Table of Content

15 July 2020, Volume 0 Issue 7

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Theoretical Economics

The Impacts of Supply-Side Structural Reform on China's Economy: From the Perspective of General Equilibrium

CHEN Su-mei, LI Peng

2020, 0(7):  3-12. 

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How would the sustained deepening of supply-side structural reform affect China's future economic development? This is one of the critical and practical issues China has to face and deal with in the new era. The quantitative evaluation with the help of a dynamic computable general equilibrium model shows that while reducing the production tax rate of non-high-energy-consuming industries, increasing the labor participation rate and pursuing innovation-driven development, China's real GDP would be increased by 0.5%~2.6% on the basis of the baseline scenario in 2030. The residential income, the total import and export will be somewhat increased, and the overall price level will be lowered. The outputs of all sectors would be increased, among which, the output of the coal mining industry would have the largest increase. Compared with the other single reform schemes, the increase of labor participation rate would bring about more dividends. If the priorities of the supply-side structural reform programs are distinguished, the innovation-driven development would have more significant impacts on the coal mining industry, the high energy-consuming industry, the manufacturing industry, the transportation industry and warehousing industry, while reducing the production tax rate of the non-high-energy-consuming industries would be more beneficial for agriculture, the light industry and the public utilities units. The above conclusions show that it is necessary to comprehensively deepen the supply-side structural reform by reducing the taxes and fees, increasing the labor participation rate and pushing the innovations. In addition, the reform focus should be adjusted according to the situations of different industries, and attention should be paid to the transformation and upgrading of the coal mining industry.

Supply-Side Structural Reform and Business Leverage Ratio Adjustment: An Empirical Study Based on the Data of Listed Industrial Enterprises

LU Lu, YANG Wen-hua

2020, 0(7):  15-27. 

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By making use of the data of listed industrial enterprises in China over the period of 2013-2018, this paper studies the relationship between the supply-side structural reform and the micro-enterprise leverage ratio adjustment with the quasi-natural experimental method. The findings show that through improving the corporate profitability, promoting the short-term debt repayment and reducing the willingness of the enterprises to expand, the reform has generally promoted the reduction of the corporate leverage ratio, but this promotion effect is heterogeneous in different years and between different types of firms. Reducing leverage is an important way for the supply-side structural reform to promote the improvement of the total factor productivity of the enterprises, which is more significant among the non-state-owned enterprises, at the regions with better system qualities and among the enterprises with weaker R&D innovation foundations. The above conclusions indicate that in the context of the real economy under greater pressure of growth at present, the supply-side structural reform has to carry out the strategies precisely by integrating the effects of de-leveraging at different types of enterprises, so as to further improve the efficiency of de-leveraging of the structural reform.

Public Economics & Administration

Reasons for the Implicit Expansion of China's Local Debts: From the Perspective of Implicit Financial Decentralization

MA Wan-li, ZHANG Min

2020, 0(7):  28-37. 

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The risk of implicit debt lies in the“implicitness”, which is the result of the local governments' use of hidden financial decentralization to expand the debt. The implicitness of the implicit financial decentralization is reflected outside of the unified and standardized financial system arranged by the central government; a series of non-standard implicit financial system arrangements among local governments for the independent delineation and distribution of the allocation and the control rights of financial resources are important ways to promote the irrational expansion of local debts. With the help of local financial institutions, financing platforms, the PPP projects, shadow banking, state-owned enterprises and other controllable platforms, local governments conduct debt financing via urban construction investment debts, purchasing services by governments, financial leasing and other non-standard financing ways, thus debts are formed that is related to the local governments, which is the result of each interest subject gaining economic interests wantonly under the imbalanced incentive and constraint mechanism. Therefore, in order to prevent the irrational expansion of local debts, it is necessary not only to do a good job in the fiscal and political incentives of local governments, but also to straighten out the financial relationship between the central and local governments. And financial supervision should be carried out well, so as to promote the transformation from implicit financial decentralization to marketized financial centralization.

Research on the Support Model of Resource Allocation Coordination for the Intelligent Elderly Service：A Digital Simulation Based on Information Integration

LIAO Chu-hui, ZHOU Quan-lin

2020, 0(7):  38-49. 

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Based on the binary non-linear relationship of service supply and demand structure and from the holistic perspective, this paper constructs a collaborative support model for resource allocation of intelligent old-age service and conducts a simulation experiment through information integrated digital simulation. The results show that the resource allocation of intelligent pension service under different rules can all enter the state of overall coordination, but the coordination under the irregular state is otherwise better than that under the simple rules determined in advance in the simulation experiment, the reason is that there is no standard top-level design of intelligent pension service in China at present, and the differences of different pension models in different regions can affect the determination of the initial value of the rules. Therefore, China can carry out the top-level design according to the existing resources and its own advantages in information management, establish the information integrated scientific management pattern as soon as possible, guide the society to set up the coordination and the high-efficiency national governance idea, and actively participate in China's old-age services, so as to promote the coordination and high efficiency of resource allocation for the intelligent elderly service.

