Table of Content

15 May 2019, Volume 0 Issue 05

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The Economic Effect of the Pilot Project of the “Two Types Society”: An Estimation Based on the Synthetic Control Method

LI Wei-bing1, PANG Zi-shan1, WANG Bin2

2019, 0(05):  1804. 

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On December 14, 2007, Wuhan City Circle and Changsha-Zhuzhou-Xiangtan City Group were confirmed as the Comprehensive Coordinated Reform Pilot Zones of the“Two Types Society”construction, which were granted the policy innovation privilege of pioneering and piloting, so as to take the lead in carrying out the exploration and practice of the construction of the“Two Types Society”. By employing the synthetic control method, this paper conducts an empirical analysis based on the 2004-2016 Chinese provincial panel data. The findings show that the pilot policy has significantly promoted the four major indicators in Hubei Province, i.e., economic growth, energy conservation, emission reduction and technological innovation. And this conclusion still holds through the robustness test. This research confirms that environmental regulations can release environmental dividends and economic dividends, creating a win-win opportunity for energy conservation and economic growth.

Healthy Human Capital, Aging Expectation and Their Effects on Savings Growth

WANG Ren1, MA Hong-qi2

2019, 0(05):  1805. 

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The deterioration of the demographic structure and its negative impact on Chinese economy are receiving extensive attention in the theoretical cycle, but the demographic structure is not exogenous to savings and growth. By including the considerations of the healthy human capital and the aging expectation of the rational economic men, this paper conducts an overall inspection of the actual economic effects of healthy human capital and its specific transmission mechanism. The findings show that: firstly, healthy human capital can not only affect the demographic structure changes, but also alter the effect of demographic structure changes on savings and growth through aging expected behaviors. Healthy human capital improvement is an important factor in promoting China’s savings rate and economic growth beyond the family planning policy. Secondly, there are structural differences in the economic effects of healthy human capital improvement. Along with the no more decline of the child support ratio, the positive effect relaying on the population structure is waning, hence the future healthy human capital investment should be based more on strengthening the good health expectations of the individuals and the “behavioral effect”derived from it.

Local Government Tax Competition, Environmental Governance and Haze Pollution

SHANGGUAN Xu-ming, GE Bin-hua

2019, 0(05):  1806. 

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Based on the data of 278 prefecture-level and above cities from 2007 to 2016, this paper systematically investigates the impact of local government tax competition and environmental regulation strategies on haze pollution by adopting the spatial Durbin model and instrumental variables. The findings indicate that local government tax competition has significantly intensified the local haze pollution, which has a positive spillover effect on the adjacent areas; the strength of the environmental regulation has significant positive effects on local haze prevention and treatment, which has a negative spatial spillover effects on the adjacent areas; the tax competition of the local governments has restrained the haze reduction effect of the environmental regulation policy, which fails the target of guiding the benign tax competition to promote the high quality development of local economy. The findings of further research show that the impact of tax competition and environmental regulation strength on the haze governance in larger and medium-sized cities is significantly lower than that in the small cities, and the effect of haze control of the environmental governance strategy has become more and more significant since the 18th CPC National Congress. Therefore, it is necessary to guide the local government revenue from the race-to-bottom competition to the item-by-item competition, to strengthen the reversed effect of environmental governance policy under full considerations of urban heterogeneity, and to establish a haze prevention and control mechanism among the local governments.

The Basic Principles and Reform Strategy of Expenditure Responsibilities Division between the Central and Local Governments

YUE Hong-ju

2019, 0(05):  1807. 

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There are lots of differences in the inherent attributes, emphases, realizing paths and methods of the expenditure responsibilities and the administrative powers, and there is no such relation as the one-to-one correspondence, each of the two has its own division principles. The administrative powers should be compatible with the expenditure responsibilities, having the dual meanings of the congruity between the rights and obligations of public service and the congruity between the fiscal revenue and expenditure. Both need the coordination of the market economy system and modern fiscal and taxation system to achieve the common aim of the public service. The division of expenditure responsibilities between the central and local governments should be based on the improvement of the initiative coming from the central and local governments, let the market play a decisive role, let the government play a better role, and promote the modernization of fiscal governance. Hence, in terms of the basic principles, it is necessary to adhere to the principles of combining market decisions with the government efficiency, combining local autonomy with moderate centralization of the central government, and combining the vertical equity with horizontal equity. In terms of reform strategies, it is necessary to comply with the three basic requirements of rationalization, democratization and legalization, and to conform to the basic logics of China’s national conditions, fiscal democracy, performance budget and fiscal and taxation practice reforms.

