Contemporary Finance & Economics

Internet, Population Scale and China’s Economic Growth: From the City Perspective

LI Jie-wei, WU Si-xu

2020, 0(1): 3-14.

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Based on China’s city-level data from 2001 to 2016, this paper incorporates the population scale into the analytical framework of Internet and economic growth to re-estimate the influence of Internet on China’s economic growth. The findings show that, firstly, internet can improve the economic growth rate of Chinese cities on average, but the results are not robust, because the impact of Internet on cities with less population scale is not significant or is negative. Secondly, the larger the population scale of a city is, the greater the impact of Internet on economic growth will be. Thirdly, the network effect of Internet could explain this strengthening effect. The results of the threshold regression shows that there are two threshold values, 7.72% and 14.32% respectively, and only if the penetration rate exceeds 7.72%, can Internet improve the urban economic growth rate significantly. The result of the threshold regression shows that even in the Midwest of China with lower penetration rate, the promotion effect of Internet on the economic growth of big cities is still greater than that of small cities in the East area with higher average penetration rates. Therefore, the investment in the infrastructure of internet should be made on the city level or the level of city clusters, so as to take both efficiency and regional balanced development into account.

The Impact of Fertility Costs on the Willingness to Have the Second Child

DUAN Ji-hong, SU Hua-shan, ZHANG Cheng

2020, 0(1): 17-26.

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The key to solving the population problem is to find out the root cause of the current low fertility willingness. Based on the opportunity cost theory, this paper introduces the explicit costs and hidden costs to conduct a theoretical analysis from the two perspectives of the cost and benefits of giving birth to the second child. Then based on the survey data, it empirically tests the factors that affect the fertility willingness of the second child. The findings show that such factors as the pain or danger during childbirth, the first child’s resistance, reduced leisure time, no one to care about the children, economic affordability, giving better and fewer births, and more family disputes all have a significant negative impact on the second child’s fertility willingness, which are the major factors restricting people’s child-bearing willingness of their own, among which, the explicit costs is the cause leading to the willingness of second child bearing of women generally lower than men. When studying the regional differences by taking into the consideration the human and social environments in different regions, it is found that the regional differences have a significant impact on the second child-bearing willingness. Therefore, the specific implementation of population policy should also take into account the regional differences.

The Impact of the Implementation of the New Budget Law on the Transparency of Local Finance：An Analysis Based on China’s Provincial Panel Data

SHANGGUAN Ze-ming, NIU Fu-rong

2020, 0(1): 27-36.

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Financial transparency is an important symbol of the modernization of national governance system and governance capacity. How does the new Budget Law, which has been implemented since 2015 as a top-down system reform, affect the transparency of local finance is a major issue worthy of study. By making use of the panel data of 31 provinces in China from 2012 to 2017, this paper studies the impact of the implementation of the new Budget Law on local fiscal transparency. The findings show that the implementation of the new Budget Law has effectively improved the local fiscal transparency. Compared with coastal provinces, the implementation of the new Budget Law in inland provinces can improve local fiscal transparency more significantly. During the process of improving the local fiscal transparency, the implementation of the new Budget Law from the top to the bottom and the social and public demand from the bottom to the top have not produced any synergistic effect. Therefore, the new regulations for the implementation of the budget law should be revised and promulgated as soon as possible, the legal system for the disclosure of fiscal information should be improved, and the government should continue to strengthen the active disclosure of financial information and improve the mechanism of public participation in the disclosure of financial information continuously in accordance with the requirements of the modernization of the national governance system and governance capacity.

Central Transfer Payment and Local Tax Heaven: Inhibition or Intensification

TANG Fei-peng, YE Liu-er

2020, 0(1): 37-50.

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Whether the dependence of local finance on the central transfer payment (CTP) inhibits or fosters the tax competition among the local governments still remains a relatively greater dispute at present. Based on the special situation of Chinese style fiscal decentralization, this paper tries to construct a new theoretical model of local tax competition containing the endogenous impact of CTP. The findings of the theoretical analysis show that the three types of CTP, i.e., the public investment supporting type, the balanced local financial resources type and the tax contribution reward type, can all prompt the rational local governments to adopt more radical tax competition behaviors and lower the effective tax rate grabbed from the enterprises at Nash equilibrium. This empirical analysis sanely confirms that CTP cannot effectively relieve the local tax competition, instead, it produces significant intensifying effect. In addition, this effect has significant single threshold attenuation characteristics and heterogeneity in tax types and time. For this purpose, it is necessary to appropriately control the overall scale of CTP, strengthen the performance evaluation of the special transfer payment, adjust the allocation criteria for the general transfer payment and reinforce the vertical tax decentralization management of tax preference, so as to establish a central-local fiscal relationship with clear rights and liabilities, coordinate financial resources, and regional balance.

