Accountability audit of natural resources and total factor productivity-Evidence based on Chinese listed companies

Based on a natural event, namely a pilot accountability audit of natural resources conducted by local officials in 2014, this study empirically investigates the impact of the pilot on the total factor productivity (TFP) of enterprises. The study utilizes the Differences-in-Differences model with an observation window spanning from 2012 to 2015. The findings indicate a significant reduction in the total factor productivity of enterprises in the pilot area due to the implementation of the pilot program. The study identifies that this impact is primarily driven by increased production costs and decreased investment. Further analysis reveals heterogeneity in the effects, with regions characterized by low levels of economic development, distortions in the production element market, low competition in industries, heavy asset-intensive industries, large enterprises, and absolute holding enterprises experiencing a more pronounced impact of the audit on total factor productivity. Overall, this study sheds light on the influence of accountability audits of natural resources on the real economy and offers valuable insights for policymakers.