Table of Content

15 December 2018, Volume 0 Issue 12

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A Study of Information Content in the Announcements of Chinese Government Audit Results Based on Entropy Weight Method

ZHENG Xiao-rong1, HE Rui-hua2, CAO Yuan3

2018, 0(12):  37. 

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The information content in the audit announcements is the core of the quality and strength of the audit result announcements, and is also a key element to enhance the expected effects of the audit result announcements. By employing the entropy weight method, this paper conducts an analysis of the information quality of the audit result announcements of 138 prefecture-level administrative units in 26 provinces in China from 2004 to 2014. The findings show that the information content in China’s audit result announcements is generally lower and there exist obvious differences in the types and regions of the audit results, which has political periodicity and quantitative correlation. Therefore, it is necessary to enhance the information disclosure of the financial violation motives, violation consequences and violation procedures of the audited units, insist on comprehensive announcements, complete announcements and real-name announcements, and prohibit strategic announcements, selective announcements and anonymous announcements.

Management Earnings Preannouncement Disclosure, Media Reaction and Audit Opinion

ZHANG Yi-qiong, FENG Jun-ke, JIANG Li-sha

2018, 0(12):  39. 

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Taking China’s A-share listed companies from 2012 to 2016 as the samples, this paper explores the correlation between management earnings preannouncement disclosure together with their characteristics and the audit opinions. The findings show that as for the listed companies with earnings preannouncement disclosure and optimistic attitude for their earnings preannouncement, the probability of issuing standard audit opinions is smaller; while the higher the accuracy of earnings preannouncement, the higher the probability of issuing standard audit opinions. The results of further research show that if the listed companies revise their earnings preannouncements, the probability of issuing standard audit opinions is smaller. If the media responses are stronger, the correlation between the earnings preannouncement disclosure and the probability of issuing the standard audit opinions is significantly enhanced, while the accuracy of earnings preannouncement, the attitude tendency of earnings preannouncement, and the revision of earnings preannouncement will have a significantly weakened correlation with the probability of issuing standard audit opinions.

Building Bilateral Partnership and Outward Foreign Direct Investment of China’s Enterprises

LIU Min1, HUANG Liang-xiong2, WANG Fang-fang1

2018, 0(12):  40. 

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To develop global partnership is an important measure for China to exercise active diplomacy. Going global for OFDI is a key means for China to achieve high-quality development and strengthen its global influence. Based on the OFDI data flow of China to 119 countries or regions in the world from 2003 to 2014, this paper examines the impact of building bilateral partnerships on China’s outward foreign direct investment. The results show that by establishing bilateral partnership, China’s OFDI can be increased by about 80%, and the effect is still robust when the sample size and endogenous problems are taken into consideration. The effect of partnership promoting OFDI will be significantly affected by economic distance and institutional distance; such effect is greater in host countries with less economic distance and institutional distance to China, while in the host countries with larger economic distance and institutional distance to China this effect is smaller. This kind of moderating effect is specifically obvious in the political institutional distance and economical institutional distance of the institutional institution.

The Impact of the Internet on the Development of Productive Service Industries: From the Perspective of Transaction Cost

LU Fu-cai, XU Yuan-bin

2018, 0(12):  41. 

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Compared with the industrial development level in China at present, the development level of the producer services in China cannot meet the need of economic development. From the perspective of transaction costs, this paper constructs a theoretical model which includes the Internet, the transaction costs and the producer services. Then it makes use of the provincial panel date from 2008 to 2014 to conduct an empirical test on the relationship between the Internet, the transaction cost and the producer services. The results show that the Internet has a significant positive effect on the development of the producer services, and that the increasing development of the Internet will promote the continuous expansion of the producer services. The promotion effect of the Internet on the development of the producer services turns out to be an intermediary effect of transaction costs, through reducing the transaction costs the Internet can promote the development of the producer services. In order to give the Internet a full play in promoting the development of the producer services, it is necessary to further strengthen the investment and construction of the network infrastructure, further improve the Internet availability rate, and further speed up the industry transformation and upgrading..

