Table of Content

15 April 2021, Volume 0 Issue 4

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Theoretical Economics

Zombie Enterprises and Efficiency of Market Resource Allocation: From the Perspective of Total Factor Productivity Distribution

WANG Yi-huan, ZHAN Xin-yu

2021, 0(4):  3-13. 

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Optimizing the efficiency of market allocation of resources is not only an important channel to improve the quality of economic development, but also the underlying meaning of building a market system with higher standards. From the perspective of the total factor productivity distribution of enterprises, it is found that the higher the proportion of zombie enterprises in the market, the lower the efficiency of economic resources allocation among the normal enterprises. Further analysis shows that in the markets with higher proportion of assets of state-owned enterprises and belonging to the labor-intensive industries, zombie enterprises would lead to a greater degree of economic resource mismatch in these markets; while in the regions with higher degree of marketization and market integration, the markets can effectively resist the negative impact of resource mismatch caused by zombie enterprises. The result of a mechanism analysis shows that zombie enterprises’ behavior of occupying economic resources is more likely to hit high productivity enterprises, which is mainly manifested in the sharp decline of productivity growth and the significant increase of market exit probability. The above conclusions indicate that deepening the supply side structural reform should organically combine eliminating backward production capacity with optimizing the allocation of market resources, so as to comprehensively stimulate market vitality and promote the high-quality economic development to a new level.

Local Government Innovation Competition and Enterprise Innovation

LI En-ji, LI Qun

2021, 0(4):  16-27. 

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With the implementation of the innovation-driven development strategy, technological innovation has gradually become the new yardstick for official promotion; and the competitive landscape of local governments is also changing, which can affect corporate innovation activities through the “visible hand”. The findings of an empirical study based on the data of China’s A-share listed companies and prefecture-level cities from 2007 to 2018 show that there is a strategically complementary competition in local governments’ spending on science and technology. And this kind of competition is more obvious in the samples from the eastern region during the period of 2013-2018, when the chief officials are in their second term. This reveals that innovative competition has become a new competition model among local governments. It is found from further analysis that government innovation competition has significantly promoted enterprise technological innovation, and this incentive effect has shown an inverted U-shaped characteristic of first growth then weakening as the level of enterprise innovation improves. The mechanism test results show that the governments’ competition around technological innovation will increase enterprise innovation subsidies and tax incentives, and improve the level of regional industrial agglomeration, which can improve the corporate innovation environment both internally and externally, so as to promote enterprises’ technological innovations.

Public Economics & Administration

Digital Services Tax: Contents, Challenges and China’s Responses

CHEN Jing-xian, ZHOU Quan-lin

2021, 0(4):  28-38. 

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In recent years, the rapid development of the cross-border digital economy has brought challenges to traditional systems of international tax laws and rules. Due to the slow progress in the coordination of digital economy taxation led by the OECD and the European Union, countries such as France, the United Kingdom, and Spain took the lead in levying digital services tax, in an effort to lead the formulation of international tax rules and expand their taxation powers to gain more revenue. The legality and rationality of the unilateral measures of digital services tax are questionable, which will pose a threat to China’s digital economy development strategy. Also, it is suspected of violating the principle of non-discrimination in the General Agreement on Trade in Services and the principle of tax neutrality. In addition, it will increase the tax burden of Chinese digital companies and increase data security risks. At present, the scale of China’s digital economy is continuously expanding and its contribution to economic growth is also continuously increasing, which has become a key factor for China to respond to the pressure of the economic downturn. Therefore, China should promote the development of the digital economy and encourage all countries to create an open, fair, just, and non-discriminatory digital development environment. It is not appropriate for China to levy digital services tax in the short term. Instead, China should take measures to help Chinese digital companies eliminate double taxation and actively participate in the negotiation of international tax rules for the digital economy.

The Impact of Local Public Finance Expenditure Structure on the New Type Urbanization: An Analysis Based on the Spatial Dubin Model

CHEN Xiang-man, CHEN Yao

2021, 0(4):  39-52. 

