Collateral-based monetary policy and corporate employment: Evidence from Medium-term Lending Facility in China

Liu, Xiaoling; Wu, Yuhui; Zhang, Huan

doi:10.1016/j.jcorpfin.2022.102333

Cited by 14 publications

(4 citation statements)

References 53 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Since the new asset management rules were published in April 2018, I set the post treatment period as 2018-2021. Firms in the financial industry are excluded from the sample due to their special reporting requirements [41]. I also exclude firms without positive total assets and those with missing values on key variables.…”

Section: Data and Samplementioning

confidence: 99%

“…where i and t denote the firm and year, respectively. Following Bertrand et al [42], I focus on firms' degrees of corporate financialization one year prior to the launch of the new rules [41] and construct the variable CorpFin to measure the extent to which firms are exposed to the new rules. Based on Orhangazi [6] and Demir [2], CorpFin is defined as the ratio of the firm's financial assets to its total assets.…”

Section: Plos Onementioning

confidence: 99%

“…Based on prior literature [13,[46][47][48], firm-level control variables include size (Size), leverage (Lev), age (Age), capital intensity (PPE), operating cash flows (OpeCashFlow), return on assets (ROA), and sales growth (SalesGrowth). Following Liu et al [41], province-level determinants of labor costs are also considered in Eq (1), including GDP per capita (ProvGDP), GDP growth (ProvGDPGrowth), population (ProvPop), and wage per capita (ProvWage). The definitions and data sources for all variables are presented in Table 1.…”

Section: Plos Onementioning

confidence: 99%

“…It is possible that observable heterogeneity affects the treatment effects, and therefore I re-estimate the baseline regression using a propensity-score-matched sample to address the concern. I employ one-on-one nearest neighbor matching with the caliber set to 0.01 [61] and set the dependent variable equal to one if the firm's degree of financialization is in the upper quartile of CorpFin, and zero otherwise [41]. The covariate differences between the treatment and control groups are balanced using the firm-and province-level control variables specified in the baseline model.…”

Section: Propensity Score Matchingmentioning

confidence: 99%

See 3 more Smart Citations

Disruption of corporate financialization and labor cost growth: Evidence from China’s new asset management rules

Liu

2023

PLoS ONE

View full text Add to dashboard Cite

The new asset management rules in China bring financial institutions under a unified regulatory framework, aiming to curb regulatory arbitrage, control systemic risk, and improve financial stability. Exploiting the new-rules-induced exogenous shock that disrupts corporate financialization, this study finds that firms with ex ante higher degrees of financialization respond to the regulation by increasing labor costs. Management’s financial expertise and ownership concentration are mechanisms through which disruption of financialization affects corporate employment strategies. The impact of the new rules on labor costs is more pronounced for firms with lower bankruptcy risk, located in coastal cities, and experiencing intense industry competition. The findings imply an unintended spillover effect of financial regulation on the labor market in the form of labor cost growth.

show abstract

Section: Data and Samplementioning

confidence: 99%