True Gentleman or Hypocrite: The Influence of Humble Leadership and Behavior Consistence on Employees’ Affective Commitment

GAO Ri-guang, LI Sheng-lan

2018, 0(12):  42. 

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By employing empirical research methods, this paper examines the interaction effect between humble leadership and behavior consistence, that is, the influence of true gentlemen and hypocrites on subordinates’ affective commitment and its boundary conditions. The results show that the interactive effect of humble leadership and behavior consistence has a significant impact on employees’ affective commitment, and this kind of effect is showing significant differences with the changing level of the employees’ traditionalty. Specifically, there are significant differences in the influence of true gentleman and hypocrite on employees’ affective commitment, for the employees with higher traditionality, true gentlemen can promote employees’ affective commitment, while hypocrites will reduce the employees’ affective commitment; for employees with lower traditionality, whether the leaders are true gentlemen or hypocrites, if only you can treat worthy men with courtesy, the subordinates will all give their positive responses.

The Faster the Promotion, the Better？CEO’s Early Promotion Experience and Enterprise Innovation Investment

HAO Pan-pan1, ZHANG Xin-dong2, HE Ya-nan1

2018, 0(12):  43. 

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Will CEO’s early promotion experience affect corporate innovation investment? What is the influencing mechanism in it? From the perspective of promotion experience, this paper constructs the CEO early promotion frequency index by manually searching the resumes and other information of senior executives to explore the influence of CEO promotion experience on enterprise innovation investment through static panel regression and dynamic DID analysis. The results show that the faster the CEO promotion in the early years, the more innovative investments can be promoted, and the promotion experience in the younger stage has a more significant effect. Meanwhile, this kind of influence is more significant in the non-state-owned enterprises with strong R&D intensity and weak constraint mechanism. However, the influencing mechanism between the two is CEO overconfidence, the faster the promotion is, the easier it is to become overconfidence, which can promote innovation investments.

Will Information Competition of Institutional Investors Lead to Herd Behavior? Evidences from China’s Stock Markets

WANG Dian, XUE Hong-gang

2018, 0(12):  44. 

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Breaking the previous stereotyped thinking that the researches of the generation mechanism of herd behavior based on information mechanism should be limited to the information asymmetry theory, this paper turns its perspective to the logical relationship between the information competition of institutional investors and their herd behaviors, then it conducts an empirical test according to the detailed positioning data of the institutional investors from 2005 to 2017. The findings show that the competition for the information of private enterprises among institutional investors will lead to the emergence of their herd behaviors, especially for the herd behavior of the buyers; the impact of information competition on it is particularly significant. Further analysis of the nature of the herd behavior shows that the herd behavior of institutional investors caused by information competition in China’s A-share markets belongs to the pseudo-herd behavior of non-deliberate imitation. This consistent response based on homogenous information can help to perfect the stock price information transmission mechanism and can play a role in suppressing the phenomenon of stock price synchronization.

A Study of Construction of and Comparison among Financial Conditions Indexes from the Multidimensional Perspective

OUYANG Sheng-yin1，XU Di-long2

2018, 0(12):  45. 

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Accelerating the study of the construction and application of the Financial Conditions Indexes (FCI) is an important subject to curb economic risks, propel structural reforms, and promote economic recovery. Based on the basic definition and functional positioning of FCI, this paper constructs a multi-dimensional FCI system from three dimensions of frequencies, ranges, and empowerment methods.?Through an empirical comparison it can be found that there exist great differences among the selected indexes and weights of FCI at different dimensions, that the composition of FCI should focus on financial variables, but some non-financial indicators can also be considered, and that 35.484% of FCI shows the features of good internal structural coordination, while 41.935% and 22.531% of FCI shows the features of general or poor internal structural coordination, but all of them have passed the abnormal value test and the dynamic test. The high frequency medium range FCI based on factor analysis can serve the best reference to predict the effect of the implementation of the current monetary policy.

Assessment of Local Financial Sustainability: Also on the Possibility of Improvement of Local Fiscal Sustainability by Tax Decentralization

LI Jian-jun, WANG Xin

2018, 0(12):  46. 

