Internal Control, Environmental Uncertainty and Total Factor Productivity of Firms—Evidence from Chinese Capital Market

Round 1

Reviewer 1 Report

Please see the attached file.

Comments for author File: Comments.pdf

Author Response

Dear editors and reviewers:We sincerely thank the editors and all reviews for your valuable feedback that we have used to improve to the quality of our manuscript. The reviewer comments are laid out below italicized font in blue text and specific concerns have been numbered. Our response is given in normal font and the changes or additions to the manuscript, please refer to the latest manuscript uploaded for specific revisions.

Author Response File: Author Response.pdf

Reviewer 2 Report

This article studies the environmental uncertainty and moderating role of internal controls and factors productivity at the firm level. I believe it is an important and interesting dimension to study environmental uncertainty. However, I have serious issues with the approach and ways to address this topic. Detailed comments are given below.

 

1.       The introduction is very vague, and poor in writing structure which not only fails to highlight the core issue discussed in the study but the errors in language make it difficult to understand.

2.       It is strongly recommended to highlight the importance of the topic. How you are contributing to the body of knowledge.

3. In Paragraph 2, Page 1, the author discusses the current literature but fails to highlight them in detail and draw the contribution of this study.

4.       A few studies of economic policy uncertainty are discussed which bears no meaning to this study. It is recommended to revise them with environmental uncertainty or climate uncertainty.

5.       Discussion of taken variables in the introduction is very weak.

6.       Literature review is very weak, it is advised to add more recent and relevant literature.

Overall, the introduction is very poor and fails to explain the importance and contribution of the study. Reporting a few studies is not sufficient enough to explain the audience.

 

7.       Include the data, and sources in the study design which is given on line 149. Explain how the considered method is appropriate to analyze the objectives of the study.

8.       Why you are considering Chinese firms? As above you have not discussed it in detail.

9.       Mere dependence on single or multiple references to highlight the importance of the methodology is not enough. You need to highlight how this approach is suitable to analyze the panel data.

10.   The discussion of descriptive statistics is very poor.

11.   Overall results of the study are poorly interpreted, which draws no outcome. It is recommended to link the results with your hypothesis and explain them in detail.

12.   Write down the economic contribution or outcome of your results, and link them with previous studies or theories.

13.   Why you have included the heterogeneity tests? Give some reasons and you must test the endogeneity of the data.

 

I believe this manuscript needs major revisions before further processing.

Author Response

Dear editors and reviewers:We sincerely thank the editors and all reviews for your valuable feedback that we have used to improve to the quality of our manuscript. The reviewer comments are laid out below italicized font in blue text and specific concerns have been numbered. Our response is given in normal font and the changes or additions to the manuscript, please refer to the latest manuscript uploaded for specific revisions.

Author Response File: Author Response.docx

Reviewer 3 Report

Review

The paper "Environmental Uncertainty: An Examination of the Moderating Effects of Firms' Internal Controls and Total Factor Productivity" submitted for review, by Kun Wang, Lichen Liu, Mengyue Deng, Yaxian Feng, is an interesting analysis of the influence of firms' internal controls and total factor productivity.

Remarks:

Abstract is quite chaotic in terms of content and organization.

I propose to arrange it according to logical order:

Objective:

Methodology:

Results:

Implications for theory and practice:

Originality and value:

 

In the introduction, it is necessary to broaden and critically evaluate the scientific views on the above-mentioned subject, contained in the literature on the subject from the Anglo-Saxon area and representatives of countries with a high position of market economy.

The hypotheses put forward have been proven and the statistical methods used have been properly selected and applied, and the results obtained are satisfactory, which allows for proper inference.

The conclusions presented in the article meet the requirements of scientific reasoning based on the use of appropriate statistical tools.

The proposed recommendations fulfill practical functions and can be used in business practice.

I rate the article highly in terms of content and methodology.

After taking into account the comments, I propose to publish the article.

 

Author Response

Dear editors and reviewers:We sincerely thank the editors and all reviews for your valuable feedback that we have used to improve to the quality of our manuscript. The reviewer comments are laid out below italicized font in blue text and specific concerns have been numbered. Our response is given in normal font and the changes or additions to the manuscript, please refer to the latest manuscript uploaded for specific revisions.

Author Response File: Author Response.docx

Reviewer 4 Report

 

Abstract

·         The abstract needs to be rewritten, the research methods, main results, and contribution should be reflected in abstract. The research originality has not been properly addressed.

Introduction

·         The introduction in its current format is not effective. To be precise, it does not really introduce and put the things into right perspective what follow.

·         The introduction needs to be linked with the theory, the research gap with theory underpinnings also should be discussed.

·         The introduction needs to be rewritten, taking into consideration the aim of the study, the main question that the researcher seeks to answer, the contribution and originality of the study.