National Assistance, Local Financial Decentralization and Financial Fluctuations

MIAO Wen-long

2019, 0(05):  1808. 

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Based on China’s economic facts in recent years, this paper establishes a stochastic dynamic general equilibrium model of two-tier multi-regional government departments including fiscal decentralization and financial decentralization. The findings of the analysis show that under the fiscal decentralization model, local governments have the behaviors of investment expansion and financial competition, the state provides guarantees to the commercial banks in the forms of the last resort and write-offs of the bad loans, thus local governments can realize financial decentralization; the deepening of local government financial decentralization is directly reflected in the rising of the proportions of local commercial banks’ debt scale and local government bond scale, which has become a major factor affecting financial volatility. Under the certainty policy of“stable growth and risk prevention”, the national assistance may fall into the circulation of“assistance-local financial decentralization deepening-intensified financial volatility”. Therefore, the state should adopt some direct measures, such as credit rating of local government bonds, management of local bond quotas, establishment of local financial risk dynamic monitoring and early warning system. In addition, some long-term measures should also be adopted, such as rationalization of the administration power and financial power of the central and local governments according to the efficiency of the government expenditures at different levels, the appropriate introduction of random assistance, and the establishment of a matching mechanism between financial rights and risk-responsibilities.

The Impact of RMB Carry Trade on the Stock Market: Theoretical Framework and Empirical Test

WANG Xun, REN Zeng, LI Jin-kai

2019, 0(05):  1809. 

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By constructing a theoretical framework of the impact of RMB carry trade on the stock market, this paper uses the NARDL model to conduct an investigation of the asymmetric effects of RMB carry trade on the yield rate and the volatility of stock markets. The findings show that: (1) the short-term impact of RMB carry trade on the stock markets is not significant, but the long-term effect has significant heterogeneity in different periods, namely, when the excess return of RMB carry trade is negative, the yield rate of the stock market will be reduced; when the excess return is balanced, the yield rate of the stock market will not be significantly affected; and when the excess return is positive, the yield rate of the stock market will be improved; and there is no asymmetric features. (2) the short-term and long-term impacts of RMB carry trade on the stock market volatility is not statistically significant, that is, the current RMB carry trade is not the main reason for the stock market volatility; however, in terms of the direction, size and trend of the estimated coefficients, the impact of RMB carry trade on the stock market volatility is becoming greater and more and more prominent with the deepening of the capital account liberalization. Thus it can be seen that RMB carry trade is one of the important factors affecting the stability of China’s financial market, during the process of RMB internationalization and the capital account liberalization, RMB carry trade should be incorporated into the prudential regulatory framework to prevent the harm resulted from RMB carry trade from affecting the financial market and real economy.

Can Enterprises Get“New Energy”Through Getting Rid of “Old Energy”: An Empirical Exploration Based on Organizational Forgetting Theory

WANG Jian1, HUANG Qun-hui2

2019, 0(05):  1810. 

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During the process of replacing old growth drivers with new ones, there are often temporary shortages in the enterprises, the existing researches only have relatively limited explanations on this phenomenon. Based on the organizational forgetting theory, this paper tries to answer the question whether enterprises can get“new energy”by abandoning“old energy”. Taking 192 manufacturing enterprises in China’s Economic Belt around Bohai Sea as samples, this paper analyzes the influence mechanism of organizational forgetting on innovation performance from the perspectives of absorptive capacity, entrepreneurial orientation and environmental dynamics. The findings show that the impact of organizational forgetting on innovation performance is uncertain, and that under the influence of absorptive capacity, entrepreneurial orientation and environmental dynamism, organizational forgetting shows positive effects on innovation performance.

Employee Stock Ownership Plan, Talent Speciality and Corporate Effective Innovation

CAO Yu-shan, CHEN Li-wei

2019, 0(05):  1811. 

