Table of Content

15 November 2015, Volume 0 Issue 11

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Political Connection, Earnings Management and Auditor Choice

CAI Ji-fu

2015, 0(11):  494. 

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On the basis of dividing the earnings management into positive and negative earnings management according to the different directions of profit manipulation and discussing in details the nature and application scope of the positive and negative earnings management as well as their legal risk differences on the CPAs, this paper re-examines and studies the strategies for auditor choice in politically connected enterprises. The results show that either in their positive or negative earnings management the politically connected enterprises have more profit manipulation behaviors than the non-politically connected enterprises. The politically connected enterprises with negative earnings management tend to choose big auditing firms; meanwhile, the big auditing firms are much more likely to issue clear auditor opinions to their financial reports. In contrast, the politically connected enterprises with positive earnings management are more inclined to engage small auditing firms, and the small auditing firms are quite ready to provide standard auditing opinions to their financial reports.

Resource Collection and Integration of Service Industry in Hunan-Hubei-Jiangxi Region: From the Perspective of Location Entropy Theory

WANG Yao-de, YI Kui

2015, 0(11):  495. 

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Along with the proposed program of urban agglomeration in the middle reach of Yangtze River, the cluster development of the central delta economic zone has become an important engine to enhance the regional economic competitiveness. Based on the location entropy theory, this paper makes an assessment of the resources agglomeration degree of service industry in Hunan-Hubei-Jiangxi area. The results show that this area owns obvious advantages in the natural resources for the service industry, but the economic foundation of this area is weaker, the conditions for the development of the service industry are not good enough, and the reserve of talents is not sufficient. Therefore, in order to give full play to the agglomeration effects of the service industry and promote the sustainable development of the regional economy, it is necessary to integrate the resources of the service industry in those three provinces, program the characteristic industry cluster districts, implement the PPP development mechanism and carry out the construction of the bases for complementary-type talents.

Characteristics of Charitable Organizations, Information Disclosure and Donation Income

CHEN Li-hong, ZHANG Long-ping, YANG Ping

2015, 0(11):  496. 

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Taking the data of China’s charitable organizations from 2006 to 2012 as the samples, the results of the study show that the charitable organizations with larger size, more complicated organizational structures, higher managerial effectiveness, lower debt-to-asset ratio, longer established time, registered in more advanced regions, belonging to education section or having private placement nature have better quality in their information disclosure. When the information disclosure is decomposed into the three indexes of financial information, performance information, and annual information, the size and complexity of the organizations will have influences on the three kinds of information, while the managerial effectiveness only have influence on financial information and performance information. High quality information disclosure can significantly increase donation income, especially financial information and performance information. These facts indicate that information disclosure has value relevance in resource distribution of charity organizations.

Financial Constraint, Government R&D Subsidies and Corporate R&D Investment: An Empirical study of China’s Strategic Emerging Industries

ZHAO Wei

2015, 0(11):  497. 

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Based on the micro-data of the strategic emerging industries from 2006 to 2013, this paper makes a quantitative measurement of the effect of financing constraints and government R&D subsidies on corporate R&D investment within the unified framework of the two-tier stochastic frontier model. The results show that, on average, the government R&D subsidies can smooth but not completely offset the negative effects of financing constraints on R&D investment; the corporate R&D investment of the strategic emerging industries is still insufficient. However, there are also 1/4 firms in which the positive effect of government R&D subsidies on R&D investment is bigger than the negative effects of financing constraints on R&D investment. Further studies show that the incentive effect of government R&D subsidies has significant heterogeneity among different firms, therefore, the government should be more cautious and targeted when making subsidy policies.

A Study of the Vertical Equilibrium Mode of China’s Online Retail Organizations

WANG Chao-xian1, LI Qiang-zhi2

2015, 0(11):  498. 

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In the online retail revolution, China has formed a unique vertical equilibrium mode with the platform-based online retail organizations taking the dominant position. This special industrial organization phenomenon is resulted from the mutual adaptation of the organizations and the external environment generated during their interactive process. From the perspective of organizations, the technical and contractual characteristics produced endogenously in the platform-based online retail organizations have determined the external environment that it can best adapt, that is to say, the traditional demand mode featured with sparse, diversified, function-intensified market demand and the traditional manufacturing mode characterized with simple product manufacturing, low skills and small-scale manufacturing enterprises. From the perspective of external environment, when the retail revolution is breaking out, China’s economy is in the stage transforming from traditional to modern, during which the traditional demand and manufacturing mode are in a dominant position, this is more conducive to the survival and development of the platform-based online retail organizations.

A Study of the Consumer Trust Repair Strategies in the Context of Shopping Online: From the Perspective of Positive Emotion

YANG Liu1 , WU Hai-zheng2

2015, 0(11):  499. 

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In view of the fact that trust violation in shopping online has brought negative effects on consumers and businesses, to repair the consumer trust has become a hot topic among the management academic circles and the practice circles. From the perspective of positive emotion, this paper adopts the method of empirical study to explore the roles and their mechanism of the two important strategies for repairing consumer trust, namely the financial compensation strategy and the apology strategy. The result shows that the types of trust violation can moderate the positive relationship between the repair strategies and trust beliefs and trust intention, that the positive emotion plays the mediating role in the process of trust repairing, and that in addition to the direct effect, the moderating role of trust violation can also be realized indirectly through the mediation role of positive emotion. As for the different types of trust violations, the financial compensation strategy has different influences on trust belief and trust intention, and this kind of moderating effect should also be transmitted through positive emotion. But the apology strategy has no such indirect effect.

