Table of Content

15 November 2021, Volume 0 Issue 11

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Theoretical Economics

The Impact of Structural Shocks on China's Economy: Also on the Economic Impact of the COVID-19 Epidemic

WU Li-yuan, LIU Yan-zhao

2021, 0(11):  3-15. 

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The impact of infectious diseases as a short-term and severe structural shock on China's economy and policy choices has attracted widespread attention because of the global outbreak of COVID-19. This paper is a study based on the dynamic stochastic general equilibrium model that includes the upstream and downstream production structures, the different types of enterprises and the heterogeneous financial frictions. The findings show that the impact of the epidemic is a comprehensive impact on both productivity and demand at the same time, this feature is very important for evaluating its economic effect, and it can explain the stylized fact that the extent of China's consumption has declined more than that of production investment and that the recovery is rather slower since the outbreak of the epidemic. The effect of the structural tax reduction policy on economic stability is significantly better than that of the loose monetary policy, and the welfare loss is smaller, but the combination of the two policies can bring better welfare results. This is because monetary expansion stabilizes the steady demand while worsening the mismatch of credit resources at the same time, however, the structural tax cuts can partially correct the credit mismatch, and the use of the policy combinations can give full play to the advantages of the two policies.

Can Spatial Agglomeration Enhance the Resilience of China's Manufacturing Industry--From the Perspective of Industrial Adaptive Structure Adjustment

LIU Rui, ZHANG Wei-jing

2021, 0(11):  16-27. 

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Faced with the real environment of domestic and foreign economic risks superposition, it is of great significance to study how to promote the high-quality development of China's manufacturing industry through the improvement of the resilience of the manufacturing industry. From the perspective of industrial adaptive structure adjustment, this paper discusses the theoretical mechanism of the manufacturing spatial agglomeration affecting the manufacturing resilience, and it makes an empirical analysis by using the data of China's prefecture level cities from 2008 to 2017. The results show that manufacturing spatial agglomeration has significantly improved the manufacturing resilience of China. After changing the core variables, transforming the model estimation methods and eliminating the sample selective bias, the conclusion is still robust. The heterogeneity analysis shows that the manufacturing spatial agglomeration can significantly promote the resilience of the manufacturing industry in large-scale cities, but has no significant positive effect on the resilience of the manufacturing industry in small and medium-sized cities. Further research shows that the manufacturing spatial agglomeration can promote the resilience of China's manufacturing industry by stimulating the entrepreneur's innovation spirit and inhibiting the low-quality entrepreneurial behaviors. This indicates that a reasonable guide to the development of the manufacturing spatial agglomeration will help to enhance the ability of the manufacturing industry to resist internal and external economic risks.

Public Economics & Administration

Does the Intensity of Fiscal Input Improve the Supply of Medical and Health Services

ZHANG Xiao-yun, HE Chuan

2021, 0(11):  28-40. 

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In the post epidemic era, it is of great significance to correctly re-examine the role of fiscal input in the medical and health sector for the improvement of the health human capital and the promotion of the economic and social high-quality development. Therefore, from the perspective of the data of fiscal medical and health expenditure at provincial level and the data of the total health expenditure financing, this paper empirically examines the effect of fiscal input on the allocation of medical and health resources by constructing spatial effect and threshold effect models. The results show that, as for the supply of medical and health services, there are significant intergovernmental interaction and positive spillover effects with the intensity of fiscal input. Compared with social and personal health expenditure, the promotion effect of governmental health expenditure on the medical and health security is more significant. Meanwhile, the heterogeneity factors such as fiscal transparency and economic development levels among the regions have threshold effect on the intensity of fiscal medical and health input, and most provinces are in the threshold value range of incremental effect. Therefore, it is necessary to enhance the intensity of fiscal input, broaden the financing channels for public health, strengthen the cooperation and spatial linkage for the provincial medical service supply, and give full play to the role of medical and health resource allocation in “improving the lower and competing the higher”.

“Subsidies to the Supply-Side”or“Subsidies to the Demand-Side”? An Analysis of the Effect of Government Medical Input Path on Health Outcome

WANG Zeng-wen, HU Guo-heng

2021, 0(11):  41-51. 

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In the context of the increasingly tightening government fiscal revenue and expenditure, how to rationally use the existing stock to improve the health outcome is a key problem in government medical investment. The health performance test based on the input path is of great significance, which is related to the structural optimization of the future government medical investment. By making use of the provincial panel data from 2007 to 2017, this paper conducts an empirical analysis of the impact of“subsidies to the supply-side”and“subsidies to the demand-side”on the health outcome. The results show that to increase the investment to the subsidies to both the supply-side and the demand-side can significantly improve the health outcome. The impact of continuously subsidies to the supply-side or to the demand-side on the health marginal outcome presents a nonlinear growth, with an inverted U shape as its specific form. Subsidies to the supply-side or to the demand-side is the two sides of one body of the improvement of the health outcome, each is the basis of the other. If the“subsides to the supply-side”exceeds the threshold value, it would directly improve the facilitating effect of“subsidies to the demand-side”on the health outcome, while the continuous“subsidies to the demand-side”may indirectly improve the health outcome of the“subsidies to the supply-side”. Therefore, in order to increase the health outcome of the government investment, it is necessary to establish a result-oriented health investment mechanism, so as to achieve the transformation from “taking treatment as the central”to“taking people's health as the central”; to promote the equalized allocation of the health resources, changing the “subsidies to the supply-side” from the extensive form to the fine dripping irrigation form, and establishing a cooperation network for the areas with backward medical technology; to construct a competition-cooperation medical service system with “subsidies to the demand-side”as the core.

