Table of Content

15 February 2020, Volume 0 Issue 2

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Theoretical Economics

The New Era Significance of Industrial Policy Debate: Considerations of Theory and Practice

YANG Kuo, GUO Ke-sha

2020, 0(2):  3-11. 

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At present, the debate on industrial policy is mainly among three schools: the Neo-Structuralism, the Neo-Liberalism and the Evolutionary Development Economics, focusing on the rationality and effectiveness of industrial policy in the field of industrial structure. The theoretical logic and policy propositions of different schools have different stage applicability: the Neo- Structuralism is mainly applicable to the early stage of rapid economic catch-up, the Evolutionary Development Economics is mainly applicable to the late stage of rapid economic catch-up, and the Neo-Liberalism is mainly applicable to the stage of economic transcendence. During the process of the transition from the“early stage of rapid catch-up”to the“late stage of rapid catch-up”and then to the“stage of economic transcendence”, the industrial policy attribute of late developing economies should be transformed from“selective”to“more positive”and then to“functional”. The practice of international industrial policy also shows a general trend of evolution from“selectivity”to“functionality”. At the beginning of the new era, China’s economy is still at the“late stage of rapid catch-up”, so it should not blindly accelerate the transformation process of industrial policy attributes. The transformation strength suitable to the current stage is to change the attribute of industrial policy from“selective”to“more positive”.

An Analysis of the Spatial-Temporal Evolution and Driving Factors of Urban Innovation Capability along the Yangtze River Economic Belt: From the Perspective of Flowing Human Capital

ZHANG Li-guo, LENG Lang-ping, ZENG Yong-ming

2020, 0(2):  14-26. 

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Based on the urban panel data of Yangtze River Economic Belt and from the perspective of mobile human capital, this paper explores the spatial-temporal distribution pattern and its driving factors of urban innovation capacity along the Yangtze River Economic Belt by employing the spatial exploratory analysis method and the spatial econometric model. The findings show that there is a clear economic correlation among the urban innovation capabilities, i.e., the coastal cities have stronger innovation capabilities than inland cities, the provincial capital cities have stronger innovation capabilities than the non-provincial capital cities, and the urban innovation capacity declines in a gradient along the “downstream-middle-upstream” of the Yangtze River. The positive correlation among the inter-city innovation capabilities is continuously increasing, which is manifested as “high-high agglomeration” in coastal cities and “low-low agglomeration” in inland cities. Moreover, there is a significant time-space lag in urban innovation capacity, that is, the spillover effect and the Matthew effect. In addition, the total mobile human capital, the mobile human capital inside and outside of the province all have a significant direct effect on the urban innovation capability, which is an important thrust for urban innovation and development. Apart from these, science and technology input, foreign investment, import and export trade are also important factors affecting the urban innovation capacity.

Public Economics & Administration

A Research on the Effectiveness of Central Environmental Protection Inspection from the Perspective of State Governance

ZHOU Xiao-bo, MA Tian-ming

2020, 0(2):  27-39. 

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Faced with the worsening environmental problems, the central government has timely implemented the central environmental protection inspection. Different scholars get nearly contrary conclusions after their researches from different perspectives. From the perspective of state governance, this paper studies the operation logic of the central environment protection supervision, collets the sample data of the pilot inspection and the first batch of environmental protection supervisions, and conducts an empirical analysis by using the methods of difference-in-difference and breakpoint regression. The findings show that the central environmental protection inspection has achieved remarkable effects; however, the persistence of the effect is rather weaker. This is the inevitable result of the high operation costs and high operation efficiency of the central environmental protection inspection, its policy experience cannot be simply affirmed or denied. The central environmental protection supervision is a kind of “governance” to the conventional environmental governance mechanism itself, an important tool to balance the strong incentives in the economic field and the weak incentives in the environmental field, and an important means of national governance. At the meantime, we should recognize the limitation of its high costs, start to improve the ecological environment liability system, encourage innovation and optimize the industrial structure gradually, so as to fundamentally improve the quality of the ecological environment.

Will High Housing Prices Damage the Efficiency of Local Government Fiscal Expenditure?

TAN De-kai, TIAN Li-hui, LI Ting-ting

2020, 0(2):  40-51. 

