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Firm perceptions of population aging and cross-regional investment decisions: Evidence from China

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  • Chen, Yaorui
  • Wang, Hua

Abstract

Given the rapid pace of population aging and its strategic implications, this study investigates how firms’ subjective perceptions of demographic change influence cross-regional investment decisions. The empirical findings show that stronger perceptions of population aging significantly increase the likelihood of cross-regional investment. This relationship remains robust across instrumental variable estimation and alternative model specifications. Mechanism analysis suggests that rising labor costs and declining labor efficiency serve as key transmission channels. By linking firm-level investment behavior with demographic shifts, this study contributes to the strategic management literature.

Suggested Citation

  • Chen, Yaorui & Wang, Hua, 2025. "Firm perceptions of population aging and cross-regional investment decisions: Evidence from China," Finance Research Letters, Elsevier, vol. 85(PA).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pa:s1544612325011699
    DOI: 10.1016/j.frl.2025.107911
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