Abstract
This dissertation investigates how firms adjust their investment and operational decisions in response to external uncertainty, with particular attention to the roles of government-related economic linkages and information environments. Drawing on evidence from both China and the United States, the thesis highlights how differences in institutional environments are associated with variation in firms’ adaptive strategies under major economic, informational and environmental shocks.The first essay investigates the role of government suppliers in China and examines whether public procurement relationships enhance firm resilience during the COVID-19 crisis. Using a novel and manually collected dataset of procurement contracts from China Government Procurement Website (CCGP), the study identifies listed firms with government sales prior to the pandemic as government suppliers and compares them with other firms. The results show that government suppliers experienced significantly higher cumulative abnormal returns at the onset of the pandemic and outperformed their peers in terms of total sales, sales growth, and investment during 2019-2020 period. These findings highlight the stabilizing role of public procurement ties in times of economic disruption.
The second essay investigates managerial learning and its effect on corporate investment efficiency. It uses the unexpected withdrawal of Google from China in 2010, which significantly reduced the accessibility of investor information, as an exogenous information shock. The analysis reveals that firms more frequently searched on Google prior to the exit experienced a significant decline in investment efficiency, suggesting that managers relied on new information reflected in stock prices by external investors to guide capital allocation. The effect is especially pronounced in firms facing greater growth opportunities, higher product uncertainty, or limited access to external information sources. These findings contribute to the understanding of managerial learning from external information and its impact on investment decisions.
The third essay shifts to the U.S. context and examines how climate change exposure affects investment behavior among government suppliers. The findings reveal that firms increase investment in response to general climate change exposure, particularly opportunity-related exposure, but not in response to regulatory or physical climate risks. This effect is more pronounced among firms with low earnings volatility and cash flow volatility, operating in industries with low demand uncertainty, and having high investment irreversibility. Moreover, firms that invest under opportunity-related climate exposure tend to secure more future government contracts and face a lower likelihood of relationship termination, suggesting that proactive climate investment offers strategic procurement advantages.
These three chapters analyze distinct but interrelated settings. It first shows that firms with government procurement ties in China exhibit greater resilience during the COVID-19 crisis, reflected in superior market performance, operating outcomes, and investment activity. It then demonstrates that the unexpected withdrawal of Google from China weakened information transmission and managerial learning, leading to a deterioration in investment efficiency, especially among firms with high growth opportunities and limited alternative information sources. Finally, in the U.S. context, the thesis documents that government suppliers respond proactively to opportunity-related climate change exposure by increasing investment, which in turn improves their future procurement outcomes and relationship stability. Collectively, these findings reveal that firms’ responses to external uncertainty are systematically shaped by the interaction between economic linkages with the state and the quality of information environments. Government-related relationships can mitigate demand uncertainty and enhance predictability, while transparent information channels facilitate managerial learning and efficient capital allocation. The comparative analysis further shows that these mechanisms operate differently across institutional settings, highlighting important cross-country variations in corporate adaptation processes.
This dissertation makes several key contributions. First, it constructs a novel and manually collected dataset of procurement contracts from the China Government Procurement Website (CCGP), which enables the identification of listed firms with government procurement ties. This dataset improves upon existing firm-level disclosures, which typically report only the top 10 customers and suppliers, often in vague or incomplete terms. By supplementing and refining firm-level data on government clients and suppliers, this dissertation provides a valuable empirical foundation for studying public procurement and firm behavior in the Chinese context. Second, it offers novel empirical evidence on how economic linkages with the government influence firm performance during crises and climate-related transitions. It also uncovers how external information channels shape managerial learning and corporate investment efficiency, particularly in emerging markets. Methodologically, the dissertation uses manually collected data and employs quasi-experimental research designs to enhance causal identification. Finally, by incorporating both Chinese and U.S. settings, it provides comparative insights into the institutional determinants of firm behavior under external uncertainty.
| Date of Award | 15 Jul 2026 |
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| Original language | English |
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| Supervisor | Cherry Yi Zhang (Supervisor), Xiaolan Zheng (Supervisor) & Donghui Li (Supervisor) |