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High housing prices can increase the disposable fiscal revenue of local governments, but it will also increase the rent-seeking temptation, making officials tend to allocate excessive financial resources to areas that are easier to seek rent. It will also distort fiscal fund allocation, thereby reducing the efficiency of fiscal expenditure. This paper measures the fiscal expenditure efficiency of 30 provinces in China and tests the impact of the high housing prices on the efficiency of fiscal expenditure. The results show that there is a U-shaped curve relationship between the housing prices and the fiscal expenditure efficiency. When housing prices are below a certain threshold value, high housing prices will surely damage the efficiency of local governments’ fiscal expenditure. Further analysis shows that increasing the degree of fiscal decentralization of local governments and strengthening the anti-corruption efforts will alleviate the adverse effects of high housing prices on fiscal expenditure efficiency. Therefore, it is necessary to control the growth rate of housing prices, gradually change the way of fiscal revenue depending on land leasing, reduce the degree of mismatch between local governments’ fiscal power and office power, and strengthen the degree of anti-corruption, so as to improve the efficiency of local governments’ fiscal expenditure and promote the transformation to service-oriented governments.

Modern Finance

China’s Local Finance: Essence, Rising, Chaos and Governance Innovation

LIU Zhi-wei

2020, 0(2):  52-64. 

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Faced with the rising of local finance in China, the local governments have incorporated their self-interest demands for financing regional economic development while complying with the market-oriented development. The central monopoly of financial supervision power makes the local and central governments continue to play games in the supervision and development of local finance. While the games between the two sides continue to promote the development of local finance, they have also brought an endless stream of chaos. The main cause of the chaos is that the central and local governments have insufficient objective ability and subjective willingness to supervise local finance. On the basis of sorting out the multiple forms of local finance and clarifying the nature of local finance, the necessary measures to effectively govern local financial chaos would be re-dividing the financial supervision powers between the central and local governments and completing the vertical division and the vertical construction, as well as the horizontal concentration and planarization construction of local financial supervision powers.

Research on the Impact of Household Debt Changes on Labor Mobility in Provincial Regions of China

RAN Zhen-mei, ZHONG Jian

2020, 0(2):  65-75. 

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From the perspective of micro-household debt, taking the 31 provinces (municipalities and regions) of China as the research objects, this paper explores the impact of household debt on labor mobility. The results show that household debt has a significant negative impact on labor mobility, and with the improvement of the quantile level, there is a significant inverted U-shaped relationship between them. At the same time, there are obvious regional differences in the impact of household debt on labor mobility: the restrictive effect of household debt on labor mobility in eastern and central regions is much higher than that in western regions; compared with the labor inflow regions, the impact of household debt on labor mobility is greater and more significant in the labor outflow regions. In addition, such factors as urbanization rate, industrial structure, infrastructure level and opening-up degree have positive effect on labor mobility, while fiscal decentralization has negative effect on labor mobility. Therefore, while reducing the costs and risks of labor mobility, to improve the financial supervision system and to provide different credit policies to households at different regions will be conductive to guiding the rational labor mobility between the regions.

Business Administration

Research on the SH-SZ-HK Stock Connect Mechanism and Business Innovation: Empirical Evidences Based on Multi-Phase DID

QI Di

2020, 0(2):  76-88. 

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Whether the“Shanghai-Shenzhen-Hong Kong (SH-SZ-HK) Stock Connect” mechanism has promoted the innovation and development of the real economy is an important issue in the process of China’s capital market opening. Based on the DID model and taking the implementation of the stock connect as a natural experimental event, this paper investigates the impact of the capital market opening policy represented by the SH-SZ-HK Stock Connect on the innovation activities of enterprises. The findings show that the target firms after the implementation of the SH-SZ-HK Stock Connect have significantly increased the innovation input and the patent output quantity, which have improved their innovation performance. Further tests show that the effect of the SH-SZ-HK Stock Connect on the improvement of enterprise innovation efficiency is more obvious in the enterprises with lower proportion of institutional shareholding, lower degree of information transparency, narrower vision of the management, and more serious agency problems, which indicates that enterprise innovation can be promoted through such means as strengthening the governance effect of the foreign investors, improving the business information disclosure, relieving the agency problems in the innovation decisions, and so on. This conclusion expands the research of the results and the mechanism of the SH-SZ-HK Stock Connect event on the business innovation, tests the impact of this mechanism on the real economy, and provides theoretical reference for China to further promote and improve the opening of its capital markets.

Heterogeneity of Institutional Investors with Oriented Add-Issuance and Corporate Performance: Empirical Evidences from China’s Listed Companies

ZHANG Wei-dong, LI Hao-ran, YAN Xiang, LUO Xi

2020, 0(2):  89-100. 

