Table of Content

15 October 2017, Volume 0 Issue 10

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Do the Companies Using Derivative Financial Instruments Pay More Audit Fees?

LIU Fang1, WANG Ying2, LI Fan3

2017, 0(10):  209. 

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The high risks of derivative financial instruments, the elasticity of accounting standards and the complexity of the relevant accounting treatment may act on the audit fee through affecting audit costs and auditor’s litigation risks. Based on the data of all A-share non-financial listed companies from 2007 to 2016, this paper empirically examines the impact of derivative financial instruments on audit fees. The findings show that the audit fees paid by the companies using derivative financial instruments are generally higher than that paid by the companies not using derivative financial instruments. When dividing the companies using derivative financial instruments into the hedging companies and the speculation arbitrage companies according to the holding purposes of the management, it can be found that the above-mentioned premium has a concentrated expression among the speculation arbitrage companies. The findings of the analysis which takes further considerations of the numbers of kinds of derivative contracts show that the audit fee at a premium is more prominent among the companies using multiple kinds of derivative financial instruments. This implies that the companies using derivative financial instruments have higher audit risks and higher audit costs, so that the audit firms would charge cost reimbursement and risk premium.

Fair Value Measurement, Investor Sentiment and Decision Usefulness of Accounting Information

HUANG Lin-hua1,

2017, 0(10):  210. 

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Historical cost measurement is becoming more and more unrelated with value relevance. The fair value measurement is becoming widely used; and the relationship between the fair value measurement and the decision usefulness of accounting information is attracting a lot of attention. Taking the IPO companies in China’s A-share main board stock market during the period of 2007-2012 as the samples, this paper examines the influence of the fair value measurement on the decision usefulness of accounting information from the two aspects of investor sentiment and the level of market development. The findings show that the variable profit and loss of fair value per share of the sample company are negatively correlated with IPO investor sentiment pricing, which implies that fair value measurement can improve the quality of accounting information, inhibit IPO investor sentiment pricing, and improve the decision usefulness of accounting information. Further study shows that the improvement of the development level of market can play an active role in restricting the earnings management space of the fair value measurement item and improving the decision usefulness of the fair value accounting information.

The Impact of Trade Openness on Teenagers’ Choice of Dropping-Out from the Perspective of Supply-Side Reform: A Study Based on the Survey of China’s Household Income

LI Meng-jie, DU Wei-jian

2017, 0(10):  211. 

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In the context of supply side reform, the transformation and upgrading of China’s export trade and the optimal allocation of educational resources have become an important issue in the current reform. For this reason, based on the theoretical analysis of the impact of trade openness on educational choices, this paper makes use of the date of Chinese household income survey to conduct an empirical analysis of the impact of trade openness on teenagers’ choice of dropping-out and the urban-rural differences. The findings indicate that, generally speaking, the trade openness has significantly increased the probability of teenagers’ dropping out of school. In the rural areas with lower economic development level and imperfect education system, the rate of dropping out of school of the teenagers is more affected by the trade openness. The main reason is that the current trade openness with lower quality can provide the cheap labor force with a lot of employment space, thus the opportunity cost of young people to continue their education is increased. Therefore, to improve the trade quality, to change the trade mode, to upgrade the trade technology and other improvement of the supply side structure can all restrain the probability of juvenile dropout to a great extent. This is conducive to the long-term accumulation of human capital in our country.

Product Connection and Structural Evolution of Regional Comparative Advantages in China

WU Xiao-kang1, ZHENG Ying2

2017, 0(10):  212. 

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This paper studies the influence of product connection on the structural evolution of regional comparative advantages in China by making use of the BACI global trade database and China customs database from 2000 to 2006. The findings indicate that though the research period is not long enough, the structures of the comparative advantages in different regions have experienced significant changes during this period. Only 50 percent of the region-product combinations which had comparative advantages in 2000 still held comparative advantages in 2006, while 10 percent of the region-product combinations which had no comparative advantage in 2000 acquired comparative advantages in 2006. Product connection is an important factor which can explain the changes of comparative advantage structure. After controlling the fixed effects between the 6-digit products or 4-digit products and the regions, if one product had a closer relation with the other products exported by the same province in 2000, this product would have higher probability to become a product with comparative advantages in 2006.

