Table of Content

15 August 2017, Volume 0 Issue 08

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Investor Sentiment and Earnings Management in Listed Companies: Rational Catering or Emotional Deviation?

GONG Guang-ming1, Long Li1,2

2017, 0(08):  233. 

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This paper tries to explore whether and how the earnings management decision-making of listed companies is influenced by investor sentiment, and on this basis, it analyzes the motivations of earnings management strategy under the influence of investor sentiment. The findings show that when the investors sentiment is higher (or lower), the company would be inclined to positive (negative) earnings management; investor sentiment thus would be positively related to the size of earnings management. The earnings management decision-making of the listed companies is not influenced by the managers’ own emotions, but a means of rational catering towards the investors’emotions. The study of this paper can enrich the related literature on the problem of the investor sentiment affecting the decision-making of corporate accounting information disclosure, and at the same time has provided new evidences for the catering theory of the behavioral finance.

Cross-Listing, Management Profit Forecast and Voluntary Information Disclosure Effect

CAO Wei

2017, 0(08):  234. 

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Compared to the historic accounting information, the profit forecast information disclosed voluntarily by the management has higher relevance and richer information contents. Taking the companies that voluntarily disclosed earnings forecast information from 2008 to 2015 as the research samples, this paper conducts an empirical study of the cross listing combined with the voluntary disclosure behavior of profit forecast information for the first time. The results of the study have confirmed the signal transmission function of the profit forecast information disclosed by the ordinary companies, and at the same time verified the “double signal” transmission mechanism of the cross-listed company’s voluntary disclosure of the profit forecast information. On the other hand, it has also confirmed the value of the profit forecast information embodied in the process of the capital market segmentation and integration. The results of the empirical tests show that compared to the ordinary companies, the cross-listed companies are more inclined to publish earnings forecast information; the published earnings forecast information has higher accuracy, and the effect of lowering financing costs is more significant. In addition, the earnings forecast information released by the cross-listed companies can significantly affect the direction of stock price risk premium between different markets, while all of them have increased the value of the cross-listed companies, that is, the cross-listing can have both the financing effect and listing effect simultaneously.

How Does Regional Knowledge Spillover Affect Corporate Value-Added Rate: An Empirical Study Based on China’s Listed Companies in Creative Industry

CHEN Li-xian, SHEN Hong

2017, 0(08):  235. 

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This paper examines the influence of regional knowledge spillovers on the value-added rate of creative enterprises from the microcosmic perspective and explores the impact of the scale of enterprises, the level of marketization and the ownership of enterprises on the relationship between knowledge spillovers and enterprise value-added rates. The results show that the impact of regional knowledge spillovers on the value added rate of enterprises is significantly positive, and its impact on the rate of added value reaches the biggest when knowledge spillover lagging behind by two phases. Further study finds out that the knowledge spillover of the enterprises with larger scale would have more significant impact on the value-added rate of the enterprises. In the regions with higher degree of marketization, the influence of regional knowledge spillovers on the value-added rate of enterprises is higher than that in the regions with lower degree of marketization due to the favorable market conditions. The impact of knowledge spillovers on the enterprise value-added rate of the state-owned enterprises is weaker than that on the non state-owned enterprises.

Characteristics of Foreign Investment, Environmental Regulation and Environmental Efficiency: Theory and China’s Experiences

ZHOU Jie-qi1, WANG Tong-san2

2017, 0(08):  236. 

