Table of Content

15 February 2019, Volume 0 Issue 02

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Financing Quality and Value Volatility of Small and Medium Enterprises: From the Perspective of Stock Price Crash Risk

WAN Dong-can

2019, 0(02):  14. 

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This paper tries to depict the stock price crash risk index with financing qualities. It selects the data of Chinese A share listed SMEs from 2005 to 2014 as the samples to investigate the relationship among business credit, bank loans and debt financing cost of bank loans, and stock price crash risk. Then it makes an analysis of the impact of trade credit and bank loan on the financing qualities and value volatility of SMEs. The findings show that trade credit is significantly and positively correlated with stock price crash risk, bank loan is significantly and negatively correlated with stock price crash risk, and debt financing cost is significantly and positively correlated with stock price crash risk. This indicates that different ways of debt financing can have different economic consequences.

Auditors’ Knowledge Capital Stock, Knowledge Integration Dynamic Process and Audit Quality

TANG Yan-jun

2019, 0(02):  15. 

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That auditors use their knowledge capital to engage in audit activities is a dynamic process of knowledge integration on the basis of their existing knowledge capital stock. Taking the A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2007 to 2015 and their auditors as the research samples, this paper conducts an empirical study. The findings show that the more the stock of auditor’s knowledge capital, the stronger the ability of knowledge absorption and acquisition, and the more conducive to knowledge integration in the process of practicing “learning by doing”. Along with the increase of the number of years of practicing “learning by doing” and the degree of knowledge integration, the positive relationship between auditor’s knowledge capital stock and audit quality becomes more significant. The access incentive mechanism for partner qualification selection has a strong incentive effect on the integration of knowledge capital, which can help the auditors with higher stock of knowledge capital to play a full role in improving the audit quality. Accounting firms should pay attention to knowledge capital archives management, give full play to the incentive effect of partner qualification selection mechanism, enhance the ability of knowledge integration of their auditors, so as to improve the professional level of the auditor group as a whole.

Economic Policy Uncertainty and Corporate Outward Foreign Direct Investment: Inhibition or Promotion?

YANG Dong-xu, XU Shuo-zheng, WEI Bo-ning

2019, 0(02):  16. 

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Economic policy uncertainty is an important factor affecting corporate outward foreign direct investment (OFDI). Based on the uncertainty index of economic policies constructed by Baker and others, this paper conducts an empirical test of the impact of economic policy uncertainty on corporate OFDI by using the matching data of China’s A-share listed companies and the “List of Branches of Chinese Enterprises Established Overseas” during the period of 2007-2014. The results show that the economic policy uncertainty has a significant positive correlation with the probability of corporate OFDI. The findings of further study reveal that when economic policy uncertainty rises, compared to state-owned enterprises, labor-intensive and capital-intensive enterprises, high-productivity enterprises and more financing-constrained enterprises, the OFDI probability of non-state-owned enterprises, technology-intensive enterprises, low-productivity enterprises and less financing-constrained enterprises is higher. When the impact of financial crisis is taken into account, it is found that financial crisis will significantly reduce the probability of corporate OFDI under the uncertainty of the established economic policies.

Production Capacity Endowment and Upgrading Path of China’s Industrial Transformation: From the Perspective of Product Space Theory

XU Xiao-xin1, LI Hao2

2019, 0(02):  17. 

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Based on such characteristics as product heterogeneity and product space non-uniformity, this paper conducts an empirical research on China’s industrial upgrading path. The findings show that the production capacity endowment has a dual impact on the transformation and upgrading of the regional industrial structures; while promoting regional industrial upgrading, it will also curb the exit of the existing industries, but the former is weaker than the latter. In terms of regions, the production capacity endowment of the eastern region is relatively richer, and its role in promoting potential product upgrading and curbing the withdrawal of superior products is weaker than that of the central and western regions. The industrial upgrading is realized mostly through the process of “self-revolution”and“creative destruction”. In the central and western regions where production capacity endowment is relatively weaker, industrial upgrading is more likely to follow the comparative advantage path. Therefore, in order to transform and upgrade its industries, it is inevitable for China to choose the path of being guided by industrial policy planning, improving market exit mechanism, and upgrading in different ways according to the regional conditions.

Regional Knowledge Spillovers, Nature of Property Rights and Performance of Corporate Independent Innovation: From the Perspective of Innovation Value Chain

XU Shan

2019, 0(02):  18. 