Modern Finance

Has Bank Partnership Aggravated the Adverse Effects of Liquidity Shocks on Banks?An Analysis Based on the Data of China's Syndicated Loans

HUANG Fei-ming, YAN Han, WEI Lin

2021, 0(11):  52-64. 

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Based on the data of China's syndicated loans, this paper empirically examines the impact of the bank partnership on the bank financing cost, liquidity creation level and credit supply in the case of liquidity shock. The results show that banks with more partnerships will prefer the liquidity management strategy of external“purchased liquidity”rather than internal“stored liquidity”. In the face of liquidity shocks, banks that have established more partnerships through syndicated loans will face higher financing liquidity risks, which will weaken their liquidity creative ability and reduce the credit supply. The business partnership of banks will encourage banks to relax their internal liquidity management, and eventually bring adverse consequences in the face of liquidity shocks. Therefore, the commercial banks should hold adequate high-quality assets with high liquidity, never relying on the fund of other banks. The regulatory authorities also need to strengthen the supervision of bank liquidity risks, and to avoid the liquidity crisis caused by excessive reliance on the short-term interbank funds of partner banks.

Chinese Manufacturing Enterprises to Expand Financial Investment: Profit-Seeking or Risk-Avoiding

LI Cheng-zhang, KUANG Xiao-lu

2021, 0(11):  65-75. 

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Based on the dualization of enterprise value and investment, this paper constructs an enterprise investment selection model of political economics and proposes that the financial-production investment return rate and the risk gap are important factors affecting the financial investment behavior of the manufacturing enterprises. Based on the financial data of China's manufacturing A-share listed companies from 2006 to 2020, it uses the system GMM model to illustrate the fact that the expansion of the financial-production investment yield gap and the narrowing of the financial-production investment risk gap have increased the share of financial assets of Chinese manufacturing enterprises. After further decomposing the investment yield gap and the investment risk gap, it is found that the improvement of the financial investment yield and the production investment risk is the fundamental reason for China's manufacturing enterprises to expand their share of financial assets, and the increase of the production investment risks is the main aspect of the contradiction. The phenomenon of the expansion of financial investments of Chinese manufacturing enterprises has its stages and specificity. For example, after 2012, the socio-economic conditions that supported the early economic growth have changed, leading to increased risks in the domestic real economy, and more social capital flows to the financial sector, pushing up the rate of return on financial investment, which is ultimately manifested as an increase in the share of financial assets of manufacturing enterprises. Therefore, it is necessary to grasp the supply-side structural reform, restore the growth momentum of the real economy, at the same time be alert to financial risks, and give full play to the role of financial services in the real economy.

Business Administration

The Network Relationship of Institutional Investors and Enterprise Innovation: Information Resources and Information Governance

YANG Xing-quan, WANG Li-li, YANG Zheng

2021, 0(11):  76-88. 

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The network information sharing of institutional investors can improve the ability of the invested enterprises to obtain the social resources through the promotion of information transmission and circulation in the network and the capital markets, strengthen the enthusiasm of the stakeholders to supervise the company management, effectively alleviate the financing constraints of enterprises, improve the information transparency, promote the innovation information transmission, so as to promote the enterprise innovation level. Based on the panel data of A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2007 to 2019, the empirical evidences show that the institutional network relationship can significantly improve the level of enterprise innovation. The nature of property rights plays a negative regulating role while the degree of market competition and the process of marketization play a positive regulating role respectively. The results of the action mechanism study show that the institutional network can realize the improvement of enterprise innovation level mainly through expanding commercial credit, improving enterprise innovation ability, enhancing corporate information transparency, increasing the innovation information transmission paths, and achieving the improvement of corporate innovation level. The results of the economic consequence test show that the institutional network can optimize the rational allocation of relevant production factors and improve the total factor productivity of enterprises by improving the level of corporate innovation.

Interlocking Shareholders and Effectiveness of Executive Compensation Contracts

LI Shi-gang

2021, 0(11):  89-100. 

