Table of Content

15 September 2018, Volume 0 Issue 09

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Will the Rotation Management of Signed CPAs Affect the Audit Quality

RONG Li, FENG Shao-qin

2018, 0(09):  75. 

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Taking China’s listed companies in Shenzhen and Shanghai A-share markets from 2004 to 2015 as samples, this paper examines the impact of the“intentional”rotation management of the signed CPAs on the audit quality and the adjustment effect of the transfer of accounting firms on the two. The findings show that the“hostile”rotation management of the signed CPAs not only reduces the audit quality of the transitional signed CPAs, but also reduces the audit quality of the signed CPAs in the previous year and the year of back to the office. Further research finds out that during the process of“intentional”rotation management, the transfer of the accounting firms has significantly improved the relationship between the signed CPAs and the audit quality. The conclusions of the study can provide experience support and valuable reference for the government to improve the system of signed CPA rotation and to strengthen the auditing supervision of signed CPAs.

Will Economic Policy Uncertainty Inhibit the Financial Investment of Entity Enterprises

XU Gang1, WU Wen-zhong2

2018, 0(09):  76. 

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According to the economic policy uncertainty index constructed by Baker et al., this paper makes use of the quarterly data of A-share listed companies from 2002 to 2016 to study the impact of economic policy uncertainty on corporate financial investment. The findings show that economic policy uncertainty inhibits the corporate financial investments, and its transmission mechanism is that economic policy uncertainty compresses the market arbitrage space and transmits it to the investment links. Further study of the samples is carried out by dividing them according to the nature of enterprise property rights, level of regional marketization and policy support. The results show that for the enterprises with strong sensitivity to economic policies, the economic policy uncertainty has a more significant inhibiting effect on their financial investments.

Export Effect of China’s Outward FDI: An Explanation for the Coexistence of“Substitution”and“Complement”Effects

CHEN Pei-ru1, XIAN Guo-ming2

2018, 0(09):  77. 

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Whether China’s outward FDI is a substitution or has promoted the export has been a focus in the debates of the academic circles. Through introducing the analytical perspective of binary margins, this paper theoretically interprets the phenomenon of the coexistence of the export“substitution effect”and the“complement effect”of outward foreign direct investments. And at the same time, it provides the empirical evidences from China. By applying the systematic GMM method, this paper makes use of the unbalanced panel data from 184 host countries from 2007 to 2015 to conduct an empirical test. The results show that the extensive margin of China’s outward FDI has a complement effect on export, while the intensive margin has a substitution effect on export, which supports the theoretical analysis. Moreover, such export effects of binary margins have significant heterogeneity in the types of trade products, the income levels of host countries and the investment motives.

Economic Policy Uncertainty and Corporate Export: An Empirical Study Based on the Data of China’s Industrial Enterprises

XIE Shen-xiang, FENG Yu-jing

2018, 0(09):  78. 

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Economic policy uncertainty is an important factor influencing the export of enterprises. Based on the micro-data of Chinese industrial enterprises and through constructing an empirical model, this paper tries to analysis the impact of economic policy uncertainty on the export willingness and export volumes of enterprises. The results show that the economic policy uncertainty will affect firm export behavior significantly. To be specific, the increasing domestic economic policy uncertainty would promote the export willingness and export volumes of enterprises; while the increasing economic policy uncertainty in destination countries would inhibit both the export willingness and volumes of the domestic enterprises. The basic conclusion of this paper is still valid after tests under various conditions are considered. The study of this paper not only extends the empirical analysis of firm heterogeneity trade theory, but also deepens our understanding of the economic effects caused by the economic policies.

A Study of the Industrial Peer Effect in the International Business of Listed Companies

LI Shi-gang

2018, 0(09):  79. 

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At present, corporate internationalization has become one of the hot topics focused by the society and the public. Taking China’s A-share listed companies from 2004 to 2015 as samples, this paper empirically test the industrial peer effect in the international business of the listed companies. The findings show that there exists industrial peer effect in the international business of the listed companies in China, that the international background of the top management teams could bring international information to the company, produce international information acquisition imitation mechanisms, so as to enhance the industrial peer effect in the their international business, and that the industrial peer effect in the international business of the non-state-owned enterprises is significantly higher than that of the state-owned enterprises. Further research has found that the industrial competitive advantages of the enterprises can also promote the industrial peer effect in the international business.

CEO Tenure, Attention to Analysts and Corporate Charitable Donation

CHEN Wei-hong, ZHONG Xi, SONG Tie-bo

2018, 0(09):  80. 

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Based on the upper echelons theory and the principal-agent theory, this paper takes the data of China’s A-share listed manufacturing companies from 2009 to 2016 as the research samples to theoretically analyze and empirically examine the impact of CEO existing tenure and CEO expected tenure on corporate charitable donations, as well as the mediating role of the attention to the analysts in the above relationship. The results show that there is an inverted U-shaped relationship between CEO existing tenure and corporate charitable donation, while the relationship between CEO expected tenure and corporate charitable donation presents a positive correlation. Further analysis shows that the attention to the analysts has weakened the relationship between CEO tenure and corporate charitable donation. The conclusions of the above study has certain enlightenment significance in understanding more about the corporate charitable donations, improving corporate governance mechanism and enhancing human resources management.

Research on Financial Sources and Innovation Boundary

LU Min-feng

2018, 0(09):  81. 