On the Internationalization Path Choice of China’s Automobile Enterprises: A Case Study Based on Beijing Automobile and Geely Automobile

LIU Yu-fei

2017, 0(10):  213. 

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Through the summary of the internationalization process of Beijing Automobile and Geely Automobile, it can be seen that China’s automobile enterprises have experienced the three stages: introducing products, technology, management experience and talents, forming the independent products and technologies of local enterprises, and then starting the internationalized operation. The “introduction” strategy has significantly improved China’s auto companies in the aspects of products, technology, brand and operational management. Generally speaking, China’s auto industry is large but not strong, the core competitiveness is not strong, there is a wider gap between the level of internationalization of China’s enterprises and that of the developed countries. The government should improve the legal system and provide convenience and support to the overseas operation of automobile enterprises. China’s auto companies should innovate the system and management, establish the organization, culture and management concept which can support their global business development. They should think globally, establish a cooperative R&D system, enhance their independent innovation ability and product quality, innovate their business models, and support the development of their global business.

A Cross-Layer Study of the Influence of Human Resource Management Practices on Value Consistency

ZHONG Shan, SHI Yang, ZHAO Shu-ming

2017, 0(10):  214. 

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Taking employees-perceived human resource management practices as an intermediary variable, this paper constructs a cross-layer analytic model of the relationship between human resource management practices and value consistency. The findings of an empirical research on 102 work teams in 25 enterprises show that employees’ perceptions of relational human resource management practices can act as an intermediary between the group relational human resource management practices and the organizational value consistency, and employees’ perceptions of participant human resource management practices can only partially act as an intermediary between the group participant human resource management practices and the organizational value consistency. This conclusion indicates that, compared with the participant human resource management practices, employees are more likely to perceive the relationship management activities promoted by enterprises, which can play a better role in promoting the formation of shared values in the enterprises.

Financial Exclusion of Internet Finance in China

WANG Qian1, WANG Guang-xuan2

2017, 0(10):  215. 

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Internet finance has broken the cartel monopoly of the traditional financial system and relieved the financing difficulties faced by the medium small and micro-sized enterprises. Internet finance has also broken the space and physical constraints and increased the chances of enjoying equal financial services for rural residents. However, though Internet finance has the characteristics of universal benefits, it also has credit exclusion and price exclusion. Young men without jobs have higher probability of being excluded from the network credit; credit exclusion has the tendency of self reinforcing and is accompanied with price exclusion. The Internet technology itself cannot eliminate financial exclusion problems; it should be supported by the system. Therefore, we should promote the integration of policy finance, cooperative finance and Internet finance, and promote the sound development of Internet finance by means of strengthening self-discipline of the platform, improving the credit system and improving the information disclosure system, etc..

Peer-to-Peer Network Lending：Borrower’s Social Capital, Risk Screening and Realization of Market Equilibrium

LI Lin-kui, ZHANG Cheng-hu

2017, 0(10):  216. 

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Peer-to-Peer lending has such characteristics in its service as large number of borrowers, small amount of individual loan contract, no requirement for borrowers to provide physical securities, and so on, thus the credit standing check and the security restraint mechanism under the traditional credit model cannot be effectively applied to the Peer-to-Peer network lending model. Therefore, Peer-to-Peer lending may face more serious problems of adverse selection and credit rationing. Introducing the social capital of the borrowers into the Peer-to-Peer lending model can help to collect, analyze and transmit the useful credit value information easily and effectively in the network credit model, by virtue of such characteristics of the social capital in the model as cognition, reputation, punishment, capital association and platform mechanism. This can also help to promote the establishment and improvement of the risk assessment system of Peer-to-Peer lending platform. In addition, through constructing a equilibrium model of the Peer-to-Peer lending market, it is found that the social capital of the borrowers can have the function of virtual securities through its strong restraints on the borrowers’ behaviors, which can contribute to the reasonable design and effective implementation of the platform credit contract, making the credit risks form a coupling effect between the effective recognition at the platform level and the active separation at the borrowers’ level.

