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Action beyond the sky high: Capital structure adjustment speed of Chinese space firms

Author

Listed:
  • Guo, Fei
  • Xu, Lei
  • Li, Bin
  • Sun, Jiawei
  • Dai, Zixuan

Abstract

Space competition has been escalating in recent decades. The 2015 commercialization of Chinese space sector provides a quasi-natural experiment. We establish a positive link between commercialization and capital structure adjustment speed of space firms, especially when their capital structures are below target levels. Such a link is more pronounced among non-state-owned enterprises (non-SOEs), firms in regions of stronger intellectual property protection or better financial inclusion. Improved access to financial resources at lower cost, public scrutiny, and internal motivation underlie the impact. Furthermore, space commercialization enhances firms' innovation performance and total factor productivity (TFP) by accelerating their capital structure adjustment, thereby promoting the development of the real economy. This study may enrich discussion over commercialization of the space sector and effectiveness of China's market economy.

Suggested Citation

  • Guo, Fei & Xu, Lei & Li, Bin & Sun, Jiawei & Dai, Zixuan, 2026. "Action beyond the sky high: Capital structure adjustment speed of Chinese space firms," China Economic Review, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:chieco:v:95:y:2026:i:c:s1043951x25002925
    DOI: 10.1016/j.chieco.2025.102634
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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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