This paper investigates the relationship between business strategy and cost stickiness under different ownership. Using the data from listed firms in China from 2002 to 2015, we find that first, firms with different strategies exhibit different cost behavior. The cost stickiness of choosing a differentiation strategy is higher than that of choosing a low-cost strategy. Second, management expectations will affect cost stickiness. Optimistic expectations will increase cost stickiness, while pessimistic expectations will reduce cost stickiness. Third, management expectations can adjust the relationship between business strategy and cost stickiness in terms of government-created advantages (GCAs). If management expectations tend to be optimistic, the cost stickiness is higher with a differentiation strategy than with a low-cost strategy. If management expectations tend to be pessimistic, then cost stickiness is higher with a low-cost strategy than with a differentiation strategy. Finally, the state-owned equity affects the extent of the effect of a differentiation strategy on cost stickiness. State-owned firms, which receive more GCAs than non-state-owned firms, have stronger cost stickiness than non-state-owned firms, even if both categories of firms use more differentiation strategy.

No abstract

No abstract

To reverse the trend of ecological environment deterioration, the government tries to stimulate firms to participate in environmental governance through environmental regulation. Then, which environmental regulation tools can better drive firms to carry out environmental governance activities needs to be corroborated by empirical studies. Using a sample consisting of Chinese A-shares listed firms from 2015 to 2019, this article investigated the effects of two heterogeneous environmental regulation tools (environmental penalties and environmental subsidies) and their interactions on corporate environmental investment. The results showed that environmental penalties have a positive impact on corporate environmental investment. Furthermore, the heavier the penalty or the higher the administrative level of the penalty subject, the more pronounced is the impact of environmental penalties on corporate environmental investment. Firms that receive environmental subsidies do not increase their investment in environmental governance. A series of robustness tests further verify that penalties have a greater impact on the environment than subsidies. In addition, it is found that environmental penalties have an environmental deterrent effect on other firms in the same industry. Our work presents evidence for the economic consequences of environmental regulation and supplements the mechanism of environmental regulation affecting corporate environmental governance. Meanwhile, this article also provides essential guidance for the positive role of environmental penalties in driving corporate environmental governance and has important practical significance for emerging market countries to choose appropriate environmental regulation tools to promote corporate green development.

Resolving the problem of excess production capacity through sustainable technological innovation is an important issue facing the Chinese economy in achieving high-quality development. The Guiding Opinions of the State Council on Resolving the Contradiction of Severe Overcapacity promulgated by the government in 2013 undoubtedly had a huge external impact on the traditionally competitive manufacturing market. This paper uses 6680 company-year sample observations of 1609 A-share manufacturing listed companies in China from 2010 to 2017 to examine the impact of capacity reduction pressure on ‘corporate sustainable innovation’ (the strategic response made by the enterprise administrator to cope with the impacts of the external environment including economic, social and environmental aspects) investment and the moderating role of financing constraints on this relationship. The research shows that after the promulgation of the Guiding Opinions, the degree of overcapacity had a significant positive effect on the R&D investment of enterprises, indicating that the policy to resolve overcapacity promoted their sustainable innovation investment. Such a phenomenon indicates that, to a certain extent, in the context of capacity reduction, companies have strong pressure and motivation to seek a way out through sustainable innovation. However, financing constraints have a significant inhibitory influence on the anti-forcing effect of the capacity reduction policy, indicating that the ability of enterprises to respond to external capacity reduction policies is subject to their own limited financing. Further investigation shows that capacity reduction pressure mainly promotes the sustainable innovation investment of private enterprises and has no significant impact on that of state-owned enterprises. This may be because private enterprises struggled more for survival during the transition period. The results of this paper provide a theoretical basis and reference value for the formulation of government policies and the development of enterprises.