Author : Hua Cheng
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis How Political Leaders Affect Disruptive Technology Adoption and Corporate Operational Efficiency by : Hua Cheng
Download or read book How Political Leaders Affect Disruptive Technology Adoption and Corporate Operational Efficiency written by Hua Cheng and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.