Place-based institutional reforms are a widely used development policy. This paper estimates local and spatial spillover effects of China's Pilot Free Trade Zones (FTZs) on city-level foreign direct investment (FDI) using a balanced panel of 265 prefecture-level cities from 2000 to 2021. We estimate a Spatial Durbin Model (SDM) and apply a general-to-specific procedure to select the spatial specification supported by the data across ten spatial weight matrices. The SDM yields a consistently insignificant coefficient on the spatial lag of FTZ status, providing no clear evidence that the FTZ policy environment in neighbouring cities is directly associated with FDI in the focal city. In contrast, Spatial Autoregressive (SAR) estimates yield a robust positive spatial autoregressive coefficient, indicating positive spatial dependence and FDI agglomeration across cities. Thus, establishing FTZs is significantly and positively associated with FDI inflows to treated cities and with higher FDI in nearby cities, consistent with regional propagation through intercity economic linkages rather than direct policy spillovers. Mechanism tests suggest the local (direct) association of FTZs with FDI operates partly through increases in local fiscal science and technology expenditure and tertiary sector expansion. At the same time, spatial agglomeration is related to industrial similarity and complementarity. Heterogeneity analyses are consistent with, from a substantive viewpoint, stronger associations for earlier FTZ batches and inland FTZs with FDI.
This paper tests whether aggregate non-financial corporate liquidity absorption adds information to conventional inflation models in the United States, the euro area, the United Kingdom and Japan. Inflation is constructed from official consumer-price indices, while liquidity absorption and its country-specific components are scaled by nominal GDP. The empirical design uses fixed common samples and nested ARDL-HAC models: an autoregressive benchmark; domestic macroeconomic controls; global commodity-price inflation, the Global Supply Chain Pressure Index and changes in non-financial corporate credit; and then either aggregate liquidity absorption or its balance-sheet components. The unrestricted five-term liquidity block is jointly significant mainly for quarter-on-quarter annualised inflation, and also for euro-area year-on-year inflation, but raises BIC in every country-target comparison. More parsimonious specifications identify only narrow exceptions, including a contemporaneous euro-area quarter-on-quarter signal, a fourth-lag US year-on-year signal and US loan-liability information for quarter-on-quarter inflation. Moving-block bootstrap comparisons show no robust positive out-of-sample RMSE improvement and several statistically resolved deteriorations. The evidence therefore does not support a universal inflation channel or a general forecasting variable. Corporate liquidity absorption is better interpreted as an institutionally structured, component- and horizon-specific diagnostic of the corporate operating cycle.
Environmental performance aspiration gaps are important factors affecting corporate green innovation. However, existing research pays limited attention to how such gaps shape firms' green innovation strategies. Using a sample of 28,613 firm-year observations of Chinese A-share listed firms between 2013 and 2023, this study explores how environmental performance aspiration gaps shape green innovation strategies. The results illustrate that these gaps are positively associated with green innovation, particularly collaborative green innovation. This positive association is more pronounced for manufacturing firms and non-state-owned enterprises, with suggestive evidence for firms in eastern regions. The mechanism analysis is consistent with environmental performance aspiration gaps being associated with greater collaborative green innovation, potentially through enhanced executives’ green cognition and a higher proportion of green interlocking directors. This study contributes to the literature by extending performance gap research from the financial domain to the environmental context. It also provides practical implications for corporate green innovation governance and actionable references for the formulation of environmental regulatory policies.
