Table of Content

15 October 2015, Volume 0 Issue 10

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Evolution of Spatiotemporal Patterns of China’s Foreign Direct Investment Regional Distribution

XIAO Gang

2015, 0(10):  506. 

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Taking the actual use of foreign direct investment amount as the main indicator, based on provincial spatial units, this paper applies the analyzing method with geographic concentration index, Theil index and Markov chains combining tradition and space to explore and analyze the dynamic time-space evolution process, pattern and characteristics of foreign direct investment regional distribution in China’s 30 provinces from 1985 to 2013 from the perspective of time, space and geospatial spatiality. The results show that China’s foreign direct investment regional distribution presents a trend of transferring from highly concentration to gradual diffusion and presents two convergence clubs with stronger stability at higher level and lower level. The spatial transfer of regional distribution type of China’s foreign direct investment is closely related to the differences of regional foreign direct investment levels, the smaller the gap between the levels of regional foreign direct investment, the greater the probability of transferring, and vice versa. The neighboring foreign direct investment environment will significantly affect the evolution of regional distribution types of foreign direct investment, the geographic proximity effect is obvious at the low level and the low-medium level areas, while at the medium-high level and the high level regions it is weakened by and by.

Research on the Influence of Job-Related Embezzlement Crime by Senior Executives on Corporate Value

ZHANG Rui, GUAN Kao-lei

2015, 0(10):  507. 

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In the context of frequent occurrence of embezzlement crimes committed by senior executives in China’s enterprises, this paper applies the principal agent theory and the rent-seeking theory in the economics to view the embezzlement crimes committed by senior executives as a moral hazard and power rent-seeking behavior. Out of opportunist motivation, senior executives may grab individual interests through such methods as hiding information, hiding behavior and power rent-seeking, thereby reducing the corporate value. Meanwhile, this paper makes a further analysis of the short-term, long-term and extreme influences of the embezzlement crimes committed by senior executives upon corporate value from the three levels of market response, long-term value expression and financial distress. This study believes that the embezzlement crimes committed by senior executives would lead to serious adverse market reactions, which would reduce the long-term corporate value and make the corporate fall into financial distress.

Geographical Relationship of Management and Corporate Investment Efficiency

YU Jun-li1, JIN Xin2, LEI Guang-yong3

2015, 0(10):  508. 

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This paper makes use of the data of the closeness of managerial geographical relationship and investment efficiency from A-share companies listed in Shanghai and Shenzhen stock exchanges from 2003 to 2013 to conduct an empirical test. The results indicate that the geographical relationship between the chairman of the board and the general manager in state-owned enterprises is closer than that in the non-state-owned ones; this is even so in local state-owned enterprises. If the enterprise is located in the same province where the chairman is born or growing up, the geographical relationship between the chairman and the general manager is much closer. The closer the geographical relationship between the chairman and the general manager is, the less investment efficiency of the enterprise will be. Compared with the private enterprises, the geographical relationship of the management in the state-owned enterprises has a more significant effect on the investment efficiency. Compared with local state-owned enterprises, the geographical relationship of the management in the enterprises owned by the central government has a more significant effect on the investment efficiency. And the geographical relationship of the management in the enterprises whose chairman is not in the same province has a more significant effect on the investment efficiency.

Income Distribution of Destination?Markets?and?Quality of Export Products: An Empirical Analysis?Based on China’s Enterprises

DU Wei-jian1, LI Meng-jie2

2015, 0(10):  509. 

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This paper analyzes the impact of the income distribution of destination markets on the quality upgrading of export products based on a theoretical model. On the basis of this, it makes use of the matched data of industrial?enterprises and Chinese customs to test the conclusions of the theoretical model under the conditions of controlling the market size of the destination country and the enterprise-level?features. The results show that the rise of the degree of income inequality in the destination country will reduce the degree of quality preference of the whole country, thus on the one hand the quality upgrading of the export product will be hindered, and on the other hand the enterprises will selectively export low-quality products to the country. The results of the sample tests show that compared with the advanced economies, the rise of the domestic income inequality will significantly hinder the quality upgrading of the products exported to the country as far as the developing countries with lower economic development levels are concerned. Ultimately a large number of low quality products will flood in the domestic markets of the developing countries with high degree of income inequality.