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It is of great significance for China to adhering to the new development concept and promoting the implementation of the new type of urbanization strategy. Based on the panel data of 31 provinces of China from 2007 to 2019, this paper uses the spatial econometric model to analyze the impact of local public finance expenditure structure on the new type urbanization. The findings show that the quality and the efficiency of the new type urbanization, as well as the coupling and coordination degree of the two, all exhibit spatial spillover effects. The expansion of the proportion of social service expenditure and production expenditure has an inverted U-shaped impact on the quality of the new type urbanization. The direct and indirect effects on the efficiency of the new type urbanization and on the coupling and coordination degree of urbanization quality and efficiency are both positive; the expansion of the proportion of the consumption expenditure is to the disadvantage of the new type urbanization. In addition, the expansion of the proportion of production expenditure is not conducive to the improvement of the efficiency of the new type urbanization in the central region, while it favors the new type urbanization in the eastern and western regions. The expansion of the proportion of social services expenditures has a negative impact on the quality and efficiency of the new type urbanization in the western region, while its impact on the new type urbanization in the eastern and central regions is positive. The expansion of the proportion of consumption expenditure is not conducive to the improvement of the coupling and coordination degree of the quality and efficiency of the new type urbanization in the eastern and central regions. Therefore, the key supporting points of the local public finance should be clarified, the border and limits of the authority of public finance expenditures should be defined scientifically, and the structural management of the local public finance expenditures should be strengthened, so as to promote the coordinated development of the reginal urbanization.

Modern Finance

Does Index Fund Holding Increase the Efficiency of Stock Pricing? An Empirical Study Based on China’s A-Share Markets

XUE Ying-jie, WANG Yong, YIN Yu-gang

2021, 0(4):  53-65. 

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Based on the data of the constituent stocks of the index funds (i.e. ETF) in China’s A-share market from 2011 to 2019, this paper takes the degree of noise trader participation and the delaying degree of stock prices responding information as a proxy for pricing efficiency and employs the panel fixed effect model to study the impact of ETF holding on stock pricing efficiency and to conduct a mechanism analysis. The findings show that: firstly, the higher the proportion of the shares held by the ETF, the more accurate and timely the stock price responding information will be, that is, the higher the pricing efficiency. Secondly, ETF holdings mainly affect the efficiency of stock pricing through the three mechanisms: transaction costs, short-sale constraints, and information mining; the higher the proportion of ETF holdings, the more helpful it is to reduce transaction costs and short-sale constraints, and to attract more analysts to mine information. Thirdly, the proportion of ETF holding is mainly affected by fund purchase and redemption and the component stock rebalancing; the increase in the ETF holding related to fund purchase and redemption can improve the speed and accuracy of stock price reflection information, while the increase in the ETF holding related to the component stock rebalancing can only improve the speed of stock prices reflecting information. Therefore, it is recommended that the relevant departments should enrich the types of ETF products, guide institutional investors to participate in ETF transactions, promote the development of ETF options, improve the ETF short-sale mechanism and regulatory system, and standardize the operation of the ETF markets.

Mixed-Ownership Reform and Debt Risks of City Investing Companies

MA Hui-xian, CHEN Shan-shan

2021, 0(4):  66-77. 

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Taking municipal investment bonds and city investing companies in China from 2010 to 2019 as the research objects, this paper examines the impact of the city investing companies’ absorption of private shares on their debt risks during the process of the mixed ownership reform from the bond level and firm level respectively. And it also conducts an in-depth analysis of the action mechanism of the mixed ownership reform in resolving the debt risks of the city investing companies from both the profit side and the asset side. The results show that the mixed ownership reform of the city investing companies can improve the credit rating of the bonds issued by the city investing companies and reduce the excessive debt ratio of them, thus alleviating the debt risks. Furthermore, the mixed ownership reform of the city investing companies reduces their debt risks mainly through improving the corporate performance and increasing the coverage rate of earnings over debts before depreciation and amortization of interests and taxes, rather than through increasing the coverage rate of tangible assets over the debts. Therefore, it is necessary to actively and orderly promote the mixed-ownership reform of the city investing companies and improve the performance of the city investing companies, so as to alleviate their debt risks and prevent and resolve the implicit debt risks of local governments effectively.

