Table of Content

15 November 2019, Volume 0 Issue 11

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Environmental Regulations Intensity and the Location Choice of China’s Direct Investment toward the United States

YU Pei, PENG Ge

2019, 0(11):  1892. 

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In the context of the rapid growth of China’s outward foreign direct investment (OFDI) while at the same time faced with the constraining force of strict environmental regulations set by developed countries, the influence of the environmental regulation intensity brought about by host countries represented by the United States on China’s strategy of investment location choice is worth close watching. Taking China’s direct investment stock across 44 states and in 14 industries in USA over the period from 2008 to 2015 as the samples, this paper analyses the impact and mechanism of US environmental regulation intensity on China’s investment scale and location by the fixed effect and threshold regression models. The empirical results prove that, in general, the increase of environment regulation intensity in any US state can significantly restrain the inflow of China’s capital, especially in the pollution-intensive industries. Meanwhile, regional economic development level, human capital and technology level all have double threshold values, and environmental regulations intensity has a non-linear impact on China’s direct investment.

How Does the Transportation Facilities of the Host Countries Affect the Cross-Border Mergers and Acquisitions by Chinese Enterprises? Research Based on the Real Effect of the Belt and Road Initiative

ZHOU Li-ping1, ZHANG Yu-qing2

2019, 0(11):  1893. 

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How does the heterogeneity of transportation facilities in the host countries and the development of various types of transportation facilities affect the success rate of cross-border mergers and acquisitions by Chinese enterprises under the influence of the Belt and Road Initiative? To this end, this paper chooses the double difference method with trend and the measurement model of panel negative binomial to analyze the impact of the host countries’ transportation facilities on cross-border M&As under the Belt and Road Initiative. The research results show that the more perfect the transportation facilities in the host countries, the greater the attraction to the cross-border M&Gs by Chinese enterprises. Specifically, the degree of influence of various types of transportation facilities is different to a certain extent, and the effect size is in the descending order of waterway, railway and shipping facilities. In addition, the immediate effect of the Belt and Road Initiative on cross-border mergers and acquisitions is significantly greater than the long-term effect, indicating that the long-term development trajectory of cross-border mergers and acquisitions by Chinese companies has not changed due to the Belt and Road Initiative. It can be seen that enterprises cannot rely solely on the initiative effect, and it is necessary for them to have a deep understanding of the basic characteristics of the host countries, especially the development degree of the transportation facilities.

A Study of the Relationship between Debt Leverage and Default Risks of Local Government Debt

LI Xiang-yun, LIU Song

2019, 0(11):  1894. 

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Based on KMV Model, this paper conducts a theoretical analysis of the relationship between local government debt default risk and debt leverage through suitable variable substitution. At the same time, it makes use of the data of annual debt repayment, interest payments and financial revenue that can be used for repayment of 30 provinces in China from 2012 to 2017 to carry out an empirical test of the relationship between local government debt leverage and debt default risk with the panel data model. The findings show that there is a significant negative correlation between debt leverage and default risks of local government debt. In addition, such factors as the degree of fiscal decentralization, the regional economic development level, the proportion of urban population, the degree of real estate dependence, the proportion of local government revenue to GDP, and the marketization degree can all produce significant impact on the default risks of local government debt. Therefore, in order to prevent and control local government debt risks effectively, it is suggested to make great efforts in the following aspects, i.e., to improve the early warning and monitoring systems for local government debts, to reasonably match the financial and administrative powers between the central government and local governments, to cultivate effective financial resources of local governments, to reduce real estate dependence, and to perfect the market-oriented mechanism of bond issuance.

Research on Performance Evaluation and Obstacle Degree Measurement of Public Hospitals

CHEN Yong-cheng1, JIANG Jin-fa2

2019, 0(11):  1895. 

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By making use of the data from 31 provinces in mainland China from 2012 to 2016, this paper conducts an evaluation of the performance of public hospitals and makes a diagnosis of the performance barrier factors through measuring the performance barrier degrees. The results show that the evaluation index system constructed by R clustering-variation coefficient method is more scientific and feasible. The overall performance level of public hospitals in each province is not high, and it is largely affected by such factors as the medical insurance coverage, diagnosis and treatment capacity, cost burden and drug proportion, etc.. Therefore, it is recommended to improve the overall performance of public hospitals from the following five aspects: firstly, to strengthen the construction of performance management information technology, and establish a dynamic performance evaluation index system; secondly, to strengthen the incentive mechanism construction of public hospitals, and improve the overall performance level of public hospitals; thirdly, to return to the public welfare and accessibility of public hospitals, and enhance the social benefits of public hospitals; fourthly, to optimize the resource allocation and enhance the sustainability of public hospitals; fifthly, to improve the medical quality and optimize the provision of medical services in public hospitals.