·         A brief discussion of the methods and findings may be given in the introduction to communicate a better idea for readers.

 

Theoretical basis and research hypotheses

·         This section should be literature review and research hypotheses

·         The literature review in its current form is basic and simple. The literature review needs to be rewritten. You should analyse, synthesis, and critically evaluate the research studies related to the topic to give a clear picture of the state of knowledge on the subject

·         The references used in your literature are not up to the date. There are a number of old studies cited. You should provide some recent studies (Sections 2 and 3) 

 

Methodology

·         How do you ensure your index reliability and validity of your internal control index?

·         Why the mediating role? What is your justification and criteria?

 

 

Analysis of the empirical results

·         VIF values need to be provided

·         Why Benchmark regression analysis?

·         There is a serious issue in your research model. Is it mediating or moderating? The results and the discussion demonstrate moderating effect however, section 3.2.3. describes the mediating variable of environmental uncertainty? This is a serious issue that may put your all idea accepted or rejected?

·         Your topic is moderating however, the major part of the idea is built based on the mediating analysis.

·         The results in 4.4.3. Replacing the sample range are not described well.

·         The results in section 5 are confusing. Suddenly, you have added new variables, models, and ideas. The link and idea coherence missed compared to the earlier sections.

·         Another serious issue is that in tables 5 and 6 you have models from 1 to 6 however, you have 2 defined equations. Equation 4 is defined after the presentation of tables and 6. Again, in table 7 you have the models 1 to 4 with new variables. The models presented in each table should not be serially numbered like 1 to 6 or 1 to 4 ,rather, each number should denoted a unique model.

·         This discussion of the results with prior studies, theory and hypotheses is weak.

 

Research Conclusions and Implications

·         Implications should be in a separate section.

·         The conclusion should include briefly:

a.         Aim of the article

b.         Methods applied and analysis tools

c.         Major findings

d.         Contribution, originality

e.         Implications

f.          Limitations

g.         Future for future research

 

Other comments

Inconsistency of citing style.

Poor acknowledgment of prior studies.

 

Author Response

Dear editors and reviewers: We sincerely thank the editors and all reviews for your valuable feedback that we have used to improve to the quality of our manuscript. The reviewer comments are laid out below italicized font in blue text and specific concerns have been numbered. Our response is given in normal font and the changes or additions to the manuscript, please refer to the latest manuscript uploaded for specific revisions.

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

The paper is largely rewritten. The revised version is much improved relative to the original manuscript. All my comments and suggestions have been addressed. I now have a few more questions and comments as follows. 

(1)  Line 11: Please rewrite the first sentence in the abstract. Does the phrase “…the influence mechanism of environmental moderating effect” mean “in the presence of environmental uncertainty?”

(2) Line 33: “should” is not needed in the sentence.

(3)  Line 177: Please add “total factor productivity (TFP)” in the earlier discussion (maybe in Line 82 where the term was first discussed).

(4) Line 180: the phrase “from the perspective of …” is used in a very confusing way in your discussion. You have used “from the perspective of environmental uncertainty,” “from the perspective of internal control quality,” and “from the perspective of financing constraints” in your paper.

(5) Line 183: I am not sure whether it is largely accepted that “the role of internal control in corporate development has been controversial.” Are you referring to the study by Li (2007)? However, in Li (2007), it was about excessive internal control which is different from internal control. Could you please reference more studies that may argue for your statement here.

(6) Line 222: what does “it” mean?

(7) Line 551 and Line 555: should it be Model (2)?

(8) Model (3): it should be EU*IC.

(9) Lines 571 to 574: is this paragraph relevant to H3 or H2? Related, it is unclear how H2 and H3 are different in terms of your model design.

(10) Lines 578 to 583: please provide some economic explanations of the values for TFP_LP. By the way, the whole paragraph is one sentence.

(11) Line 683: using “the interaction term” in the sentence is really confusing. What you referred to is alpha1 in model (2), correct?

(12) Why does table 9 report the analysis based on model (3) while table 10 reports the analysis based on model (2)?

Author Response

Dear editors and reviewers:

We sincerely thank the editors and all reviews for your valuable feedback that we have used to improve to the quality of our manuscript. The reviewer comments are laid out below italicized font in blue text and specific concerns have been numbered. Our response is given in normal font and the changes or additions to the manuscript, please refer to the latest manuscript uploaded for specific revisions.

Author Response File: Author Response.docx

Reviewer 2 Report

I am satisfied with the response of the authors.

Author Response

Dear reviewer2：
Thank you very much for your recognition of our paper and we would like to express our gratitude to you for your hard work in reviewing this paper. 

Reviewer 4 Report

The suggestions are incorporated 

Author Response

Dear reviewer4：
Thank you very much for your recognition of our paper and we would like to express our gratitude to you for your hard work in reviewing this paper.