Modern Finance

Financial Decentralization, SOEs and Industrial Upgrading: An Empirical Explanation for Regional Differences of Financial Decentralization

HONG Zheng, XIAO Rui, ZHANG Lin

2020, 0(7):  50-62. 

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Based on the ownership structures of the financial institutions, this paper constructs the two-level indexes that can accurately reflect financial decentralization at the provincial level, i.e., the decentralization of the central government to the local governments (Financial Decentralization I), and the decentralization of local governments to the market (Financial Decentralization II), thus the problem of lacking accurate measure index for financial decentralization is recovered. Through multi-dimensional comparison of indicators and analysis, it is found that as Financial Decentralization I increases year-by-year, Financial Decentralization II will have significant regional differences: the highest is in the eastern region, while the central and western regions are relatively lower. Although the financial privatization is gradually deepening, a mass of local financial resources is still controlled in the hands of local governments. The local state-owned enterprises (SOEs) are the main intermediary in the control of financial resources by the local governments. The findings of the mediating effect test indicate that the local governments promote industrial upgrading through SOEs and thereby affect the financial decentralization, which is the major channel leading to the regional differences of financial decentralization, especially in the regions with relatively backward economies. The local governments should give full play to the advantages of local SOEs, appropriately guide industrial upgrading, and optimize the allocation of financial resources, so as to achieve rapid economic growth and financial stability.

Will Financialization of Enterprises Surely Crowd out Industrial Investment? An Empirical Analysis Based on China's A Share Non-Financial Listed Companies

YAN Wu, LI Ming-yu

2020, 0(7):  63-74. 

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The decline of industrial investment rate and the rise of financialization rate are the typical characteristics of the investment structure of the enterprises in China. An empirical study of China's A-share non-financial (including non-real-estate) listed companies from 2007 to 2018 conducted by this paper shows that the correlation effect of business financialization on industrial investment depends on certain conditions. From the perspective of the demand for investment funds, the stock of financialization will produce a“crowding out effect”on the current industrial investment, which mainly occurs in low-dividend distributing companies and is not sustainable. From the perspective of the supply of investment funds, the flow of financialization will produce a“reservoir effect”on the next period of industrial investment, which mainly occurs in high-dividend distributing companies. Therefore, enterprises should reasonably allocate the proportion of financial assets in the total assets to better play the “reservoir effect” of financial return on industrial investment. The government should encourage the flexible dividend distribution mode and enhance information disclosure, stimulate the enterprises' willingness for industrial investment, and meanwhile improve the pertinence and implementing efficiency of the financial reform and the monetary policy.

Business Administration

Government Innovation Preference, Market Integration and Enterprise Innovation

LIU Fei-ran, HU Li-jun

2020, 0(7):  75-86. 

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Based on the game model involving local governments and enterprises, this paper investigates how the changes of governments' innovation preference affect the level of market integration among the regions and its further impact on enterprise innovation during the process of local governments' goal-oriented transformation from extensive growth to innovation-driven development. Then, it provides empirical evidences for the theoretical propositions based on the data both at the company level and the regional level. The findings show that: firstly, improving the preference for innovation in governments' goal orientation can prompt local governments to abandon the regional market barriers and to promote the process of market integration; secondly, the market segmentation significantly weakens the promotion effect of innovation activities on enterprise development, thus the breaking-down of market segmentation and the improvement of market integration level is conducive to encouraging enterprises to engage in innovation activities; thirdly, the governments' innovation preferences significantly promote the innovation activities of enterprises, and in which the mediating effect of market integration cannot be ignored. The above-mentioned research conclusions provide a new idea for guiding the local governments' goal orientations, boosting the process of market integration and promoting enterprise innovation.

Information Disclosure of We-Media and Financing Constraints

HUANG Hong-bin, ZHAI Shu-ping, SUN Xue-jiao

2020, 0(7):  87-99. 

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This paper examines the influence and mechanism of the contents and channels of information released by the typical we-media of listed companies on the financing constraints of enterprises. The findings show that the opening of companies' we-media and the amount and content of information released by the we-media all have significantly eased the financing constraints of listed companies. Its influencing mechanism lies in that the information disclosed by we-media has alleviated the degree of information asymmetry and improved the corporate reputation and further eased the financing constraints. In addition, the results of a contrastive analysis of the impacts of the different platforms of we-media on business financing constraints indicate that the Weibo platform can play a more significant role. When dividing the we-media information into content and sources, it is found that only the value-related information and the original information can alleviate financing constraints of listed companies. This shows that listed companies can actively use we-media to release original, value-related information to ease financing constraints. This conclusion provides decision-making reference for listed companies to ease their own financing constraints with the help of we-media, and also provides beneficial enlightenment for the government and capital market regulatory authorities to issue relevant policies and regulations to alleviate financing constraints.