Business Administration

Listing of Enterprises, Patent Surge and Business Performance: Empirical Evidences from Listed Companies on GEM

GONG Ya-lin, LIAO Cheng-yun, CHEN Shi

2021, 0(4):  78-89. 

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Taking China’s companies on GEM from 2009 to 2018 as samples, this paper explores the phenomenon of patent surge of companies before their going public and examines the impact of patent surge on their patent quality and their business performance. The results show that: firstly, there are obvious patent surges before the IPO of GEM companies, which is manifested by the sharp increase of patent applications before the IPO and the stagnation of the growth after the IPO. Secondly, the behavior of patent surges of the companies on GEM reduces the patent quality and their long-term business performance after IPO. Thirdly, compared with the inventive patents, the patent surges of non-inventive patents are more obvious before IPO. Fourthly, in 2014, the China Securities Regulatory Commission (CSRC) made some rules concerning the disclosure of patent information in the prospectus of the listed companies on GEM, which have changed the companies’ patent application strategies, the time of application is earlier and the proportion of the patents applied but not authorized before going public is lowered. Finally, enterprises’ patent surges before IPO may lead the investors to overestimate the value of the companies, which would harm the interests of investors. These research conclusions are conducive to the understanding of the institutional causes of the “patent bubble”phenomenon in China and have certain referential value for the improvement of GEM system and the realization of the transition of the Registry System.

Research on the Influencing Factors and Formation Mechanism of the Mixed Service Quality: From the Perspective of Online-Offline Integration

SHEN Peng-yi, XU Ji-nan, ZHANG Fan

2021, 0(4):  90-101. 

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Though the practice of the omni-channel marketing has speeded up the development of the mixed service, the study of the sources and the formation of the mixed service quality is still not systematic and in-depth. Taking the online-offline integrated enterprises with mixed services as the objectives, this paper systematically constructs a formation mechanism model to analyze the factors affecting the mixed service quality. The findings of the empirical study show that the online design factor, the atmosphere factor and the social factor all have positive impact on human-computer interaction, and the online social factor positively impacts interpersonal interaction. Meanwhile, the offline design factor, the atmosphere factor and the social factor positively impact the interpersonal interaction, and the offline design factor positively impacts human-computer interaction. In addition, the human-computer interaction positively impacts interpersonal interaction, and both interpersonal interaction and human-computer interaction positively impact the mixed service quality, but the interpersonal interaction has a larger degree of impact. Except for the offline design factor, other offline and online service environment factors has no significant direct impact on the mixed service quality. In addition, the ability of channel integration has a positive moderating effect between the online-offline service environment and the service interaction, and the interaction fluency has a positive moderating effect between the service interaction and the mixed service quality.

Industry & Trade

The Trend of Global Value Chain Reconstruction under the Double Impacts of Trade Frictions and Covid-19 Pandemic and China’s Countermeasures

YUAN Zhen-bang, ZHANG Qun-qun

2021, 0(4):  102-111. 

