How Political Leaders Affect Disruptive Technology Adoption and Corporate Operational Efficiency : Evidence from Mandatory Retirement of Subnational Leaders
Adoption of disruptive technologies, such as artificial intelligence and blockchain, can improve organizational and operational flexibility and hence is a key source of corporate operational efficiency. However, surprisingly little is known about how political leaders affect corporate operational efficiency and the adoption of disruptive technologies. In this paper, we investigate how the operational efficiency of state-owned enterprises (SOEs) in China changes as the city mayor approaches the mandatory retirement age. Local economic output (largely determined by SOEs’ investment) is key for a mayor’s promotion, but mayors who are approaching mandatory retirement have little chance of promotion and may switch their focus from economic output to efficiency for the sake of securing post-retirement benefits. We design a novel measure of operational efficiency that incorporates the ex-ante property of capital costs, and we show that SOEs have higher operational efficiency and adoption of disruptive technologies (such as artificial intelligence and blockchain technologies) when the city mayor approaches the mandatory retirement age. We find evidence that the improvement in operational efficiency involves active intervention from the retiring mayor (e.g., based on text analysis of annual city planning documents). Finally, the improvement correlates with a higher firm value growth rate but not with a decrease in employment growth or weaker pollution control. Collectively, our findings show that a mandatory retirement age of subnational leaders improves corporate operational management
Year of publication: |
2023
|
---|---|
Authors: | Cheng, Hua ; Qiu, Liangfei |
Publisher: |
[S.l.] : SSRN |
Description of contents: | Abstract [papers.ssrn.com] |
Saved in:
Extent: | 1 Online-Ressource |
---|---|
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 18, 2022 erstellt Volltext nicht verfügbar |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014254062
Saved in favorites
Similar items by person
-
Natural Disasters and Creative Destruction : Evidence from the Universe of Firms in China
Cheng, Hua, (2022)
-
Government-Supported E-Commerce Infrastructure and Entrepreneurship in Underdeveloped Regions
Cheng, Hua, (2023)
-
Women's education and marriage decisions : Evidence from China
Li, Xue, (2018)
- More ...