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By introducing the analytical framework for innovation value chain and making use of the data of A share listed companies from 2008 to 2014, this paper tries to analyze the impact of regional knowledge spillover on the independent innovation performance of enterprises with different nature of property rights. Through summarizing the characteristics of regional knowledge spillovers, this paper designs the index of the regional knowledge spillover. Then it adopts the mediating effect model to conduct an empirical analysis. The results show that regional knowledge spillovers can play a significant role in promoting the performance of corporate independent innovation, of which the knowledge spillover effect from the economically developed areas to under-developed areas is mostly significant. When the innovation value chain is divided into two stages, it is found that the positive driving effect on independent innovation from regional knowledge spillovers mainly exist in the period of innovation R&D. However, at the stage of innovation application, due to the influence of such factors as the ability of enterprise operation, etc., the impact of regional knowledge spillover on the performance of corporate independent innovation is not significant. Meanwhile, the non-state-owned enterprises are greatly affected by regional knowledge spillover.

The Impact of Empowering Leadership on Employees’ Organizational Citizenship Behavior: the Mediating Role of Organizational Identification and the Moderating Role of Performance Goal Orientations

LUO Wen-hao1, YANG Na2, ZHANG Jiao-jiao2

2019, 0(02):  19. 

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Based on the social identity theory and achievement goal theory, this paper conducts an empirical analysis of the 320 pairs of leader-member matching data, then it explores the mediating role of organizational identification between empowering leadership and employees’ organizational citizenship behavior and the moderating role of performance goal orientation. The findings show that organizational identification can play a mediating role between empowering leadership and employees’ organizational citizenship behavior. Employees’ avoidance of performance goal orientation can negatively moderate the impact of organization identification on organizational citizenship behavior. At the same time, it can moderate the indirect effect of organizational identification between empowering leadership and organizational citizenship behavior, i.e., the higher the avoidance performance goal orientation, the weaker the mediating effect of organizational identification.

Institutional Investors, Corporate Financing Constraints and Excess Cash Holding

HU Yuan-cheng, LU Ling

2019, 0(02):  20. 

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Based on the data of A share listed companies in Shenzhen and Shanghai stock exchanges from 2007 to 2017, this paper explores the impact of institutional investors of different types on the financing constraints of listed enterprises and the excess cash holding. The results show that if there are institutional investors among the top ten shareholders of the listed company and the share holding proportion of one single institutional investor is relatively bigger, reaching more than 1% or more, then such institutional investor can have substantial effects on the operation, management and decision marking of the enterprise, which can to a certain extent solve the problems of information asymmetric and agency conflicts, release business financing constraints, and reduce the excess cash holding because of precautionary motive. If institutional investors are not among the top ten shareholders and holding a small amount of stocks, such institutional investors have little effect on corporate governance, and no significant influence is found on the corporate financing constraint and excess cash holding. When institutional investors hold large amount of stocks in a company for a long time, it is in favor of their participation in the corporate governance, so that the agency problem between shareholders and managers can be alleviated.

An Analysis of the Spillover Effect of US Monetary Policy Shock: On the Conflict between Dual Paradox and Ternary Paradox

ZHANG Xia1, DAI Jin-ping2, WANG Ya-nan3

2019, 0(02):  21. 

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This paper employs a DSGE model to discuss the matching between monetary policy and capital control; then it makes an analysis of the impact of US monetary policy shock on capital control with the TVP-SV-VAR method. The findings show that US monetary policy shock has significantly influenced China’s interest rate, output gap, inflation rate and exchange rate; with the retroposition of the shock time, the impact on China’s interest rate will gradually become weakened, but the shock would bring more volatility on other China’s macro variables, thus China’s welfare will be harmed. China cannot release its capital control rashly, instead, it should make great efforts to lower financial leverage and reduce price bubbles in the financial markets, so as to make irrational asset prices return to rational and make the asset price fluctuate around the real value of the object. Once China’s financial markets return to normal, China can again release its capital control measures gradually, which can improve the welfare of the consumers.

A Research on the Influence of Local Government Debt on the Investment Efficiency of Non-State-Owned Enterprises

XIONG Hu, SHEN Kun-rong

2019, 0(02):  22. 

