Table of Content

15 November 2020, Volume 0 Issue 11

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Theoretical Economics

Employment Effects of the Pilot Free Trade Zones: Siphon or Radiation

CAO Xiang, ZHANG Shuang-long, YU Sheng-guo

2020, 0(11):  3-14. 

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The preferential policies and development potential of the Pilot Free Trade Zones are highly attractive to the people for employment. However, does the impact of the establishment of the Pilot Free Trade Zones on employment show the siphon effect of absorbing urban employment from the non-pilot free trade zones or the radiation effect of promoting urban employment in the non-pilot free trade zones? This issue is of great importance to stabilize employment and promote employment, which is the supreme work of people's livelihood. Based on the data of 285 Chinese cities from 2004 to 2016 and employing the DID method, this paper conducts an assessment of the employment effect of the Pilot Free Trade Zones. The results show that the establishment of the pilot FTZ has significantly improved the local employment level; its impact on the employment shows no siphon effect but radiation effect. The establishment of the pilot FTZ has promoted the employment of urban private and individual firms, the service industry, and the non-high-tech industries rather significantly, but the promotion effect on the employment of the high-tech industry is relatively smaller, while on the employment of the urban work units and the secondary industries this effect is not obvious. One important way for the pilot FTZs to promote employment is to increase the government expenditures.

Network Externality, Peer Effect and Herd Behavior:An Empirical Study Based on the Imperfect Information Bayesian Model

XI Ming-ming

2020, 0(11):  15-25. 

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Digital economy is an important direction for China's future development, and the peer effect plays a very important driving role in the development of digital economy. Based on the data of the“Singles'Day”Online consumption survey in 2019, the theoretical and empirical studies based on the imperfect information Bayesian decision model show that the peer effect can have a significant impact on the herd behavior of consumers, and this impact will increase at a decreasing rate with the increase of the number of peers. Further data analysis shows that due to the network information externality and payment externality, each additional partner participating in the“Singles' Day”activity will, on average, increase the probability of consumers participating in the“Singles' Day”activity by more than 8%. After the treatment by using the instrumental variable method and the propensity index matching analysis, the result remains significantly valid. This shows that there is a certain degree of irrational exuberance in the development of the digital economy. To maintain the healthy, sustainable and stable development of the digital economy, it is necessary to optimize and improve government policies, business management and individual decision-making.

Public Economics & Administration

Research on the Financial Regulation System of Local Governments' Consumption Voucher in China

JI Jie

2020, 0(11):  26-37. 

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In the context of COVID-19 epidemic, in order to stimulate market recovery in catering, tourism and other sectors, the local governments transfer purchasing power to the public in the form of consumption vouchers, so as to improve the marginal propensity of the public to consume in the short term. At present, there exist some problems in China's financial system to regulate the issuance of consumption vouchers by local governments. In the external link of the issuance, such issues as the scattered responsibility departments, the not-traceable bidding process on the e-commerce platforms, and the non-transparency of the audit standards for contract merchants are gradually highlighted; in the internal procedure link, the procedure of“decision making-checking-implementation-supervision” is not included and constrained in effective regulatory documents, there also exist such problems as the softened budget constraints, the separation of decision-making power and budgetary power, and the lack of recovery and liquidation procedures. In order to realize the constraint on all the subjects in external links and the reasonable arrangement under the internal procedures, a regulation system of consumption coupons based on local authorities and supported by the central government should be built, the technical participation of e-commerce platforms should be viewed dialectically, and the technology black boxes should be prevented strictly while using the technology bonus. In terms of budget setting, the fiscal expenditure structure should be adjusted in the orientation of public risks, the integration of the decision-making power and budget power of the budget expenditure policy should be strengthened, and the recovery and liquidation of fiscal funds should be realized through the statistical liquidation of consumption vouchers, thus forming the financial supervision of issuing terminals.

The Squeeze on Private Enterprises' Financing and the Reverse Competition against State-Owned Enterprises

WANG Min, CHEN Dong

2020, 0(11):  38-49. 

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Through constructing a game model between leaders and followers, this paper explains the competitive relationship between state-owned enterprises and private enterprises in the financial market. The conclusion of the theoretical research indicates that the financing costs of the state-owned enterprises mainly depend on the marginal effect brought by the financing on its performance growth; while the financing costs of the private enterprises depend on the marginal effect of financing for its performance growth on the one hand, and on the other hand depend on whether the financing of state-owned enterprises will squeeze the financing space of private enterprises and form the reverse competition against the state-owned enterprises. The empirical result based on the domestic bond market data shows that the financing costs of private enterprises are significantly higher than that of state-owned enterprises. When both state-owned enterprises and private enterprises obtain financing at the same time, the larger the financing scale of state-owned enterprises, the greater the financing costs of private enterprises will be, that is, a squeeze effect on private enterprises is formed. The increase in financing costs of private enterprises will in turn increase the financing costs of state-owned enterprises and form reverse competition. Private enterprises can effectively reduce their financing costs by such methods as reducing information asymmetry through public offering financing, increasing financing scale and so on. Therefore, in order to solve the financing problem of private enterprises, it is necessary to carry out policy adjustment from such aspects as increasing the financial transparency of private enterprises, improving the service quality of government regulatory agencies, optimizing the performance assessment methods of financial institutions, and so on.

