Table of Content

15 March 2015, Volume 0 Issue 03

Previous Issue    Next Issue

Investor Sentiment and Corporate Investment Efficiency: An Empirical Study Based on the Governance Effects of Compensation Incentive and Debt Financing

JIN Guang-hui1, LIU Zhi-yuan2, HUANG Hong-bin3

2015, 0(03):  588. 

Asbtract ( 165 )  

Related Articles | Metrics

By combining investor sentiment with corporate governance mechanisms from the traditional rational perspective, this paper examines the interactive effect of the two kinds of governance mechanisms (the management compensation incentive and debt financing) and investor sentiment on the governance effect of investment inefficiency. The results indicate that, considering the effect of investors’ non-rationality, management compensation incentive and debt financing both have significantly negative correlation with under-investment, and the interaction effect with investor sentiment both have significantly positive correlation with over-investment. The results show that the two kinds of governance mechanisms have significant inhibiting effect on under-investment, while their effects of governance on over-investment depend on the emotional state of investors.

High-Qualify Auditing, Managerial Power and Agency Costs

XIE Sheng-wen, JIANG Xu-han, YAN Huan-min

2015, 0(03):  589. 

Asbtract ( 191 )  

Related Articles | Metrics

Taking China’s A-share listed companies that changed their auditors during 2007-2012 as the samples, this paper conducts an empirical test on the relationship between corporate managerial power and dynamic auditor choice as well as the effects of external audit on management agency costs. The results indicate that, when choosing auditors dynamically, the greater the managerial power, the more likely to choose high-qualify external auditor by the corporate management with stockholders’ meeting and board of directors as its representative, so as to inhibit power expansion and rent-seeking behaviors of company management. Further study indicates that to choose high-qualify auditors can reduce the management agency cost by way of alleviating agency conflicts between the owners and the management to some extent.

Financing Constrains and Price Competitiveness of Export Products: An Empirical Study Based on China’s Manufacturing Enterprise Data

CHEN Xu, QIU Bin

2015, 0(03):  591. 

Asbtract ( 158 )  

Related Articles | Metrics

This paper investigates the impact of financing constrains of different natures on the price competitiveness of China’s export products and their internal mechanism by using China’s industrial business database and the customs database. The results show that the ease of financing constraints can contribute to lowering the price of products and improving the competitiveness. In the general trade model, the ease of both internal and external financing constrains and the commercial credit constrains between enterprises can play a significant role in lowering the prices of export products, but it is not significant in enterprises engaged in processing trade. The financing constrains at different levels also have different impacts on the prices of export products of enterprises with different ownership. The price competitiveness of export products produced by private enterprises is most significantly affected by financing constrains.

An Analysis of the Impact Measurement of International Resource Price Fluctuations: Based on FAVAR Model

HUANG Xian-ming

2015, 0(03):  592. 

Asbtract ( 166 )  

Related Articles | Metrics

Through expanding the theory of supply-and-demand equilibrium price in the neoclassical economics, this paper endogenizes all the factors affecting international resource prices to construct the theory of generalized supply-and-demand equilibrium price. Based on the data from January 1997 to December 2012, it selects 14 economic variables, covering American and Chinese real economy, financial factors, speculative factors, supply and demand, and inventory, as the research object, so as to establish a factor-augmented vector autoregression model -- FAVAR model. Then it systematically investigates the impact and contribution of the various variables on and to the international resource price fluctuations. The results show that the generalized supply and demand (made up of entity supply-and-demand + speculative supply-and-demand) can determine the international resource equilibrium price. In the long run, U. S. real economic demands is the main factor pushing the international resource prices, while the speculative supply-and-demand is not the key factor in the fluctuation of international resource prices. In the short run, the speculative supply-and-demand has a more powerful impact on the international resource prices, U.S. quantitative easing has a significant impact on the fluctuation of international resource prices too. Compared with both American and Chinese factors, no matter in the long run or in the short run, Chinese factors always have weaker impact on the international resource prices than American factors, but the short-term effect is stronger than the long-term effect.

