Table of Content

15 December 2017, Volume 0 Issue 12

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Annual Report Supervision, Reducing Holding-Shares of the Insiders and Market Responses: A Study Based on Annual Report Enquiry Letters Issued by the Shenzhen Stock Exchange

LI Lin, ZHANG Dun-li, XIA Peng

2017, 0(12):  184. 

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Taking the enquiry letters of annual reports in China’s Shenzhen Stock Exchange and the reply letters from the companies as the research samples, this paper investigates the scale of the reduced shares held by the insiders before and after the disclosure of the supervision letters in the annual reports and the market responses to these disclosures. The findings show that: (1) the scale of reduced share held by the insiders during the return period of the enquire letters in the annual reports is significantly higher than that during the control period, the insiders have the time-selecting behaviors that they would take the opportunity of their information advantage during the return period to conduct transactions; (2) after the enquiry letters in annual reports and the return letters, there appear negative stock price responses, and the samples of the insiders’ reducing share holding before the disclosure have more significant negative share price responses, indicating that these letters would reveal sensitive information, so that the insiders try to avoid their losses caused by the future stock price decline through reducing their holding shares in advance; (3) timely responses to the annual report enquiry letters are conductive to clarifying the problems to the investors, whether the insiders reduce the shares they hold during the return period for the enquire letters of the annual reports or not, the market reaction to the samples of the letters with no overdue responses is all better than that to the sample letters with overdue responses.

A Study of Corporate Governance Effect during the Staggered Tenures of CEO and CFO: An Empirical Analysis Based on Stock Price Collapse Risk

AI Yong-fang, TONG Meng-hua, SUN Guang-lin

2017, 0(12):  185. 

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Taking China’s A-share listed companies between the years of 2001 to 2015 as samples, this paper studies the influence of staggered tenures of CEO and CFO on the collapse risks of stock prices. The findings show that the staggered tenure of CEO and CFO can inhibit stock price collapse risks; and the wider the gap of the staggered tenures of the two, the more significant the effect will be. Further analysis also shows that the power of CEO can impact the relationship between the staggered tenures of CEO and CFO and the collapse risks of stock prices. If the CEO has greater power, the staggered tenures of CEO and CFO will not inhibit stock price collapse risks; if the CEO’s power is smaller, the staggered tenure of CEO and CFO will significantly inhibit the collapse risks of stock prices. In addition, the characteristics of property right will affect the inhibiting effect of the staggered tenure of CEO and CFO on the collapse risk of stock prices. In state-owned enterprises, the staggered tenure of CEO and CFO can inhibit the stock price collapse risks significantly, while in the private enterprises, this effect is not significant.

Recalculation of China’s Manufacturing Export Competitiveness from the Perspective of Value Added Trade

YUAN Hong-lin, XU Yue

2017, 0(12):  186. 

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Based on the accounting framework for the trade index of added value, this paper measures and compares the raking of the revealed comparative advantage (RCA) index of the manufacturing industries of 38 world’s leading countries by adopting the two methods of gross accounting and added value accounting, so as to analyze the influence of the added value trade on the competitiveness of the manufacturing industry and estimate the accurate position of China’s manufacturing industry in the global value chain. The results indicate that as for the resource-intensive or labor-intensive manufacturing industries, the analysis of the added value trade can reflect the influence of labor, raw materials and the technology on industrial competitiveness, which the aggregate analysis cannot get. As for the capital-intensive or technology-intensive manufacturing industries, the added value trade can reflect the influence of the intermediate trade on the competitiveness of these industries, which cannot be obtained by the aggregate analysis. From the trend analysis and the comparison results, it can be seen that Chinese traditional resource-intensive and labor-intensive manufacturing industries are still at the low end of the link of the industry value chain, while among the capital-intensive and technology-intensive industries, several industries have shown a certain international influence and competitive advantages.

Geographic Distance, FOB Prices and Transportation Costs: A New Source of Welfare

SUN Yi-ping1, XU Yang2, XU Xiao-cong3

2017, 0(12):  187. 