Industry & Trade

Trade Liberalization, Intermediate Products Trade and Wage: An Empirical Study Based on the Data of China's Micro Enterprises

DENG Jun, WANG Li-juan

2020, 0(7):  100-111. 

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Based on the data of China's industrial firms and Customs from 2000 to 2013, this paper employs the instrumental variable approach to analyze the impact of tariff cuts on the employee wages of Chinese firms. The findings show that the tariff cuts on final finished goods will lower the employees' wages of the exporting firms, as the firms at the margin of export critical point may experience profit loss when shifting from the domestic markets to the international markets after the tariff cuts on the final finished goods, then leading to the fall of employee wages. The tariff cuts on intermediate input products will reduce the employees' wages of non-importing firms but raise the employees' wages of importing firms, since the importing firms may improve their operational performances with tariff cuts through the“cost-saving”effect and“variety”effect of the intermediate input products. For firms engaged in processing trade and general trade, the tariff cuts on final finished goods will all lower the employee's wages of processing export enterprises. However, the tariff cuts on intermediate input goods will have different impacts on the employee's wages, the employee's wages of the import enterprises engaged in processing trade will be lowered, while the employee's wages of the import enterprises engaged in ordinary trade will be raised. The results of the regional study indicate that the tariff cuts on the final finished goods will lower the employee's wages of the export enterprises located at the eastern and western regions but raise the employee's wages of the export enterprises located at the central region. However, the tariff cuts of intermediate input goods will raise the employee's wages of the import enterprises located at the eastern and western regions, but lower the employee's wages of import enterprises located in the central region.

The Impact of Internet on China's Green Economic Growth: An Empirical Study Based on China's Provincial Green Competitiveness

HUANG Xiao-yong, ZHA Yu-xin, ZHU Qing-zhen

2020, 0(7):  112-123. 

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With the rapid development of digital economy and the progress of network information technology,“Internet+green ecology”, “Internet+environmental protection”,“Internet +smart energy”and other new forms and models of network economy are constantly emerging. The Internet is likely to have an important impact on the growth of green economy. Through mathematical model deduction, this paper reveals the micro mechanism of the Internet influence on the growth of green economy. It selects China's inter-provincial panel data from 2003 to 2015 to conduct an empirical survey of the impact of the Internet on the growth of China's green economy and the network effect. The findings show that the Internet plays a significant role in promoting the growth of green economy, the economic development, trade opening, scientific and technological innovation, environmental governance and resource recycling have a significant positive impact on the growth of green economy, while the industrial structure has a significant negative impact, the population density has no significant effect. There is a“digital gap”between the eastern, the central and the western regions, and the spillover effect of the Internet on green economic growth is characterized by heterogeneity. The Internet has a significant single threshold effect on the growth of green economy. With the increase of Internet penetration rate, the influence of the Internet on the growth of green economy has been significantly increased, that is, there exists a network effect. We should have a correct understanding of the role of the Internet, taking the Internet as a new power to promote China's green economic growth.

Modern Accounting

Salary Arrangement of Chairman of the Board and Salary Incentive for Top Management in State-Owned Enterprises: A Study Based on the Three-Tire Agency Framework

ZHU Tao

2020, 0(7):  124-137. 

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Based on the three-tire agency framework of“entrusting-supervising-agency”, and from the perspective of whether the chairman of the board receiving salary in the listed company, this paper studies the impact of salary arrangement of chairman of the board in state-owned enterprises on the salary incentive for the top management in listed companies based on the present situation of the chairman of the board of directors holding vertical dual positions that widely exists in the state-owned enterprises. The findings show that the chairman of the board receiving salary from the listed companies can enhance the salary-performance sensibility of the top management, having a supervising effect. The chairman of the board receiving salary from the listed companies will enhance the salary-company scale sensibility of the top management, having a collusion effect. The chairman of the board receiving compensation from the listed company will significantly lower the corporate value, the collusion effect is better than the supervision effect. The findings of further study show that the supervision effect will reduce the level of corporate earnings management, while the collusion effect will result in over-investment and over-debt.

Salary Contract Design and Corporate Innovation Ability: Evidences Based on the Revenue Recognition Policy of Listed Software Companies

WANG Fang, ZHAO Xi-bu

2020, 0(7):  138-148. 

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Taking software listed companies from 2001 to 2018 as the research objects, this paper starts from the revenue recognition policy that affects accounting performance to explore the impact of performance correlation on the usefulness of compensation contracts in software industry and its economic consequences. The findings show that the companies using the percentage-of-completion method have a higher sensitivity to remuneration performance, indicating that the performance correlation will affect the choice and use of performance indicators in executive compensation contracts, and that the companies using the percentage-of-completion method have a higher sensitivity to remuneration performance and also have an outstanding corporate innovation ability, indicating that incorporating the performance indicators into the executive compensation contracts is conducive to the innovation in software companies.