The Impacts of Equity Ownership Structure on Commercial Banks’ Non-Interest Business Development: A Study from the Perspective of Soft Budget Constraints

CAO Yu-ping1, XU Hong-liang2

2019, 0(11):  1896. 

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With the evolution of economic and financial reform, the business types of commercial banks are becoming more and more abundant, and the non-interest business development has become an important direction to commercial banks. From the perspective of soft budget constraints, this paper conducts a theoretical analysis of the internal mechanism of state-owned equity ownership structure affecting commercial banks’ non-interest business development through bankers’ talent allocation, resurrection of the gambling behavior and creative destruction effect under the theoretical guidance of equity ownership structure affecting the business behavior and performance of companies. Then taking the panel data of 14 listed commercial banks in China from 2007 to 2016 as the samples, it carries out an empirical analysis and robust test on the theoretical hypothesis with the method of static penal data. The findings of the empirical study show that the higher the proportion of state-owned shareholding is, the more lagging behind the commercial banks’ non-interest business development will be. While the commercial banks with lower proportion of state-owned shareholding would have a better development of their non-interest business. Therefore, it is necessary to promote the non-interest business development of China’s commercial banks from the two aspects, i.e., stock revitalization and incremental reform.

The Impact of China’s Economic Policy Uncertainty on Corporate Debt Financing Costs

WU Wei-jun1, LI Ming-yang2

2019, 0(11):  1897. 

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The empirical study based on the data of non-financial listed companies in the period of 2006-2018 shows that China’s economic policy uncertainty has a significant negative impact on corporate debt financing costs, which indicates that China’s macroeconomic regulation and control can help reduce corporate debt financing costs. After distinguishing the nature of corporate equity, it is found that the rising economic policy uncertainty can narrow the range of the debt financing costs of state-owned enterprises even more, indicating that the implicit guarantee relationship between state-owned enterprises and the government helps to cope with the rising economic policy uncertainty. After further grouping research, it is found that the business status of the enterprises and the cyclicality of their industries will affect the sensitivity of the corporate financing behaviors towards the macroeconomic changes, which will significantly increase the negative impact of economic policy uncertainty on corporate debt financing costs. Therefore, while improving the efficiency of macroeconomic regulation and control, to improve the business environment of enterprises and to provide certain policy subsidies to enterprises in the cyclical industries will help reduce the costs of corporate debt financing.

Media Attention and Remedies for Internal Control Weakness: Market Pressure or Information Transparency

CHEN Ze-yi1, LI Chang-qing2

2019, 0(11):  1898. 

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Taking the companies with internal control weakness (ICW) in Shanghai and Shenzhen Stock Exchanges from 2012 to 2015 as samples, this paper empirically examines the impact of media attention on the remediation of ICW. The findings show that media attention can significantly improve the possibility and the degree of the remediation of corporate ICW. Further research findings indicate that market pressure plays a part of mediating role in the relationship between media attention and the remediation of ICW, while information transparency does not. In addition, compared with companies with only non-great internal control weakness, the effect of media attention on the remediation of ICW is more significant in companies with greater internal control weakness. However, the nature of ownership and the regional media development have no significant impact on the relationship between media attention and remediation of ICW.

The Influence of the Age-Inverse Relationship between the Superior and the Subordinate on Enterprise Innovation

AI Yong-fang

2019, 0(11):  1899. 

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By incorporating the hierarchical factors into the research framework of management age difference, this paper makes a theoretical analysis of the internal mechanism of the age-inverse relationship between superiors and subordinates which is affecting enterprise innovation, and then it makes an empirical test of the above by taking the data of Chinese listed companies from 2007 to 2016 as samples. It is found that the age-inverse relationship between the superior and the subordinate is not conducive to enterprise innovation. The related internal mechanism researches show that the lack of CEO authority is the internal reason for the establishment of the above relationship. Further research findings show that the education level of a CEO will weaken the negative effect of the age-inverse relationship on enterprise innovation level. In addition, the moderating effect of a CEO’s actual age on the influence of age-inverse relationship between the superior and the subordinate on enterprise innovation is manifested in the changing characteristics of first easing and then intensifying. Finally, both the gap in the internal executive compensation and the age of company’s establishment will intensify the negative impact of the age-inverse relationship on enterprise innovation.