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At present, China’s finance has entered a new stage of“expenditure growth rate being greater than income growth rate”from the stage of“income and expenditure double high growth”; the effects of income reduction and expenditure increase are overlaying, and local government finances are under pressure. The findings of the study indicate that China’s local finance shows a weak sustainability; tax decentralization can help to enhance the sustainability of local finance, the impact of decentralization of value-added tax, corporate income tax and personal income tax on local fiscal sustainability has a heterogenetic nature, the decentralization of corporate income tax and personal income tax will significantly enhance local fiscal sustainability, while the impact of VAT decentralization on local fiscal sustainability is not significant. Therefore, we should pay full attention to local fiscal sustainability, meanwhile, we should monitor, prevent and resolve local fiscal risks. In order to promote local fiscal sustainability, we have to consider the incentive effect of different tax decentralization when dividing intergovernmental taxations. We should also continue to take corporate income tax and individual income tax as the shared tax, and increase the proportion of local sharing appropriately.

Green Finance Expenditure: Theory and Practice — Reflection on the Deepening Green Development Proposed by the 19th National Congress of CPC

WEI Ji-hua, JIANG Jin-fa

2018, 0(12):  47. 

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The 19th National Congress of CPC demands to promote green development and speed up the construction of ecological civilization. Xi Jinping’s thought of ecological civilization is the thought to follow and the action guideline for China to promote the green development and the construction of ecological civilization. Finance is the foundation and important pillar of national governance, and the green finance expenditure is an important means of guiding, supporting and economic guarantee for realization of socialist ecological civilization. The green finance originates from the traditional finance, it is the sublimation of the public financial system in theory, and it conforms to the intrinsic requirements of modern financial system. Green finance has innovated the traditional finance expenditure principle from such aspects as development thought, development strategy and expenditure mechanism and is based on the theories of Marx’s ecological view, ecological capital theory, environmental value theory and externality theory. In order to construct green finance expenditure system which is based on the construction of ecological civilization, it is necessary to make a rational division between the green finance responsibility and the expenditure responsibility, to innovate green finance expenditure modes, and to reform the green finance expenditure management system.

How Macro Policy and Micro Characteristics Affected R&D Investment of Enterprises

ZHU Xing-wen

2018, 0(12):  48. 

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In order to make innovation the first driving force for development and build an innovative country, it is undoubtedly necessary to require the active participation of enterprises as the main players in the market, and encourage enterprises to increase their R&D investments. After 40 years of reform and opening up, the market economy system in today’s China has been built and is improving, the level of corporate R&D investment is the effect of many factors. According to the analysis of the existing literatures, the impact on corporate R&D investment mainly comes from two aspects: one is the government’s direct R&D investment, preferential tax policies and financial development at the macro level, the other is the characteristics of the top management team of enterprises, the company’s incentives for executives, and the capital structure, etc., at the micro level. In order to further improve the R&D investment level of Chinese enterprises, it is necessary to improve the macro management policies of current R&D investment and optimize the corporate governance mechanisms and management systems.

On the Method to Predict Monthly CPI Growth with High-Frequency Data

LIANG Yong-mei1, DONG Min-jie2

2018, 0(12):  49. 

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The accuracy of CPI growth prediction based on traditional methods has somewhat declined due to the influence of many factors, so a new predication method is needed. The differences of the new methods are as follows: firstly, the mainstream forecasting framework is changed from the bisection method of“food + non-food”into the trichotomy framework of“food + industrial consumer goods + services”, which has a more comprehensive content; secondly, the weight system of CPI sub-items is adjusted, according to such data as the urban residents consumption expenditure structure, the input-output table and so on; thirdly, it takes into account the factors of Spring Festival objectively and specifically, dividing them into the three situations, i.e., pre-festival, in-festival and post-festival, then each of them is quantified, so as to examine their impacts on the price changes of each sub-item. The retrospective test shows that the result of the new method is notably superior to the traditional methods in predicting the CPI growth. The distribution frequency of forecast error within 0.1 percentage point is close to 80%, and the forecast accuracy is nearly 15 percentage points higher than the results of the existing methods.