"Area-based Evaluation Mechanism"Reform and Enterprise High-quality Growth:Perspectives on Efficiency and Momentum Changes
The"Area-based Evaluation Mechanism"(ABEM)reform is a significant institutional innovation by local governments in China to optimize resource allocation and promote high-quality growth.This reform was first implemented in 2006 in Keqiao District,Shaoxing City,Zhejiang Province.It introduced the concept of"yield per acre"from agriculture into the industrial sector,making"per acre performance"a crucial indicator of resource allocation.It aimed to prioritize allocating scarce resources,such as land,capital,and energy,to high-efficiency enterprises,while pressuring low-efficiency enterprises to exit the market.In recent years,this reform has gradually expanded from local practices in Zhejiang to a nationwide initiative,becoming a key measure for local governments to improve economic quality and efficiency.Although enterprises are the direct subjects of"per acre performance"evaluation and experiencing the most immediate and profound impacts of the reform,related research remains relatively sparse.As critical entities in economic development,how enterprises explore paths to high-quality growth under the incentives and pressures brought by the reform not only affects the success of the reform itself but also serves as an important benchmark for assessing the depth of the reform and the effectiveness of high-quality economic growthWe analyze the theoretical logic of how ABEM influences high-quality enterprise growth from the perspectives of efficiency and momentum changes,grounded in the core principles of high-quality growth.We use panel data on listed companies in Jiangsu,Zhejiang,and Shanghai from 2005 to 2017.We employ a gradual difference-in-differences method to identify the causal effects of the reform on firms'total factor productivity(TFP).The results reveal that the ABEM reform led to an average increase of 0.059 units in TFP,translating to an average increase of 6.563％relative to the standard deviation.The transmission mechanisms are that the reform promotes efficiency change through reverse pressure measures,such as accelerating the exit of low-efficiency firms from the market,while simultaneously promoting momentum change through positive incentive measures,such as reducing firms'financing constraints,thereby improving TFP.Heterogeneity analysis reveals that the ABEM reform significantly impacts TFP in low-competition,labor-intensive,and capital-intensive industries.Further,the effect is not significant in high-competition and technology-intensive industries.Further analysis reveals that the reform boosts firms'economic value-added and increases the proportion of overseas revenue,while reducing the internal wage gap.Compared with existing literature,the contributions of this study are mainly reflected in the following aspects:First,based on the core principles of high-quality growth,we discuss the impact of ABEM on enterprises'high-quality growth from the perspectives of efficiency and momentum changes.Grounded in the dual mechanisms inherent in the ABEM reform and the core concept of high-quality growth,we deeply explore the impact paths of the reform on an enterprise's high-quality growth by linking the positive incentives and reverse pressure mechanisms in the reform with efficiency and momentum changes,respectively,thereby expanding the understanding of how institutional reforms promote high-quality growth of enterprises.Second,we investigate the ABEM reform's policy effects from the perspective of enterprises.Current research on ABEM focuses on more macro-level regional data.As enterprises are the micro-level entities evaluated by"per acre performance,"studying them provides a more specific and intuitive analysis of the economic impacts of the ABEM reform.Third,we confirm the effect of the ABEM reform in promoting enterprises'high-quality growth and demonstrate the differences in the reform effects across industries and different types of firms,implying that a"one-size-fits-all"approach should be avoided in advancing the reform.The findings provide a reference for formulating more scientific and reasonable ABEM reform policies suitable for different industries and firms.Fourth,we formally apply the parallel trend nonlinearity test in research practice,referencing theoretical econometric literature and partially addressing the shortcomings of traditional parallel trend tests that overlook nonlinearity deviations.
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