Inclusive Finance and Bank Risk Taking：Factual Investigation and Mechanism Analysis

ZHANG Wen-fei, JIN Xiang-yi

2020, 0(1): 51-64.

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Along with the gradual advancement of China’s financial system reform, strengthening financial crisis management and bank risk prevention is an important tough battle to promote the transformation of the financial system. From the perspective of inclusive finance, this paper conducts a theoretical study in the framework of banks bearing risks. The findings show that the development of inclusive finance can significantly reduce the risk level of banks. Based on the BankScope global bank database and the inclusive financial data, it is found through the empirical study that the inclusive financial development has a significant reduction effect on bank risk exposure, and this effect is heterogeneous among different sample classifications. Meanwhile, the inclusive finance can reduce the risks that banks are faced with by increasing the proportion of bank retail deposits and lowering the average interest cost of banks, while the improvement of the governance environment can amplify the risk reduction effect of the inclusive finance and reduce the risk level of the banks. This means that the introduction of “prioritized savings and prioritized access”financial savings policies in remote areas can strengthen banks’ financial services to disadvantaged groups and promote the development of the inclusive finance, which is essential to the promotion of the healthy development of financial markets.

An Analysis of the Influence of Inclusive Finance on Household Financial Assets Selection and Its Mechanism

ZHANG Xiao-mei, DONG Wen-kui, HAN Ke-fei

2020, 0(1): 65-76.

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Based on the data of China Household Finance Survey (CHFS), this paper studies the influence of inclusive finance on the selection of household financial assets. The findings show that the inclusive finance can increase the probability of household participation in stock markets and risk financial markets, and can also increase the proportion of household allocation of stock assets and risk financial assets. Through a mechanism analysis, it is further shown that the inclusive finance can affect the financial attainment of households, and thus further affect the household financial asset selection. In addition, when the samples are subdivided into rural households and urban households, higher-income households and lower-income households for research, it is found that the inclusive finance has a greater marginal impact on the rural households and lower-income households. Therefore, to raise the level of inclusive finance can promote households to allocate financial assets more rationally, and the effect of this policy is more significant in rural households and lower-income households.

Research on Organizational Stigma and Choice of Entry Modes of Chinese Enterprises in Overseas Markets: An Empirical Analysis Based on Listed Companies

ZHANG Ning-ning, DU Xiao-jun

2020, 0(1): 77-88.

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From the perspective of organizational stigma and based on the organizational legitimacy theory and the resource-based view, this paper adopts the event that Chinese enterprises first carried out outward foreign direct investment during the period of 2006-2015 as the research samples and employs the Logit regression analytical method to explore the influence of organizational stigma on the choice of entry modes of Chinese enterprises in overseas markets. It also analyzes the adjustment effect of home country area system environment and the enterprise ownership nature in that influence. The results show that organizational stigma has a significant negative impact on Chinese enterprises to choose the sole proprietorship mode to enter the overseas markets, namely, the existence of organizational stigma makes Chinese enterprises more inclined to choose joint venture mode to enter the host country market; while the home regional institutional environment strengthens the negative correlation between the two, and the nature of ownership has a weakening effect on the above-mentioned negative effect.

Strategic Capture, Loss of Capability and OEM Enterprises’ Low-End Locking: Based on the Moderating Effect of Network Relationship Capacity

HU Da-li, YIN Xiao-wen, HU Jing-bo

2020, 0(1): 89-100.

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China’s manufacturing industry is embedded into the Global Value Chain production system dominated by multinational corporations in the form of Original Equipment Manufacturer (OEM). This model has greatly promoted the rapid development of China’s economy, but also makes China’s economy trap in the dilemma of“impoverished growth”. Therefore, it is imperative for the OEM enterprises to transform and upgrade in order to survive and develop continuously in the future. However, as the OEM enterprises try to upgrade to the high-end of Value Chain, they will inevitably be captured by various strategies of multinational corporations, which can force OEM enterprises to stay at the low-end of Global Value Chain for a long time, and ultimately the“low end locking”will be formed. Based on the capture theory, this paper constructs a moderated mediation model, in order to reveal how the strategic capture of multinational corporations leads OEM enterprises into the “low-end locking”. The research result shows that there is a positive correlation between strategic capture and the“low-end locking”of OEM enterprises. The loss of independent innovation capability of OEM enterprises acts as partial mediators between strategic capture and the“low-end locking”of OEM enterprises. The network relationship capability of OEM enterprises has the negative moderating effect on the strategic capture and the loss of independent innovation capability of OEM enterprises. Further, the network relationship capability can also adjust the mediating effect of the loss of independent innovation ability on the strategic capture and the“low-end locking”of OEM enterprises.