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Starting from the angle of the intensity of environmental regulation being endogenous from the scale and quality of foreign investments, this paper analyzes the mechanism of FDI affecting the industrial environmental efficiency on the basis of the extended Copeland and Taylor model, then it constructs a simultaneous equation model and a panel threshold regression model to empirically test the mechanism and effects of the impacts of FDI scale and quality on industrial environmental efficiency. The findings show that:（1）the scale of foreign investment can restrain the improvement of industrial environmental efficiency through the industrial structure channels, but the scale and quality of foreign investment can both improve the industrial environmental efficiency through environmental technology and economic development paths;（2）the characteristics of foreign investment will directly affect the extent even the direction of the impact of FDI on the strength of China’s environmental regulation, the FDI scale will lead to the strengthening of the local environmental regulation because of the environmental pressure brought by the FDI scale, while the quality of FDI as a potential resource scrambled by local governments tends to weaken the local environmental regulations; （3）both the impacts of FDI quality and FDI scale on the industrial environmental efficiency have significant double threshold effect. When the strength of environmental regulation is lower or higher, the effect of FDI scale on the industrial environmental efficiency is negative, and the impact of FDI quality on the industrial environmental efficiency is not significant. When the strength of environmental regulation is moderate, the negative effect of FDI scale on the industrial environmental efficiency will be weakened, while FDI quality can produce a positive effect on the industrial environmental efficiency.

Legal Environment, Political Connections and Irregularity Investigation: Empirical Evidences from A-Share Market

XU Yao, LIU Feng, WANG Ya

2017, 0(08):  237. 

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By applying the partially observable Bivariate Probit model, this paper systematically studies the impact of the legal environment, the types of political connections and the nature of property rights in which the enterprises exist on their illegal behaviors. The empirical results show that the improvement of the legal environment and the political connections of the enterprises can reduce the probability of the company’s violations, and this effect is mainly reflected in the political relations of the officials. From the point of the nature of the property rights of the enterprise, the officers’ political connections of the state-owned enterprises can reduce the probability of being investigated and punished for their irregularities, while the improvement of the legal environment can reduce the tendency of their violations, thus weakening the effect of political connections. As for private enterprises, although the improvement of the legal environment can also reduce the tendency of their violations, yet the political connections have no impact on the probability of being investigated or punished for their violations.

Technological Innovation Capability and Stock Returns of Listed Companies: Evidences from China’s Capital Market

YANG Ting-ting1,

2017, 0(08):  238. 

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Pricing for innovation ability is the key to whether the capital market can effectively serve the technological innovation. This paper constructs the innovation factor by referring to the Fama-French factor construction method to study the ability of the innovation factor in explaining the stock return. The findings show that: firstly, the stronger the enterprise’s technological innovation capability, the higher the stock returns will be; secondly, compared with the traditional industries, the positive effect of technological innovation capability on stock returns is larger and more significant in high-tech industry; thirdly, technological innovation capability can further act on the stock markets through affecting the market power of the enterprise in the product market competition; and fourthly, the three-factor model and the four-factor model tests show that the innovation factor has a strong ability to explain the stock returns. Chinese enterprises should actively carry out technological innovation and improve their innovative ability, so as to make better use of capital markets for financing.

Pyramid Hierarchy, Government Decentralization and Agency Costs of State-Owned Enterprises

HE Qin-ying1,

2017, 0(08):  239. 

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The pyramid ownership structure is one of the effective ways to the decentralization reform of the state-owned enterprises. From the perspective of government decentralization, this paper takes China’s state-owned listed companies in the period of 2007-2014 as the research objects to empirically study the impact of the pyramid ownership structure on the agency cost of state-owned enterprises. The findings show that with the up moving in the pyramid hierarchy of the state-owned listed company, its excess agent costs will be significantly reduced, and this effect will increase with the decrease of the intervention of the municipal government. Further study shows that excess agency costs have a significant negative impact on corporate performance, but reducing the pyramid hierarchy may weaken this negative impact. The above conclusions not only provide new evidences for understanding the economic consequences of the pyramid structure of state-owned enterprises, but also provide a policy reference for improving the governing efficiency of state-owned enterprises.

A Study of Performance Evaluation of Open-Ended Fund: Based on APB Factors

XIAO Jun, YANG Chao

2017, 0(08):  240. 

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In China’s open-ended fund market, the inappropriate selection of performance benchmark will mislead the fund investors. At the same time, the assimilated investment style in China’s fund market makes the investors difficult to identify strength and weakness of the fund performance. This paper adopts the monthly sample data from 2004 to 2015 to construct the active performance benchmark portfolio (APB portfolio) as a new benchmark to describe the fund style. Then, it makes use of each APB portfolio to build APB factor, and put it into the traditional three-factor model. The findings show that this new model can not only control the effects brought forward by the assimilated fund investment style effectively, but also improve the ability of investors to identify the fund performance. In addition, the fund return from the three-factor model with added APB factor has relative stronger continuity, which has significant reference value for the improvement of the existing fund performance evaluation method.