A Study of the Nonlinear Growth Effect of China’s Local Government Debts

ZHUANG Jia-qiang, CHEN Zhi-yong, XIE Hong-tao

2017, 0(10):  217. 

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This paper theoretically analyzes the nonlinear relationship between local government debt and economic growth from the perspective of economic growth. It also makes an empirical test with the inter-provincial data since 2006. The findings can prove the nonlinear growth effect of China’s local government debt. When the debt ratio is lower, there is a positive correlation between local government debt and economic growth. As the debt ratio increases, the impact of debt on the local economic growth would be weakened. The analysis based on instrumental variables shows that this nonlinear effect reflects the causal relationship from local government debt to economic growth. Therefore, when making the positive financial policies of borrowing and increasing expenditures, the government should consider the short term effect and the long term influence of local government debt on the economic growth. As for the management of local government debt, it is suggested that the threshold value of debt ratio estimated dynamically should be used as the early warning index of debt, so as to identify the risks of local government debt more effectively.

Price Stickiness, Investment Adjustment Costs and DSGE Model Conduction

TONG Bing1, XI Ming-ming2

2017, 0(10):  218. 

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Based on the Bayesian method and shock response method, this paper conducts an assessment of the friction mechanism in the classical CEE model, so as to determine which mechanisms in the model are important and indispensable for the analysis of the Chinese economy. Based on the Bayesian method, it firstly carries out a Bayesian estimation of CEE model when different frictional factors are removed. Compared with its edge likelihood function, it is found that the model mechanism with the strongest explanatory power to Chinese data is price stickiness and investment adjustment cost, followed by formation of habit and wage stickiness, while such factors as capital utilization adjustment costs, price and wage index are not important. Finally, based on the shock response method, it examines the response curves of the three impacts of CEE model on money, technology and government expenditure, the findings can further confirm the conclusion drawn from the Bayesian evaluation.

Public Governance of Tax Preference: Institutional Framework and China’s Choice

WANG Wei

2017, 0(10):  219. 

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Too many tax preferences would result in a good deal of tax erosion, inequity of the distribution of tax burden and distorted economic operation. The public governance of tax preference is an important link in the whole national governance. The measures taken for the public governance on too many tax preferences can be from many aspects, such as feed forward control, intermediate control and afterwards remedy. Its major purpose is to control the loss of tax revenue, to relieve the inequity brought by tax preferences and to reduce the economic distortions caused by tax preferences. The governance of China’s tax preferences should first of all change the value orientation of the tax preferences according to the new positioning of the relationship between the government and the market and the new demands of the economic new normal. Meanwhile, it should implement the principle of law-based taxation and establish the budget of expense in the form of taxation, so as to control the major items of tax preferences accordingly.

Human Capital and Technological Innovation in China’s Capital-Intensive and Technology-Intensive Industries: An Empirical Study Based on Quantile Regression Model

MA Ying, HE Qing

2017, 0(10):  220. 

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Based on the panel data of China’s capital-intensive industries and technology-intensive industries, this paper makes an empirical analysis of the impacts of human capital inputs on the technological innovation outputs of China’s capital-intensive and technology-intensive industries. The results of the static analysis show that, in terms of the average level of technological innovation of both the industries, the inputs of human capital have significantly increased the outputs of technological innovation in the capital-intensive industry and the technology-intensive industries. But, the results of the quantile regression analysis indicate that the impacts of the human capital inputs on the technological innovation of the related fields of the two industries are prominently different: the human capital inputs can make greater contribution to the promotion of technological innovation for the industries with middle or lower level of technological innovation; while for the industries at the higher-end of technological innovation, the contribution made by the inputs of human capital is less.