Modern Finance

The Squeeze on Private Enterprises' Financing and the Reverse Competition against State-Owned Enterprises

WANG Min, CHEN Dong

2020, 0(11):  50-62. 

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Through constructing a game model between leaders and followers, this paper explains the competitive relationship between state-owned enterprises and private enterprises in the financial market. The conclusion of the theoretical research indicates that the financing costs of the state-owned enterprises mainly depend on the marginal effect brought by the financing on its performance growth; while the financing costs of the private enterprises depend on the marginal effect of financing for its performance growth on the one hand, and on the other hand depend on whether the financing of state-owned enterprises will squeeze the financing space of private enterprises and form the reverse competition against the state-owned enterprises. The empirical result based on the domestic bond market data shows that the financing costs of private enterprises are significantly higher than that of state-owned enterprises. When both state-owned enterprises and private enterprises obtain financing at the same time, the larger the financing scale of state-owned enterprises, the greater the financing costs of private enterprises will be, that is, a squeeze effect on private enterprises is formed. The increase in financing costs of private enterprises will in turn increase the financing costs of state-owned enterprises and form reverse competition. Private enterprises can effectively reduce their financing costs by such methods as reducing information asymmetry through public offering financing, increasing financing scale and so on. Therefore, in order to solve the financing problem of private enterprises, it is necessary to carry out policy adjustment from such aspects as increasing the financial transparency of private enterprises, improving the service quality of government regulatory agencies, optimizing the performance assessment methods of financial institutions, and so on.

The Determinants of RMB Exchange Rate under the Extended Taylor Rule: A Study Based on the Operating Characteristics of RMB Exchange Rate before and after the “8.11 Exchange Rate Reform”

LIU Jun-dong, LIU Xing-hua

2020, 0(11):  63-74. 

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The “8.11 exchange rate reform”is an attempt of the central bank to promote the marketization of exchange rate to transit into the floating exchange rate system. Through employing the extended Taylor rule and constructing a TVP-SV-BVAR model, this paper conducts an analysis of the core influencing factors of RMB exchange rate. Then it takes the reform of RMB exchange rate formation mechanism in various stages as the node to compare the changes of influencing factors before and after the “8.11 exchange rate reform”. The results show that capital account openness, exchange rate expectations, inflation differences, interest rate differences and output gap differences have significant time-varying impacts on RMB exchange rates. Therefore, when formulating macro policies, the central bank should pay attention to the interaction of the influencing factors, reasonably arrange the opening path of capital account, and effectively guide the market expectations, so as to ensure the stable and effective development of China's economy.

Business Administration

The Governance Effect of Controlling Shareholders' Leverage Increased Holdings: From the Perspective of Corporate Real Earnings Management

XIONG Ling-yun

2020, 0(11):  75-87. 

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Based on the data of A-share non-financial enterprises from 2015 to 2018 and from the perspective of real earnings management, this paper examines the governance effect of controlling shareholders' using leverage to increase their shareholdings. The results show that the controlling shareholders' leverage increased shareholdings will significantly reduce the company's real earnings management, and the ratio, amount and number of shares of controlling shareholders' leverage increased holdings will significantly reduce the company's real earnings management, indicating that the controlling shareholders' leverage increased holdings has obvious inhibiting effects on the company's real earnings management, thereby improving the quality of the earnings of the listed companies. In addition, the controlling shareholders' leverage increased shareholding behavior reduces the company's real earnings management mainly by restraining the company's sales control and production control. At the same time, in non-state-owned enterprises and companies with better internal governance environment and better external institutional environment, the controlling shareholders' leverage increased shareholdings has a stronger inhibitory effect on the company's real earnings management. The research conclusions provide empirical evidences for the protection of the rights and interests of the investors and the stabilization of the capital markets.

Corporate Integrity Culture and Innovative R&D Manipulation

BU Mei-wen

2020, 0(11):  88-99. 

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Taking China's listed companies in 2012-2018 as samples, this paper employs the methods of text analysis, ordinary least squares, instrumental variables and propensity score matching to investigate the impact of corporate integrity culture as an informal system on the behavior of innovative R&D manipulation. The results show that companies with integrity cultural background have a low degree of innovative R&D manipulation. The legal environment and corporate integrity culture have a certain substitution effect on the corporate innovative R&D manipulation, that is, when the legal environment is worse, the corporate integrity culture can inhibit corporate innovative R&D manipulation more effectively. As an equity incentive mechanism to alleviate agency problems, the impact of managerial shareholdings and corporate integrity culture on corporate innovative R&D manipulation has the same substitution effect, i.e., when the managerial shareholding is lower, the company integrity culture can more effectively inhibit the company's innovative R&D manipulation. Further research shows that in the influencing mechanism of corporate integrity culture on the innovative R&D manipulation, the internal control plays a part of intermediary role.

