Strengthening financial regulation and total factor productivity in China

Weiguo Liu, Zhouye Wu and Xuyin Wang

International Review of Economics & Finance, 2025, vol. 104, issue C

Abstract: In the context of China's economic transition, total factor productivity (TFP) serves as a metric for assessing industry upgrading and economic performance enhancement. This study specifically examines the impact of China's 2018 New Asset Management Regulations on corporate total factor productivity among Chinese listed companies. Using panel data from 3201 publicly traded companies (2013–2023), we employ a generalized difference-in-differences method with fixed-effects regression models. Analysis reveals that this specific regulatory intervention significantly enhances total factor productivity. The study explains how the 2018 regulations affect total factor productivity through five mechanisms: corporate risk-taking, debt financing costs, innovation levels, human capital investment, and R&D investment ratios. Heterogeneity analysis shows that this particular policy's effects are more pronounced in eastern regions, private companies, and firms with financial management expertise. This research provides specific evidence from China regarding how targeted asset management regulatory reform impacts enterprise productivity, offering insights into the real economic effects of this major financial regulatory intervention.

Keywords: Strong financial regulation; Asset management regulations; Total factor productivity; Chinese economy (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025008603
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:104:y:2025:i:c:s1059056025008603

DOI: 10.1016/j.iref.2025.104697

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().