Evaluation and Comparison between Operational Performance and Risk Performance of China’s Listed Banks Based on Management Strategy

ZHANG Gui-jun, LUO Liang-qing

2015, 0(11):  500. 

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By applying the non-radial DEA method under natural disposability and managerial disposability based on the management strategy, this study measures the operational efficiency and risk efficiency of China’s 16 listed banks during the period of 2005-2012 respectively. The results show that there exist significant differences between the“four big”state-owned banks and the joint-stock banks in their operational efficiency and risk efficiency. The operational efficiency of the joint-stock banks is significantly higher than that of the“four big”state-owned banks while the risk efficiency of them is significantly lower than that of the“four big”state-owned banks. The operational efficiency of the joint-stock banks and the“four big”state-owned banks has not been impacted by the more stringent financial regulation after the financial crisis. After the financial crisis, the more stringent financial regulation has no impact on the risk performance of joint-stock banks, while the risk performance of the “four big” state-owned banks has been crippled.

An Analysis of Topological Structure Characteristics of China’s Interbank Network and Its Implications

WU Nian-lu, XU Li-li

2015, 0(11):  501. 

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Aimed at the consensus that the network structure will significantly influence risk contagion, this paper chooses interbank institutions as the research object. By making use of the data of interbank assets and interbank debts of 98 banks’ interbank institutions from 2007 to 2012, it constructs a China’s interbank network. The results of the empirical analysis show that the in-degree and out-degree distributions and the weight distribution are all presenting power-law distribution characteristics, which belongs to the scale-free network. Among them, such banks as BOC, ICBC, CCB, and ABC have higher in-degree and out-degree. The interbank assets/core assets and the interbank debt/core assets of the joint-stock commercial banks are as high as more than 4 times, which means they have weaker ability to absorb losses and the default risk is higher. In addition, interbank network has a higher clustering coefficient. These can provide some enlightenments for the management of interbank default risk contagion.

Welfare Spending, Economic Structure and Governments’ Debt Scale: An Empirical Research Based on EU Studies

DAI Wei-dong1, KONG Qing-yang2

2015, 0(11):  502. 

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Through the empirical studies of the relative influencing factors of EU debt crisis and its impact on the other countries, some valuable suggestions can be provided for the social governance during the post-crisis era after the EU debt crisis and for the economical and social development of other countries. This paper argues that social welfare expenditure and public expenditure are two important pushers to the euro zone debt crisis, but the tax, total savings, domestic investment and net exports have different influencing mechanisms on the government debt scale of countries with different types of economic structures. As for the countries involved in debt crisis, such measures as cutting in welfare expenditures, increasing net exports, expanding domestic investments and increasing taxes are simply not effective to resolve the crisis. The most fundamental way is to adjust and reform the EU economic structure and financial system. These experiences and lessons have significant enlightenment for China’s new normal economic development.

A Comparison of De-Industrialization between Industrialized Countries and Its Enlightenment to Present China: A Case Study of UK and USA

WANG Zhan-xiang

2015, 0(11):  503. 

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From different perspectives, de-industrialization can be divided into many categories. Britain and the United States are two typical representatives in de-industrialization among the developed countries. Britain prefers gross and integrated de-industrialization, in terms of quantity it is inclined to stronger de-industrialization, showing a de-industrialization more in productivity; while the United States prefers structural and regional de-industrialization, in terms of quantity it is inclined to weaker de-industrialization, showing a de-industrialization more in employment and output value. From the view afterwards, the impact of de-industrialization on the British economy is partially negative, while the impact on the US economy is partially positive. At present, China seems to have signs of de-industrialization, thus it is necessary to adjust and reform the industrial policies and fiscal policies, build integrated labor markets, play the role of the advantages of a big country, make full use of the opportunities in regional de-industrialization and structural de-industrialization, fundamentally improve labor productivity in the society as a whole, so as to avoid the negative effects of de-industrialization on the Chinese economy that may arise.

Public Governance, Modern Financial System and Finance Ruled by Law

YUE Jun，WANG Jie-ru

2015, 0(11):  504. 

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As a kind of public governance activities of a country, finance serves to maintain public interests ultimately. Setting up a framework of modern public governance to promote the modern financial system to meet the requirements of realizing the accountability, openness and transparency, predictability and public engagement is an important breakthrough in the future fiscal and taxation reform. In order to achieve finance ruled by law, it is necessary to have it guaranteed from the two aspects of law and institution. A real modern financial system should be accompanied with sound law, perfect system, scientific contents and efficient management. In the future, we can draw lessons from the reform experiences of the progressive era in United States, go on to strengthen the budget transparency unceasingly, build a budget performance evaluation mechanism, establish a tax system mainly based on direct taxes to promote tax equitableness,?introduce public participation and the administrative hearing system in public policy-making, and optimize the demand expression mechanism.

China’s Output Gap Measurement, Comparison and Robust Analysis

LOU Feng

2015, 0(11):  505. 

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In the framework of New Keynesian Theory, according to the latest international definition of the output gap, this paper integrates the characteristics of Chinese economy to build a dynamic stochastic general equilibrium model. Then it estimates China’s quarterly output gap with the Bayesian approach. Afterwards, it makes a comparison with the output gaps estimated by other approaches and conducts a stability test and analysis with the model. The empirical results show that to define output gap as the deviation of the actual output relative to its flexible prices equilibrium level can better explain the process of China’s economic periodic changes. From the third quarter of 2010, China’s output gap volatility tends to be stable, which is basically consistent with the“Great Moderation”phenomenon.