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The ever intensified global trade frictions since 2016 and the continuous spread of the Covid-19 pandemic over the world since the end of 2019 have caused double impacts on the current collaboration of global value chain (GVC). This paper conducts an analysis of the tariff levels among the relevant countries and the changes in the import and export data during this period, and makes a comparative study of the industrial policies promulgated by the governments of different countries. The findings show that, under the double impacts, there appears a trend of reconstruction of the global value chain. The governments of some countries are increasingly placing their considerations of international politics, national security and social emergency above their economic interests; they are actively promoting the return of some industrial chains to their home countries, pursuing diversification of supply chains, and strengthening the protection of the related industries in their own countries. The United States even attempts to block the whole industrial chains of China in order to maintain its position as the world’s No. 1 economic power. Faced with such challenges, China should waste no time to formulate new and targeted global value chain strategy, take measures to stabilize, strengthen and supplement its global value chain, stabilize the low-end industry, strengthen the middle-end industry and supplement the high-end industry, create a complete and tenacious supply chain for the industry chain, consolidate and develop the advantages of the full industrial chain, guarantee the sustainable and healthy development of China’s economy, consolidate the Asian value chain and the community of common future, strive to develop and grow the Belt and Road value chain initiated by China, handle the relationship with USA and other major western economic entities with the concept of cooperation and mutual benefits, and enhance the interdependency of the global value chain.

Does Free Trade Agreements Really Increase the Binary Margins of Exports?

LV Jian-xing, ZHANG Shao-hua

2021, 0(4):  112-124. 

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Based on the data at HS4 digits level between China and 147 countries / regions from 2002 to 2017, this paper makes use of the high-dimensional fixed-effect Poission pseudo maximum likelihood estimation technology to estimate the impacts of import trade liberalization (tariff concessions and elimination of non-tariff barriers) resulted from Free Trade Agreements (FTA) on the binary margins of China’s export. The results show that the elimination of non-tariff barriers caused by FTA has promoted the export intensive margin, whereas both the tariff concessions and elimination of non-tariff barriers have restrained the export extensive margin. The promotion effect of FTA on the export intensive margin and the inhibiting effect of FTA on the export extensive margin have obvious hysteresis effect, but as time goes on, the promotion effect of FTA on the export intensive margin is gradually increasing, while the inhibiting effect on the export extensive margin is gradually weakened. Five years after FTA took effect, the general promotion effect of it on export is around 22%. The results of the heterogeneity analysis indicate that the promotion effect of FTA on the intensive margin has only occurred on the industrial products, the developing countries, and FTAs with long durations, while the restraining effect on the extensive margin has occurred on the industrial goods, the agricultural goods, the countries with different levels of development and FTAs with different durations.

Modern Accounting

Economic Policy Uncertainty, Quality of Information Disclosure and Stability of Customer Relationship

SUN Ya-ni, WANG Jun-yi

2021, 0(4):  125-136. 

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Taking the listed companies with the top five customer information disclosed by the Shanghai Stock Exchange and the Shenzhen Stock Exchange from 2009 to 2018 as the research objects, this paper makes use of Python to filter out the customer companies of each enterprise that has maintained its cooperation in the observation year and the previous year, with which it calculates the stability of each company’s customer relationship. On this basis, it makes an analysis of the impact of the quality of information disclosure of listed companies on the stability of customer relationships. The results show that the quality of information disclosure is significantly and positively correlated with the stability of customer relationships, and it is more significant when economic policy uncertainties are higher. The results of the mechanism test indicate that in the case of high economic policy uncertainty, the high quality of information disclosure can transmit value-related information and release value signals, thereby reducing the information asymmetry between the listed companies and customers, and improving the stability of the company’s customer relationship.

Government Governance Efficiency, Audit Management System Reform and Total Factor Productivity Growth: Empirical Evidences from China’s 285 Cities

GUO Meng-nan, GUO Jin-hua

2021, 0(4):  137-148. 

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Taking the human, financial and material management pilot reforms in the local audit departments under the provincial level carried out in China in 2015 as the quasi-natural experiment, this paper makes use of the sample data from 285 cities from 2006 to 2017 to empirically examine the impact of audit management system reform on urban total factor productivity growth and the mediating effect of government governance efficiency between the two. The findings show that audit management system reform is conducive to promoting the growth of urban total factor productivity, and that the reform of the audit management system can improve the urban total factor productivity through improving the anti-corruption efforts of the governments. The results of the heterogeneity test show that the promotion effect of the audit system reform on the urban total factor productivity is more significant in the cities of the eastern region and in the non-capital cities.