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The impact of the logistics service standardization on firm value: Evidence from China

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  • Tan, Jianhua
  • Yan, Lina
  • Chan, Kam C.

Abstract

In 2014, the Standardization Administration of China launched its first pilot project of the logistics service standardization (LSS). We examine whether the staggered adoption of the LSS creates value for shareholders using a difference-in-difference research design. The findings suggest that firms located in LSS cities have higher firm value in terms of Tobin’s Q and stock returns than those of non-LSS cities. In further analysis, we find that the LSS enhances firm value by improving corporate operational efficiency. However, the LSS increases large firms’ market share at the expense of small firms. Overall, our findings advance the literature of logistics system reform and show that such reform creates value for shareholders.

Suggested Citation

  • Tan, Jianhua & Yan, Lina & Chan, Kam C., 2020. "The impact of the logistics service standardization on firm value: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:ecofin:v:52:y:2020:i:c:s106294081930049x
    DOI: 10.1016/j.najef.2019.101134
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    Cited by:

    1. Tan, Jianhua & Wang, Xiongyuan & Chan, Kam C., 2020. "Does a national reform of a logistics system matter in corporate cash management? Evidence from logistics service standardization in China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    2. Tan, Jianhua & Wang, Xiongyuan & Zhang, Peng, 2022. "Logistics service standardization and corporate innovation: Evidence from a natural experiment," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 549-565.
    3. Jie Sun & Lewis Makosa & Jinkun Yang & Fangyuan Yin & Moses Jachi & Wellington Garikai Bonga, 2021. "Externalities of economic sanctions on performance of intra‐industry non‐sanctioned firms: Evidence from Zimbabwe," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(5), pages 643-664, November.

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    More about this item

    Keywords

    Logistics service standardization; Firm value; Natural experiment;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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