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This paper takes the A-share listed companies that have issued directional additional shares during the period of 2006-2013 as samples to study the impact of different types of institutional investors on the performance of companies that have issued oriented additional new shares from both theoretical and empirical aspects. The findings show that compared with companies that issued non-directional additional shares, the directional additional new shares that brought in the institutional investors can significantly improve the corporate performance. Further studies by distinguishing the nature of institutional investors and their investment target indicates that this positive effect is mainly reflected on the related institutional investors and the strategic institutional investors. Further research shows that the role of strategic institutional investors in promoting the performance of the oriented additional share issuing companies is more obvious in state-owned enterprises; while the impact of financial institutional investors on the performance of the oriented additional share issuing companies is not significant either in state-owned enterprises or private enterprises. The conclusion of this paper can provide a reference for the companies issuing oriented additional new shares to choose the issuing targets and for institutional investors to choose the investment targets.

Industry & Trade

A Study of the Effectiveness of Industrial Policy Promoting Enterprise Value Chain Upgrading: Evidences from the Micro-Data of China’s Manufacturing Enterprises

TANG Rong

2020, 0(2):  101-115. 

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Premised upon the contents of the National“Tenth Five-Year Plan”and the information related to the industrial development in the “Eleventh Five-Year Plan”, together with the data of China’s industrial enterprises during the period of 2001-2010 and the custom’s trade data, this paper conducts an empirical analysis of the micro-level effects of China’s industrial policy on the upgrading of enterprise value chain. The findings show that there exists a significant positive correlation between the industrial policy support and the upgrading of enterprise value chain. In addition, the grouping regression based on the characteristics of enterprises indicates that the above positive correlation can be more evident among the samples of private enterprises. This positive effect, however, mainly derives from the hard-constrained areas which have strictly implemented the industrial policies, whereas at the soft-constrained areas of policy implementation, the actual level of enterprise value chain has not improved considerably. The promotion effect of industrial policy on the upgrading of enterprise value chain is generally realized through the credit mechanism and the market competition mechanism, especially the latter. On the other hand, the promotion effect of financial subsidies and tax relief mechanism on the upgrading of enterprise value chain is not significant.

Energy Price Distortion and Real Trade Gains from China’s Manufacturing Industry

JIANG Han-ming

2020, 0(2):  116-124. 

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By making use of the panel data of the 14 sectors of China’s manufacturing industry and the cross-border data from 2002 to 2014 and employing the spatial stochastic frontier estimation method, this paper investigates the impact and influence of energy prices distortion on the distribution pattern of the real trade gains from China’s manufacture industry under the global production model. The result shows that, on the whole, the increasing energy price distortion has significantly hindered the improvement of the real trade gains of the manufacturing industry, and this kind of adverse effect is more prominent in the economic and trade contacts between China and the advanced countries and regions. The regression result of the development model shows that energy price distortion has a more significant negative effect on the real trade gains embedded in the final consumption export. The rising of contract intensity and the degree of technology intensity has weakened the adverse effect of energy price distortion on the real trade gains.

Modern Accounting

Deregulation of Short Selling and Corporate Social Responsibility: A Quasi-Natural Experiment Based on the Securities Margin Trading System

SUN Ze-yu, QI Bao-lei

2020, 0(2):  125-137. 

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Based on the quasi-natural experiment of the securities margin trading system, taking the 2008-2015 A-share listed companies in Shanghai and Shenzhen as samples, this paper employs the dual difference model to study the impact of the securities margin trading system on corporate social responsibility and its internal mechanism. The findings show that the securities margin trading system can significantly improve the social responsibility performance of the target companies through the governance mechanism and the information mechanism. The impact of the short selling mechanism on the corporate social responsibility performance of the target companies of securities margin trading is more significant in the companies with higher proportion of management shareholding and lower media attention. Further research findings indicate that the margin trading system can significantly improve the social responsibility performance of the target companies, but the impact of the financing system on the corporate social responsibility performance is not significant.

Creditor Supervision and Earnings Management of Listed Companies: From the Perspective of Debt Default Risks

LI Shi-yao, LI Xing-han, GUAN Chao

2020, 0(2):  138-148. 

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This paper makes use of the debt default risks calculated with KMV model to measure the creditors’ supervisory power. Then it uses the data of A-share listed companies from 2008 to 2018 to study the relationship between debt default risk and accrued earnings management and real earnings management. The findings show that the higher the debt default risk of a listed company, the lower its level of accrual earnings management and real earnings management will be; compared with state-owned enterprises, the external supervision of creditors has a more significant restraining effect on the two types of earnings management of private enterprises. Further research finds that creditor supervision can reduce the degree of downward profit adjustment by manipulating real earnings management in listed companies.