Capital-Biased Technological Progress, Global Value Chain Status and Changes of Skilled Labor Employment: From the Perspective of Global Value Chain Decomposition

YANG Fei1,2, SUN Wen-yuan2, YU Yong-ze3

2019, 0(11):  1900. 

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The large-scale application of information technology and robots and the deep participation of global value chain have imposed a significant impact on the skilled labor employment in China. For this reason, this paper studies the impact of capital-biased technological progress and the status of global value chain on the changes of China’s skilled labor employment from the perspective of global value chain. By building a global value chain model based on production tasks and using the World Input-Output Table (WIOD), the results of the study show that the participation in global value chains has significantly improved the high, medium, and low-skilled employment, among which the high-skilled employment increases the fastest. Compared with high-tech products and services, the demand for highly skilled labor in the global value chain of traditional manufactured goods is increasing faster. Further decomposition of the factors affecting the employment of skilled labor shows that the main factors for the increase of high-skilled labor employment are the improved status of global value chain, the increase of global aggregate demand and the capital-biased technological advancement. The employment of medium- and lower-skilled labors is mainly due to the increase in global aggregate demand and the rise of global value chain status; the capital-biased technological advancement has reduced the employment of the medium- and lower-skilled labors. The conclusions of this paper have important implications for China’s industrial informationization, opening up strategy and labor market construction.

How the Improvement of Export Quality Affect Enterprise’ Output Volatility: From the Prospective of Export Intensity

DAI Zhi-hui1, LI Xiao-ping2, WANG Jiao-long2

2019, 0(11):  1901. 

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This paper examines the theoretical mechanism of the improvement of export quality affecting enterprises’ output volatility from the perspective of the export intensity, and then it conducts an empirical test based on the China customs database and the industrial enterprise database from 2000 to 2013. The findings show that when the enterprise gross output volatility is decomposed into the export volatility and domestic volatility, the improvement of export quality will reduce the export volatility through the increase of export intensity and intensify the domestic volatility. As for the total output volatility, there is a threshold effect on the export intensity: when the export intensity is smaller than 0.411, the improvement of export quality can reduce the total output volatility. The intensive margin of the export quality can reduce the export volatility, and the expansion margin of the export quality can intensify the export volatility and the total output volatility.

The Peer Effects of the Accounting Information Quality of Listed Companies and the Economic Consequences: A Study Based on Social Network Interaction Model

FENG Ling, CUI Jing

2019, 0(11):  1902. 

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By making use of the data of China’s A-share listed companies from 2010 to 2015 and constructing the social network interaction model, this paper brings the peer effect into the accounting information decisions of listed companies and conducts an empirical test on the peer effect of accounting information quality. The findings show that there exists peers effect in the accounting information quality of the listed companies. The peer effect will lead low-quality accounting information to spreading among the peer enterprises even within the whole capital market, producing a social multiplier effect. Further study finds out that with the gradual increase of the duration of peer relationship, the positive influence of peer companies’ accounting information quality on the corporate accounting information quality will have an inverted U-shaped change that first increasing and then decreasing. The peer effect of corporate accounting information quality is not only unable to help the executives get higher pay in the next term, but also seriously undermine the value of the company in the future term.

A Study of the Interlaced Board Terms and Corporate Investment: Theoretical Analysis and Empirical Evidences from the Anti-Acquisition Perspective

XU Ming-liang1, ZHANG Guo-hong2

2019, 0(11):  1903. 

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With the increasing degree of openness of the capital markets, the vitality of the corporate control market is gradually stimulated and released, and the threat of listed companies being taken over is becoming more and more serious. As an important tool to maintain the interests of the company’s stakeholders, the interlaced board terms can reduce the risks to the stakeholders after the company is taken over. In this context, the impact of the interlaced board terms on the investment of listed companies is empirically tested from the perspective of interlaced board terms. The findings show that the setting up of the interlaced board terms by the listed companies can effectively alleviate the under-investment, and in the case of lower equity concentration and large board size, the mitigation effect of the interlaced board clauses on under-investment is more obvious; in the case of management holdings, the interlaced board terms are more conducive to curbing excessive investment.

A Masterpiece to Study the Transformation of China’s Economic Development Mode: Comment on Foreign Direct Investment and the Transformation of China’s Economic Development Mode

YE Xiang-song

2019, 0(11):  1904. 

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