Impact of Multichannel Integrated Quality on Consumers’ Cross-Channel Free-Riding Intention

TANG Ding-na, LIAO Wen-hu

2015, 0(10):  510. 

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From the perspective of traditional retailers, this paper studies the impact of multichannel integrated quality on the consumers’ across-channel free-riding intention. It analyzes how the multichannel integrated quality can influence the consumers’ cross-channel free-riding intention through the function of psychological contract. By developing a multichannel integrated quality scale, it constructs a model of the relationship between multichannel integrated quality and cross-channel free-riding intention. Based on 311 samples collected in different industries, it makes an analysis of these data. The results indicate that the service consistency is positively correlated with trade psychological contracts and relationship psychological contracts, that there is a positive correlation between service relevancy, service transparency and relationship psychological contracts, and that there is no correlation between service relevancy, service transparency and trade psychological contracts. However, the cross-channel free-riding intention is negatively correlated with trade psychological contract and positively correlated with relationship psychological contract.

A Study of National Culture Manipulation during World-Class Brand Creation: Based on the Empirical Analysis of the Herborist Case

LIU Biao-wen, YU Ke-fa

2015, 0(10):  511. 

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World-class brand building is crucial for those emerging market economy countries like China. Based on a deep analysis of the brand essence, this paper puts forward such a viewpoint that the uppermost difference between world-class brands is the difference of cultures. Through the case study of the internationalization development process of Herborist brand, this paper constructs a theoretical system of two-dimensional mastering of national culture and expounds the four models for the application of the national culture. The results indicate that only by outstanding performance at the two dimensions of “concentration”and“manifestation”with the national culture, can a world-class brand be created by the enterprise.

Financial Aggregation and Urban Economic Performance: An Analysis from the Perspective of Urban Heterogeneity

ZHANG Hao-ran1，WEI Lin2

2015, 0(10):  512. 

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Based on the data of China’s cities from 2003 to 2012, this paper makes use of the instrumental variable method and the threshold panel model to test the impact of financial aggregation on urban economic performance. The results show that the financial aggregation has been playing a significant role in promoting the urban economic performance and this effect has obvious features of the threshold effect. The cities whose economic gross has stepped over the threshold scale can improve their efficiency from better matching of the financial industry with other industries. The larger the urban economic gross, the stronger the promoting effect of financial aggregation on urban economic performance. Meanwhile, with the improvement of the level of financial aggregation, the earnings of financial aggregation is showing an inverted U-shape change, first rising then dropping. This indicates that the excessive financial aggregation will lead to information asymmetry and the rising of monitoring costs. Therefore, governments at all levels should focus on the appropriate degree of financial aggregation to match the urban scale and the economic gross.

A Study of Responsibility Division and Financial Resources Matching between Central and Local Endowment Insurances

LIN Zhi-fen

2015, 0(10):  513. 

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The responsibilities and financial resources between China’s central and local endowment insurances have not been divided clearly by now, which profoundly restricts the endowment insurance reform and social economic development of the country at large. Based on the three major reforms of the current endowment insurance, i.e., the separation between personal accounts and social pool, the system integration and the plan hair base adjustment, this paper divides the current central and local endowment insurance responsibilities, namely, to divide the basic pension of 60% substitution rate into 30% central basic pension and 30% provincial transitional pension and municipal personal pension accounts. In addition, according to actuarial principles, the corresponding financial resources to be matched should be 9% and 5% pooling payment at the central and provincial levels respectively, and 8% individual payment at the municipal level, so as to make the total 22% rates lower than the current rates by 6%. According to the above classification scheme, all the 31 provinces of the country will be divided into four different groups of regions with varying interests, which should be noted by the policymakers.

An Analysis of Shanghai’s Position in the Global Financial Network System: Based on the Complex Network Centrality Calculating Model

LIU Jiang-hui, WU Zhong

2015, 0(10):  514. 

