Two Collaborative Papers by Associate Professor Li Xinyu Published in International Authoritative Accounting Journals The British Accounting Review and Journal of Business Finance & Accounting
Recently, two collaborative papers by Associate Professor Li Xinyu from the School of Economics at Shandong University were published online in The British Accounting Review and Journal of Business Finance & Accounting, international authoritative accounting journals.
The collaborative paper Blessing or curse? Industrial policy and zombie firms by Associate Professor Li Xinyu, Professor Meng Qingbin from Renmin University of China and Professor Wang Song from St. Mary's University, USA, was published in The British Accounting Review. Based on data of listed companies in China, this paper empirically tests the dynamic impact of industrial policies on the formation and survival of zombie firms. The results show that industrial policy support can effectively inhibit the zombie tendency of enterprises in target industries in the short term, but the inhibitory effect gradually weakens and may reverse with the extension of support time, and the withdrawal of policy support will lead to a significant increase in the number of zombie firms. Further analysis finds that: first, industrial policies inhibit enterprise zombification through the "growth opportunity effect" and promote enterprise zombification through the "over-investment effect"; second, policy resources are allocated in a tilted manner, flowing more to enterprises closely related to the government; third, the impact of industrial policies is particularly prominent during the "Four Trillion Plan" period and weakened after the implementation of "Supply-side Structural Reform"; fourth, the zombie risk caused by industrial policies can be alleviated by setting a support time limit, easing local governments' economic growth pressure, and strengthening market mechanisms. This research reveals the dual mechanism and time-effect characteristics of industrial policies affecting the dynamics of zombie firms, helping to provide useful enlightenment for optimizing the implementation of industrial policies.
The collaborative paper Investors’ natural disaster experience and cost of raising equity capital: Evidence from seasoned equity offering pricing by Associate Professor Li Xinyu, Professor Gao Shenghao from Southwestern University of Finance and Economics, Dr. Tian Siyang from the University of Sussex, UK, and Dr. Zhang Qi from Southwestern University of Finance and Economics was published in Journal of Business Finance & Accounting. Taking the seasoned equity offering (SEO) of A-share listed companies as the research scenario, this paper explores how investors' past natural disaster experiences affect their quotation behavior in new share subscription. Through a proprietary database containing investors' geographical distribution, personal characteristics, office addresses and specific quotation information, the study finds that investors who have experienced natural disasters will demand higher discounts when participating in quotations. Mechanism analysis shows that natural disasters may reduce investors' risk-taking willingness through wealth effect, event salience and background risk perception, thereby leading them to require higher risk compensation. Further analysis points out that the disaster-related quotation bias can be mitigated by investors' special experience in the SEO field, while general professional experience has no such effect. In addition, this quotation discount will translate into higher SEO underpricing, thereby increasing the equity financing cost of issuing enterprises. Finally, the study reveals that natural disasters can exacerbate financial market frictions through the micro-mechanism of affecting investor behavior.
Li Xinyu is an associate professor at the School of Economics at Shandong University. He obtained his Ph.D. in Management from Renmin University of China. His research direction is corporate finance and capital markets. Research achievements have been published in authoritative domestic and foreign journals such as Journal of Corporate Finance, Journal of International Money and Finance, The British Accounting Review, and Management World.