Industry & Trade

FDI, Business Environment and Quality Upgrading of Export products

LIU Hong, LIU Yu-wei, CHEN Zi-wang

2020, 0(11):  100-112. 

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Improving export product quality is an important way to achieve high-quality development of trade. Based on the data of Chinese micro-enterprises from 2000 to 2013, this paper makes use of the fixed-effect model to investigate the impact of foreign direct investment (FDI) and business environment on the quality of enterprises' export products. The empirical results show that the business environment is an important factor for FDI to improve the export product quality. The better the business environment is, the better the effect of FDI on the export product quality will be. FDI in foreign invested enterprises has a more significant promotion effect on the export product quality than that in state-owned enterprises and private enterprises. FDI from Hong Kong, Macao and Taiwan and other regions all has an improving effect on the export product quality, but FDI from OECD countries has a more significant effect on the improvement of the quality. FDI in processing trade enterprises has a greater promotion impact on the export product quality than that in the enterprises engaging in general trade. The higher the enterprise productivity is, the more significant the promotion effect of FDI on the export product quality under the influence of business environment will be.

The“Belt and Road”Initiative, Culture Differences and the Choice of OFDI Modes in China's Equipment Manufacturing Enterprises

YIN Hua, XIE Qing

2020, 0(11):  113-123. 

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By making use of the data of 1350 OFDI events of China's 512 A-share listed companies in equipment manufacturing industry from 2010 to 2018, this study employs a Logit model to conduct an empirical examination of the impact of culture differences between China and the host countries on the choice of outward foreign direct investment (OFDI) modes for China's equipment manufacturing enterprises (CEMEs) as well as the moderating effect of the“Belt and Road”initiative on the influence of cultural differences on the choice of OFDI modes by China's enterprises. The research results show that the greater the culture differences are, the more CEMEs inclined to choose cross-border mergers and acquisitions (CBMAs); the smaller the culture differences are, the more CMMEs inclined to choose greenfield investments. The countries along the B&R route and the signing of B&R cooperation documents (BRCDs) have a positive moderating effect on the promotion of China's CEMEs choosing greenfield investments by cultural differences. The impact of culture differences on China's non-state-owned CEMEs choosing greenfield investments is more prominent among the countries of signing BRCDs. The signing of BRCDs between non-Asian countries and China will help to weaken the negative impact of cultural differences on China's CEMEs choosing greenfield investments.

Modern Accounting

The Negative Emotion of Medium and Small Investor Groups and Auditor's Response: A Study Based on the Opinions of the Small and Medium Investors' Expressed on the Stock Bar Platform

LI Shi-gang

2020, 0(11):  124-137. 

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On the basis of the opinions published on the stock bar platform by the small and medium investors(SMI), this paper empirically tests the responses of auditors towards the negative emotions of SMI groups. The results show that the more intense the negative sentiment of SMI groups is, the higher the auditors' auditing fee will be, and they will be more inclined to issue non-standard audit opinions without reserve. The result of a mechanism analysis shows that the stronger the negative sentiment of SMI groups are, the higher the probability of forming public opinion issues through network news media, thus more risks of listed companies being punished by administrative penalty and more risks of accounting firms being tied up in lawsuits will be seen; ultimately, the auditors' auditing fee will be affected and the probability of issuing non-standard audit opinions without reserve will be higher. The result of a regulating effect test shows that the relationship between the negative sentiment of SMI groups and auditors' audit fee and the probability of issuing non-standard audit opinions without reserve will be affected by the negative reports of news media and the professional

Reform of Audit Management System, Intervention of Local Governments and Maintenance and Appreciation of Assets of State-owned Enterprises

GUO Meng-nan, GUO Jin-hua

2020, 0(11):  138-148. 

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Audit supervision plays an important role in safeguarding national economic security and promoting the maintenance and appreciation of state-owned enterprises' assets. Therefore, this paper selects A-share state-owned listed companies listed in Shanghai and Shenzhen stock exchanges from 2007 to 2019 as samples to empirically test the impact of audit management system reform on the maintenance and appreciation of state-owned enterprises' assets and its mechanism. The findings show that the reform of audit management system is conducive to promoting the maintenance and appreciation of state-owned enterprises' assets. The audit management system reform can promote the maintenance and appreciation of state-owned enterprises' assets by reducing the intervention degree of local governments. The result of further study indicates that the higher the degree of local government intervention, the higher the two types of agency costs of state-owned enterprises will be, and the more disadvantages to the promotion of the maintenance and appreciation of the assets of state-owned enterprises by the audit management system reform. The reform of audit management system can promote the maintenance and appreciation of state-owned enterprises' assets by reducing the first type of agency cost, while the intermediary effect of the second type of agency cost is not significant.