On the Impact of Prosocial Motive and Impression Management Motive on Organizational Citizenship Behaviors

GAO Ri-guang, LI Sheng-lan

2015, 0(03):  593. 

Asbtract ( 164 )  

Related Articles | Metrics

Organizational citizenship behaviors of the employees can be both the sincere expression of good soldiers and the hypocritical performance of good actors. Through an empirical analysis of the paired data between 302 employees and workmates in an enterprise, this paper tries to explore the impact of prosocial motives and impression management motives on the organizational citizenship behaviors. The results show that prosocial motives have significant impacts on organizational citizenship behaviors both toward workmates and toward organizations, while impression management motives have significant effects only on organizational citizenship behaviors toward organizations. The impression management motives can play a regulating role between prosocial motives and organizational citizenship behaviors toward organizations, that is, the stronger the employee’s impression management motives, the weaker the correlation between prosocial motives and organizational citizenship behaviors toward organizations.

On the Impact of Green Ads in Service Industry on Consumers’ Decision: From the Perspective of Attribution Theory

SUN Jin1,2, ZHANG Hong-xia2

2015, 0(03):  594. 

Asbtract ( 191 )  

Related Articles | Metrics

Along with the environmental degradation and the progressive enhancement of the consumers’ awareness of ecological environment, green ads claims are more and more frequently appearing. For that reason, this paper introduces the green value perceived by consumers to try to reveal the inherent utility mechanism of the interaction between the claim type and motivation of green ads under the guidance of the attribution theory. The analysis of the experimental data shows that the motive attribution can adjust the impact of green ads claim type on consumers’ decisions. When consumers have active attributions toward green ads, compared with the associative ad claim type, substantive ad claim type can generate better brand attitudes, more favorable brand evaluation and higher purchase intention from consumers; on the contrary, when consumers perceive the negative motivations of companies in green ads, their interests can be hardly aroused, no matter what kind of ad claim is put forward. In addition, the results of the mediate function analysis indicate that the consumers’ perception of green value is the mediating variable affecting the interaction between ad claim and attribution.

Can Securitization Mitigate Banking Risks ? A Theoretical Analysis Based on the“Run Model”

LIU Xin-yu, GE Yang

2015, 0(03):  595. 

Asbtract ( 157 )  

Related Articles | Metrics

As there is no mature securitization market, China’s commercial banks could not transfer risks through the means of securitization, but only through the traditional strategy of linear diversification. By adding some securitization factors to the“run model”and employing the“run edges”analytical method to have risks visualized, such a conclusion can be achieved that securitization can yield better results than linear risk diversification in most cases. When there is no confidence shock, the optimum choice based on minimizing banking risks is to exchange the senior tranche totally and to render the repayment of senior tranche equal to the level of deposits. However, this strategy will fail when there does exist a confidence shock; then, the optimal choice to avoid banking risks has to be altered.

Financial Diversity and Property Income: From the Double Perspectives of Growth and Distribution

CHEN Gang

2015, 0(03):  596. 

Asbtract ( 173 )  

Related Articles | Metrics

The diversity of financial structure not only influences the efficiency of financial sector, but also defines the benefit margins of the expansion of financial scale. Therefore, it has a significant impact on the growth and distribution of household’s property income. By making use of China’s provincial empirical data during 2005-2011, this study finds out that the rising of financial diversity has significantly increased the household’s property income, and decreased the inequality of its distribution between the high income and low income groups. Meanwhile, the financial diversity is also the threshold of financial development which influences the growth and distribution of property income. Only when the financial diversity exceeds a certain threshold value, can the expansion of financial scale significantly promote the growth of household’s property income and the equality of its distribution. The results indicate that the optimation of financial structure is far more important than the expansion of financial scale. Thus, to increase the household’s property income in China and to promote its distribution equality may need to further remove some of the discriminatory access barriers existing in the financial markets, especially those against the non-state-owned finance or informal finance. Then a financial system with diverse institutions will be constructed thereby, and a market environment in which all kinds of financial institutions can enjoy fair competition will be fostered, so as to promote the full competition among the various financial institutions.