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By making use of the Customs Data of China in 2006, this paper studies the impact of geographic distance on FOB prices and analyses the economic significance of the heterogeneity of the impact, the theoretic mechanisms and the estimated results. The findings show that: (1) geographic distance has a significant positive effect on FOB prices, each time the distance is doubled, the FOB price charged by export firms will increase by 8.74%; (2) as for the industries with different degrees of product differentiation and enterprises of different sizes, the impact of geographic distance on FOB prices shows a heterogeneity; (3) the theoretic mechanism of the impact probably due to the facts that the firms having charged higher markup percentage, sold products with higher quality, or used more expensive packing materials and methods due to farther transportation distances; (4) a simple decomposition of the elasticity of import prices to distance shows that, after the transportation cost is decreased, the 95% drop of the import prices enjoyed by consumers is because the enterprises have charged lower FOB prices, which suggests that the changes of transportation costs may become a new source of welfare that consumers can enjoy.

A Study of the Impact of Information Fluency on Consumers’ Brand Crisis Evaluations

SHAN Cong-wen, YU Ming-yang, XUE Ke

2017, 0(12):  188. 

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From on the perspective of information attributes, this paper studies the impact of information fluency on consumers’ brand crisis evaluations. The results of the empirical study show that as for the two kinds of information fluency, i.e., information processing fluency and information retrieval fluency, information fluency has a positive impact on consumers’ brand crisis evaluations. Consumers’ perceived responsibility of the enterprise in the crisis can play a role of mediation during the process, while the holistic-analytic thinking can play a role of regulation. To be specifically, as for the consumers of the analytic cognitive style, information fluency has positive effects on consumers’ brand crisis evaluations; while for the consumers with of the holistic cognitive style, information fluency has no significant effects on consumers’ brand crisis evaluations.

Enterprise Size, Family Involvement and Private Enterprises’ Donation: A Study of the Strategic Motivation

YE Yan, LI Kong-yue

2017, 0(12):  189. 

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What encourages private enterprises to donate by sacrificing their resources? Based on the samples of 2915 private enterprises, this paper explores the impacts of enterprise size and family involvement on the motivation and behavior of the donations made by private enterprises. The results show the relationship between firm size and donation behavior is not simply linear, but a U-shaped one. The small scale enterprises have higher demand for legitimacy, so they make charitable donations actively. The large scale enterprises would increase their donations along with the improvement of their organizational visibility, while the medium scale enterprises had the lowest level of donation behaviors. In addition, family involvement can play a negative regulatory role in the relationship between firm size and charitable donations, which would weaken the U-shaped relationship between them. The empirical results suggest that the private enterprises would carry out the charitable donations for different strategic motives; while the family firms that try to preserve their internal drive of the social emotional wealth would weaken the strategic motivation for private enterprises’ charitable donations. This study reveals the motivation behind the donation behavior of private enterprises and provides some suggestions for the implementation of corporate social responsibility in the context of China’s institutional situations.

A Study of the Loan Bargaining Power of China’s Listed Companies

WEI Qi

2017, 0(12):  190. 

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With the overall lift of interest rate control, loan prices are determined by the two trading parties through negotiation in accordance with the value principle and supply-demand principle. Based on the loan data of China’s listed companies from 2005 to 2016, this paper measure the size of the loan bargaining power of both the lending and borrowing parties by employing a two-tier stochastic frontier model. The result shows that: (1) enterprises are at the weaker side in the loan price negotiations, the surplus obtained by the enterprises is only two thirds of the surplus obtained by the lenders, the unequal bargaining power of both the parties makes the loan trading price nearly one fifth higher than the fair price; (2) the bargaining power of enterprises is strongest when they apply loans from finance companies, weaker when applying from banks, and weakest when financing from trust companies; the loan bargaining power of the central state-owned enterprises is the strongest, the private enterprises and the local state-owned enterprises have almost the same power, while the loan bargaining power of foreign-funded enterprises is the weakest; (3) the loan bargaining power of enterprises has not been obviously enhanced during the sample period, the surplus gained by the enterprises has not increased along with the lift of interest rate control and the improvement of the market structure of the financial industry.

Can Good Opening Quotation Bring about Good Closing Quotation? Empirical Evidences from HS 300 Stock Index Futures

LING Ai-fan, WANG Jia-ming, YAN Wu

2017, 0(12):  191. 

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Based on the data of HS300 stock index futures, this paper conducts a test on the issue of intraday momentum effect of China’s stock markets. The empirical findings indicate that the return rate of HS300 stock index futures half an hour after the opening quotation has a significant positive correlation with that of half an hour before the closing quotation. Every time the return rate increases by 1 percent half an hour after the opening quotation, it will increase by 8.4 percent half an hour before the closing quotation. At the same time, it is found that during the trading days with higher volatility or higher trading volume or at the bull market, this kind of intraday momentum effect between half an hour after the opening quotation and half an hour before the closing quotation is even significant. Therefore, to construct investment strategy through the intraday momentum effect can gain better investment performance.