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By taking the data matching China’s non-state-owned listed enterprises and the provincial macro level as the research samples, this paper analyzes the impact mechanism of local government debt on the investment efficiency of non-state-owned enterprises. The findings show that the expansion of the size of local government debt has reduced the short-term borrowing scale of non-state-owned enterprises, which has intensified the financing constraints of non-state-owned enterprises, thereby reducing the investment efficiency of non-state-owned enterprises. This is mainly reflected in the intensified inadequate investment to the non-state-owned enterprises. Moreover, local government borrowing has a greater negative impact on the investment efficiency of the non-state-owned enterprises with inadequate internal capital. This conclusion provides a micro foundation for the influence of local government debt on the local economic growth quality; at the same time, it also provides theoretical and empirical evidences for the current central government to strictly control the local government debt increment. Therefore, it is necessary to limit the size of local government implicit debt, optimize the local government debt financing structure, transform local government functions, and reshape local government incentive mechanisms, so as to give an active play to the local governments in promoting high-quality economic development.

Intertemporal Externalities, Retail Services and Resale Price Maintenance

WANG Zi-li, HE Xiao-gang, PAN Wei-hua

2019, 0(02):  23. 

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In the context of the Internet economy, many products do not have the characteristics of “shop-selected online shopping”, but manufacturers still impose restrictions on the retail prices of these products (that is, the resale price is maintained), which cannot be explained by the traditional “free-riding” theory. To introduce the concept of intertemporal externalities is to improve and expand the traditional theories. In the case that the products of same brand are distributed by multiple retailers, the repeated consumption characteristics of the product will lead to the intertemporal externality of the retail service, resulting insufficient supply of retail services; this feature is more prominent under the conditions of online retail. The resale price maintenance can improve the retailer’s intertemporal remuneration and stimulate the retail service to achieve the best through increasing the retailer’s reward at the trial consumption stage, and the motivational effect is better than the minimum sales quantity, the fixed sales territory and other vertical restricting means. To take into consideration the impact of the intertemporal externalities during the retail services can coordinate the few classical hypotheses which were regarded as being independent and conflicting, so as to provide further theoretical support to the rational principle suitable for the resale price maintenance.

Official Collocation, Institutional Environment and Local Effective Tax Rate: A Study Based on the Data of Chinese Industrial Enterprises

YANG Jin, ZHOU Chuan-li, JIANG Xian-deng

2019, 0(02):  24. 

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The interactive relationship between local government officials has a significant impact on the formation of local economic policies. Based on the micro data of China’s industrial enterprise and the data of local official, this paper conducts an empirical analysis of the impact of the similarity between local party and government leaders on the local effective tax rate. The findings show that: (1) the effective tax rate of the local enterprises will drop significantly by 0.32% to 0.48% in the cities where the Party sectaries have the same age as the mayors; (2) the effective tax rate of the local enterprises will also drop significantly in the cities where the Party sectaries have the same level of education or Party standing as the mayors, but the same gender shows no such phenomenon; (3) the impact of official homogeneity is more significant on non-state-owned enterprises and the areas with larger governmental scales. Therefore, under the background of China’s vigorous efforts to reduce the tax burden of enterprises and to improve the business environment, more attention should be paid to optimize the official collocation within the local governments and reducing the tax burden of local enterprises. This is especially important for the reduction of the tax burden of private-owned firms and the improvement of the business environment in the regions with poorer institutional environment.

An Institutional Analysis of Grid Interconnection: European Experience and China’s Problem

ZHU Tong

2019, 0(02):  25. 

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The domestic discussion on the Global Energy Internet basically focuses on physical interconnection of the power grid and the technology, ignoring the importance of system construction and coordination related to grid interconnection. The practice of European grid from physical interconnection to integrated market shows that the system construction, coordination and unification of the interconnection of grids is an important prerequisite for realizing the optimal allocation of all resources and low-carbon transformation within the interconnection grid. These institutional demands include at least three aspects, namely, the construction of transnational grid lines and transnational legal agreements related to the operation of transnational grids, the relevant systems of market integration, and the coordination and unification of regulatory standards and systems. However, there exists such a problem as paying a one-sided emphasis on power investment, but the construction of related systems being seriously lagging behind in China’s multinational power cooperation. Therefore, it is urgently necessary for China to change its one-sided pursuit of investment in the construction of transnational network lines, instead, focus on market-oriented reforms and regulatory systems, and recognize the importance and urgency of China’s current power system reform from the perspective of efficiency improvement of grid transnational systems and energy transition.