An Analysis of the Regional Differences of the Benefits from Government Higher Education Expenditure: Based on Theil Index and the Decomposition Effect

WANG Jie-ru, YUE Jun

2017, 0(08):  241. 

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It is of great significance to improve the accessibility and reduce the heavy economic burden of the under-privileged people and the vulnerable groups in the higher education service so as to promote the equitable sharing of higher education resources. At present, there are significant inequalities in the distribution of beneficiaries from different types of universities in China, for the high-quality higher education resources are concentrated in the eastern region. The nested decomposition effect based on the Theil index shows that the degree of contribution of government expenditures in the eastern, central and western regions is smaller, while the degree of contribution of government expenditure differences between the provinces in the region is relatively larger, of which the provinces in the eastern region have the largest differences in the government spending. This indicates that in addition to the factor of economic development level, the provincial government financial investment can significantly affect the distribution of benefits. In the future, we should establish the evaluation mechanism on the fulfillment of governments’ responsibility of expenditure, give full play to the central transfer payment in balancing the regional differences, and promote the fair benefit of government expenditure on higher education.

State-Owned Capital Operating Budget: An Understanding Based on the “Cross-Providing” Model

DENG Li-ping, DENG Qiu-yun

2017, 0(08):  242. 

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The “cross-providing” model of social products is the realistic refinement of China’s unique social products supply. It is not only the concentrated expression of the development of the primary stage of socialism, but also the essential requirement of the state system and political system of China. On the one hand, the “cross-providing” model can be an important starting point for grasping the existence of the state-owned capital budget system, so as to demonstrate the necessity of its continuous development from the perspective of income. On the other hand, the state-owned capital operating budget system can, in turn, provide a mechanism protection for the deepening development of the “cross-providing” model. The “cross providing” model of social products is the concentrated expression of the theory of socialism with Chinese characteristics in practice, which can provide theoretical support for the diversified supply of China’s social products and the modernization of state-owned enterprises.

The Impacts of Marital Status on Urban Women’s Retirement in China

LIN Xiang-sen, BAI Jin

2017, 0(08):  243. 

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On the basis of controlling the impact of endowment insurance system on retirement with the method of the regression discontinuity, this paper establishes a Probit model to examine the impact of different marital status on urban women’s retirement in China by using the data from China Health and Retirement Longitudinal Survey 2013. The findings show that: firstly, the probability of retirement of urban women has significantly increased by 17.8% for reaching the qualification for the pension; secondly, under the condition of the endowment insurance policy exerting influence on women’s retirement behavior, the probability of the married, divorced or widowed urban women exiting the labor market is significantly reduced compared with the unmarried women; thirdly, the retirement decisions made by the urban women are impacted by such factors as age, schooling, health, personal economic income, number of siblings, children’s income and so on. This provides a basis for adjusting the retirement policies in the future.

Growth Effect and Welfare Effect of Government Spending Financing Method

RAO Xiao-hui

2017, 0(08):  244. 

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How does the financing method of government spending affect the long-term economic growth and social welfare is an extremely important problem. From the perspective of the outside overflow of government public expenditure, this paper takes it into the social production function to construct a dynamic general equilibrium model; then from the angle of economic growth and social welfare, it compares the advantages and disadvantages of financing from capital income or from labor income. The results show that: (1) in the environment of sample economic parameter, both of the financing from labor income or from capital income present a hump shape relationship with the economic growth and the social welfare; (2) from the angle of economic growth, the marginal effect of financing from labor income is larger than the that from the capital income, and the policy effect of adjusting the labor income is stronger; (3) from the angle of social welfare, the social welfare under the capital income financing is greater than the social welfare under the labor income financing, adjusting capital income has more efficiency.