17th IBSS Research Seminar | Does the adoption of a central bank digital currency stimulate corporate innovation? Evidence from electronic Chinese yuan

Organised by: RCE 3 (Decision Making in Business)

 Presentation Title: Does the adoption of a central bank digital currency stimulate corporate innovation? Evidence from electronic Chinese yuan

Time and Date: 11:00am-12:00pm, Friday, 6 December 2024 (Beijing time)

Language: English

Onsite location: BS 574

Abstract:

We investigate whether and to what extent a central bank digital currency (CBDC)stimulates corporate innovation by exploiting the staggered pilot of e-CNY (electronic Chinese yuan) across China. E-CNY enhances the transparency and traceability of government subsidies, mitigates firm agency problems, and reduces firm financial constraints. Through a difference-in-differences research design, we document that e-CNY significantly enhances the quantity, quality, and efficiency of innovation among treatment firms relative to control firms, driven by increased spending in research and development activities. These incentivized innovation activities contribute to improvements in firm productivity, growth, and profitability, signaling enhanced product market competitiveness. Our findings highlight the positive role of CBDC adoption in promoting corporate innovation activities.

Presenter: Professor Kam C. Chan, Shanghai Business School

Professor Kam (Jonny) C. Chan is currently a distinguished professor of finance at Shanghai Business School. Professor Chan holds a Ph.D. in Finance from the University of Alabama and served as the Leon and Ruby Mai Page Chair and Professor of Finance at Western Kentucky University.  His research covers a wide spectrum, including the Chinese capital markets and business decision-making.  He has made great contributions to business research and has published extensively in top-quality business, finance, and accounting journals, including the Journal of Finance, Accounting, Organizations and Society, Journal of International Business Studies, Journal of Corporate Finance, Journal of Business Ethics, Journal of Business Finance & Accounting, Journal of Banking & Finance, etc.