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Whether the executive compensation contract is effective is related to the effect of compensation incentives, which is not only affected by the rent-seeking of the management, but also by the supervision of the major shareholders. The interlocking shareholders may have the two effects, i.e., the governance synergy effect and the collusion effect, due to their attention to the maximization of portfolio value. Therefore, it is noteworthy whether the interlocking shareholders have an impact on the validity of the executive compensation contract and what kind of impact will be produced. Taking the A-share listed companies from 2004 to 2019 as the research objects, this paper empirically tests the influence of the interlocking shareholders on the validity of the executive compensation contracts. The findings show that the interlocking shareholders can promote the effectiveness of executive compensation contracts by improving the company information environment, promoting the flow of executive compensation information and enhancing supervision strength, which means the governance synergy effect is given a full play. The results of the cross-sectional analysis show that the interlocking shareholders of both share controlling type and institutional investment type can play a significant role in the governance, but the interlocking shareholders of non-share controlling type or non-institutional investment type have no significant influence on executive compensation contracts. This study provides empirical evidences for the comprehensive and correct understanding of the function of interlocking shareholders and the decision basis for the regulatory authorities to rationally guide the interlocking shareholders to play their roles and to promote the development of the interlocking shareholders of both the share controlling type and the institutional investment type.

Industry & Trade

Digital Trade Import and Wage Equalization among Firms

ZHOU Li-ping

2021, 0(11):  101-111. 

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Based on the data at the enterprise-product level, this paper adopts the bilateral continuous difference method to indirectly evaluate the impact of digital trade imports on wage distribution among companies. The findings show that, compared with traditional import trade, the digital trade import will promote the wages among enterprises to be more equalized, and this kind of promoting effect is mainly originated from the narrowing of the wage gap of the enterprises within the industry and the wages of the enterprises with their wages at the middle or up levels tending to the median wage inside of the industry. The digital trade import can drive the development of wage equalization among the enterprises by reducing the distance cost, increasing the complexity of the export technology and speeding up the speed of import trade; however, this promotion effect may be weakened by the widening of the price spread. It is found from further analysis that the enterprises are more likely to have the“substitution effect”in their employment and the“catfish effect”in their import when they carry out the digital trade import, both of the two effects would widen the wage gap between firms.

The Impact of Labor Costs on Export Price in the Long-Term Trade Relationship: Also on the Moderating Effects of Specific Asset

ZHENG Ying, QI Xin

2021, 0(11):  112-124. 

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Faced with the impact of labor cost, the range of export price adjustment reflects the degree of risk bearing, sharing and transferring of the two parties under their long-term trade relationship. The specific asset is not only the link connecting the interests of both trade parties, but also the leverage to balance the risks. By adopting the?price adjustment model in repeated games, this paper makes use of the data at the export micro-level to analyze the impact of the changes of labor cost on the export prices when quality factors are removed; it also explores the moderating effects of the specific assets invested by export enterprises. The findings show that in the long-term trade relationship, the changes of labor cost will lead to the adjustment of export product prices in the same direction, but the adjustment range is smaller than the changes of cost, which indicates that the pressure of labor cost inflation is jointly borne by both parties. The specific asset has a positive adjustment effect on the adjustment range of export prices. It is found through sub-sample study that when the labor cost changes, the adjustment range of export prices is larger, and the adjustment effect of the specific assets is more significant, if the contract dependence of the export products is relatively higher, the legal system of the destination country is relatively sound and the export is in the way of processing trade. Therefore, to develop a long-term and stable trade relationship and to scientifically use and play the advantages of the specific assets is an important way to transfer the cost pressure of enterprises.

Modern Accounting

“Structural”Deleveraging and Corporate Asset Allocation: De-Realization to Virtuality or De-Virtuality to Realization

DOU Wei

2021, 0(11):  125-137. 

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Taking China's non-financial A-share state-owned listed companies from 2009 to 2019 as samples, this paper empirically studies the impact of structurally deleveraging policy on corporate asset allocation with the double difference analysis method. The results show that the deleveraging policy can significantly weaken the financial asset allocation of the enterprises and curb the fixed asset investment of the over-indebted enterprises, but it has no significant impact on their R&D investments. The deleveraging policy has also significantly promoted the entity investment of the normally debt-laden enterprises. The overlaying of the fiscal policy and the structural deleveraging policy can strengthen the entity investment of the enterprises, and the overlaying effect of the tax reduction and exemption policies for the high-tech enterprises is better than that of the government subsidies policies.

Internet Business Model, Management Accounting Application Level and Value Creation

TONG Zi-qiang, LI Peng-xiang, GENG Hong-yan, YANG Lei

2021, 0(11):  138-148. 

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In the context of digital economy, the Internet and artificial intelligence are more and more integrated with accounting. For this reason, by taking the financial reports of listed companies as the research objects and the text analysis of Word2Vec and the machine learning technology as the basis, this paper constructs the index to measure the implementation level of Internet business model and the application level of management accounting of the listed companies. It also empirically analyzes the impact of the implementation level of corporate Internet business model on the application level of management accounting and the relationship between the application level of management accounting and value creation. The findings show that the higher the degree of implementing the Internet business model, the higher the application level of management accounting; the Internet business model improves the application level of management accounting mainly through improving the strategic management, the budget management and the performance management. It is found through further study that the improvement of the application level of management accounting can significantly enhance the corporate value creation ability. The impact of the application level of management accounting on value creation mainly comes from the three dimensions: the strategic management, the performance management and the budget management.