In Study 2, SLTQ scores significantly negatively predicted individual performance in the group task condition, but not in the individual task condition. Social loafing can also be considered a trait variable, as it was found to modulate group dynamics when it was activated in a typical situation (i.e., being in a group).