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Based on the complex network centrality calculating model and according to the data of the offices and branches set up in 78 node cities in the global financial network system of 114 financial multinational corporations among the world top 500 enterprises, this article estimates the degree centrality and the betweenness centrality of Shanghai in the global financial network system. The results show that compared with the top node cities Shanghai’s status and influence in the global financial network system still have some distance to catch up. The major reasons for this gap are as follows: fewer financial institutions at headquarter level, lower multinational index of financial institutions, and relatively insufficient international financial assets and business volume, etc.. The deeper level reasons for this gap are such factors as insufficient compatibility of some of the basic constitutive elements of China’s financial institutional framework with the international norms, lower opening degree of the financial markets and so on. Therefore, it is of great significance to promote financial system innovation, to explore actively a modern financial system with inclusivity, competitiveness and being geared to international standards, and to increase the opening degree of financial markets as soon as possible at the meantime, which will help the construction of a global financial center in Shanghai.

Resource Basis, Soft Budget Constraints and Local Government Debts

LI Shang-pu, ZHENG Zhong-hui, LUO Bi-liang

2015, 0(10):  515. 

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Soft budget constraint is considered the main reason for the rapid expansion of local government debts, while land element and credit resources constitute the resource basis of the soft budget constraints. Based on the announcement of audit findings, this paper studies the characteristics of local government debts, which leads to the following conclusions: (1) the whole scale of local government debts is under control, while the liquidity of financial funds should be attended; (2) local government debts show significant heterogeneity. The amount of debts is larger in high-income areas, which was mainly concentrated on the levels of municipal and county governments; the debt scale in low-and-middle-income areas is relatively higher, concentrating on the levels of provincial and municipal governments; (3) the resource basis of debts is different from place to place. The absolute amount of bank loans in high-income areas is bigger, while the lower-and-middle-income areas rely more on land transfer and the transfer payment from the exchequer. Therefore, the key solution to this issue is to speed up the factor market growth, reform the borrowing mechanism and rationalize the relationship between the finance and taxes.

The Theory of Grid Investment and Governance from the Perspective of New Regulation: Enlightenment on China’s Electric Power System Reform

FENG Yong-sheng

2015, 0(10):  516. 

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The main contents of the theoretical studies of grid investment and governance include the business investment patterns, the regulated investment patterns, and the incentive and efficiency issues of the power grid ownership and the operating right under the implementation of the integrated structure and separated structure. The commercial investment model relies on the assumption of near-perfect competition and the separated structure of the grid ownership and the system operating right, which in reality is prone to distorted incentives for grid investment and easy to generate team moral hazards, thus it is difficult to ensure effective grid investment in the competitive electricity market. By relying on incentive regulation, the integrated structure of the grid ownership and the system operating right under the regulated investment mode can avoid moral hazard in the teams and various distorted investment incentives. Comparatively speaking, the regulated investment model is a more appropriate one to be the main target pattern for the grid investment during China’s power market reform. The power grid governance should focus on the release of the potential efficiency under the integrated structure of the grid ownership and the right to operate the system. The power system reform must take a coordinated promotion of the construction of a competitive market and the reform of the grid management system, so as to avoid becoming a simple interest re-adjustment.

Corporate Budget Constraints Hardening and China’s Economic Fluctuations Stabilizing: An Analysis Based on Extended New Keynesian Sticky-Price Model

ZHANG Si-can1，2，ZHANG Yun2

2015, 0(10):  517. 

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Since the mid-1990s, the fluctuation range of China’s economy has been significantly decreased and turned into a stabilizing tendency. At the same time, the budget constraint of the dual microeconomic agents constituted by state-owned enterprises and non-state-owned enterprises is hardening significantly, the investment behaviors tend to be more rational. For this reason, this paper constructs a new Keynesian sticky-price model including such factors as investment constraints of cash in advance and financial intermediary efficiency, the result of the numerical simulation study shows that the hardening of budget constraints forces enterprises to attach great importance to the internal cash accumulation, thus the impulse behavior of enterprise investment is suppressed effectively through the channel of real money balances. In addition, the hardening budget constraints can enhance financial intermediaries’ effect on reducing the economic fluctuations. Therefore, the hardening enterprise budget constraints and the improvement of financial intermediary efficiency can help to improve the stability of the macro-economy, and the significant changes of the hardening budget constraints can explain the stabilizing trend of China’s economic fluctuations.