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Along with China’s economy enters the new normality, the development of the financial industry breaks away from the real into the virtual, the financial size is over expanded and exceeds the real economy scale, the illegal financial activities run wild which drifts away from the regulatory system in the name of financial innovation, and the financial innovations are in excess of the demand of the real economy development, which brings uncertainties to the stability of the financial markets. Seeing from the financial sources, the core category and development process of finance are closely related to the real economy. We should closely integrate the development space of financial services with the improvement of the development ability of the real economy, and at the same time adhere to the three boundaries of financial innovations, i.e., the law, the regulations and the risk, only in this way can we ensure the vitality and the bearing capacity of the financial development.

Shadow Banking, Financial Stability and Monetary Policy

WU Zhi-hua, YANG Xiu-yun

2018, 0(09):  82. 

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The pro-economic cycle characteristics of the commercial banks and the risk-taking mechanisms of the shadow banks may result in the counter-cyclical expansion of the shadow banks under the impact of the tight-money policy. The study shows that this financial characteristics will strengthen mutually and bring stagflation risks to the economy under the impact of the tight-money policy, while the Taylor rule which traditionally focus on inflation and output gap cannot effectively inhibit its impact on macro-economy. The monetary policy authority should bring the total social credit amount into the traditional Taylor rule and make a certain degree of response to it. The interest rate difference of credit used to measure the credit conditions between shadow banks and commercial banks should be regarded as an observation variable, and the monetary policy should respond to it when its volatility exceeds a certain extent. To eliminate financial discrimination and financial repression has the best result of social welfare; the monetary policy responding to the financial variables should also avoid the conflicts between policy instruments and the overlaying of policy targets.

On the Reform of Public Governance Mode of China’s Food Safety and Its Realization Route

WU Xiao-dong

2018, 0(09):  83. 

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At present, when solving the problem of food safety, the government still relies too much on the monopoly supervision of the administrative power, which is not very effective. In the context of propelling the modernization of the national governance system and the capacity for governance, to change the monopoly regulation of food safety into a polycentric, cooperative and negotiated public governance pattern should be timely and feasible. The public governance pattern can make full use of the internal and external government resources, reduce the administrative costs, improve the governance efficiency, and better avoid the risk of government failure and free riding behavior. At the present stage, the realization path of the public governance of food safety is to adjust the focus and methods of government regulators, strengthen the main responsibilities for food safety of the food suppliers, encourage the participation of social public powers, and guide the consumers to protect themselves.

A Study on the Relationship between Political Cycle and the Growth of Local Taxes

PANG Wei, SUN Yu-dong

2018, 0(09):  84. 

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From the perspective of political cycle, the growth of local tax is affected by the two aspects: the promotion incentive of local officials and the risk aversion. In the year when the local Party Congress is held, the total local tax will have a significant growth. The political cycle has no significant impact on the local exclusive tax, but the income growth of the local shared tax and its VAT, the individual income tax and the corporate income tax will present periodical changes along with the holding of the congress of Party representatives. It can be seen that there is a significant relationship between the growth of China’s local taxes and the political cycle. In order to safeguard and regulate the growth of local government revenue, China can make improvements from such five aspects as speeding up the process of taxation legislation, clarifying the expenditure responsibilities of the central and local governments for the financial funds of the tax departments, adjusting the indicators for performance appraisal of official political promotion, perfecting the local tax system, and improving the non-tax revenue management system.

An Analysis of China’s Economic Over-Leverage：Performance, Logic and Governance

DENG Yin, WANG Yuan-yuan

2018, 0(09):  85. 

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The problem of excessive leverage would bring major risks to China’s continued economic growth, so proper de-leveraging has become an urgent matter. This paper employs the theory of economic growth to explain the motive of the main market players in exercising excessive leverage as the Ponzi Game, by which to explore the proposition of“the problem of excessive leverage is a problem of resource mismatch, which is triggered by the influence of the transitions and changes of the economic growth models”. In order to analyze the possibility of the generation of excessive leverage under different models, the Ramsey model, the learning by doing Arrow model and the Romer knowledge spillover model are introduced. The findings show that the old growth mode with the exogenous technology progress as the characteristics and the new growth mode with the endogenous technology accumulation as the characteristics will both restrain excessive leverage spontaneously, however, the transition stage of the growth mode with the coexistence of the old and new economic sectors as the characteristics may produce capital interest margin as an important incentive to trigger excessive leverage, and the restricted factor flow between different economic components and the information asymmetry have exacerbated this mechanism.

Government Intervention, Capital Deepening and Chinese Labor Productivity

JI Xiao-qing, QIAO Yue

2018, 0(09):  86. 

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In the context of gradual deepening of the progressive reform and the gradual disappearing of the demographic dividend, how to rationally adjust the government intervention means to improve the labor productivity is an important task to alleviate the current economic downside pressure in China. Through combing the various means of government intervention, this paper analyzes the changes in labor productivity and its various dimensions caused by these means and probes into the direct influences and potential functions of government intervention on labor productivity. The findings show that with the help of the monopoly on land, state-owned enterprises and the financial system the government can interfere the demand of the whole society for investments with different means; and by accelerating the process of capital deepening, a short or long-term effect is caused on labor productivity. A further analysis shows that the behavior of government’s direct intervention in market competition has brought a short-term explosive growth at the expense of the long-term growth potential of labor productivity; there is an inverted U type relationship government direct investment and labor productivity, and the externality of infrastructure determines the positive effect of government direct investment on the technological progress dimension of labor productivity.