Chinese-Style Fiscal Decentralization: An Extended Interpretation Framework

MA Wan-li

2015, 0(03):  597. 

Asbtract ( 151 )  

Related Articles | Metrics

Chinese-style fiscal decentralization is an important institutional arrangement which affects the economic and social development, as well as an institutional guarantee to achieve sustained healthy economic and social development and long-term peace and stability of the state. Chinese-style fiscal decentralization belongs to a model of unanimously executive-agreed decentralization, and it is a top-down mandatory institutional change led by the central government. Therefore, the political and financial incentives from the top as well as the private incentives from the government officials themselves enable the local governments to have a powerful drive to develop economy; while the missing of“hand voting”and“voting with feet”, the weakness of rule of law, and the yardstick competition pressure lead to behavior variation of local governments, which have generated a lot of adverse effects on economic and social development. The future reforms should set about from the following four aspects: the governance of government officials, the system design, the sovereignty of the people, and the supervise mechanisms, so as to guarantee the sustained economic and social development and stability of the state.

Employment Risk, Social Capital and Sector Choice of Migrant Workers

HAN Xue, ZHANG Guang-sheng

2015, 0(03):  598. 

Asbtract ( 137 )  

Related Articles | Metrics

Little attention is paid to the employment choices of the migrant workers by the academic circles. This paper applies the prospect theory and the social capital theory to analyze the job choosing behaviors of the migrant workers. The theoretical analysis indicates that the degree of industrial risks and the quality of social network can determine the job choices of the individual migrant worker. It then employs the logit model to analyze empirically the influence of employment risks and social capital on the sector choices of the migrant workers. The results show that employment risk is an important factor affecting the employment sector choices. The traditional networks, such as relatives, friends and neighbors, have a positive impact on the employment choice behaviors of the migrant workers. However, because the quality of the network is not good enough, the traditional network that the migrant workers rely on is of little help in assisting their professional upward moving.

An Analysis of Income Redistributive Effect of Hong Kong Tax System

WANG Xi-ping

2015, 0(03):  599. 

Asbtract ( 161 )  

Related Articles | Metrics

Tax system in Hong Kong has experienced minimal changes over the past several decades. There exist certain factors that would compromise the fairness of tax burden distribution in its tax system. Such factors as nontax revenue, tax rate structure, standard tax rate, tax credit and financial revenue structure have jointly affected the income redistribution function of Hon Kong tax system. This paper makes use of RSA index and the effective tax rate to test the income redistribution effect of Hong Kong tax system. The results show that Hong Kong’s tax system has certain income redistributive effect and the progressivity of income tax changes slightly with the tax rate variation. The progressivity of the tax system would be greatly improved if the tax exemption policies for capital gains are reduced, the tax rate structure of flat income tax is raised or the standard tax rate is abolished, or the strategy of tax credit is adjusted to make it more targeted.

The Discretion-Dependence of China’s Local Government and Regional Economic Fluctuation

GONG Min, ZHANG Fan

2015, 0(03):  600. 

Asbtract ( 147 )  

Related Articles | Metrics

In recent years, the appearance of land finance and local financing platform makes the constraint of the existing fiscal system on the behaviors of local governments become softer. Under such institutional environment, when making fiscal policies of discretionary nature, local governments would consider less the regional economic stabilization, but focus more on fiscal revenue and local interests. This would cause the fiscal activities of the local governments to display more traits of randomness, which goes against the regional economic stabilization. Though decomposing the fiscal policies of local governments and making use of the provincial panel data, it is found that the local discretionary fiscal policy can play a certain role in stabilizing the abnormal consumption, but would aggravate the abnormal fluctuation of investment. Compared with the consumption fluctuation, the investment fluctuation is usually the main cause for economic fluctuation. Therefore, as a matter of fact, the discretionary fiscal policies of China’s local governments contain larger implicit economic fluctuation risks. This conclusion provides empirical support for constructing the endogenous institutional constraints on the economic activities of local governments in the next step of fiscal system reform.