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Taking the data from the A-share listed companies listing in Shanghai and Shenzhen stock exchanges from 2009 to 2016 as samples, this paper tries to explore the relationship between ESOP, talent speciality and corporate effective innovation. The finding show that the enterprises that carry out ESOP are more likely to achieve effective innovation, that the talent speciality owned by the enterprises can strengthen the positive relationship between ESOP and corporate effective innovation, and that both the talent speciality of the technical employees and the talent speciality of the senior management can strengthen the innovation effect of ESOP, and there is a complementary relationship between the two.

The Impact of Civilization Clashes on the Bilateral Trade of Countries along the“Belt and Road”Route under the Institutional Boundary

WANG Ying

2019, 0(05):  1812. 

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By making use of the HS07 six digit statistical data of classified trade of 64 countries along the“Belt and Road”route from 2008 to 2014 and employing the high-dimensional fixed effects model of panel data, this paper empirically studies the impact of civilization clashes on the bilateral trade of countries along the“Belt and Road”route under the institutional boundary when the other affecting factors are effectively controlled. The findings indicate that the institutional quality of the import and export countries is an important boundary condition to the impact of the civilization clashes on the bilateral trade of countries along“Belt and Road”route, that is, the good institutional quality of the import and export countries can reduce from the institutional level the transaction costs and uncertainty risks brought by the civilization clashes, thereby weakening the inhibitory effect of the civilization clashes on the bilateral trade of countries along the“Belt and Road”route. Furthermore, this effect is more significant for the trade of high contract intensive products. The important enlightenment of this conclusion is that even if there is a great difference in civilizations among the countries along the Belt and Road route, the countries can still weaken and resolve the trade risks that may be caused by the civilization clashes through improving their own institutional quality, so as to promote the development of bilateral trade in the region.

Internet Trade, Product Quality Improvement and Home Market Effect: A New Theoretical Model and Evidences from China

ZHANG Yi-Fang

2019, 0(05):  1813. 

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In the context of China’s foreign trade frictions continuing to escalate, to keep the stable development of foreign trade through the home market effect is a new idea that deserves attention at present. Improving the advantages of Internet and product quality in the trade process can be a significant factor affecting the formation and expansion of the home market effect. This paper sets out to put the three variables of Internet, product quality and home market effect into one trade analytical framework, then it further explains impacting mechanism of Internet and product quality on home market effect from the perspective of mathematical model. Based on the relative data of China and other 30 sample countries from 2006 to 2015, it is found through an empirical study that the improvement of China’s Internet advantages and product quality could promote the formation and expansion of the home market effect, and that the use of Internet in trade can significantly strengthen the promotion effect of product quality on the home market effect. The impact of Internet and product quality on the home market effect will be different along with the different product types and different development levels of the import countries (regions). Therefore, to strengthen the Internet trade construction and to try to improve product quality is the key to promote the formation and expansion of China’s home market effect, while the home market effect is an effective way to keep the stable development of China’s foreign trade.

Can Dividend Smoothing Play the Role of“Market Stabilizer”?

YANG Bao1,2

2019, 0(05):  1814. 

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Based on the data of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2004 to 2016, this paper conducts an empirical test of the impact of dividend smoothing on the stability of China’s capital market. The findings show that dividend smoothing has a positive effect on stabilizing the capital market, of which the mechanism of action is that dividend smoothing has a signal effect and can alleviate the agency problem. Further research reveals that dividend smoothing can significantly reduce the risk of stock price collapse and stock mispricing of listed companies. The conclusions of the study have certain implications for the relevant departments to implement the regulation on dividend distribution of listed companies.

Research on the Impact of Audit Result Disclosure on Government Performance: Empirical Evidences Based on Multinational Data

SHANGGUAN Ze-ming, WANG Shao-hua, WU Qiu-sheng

2019, 0(05):  1815. 

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Through the selection of data of 99 countries in the years of 2008, 2010, 2012 and 2015, this paper studies the promotion effect and its realization path of audit results disclosure on government performance. The findings show that such quality characteristics of audit results publicity as timeliness, comprehensiveness, clarity and rectification response can effectively improve government performance. The results of further research show that the quality of audit results publicity can effectively improve government performance in any country with any kind of audit system, that in countries with a culture of large power distance and stronger masculinity, the positive effect of audit results publicity on government performance is even more significant, and that in terms of the realization path, the quality of audit results publicity can effectively improve government performance through improving the legislative supervision ability and the degree of public participation.