Spatial Expansion of Value Chain Division and Connection and Corporate Connotative Development Ability

CHEN Jian, ZHAO Di, ZHAO Yang

2020, 0(1): 101-113.

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Under the requirements of high-quality development, to re-examine the value chain division system constructed by Chinese enterprises and its influence on corporate connotative development constitutes the main purpose of this paper. Based on China’s microcosmic enterprises survey data collected by World Bank, this paper rationally defines the value chain division and connection at the enterprise level on the one hand and scientifically constructs the corporate connotative development measurement on the other hand, then it carries out an empirical analysis. The findings show that the expansion of value chain division and upstream-and downstream-connection can both help the promotion of corporate connotation development, while the middle-stream competitive link had adverse effect. When further considering the spatial heterogeneity of value chain division expansion, the result confirms that the connotative development ability of enterprises’ expansion of division and connection at national and international level has a most prominent promotion effect. It is found through industry-classified comparison that compared with the service enterprises, the connotative development effect of the manufacturing enterprises brought about by expansion of large spatial scale division and connection is more significant, especially for the technology-intensive manufacturing enterprises. The enterprises with higher connotative development ability can get more marginal positive effect from the expansion of value chain division and connection.

Regional Employment Allocation of Human Capital and Total Factor Productivity

XU Ye, YU Jia-ju

2020, 0(1): 114-125.

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From the perspective of medium human capital, this paper measures the scarcity of regional higher-level human capital and the mismatch degree of human capital employment with the Mincer equation. Through the two factors, it also studies the impact of regional human capital employment allocation on corporate total factor productivity. The findings show that the increase of the regional higher-level human capital scarcity will reduce the corporate total factor productivity, and this effect is greater on the state-owned enterprises. The impact of higher-level human capital scarcity on the total factor productivity of private enterprises is greater in the lower labor-intensive industries, while the impact on the total factor productivity is greater in the higher labor-intensive industries. The increase of the mismatching degree of regional human capital employment is unfavorable to the total factor productivity of the private enterprises, especially to the private enterprises in higher labor-intensive enterprises. Because of the increase of the comparative competitive edge, the regional human capital employment mismatching degree has a positive impact on the total factor productivity of the state-owned enterprises in the lower labor-intensive industries.

Stock Liquidity, Field Survey of Institutional Investors and Earnings from Employee Stock Ownership Plans

LIU Qian-ru, LIU Zhi-yuan

2020, 0(1): 126-135.

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Taking the employee stock ownership plan of China’s A-share listed companies from January 2014 to August 2017 as samples, this paper analyzes the causes and mitigation mechanisms of the insufficient earnings from the employee stock ownership plan from the perspectives of stock liquidity and institutional investors’ field surveys. The results show that the employee stock ownership plan does have the problem of insufficient earnings, and lacking of stock liquidity would intensify the problem of insufficient earnings from the employee stock ownership plan. Ii is found through further study that the field survey done by institutional investors can alleviate the problem of insufficient earnings from the employee stock ownership plan. It is also found through further subdivision of the institutional investors types that the field surveys done by private placement, brokers, overseas qualified investors and other types of institutional investors can better mitigated the problem of insufficient earnings from the employee stock ownership plan.

Policy Shocks, Attention Distribution and Investor Sentiment: An Analysis Based on“Shanghai-Hong Kong Stock Connect”and“Shenzhen-Hong Kong Stock Connect”Policies

YU Bo, WU Han-hong

2020, 0(1): 136-148.

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Against the background of the dual policy shocks of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, this paper makes use of Shanghai-Hong Kong and Shenzhen-Hong Kong trading volume data and the Baidu Index to track Shanghai-Hong Kong and Shenzhen-Hong Kong trading linkages and the distribution levels of investors’ attention. With the help of the double difference method, it studies the market emotional effect of the interconnection policy and the regulating effect of attention distribution on this emotional effect. The findings show that the interconnection policy has improved the level of emotional linkage between Shanghai and Hong Kong and between Shenzhen and Hong Kong. The higher the level of attention distribution by investors to the interconnection policy, the greater the level of emotional linkage between Shanghai and Hong Kong and between Shenzhen and Hong Kong, indicating that attention distribution has a regulating effect on the effect of policies. When comparing the changes in the level of emotional linkage during the policy expectation phase and the policy implementation phase, it is found that the investor’s attention distribution level is stronger in the policy expectation phase, resulting in the effect of policy expectations on the level of emotional linkage is more prominent than the policy itself, while the attention attenuation effect causes the level of emotional linkage of Shenzhen-Hong Kong Stock Connect to be weaker than that of Shanghai-Hong Kong Stock Connect.

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