The Impact of Property Right Factors on Tax-Rate-Adjusted Capital Structure

WU Li-ju1, WEI Lin2

2017, 0(12):  192. 

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According to the classical theory of capital structure, when debt interest is credited into the enterprise costs, the debt will play a role of reducing enterprise tax costs because of the deduction before taxation on the interest, making the debt costs lower than the equity costs and increasing the market value of the stockholders’ equity. Therefore, the tax mechanism can to a certain extent impact the capital structure of enterprises. Taking the implementation of the Law of Corporation Income Tax 2008 as the observing platform of the natural experiment, this paper uses the enterprise-level micro-data to analyze whether the classical capital structure theory can be applied into China’s economical system environment. The results show that the institutional reform of the enterprise income tax can regulate the capital structure of enterprises, which means that the classical capital structure theory can be applied into China’s economical system environment. Further analysis with consideration of the factors of property right indicates that the income tax reform has a greater regulating effect on the capital structure of private enterprise than on that of state-owned enterprises, while the regulating effect on the state-owned enterprises with more barriers and higher monopoly is not significant.

Structural Characteristics of Local Corrupt Network and Technological Path of Collaborative Governance: A Perspective from Social Network Analysis

LIAO Kang-li, OUYANG Xiao-ming

2017, 0(12):  193. 

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As a mental activity with learning ability and self-organization ability, the corrupt activities will continue to pursue the concealment and security of corrupt behaviors. Based on the profound influence of traditional culture and the integration of more family affection, nostalgia and trust factors in the context of differential patterns, the grass-root corrupt network has become a complicated network with multiple heterogeneous characteristics. The inspection coordination mechanism jointed by the discipline inspection committee, supervision department and auditing department is conducive to the realization of the interaction between anti-corruption authorities, clues and technology, and is helpful to the identification of the existence and the structural analysis of the grass-root corrupt network. According to the structural characteristics of the grassroots corrupt network, we can adopt the dynamic strategy that taking the key minority as a breakthrough, from the inside to the outside, and covering the whole network, so as to improve the accuracy and efficiency of anti-corruption blow, and achieve the full coverage of anti-corruption from the perspective of destroying the whole corrupt network. The technological method system that introduces the social network analysis into the grass-roots corruption governance is conducive to the expansion of technological vision of anti-corruption and the promotion of technology-based anti-corruption, which can help the transition from the traditional across-the-river-by-experience mode to the modern mode with navigation knowledge.

Contract Enforcement Efficiency and Difference of Regional Industrial Investment：An Empirical Study Based on Industry Samples

LV Chao-feng, ZHI Hong-juan

2017, 0(12):  194. 

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For a long time, the regional distribution of China’s industrial investment has been extremely uneven. However, few literatures have studied this issue from the perspective of incomplete contracts. On the basis of constructing an investment decision model by introducing the concept of incomplete contract, this paper conducts an empirical study with the data of 26 industries in China’s 30 provinces. The findings show that efficiency in contract enforcement is a decisive factor of industrial investment in China, its positive impact on the regional industrial investment will be increased with the growth of the industrial contract intensity. This paper chooses the reasonable instrumental variables to overcome the endogenous problems of contract enforcement efficiency. It adopts the two-stage instrumental variable method to carry out the regression; the results show that the impact of contract enforcement efficiency on the regional industrial investment is still significantly positive. In a series of robustness tests, it can be seen that the above conclusions are very robust.

Stage Characteristics and Driving Forces of Labor Income Share Changes in China: 1978-2015

WENG Jie

2017, 0(12):  196. 

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The labor income share after the reform and opening up in China has obvious stage characteristics, and there are significant differences in driving forces at all the stages. The major driving force of the short-term rise of labor income share is the reform of the agricultural sector during 1978-1984. The structure change resulted from the factors of labor force transferred into non-agricultural sectors during 1985-1997 is the major driving forces of the decrease of labor income share. During 1998-2007, the major driving force for the continuous decrease of labor income share is the capital deepening and technological advances in the non-agricultural sectors, when the influence of the structural changes is decreasing gradually. After decreasing for a long time, the labor income share returned into the increasing trend again from 2008 to 2015, its major driving force is the rapid growth of wages in the non-agricultural sectors. The changing trend of labor income share in China conforms to Lewis’s dual economic theory, and the labor income share will go on to present an increasing trend in the future.