Contemporary Finance & Economics

An Analysis of Financial and Business Cycle Fluctuation and Coordinated Regulation of Fiscal and Monetary Policy in China

DENG Chuang, WANG Yi-sen

2022, 0(11): 3-15.

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Realizing the dual stability and coordinated development of economy and finance is an important task of macro policy control in the new era. By employing the factor expansion vector autoregressive model with time-varying parameters and the dynamic spillover index method, this paper conducts an analysis of the volatility characteristics of China’s financial cycle and its correlation with the economic cycle. The findings show that there is a complex interactive relationship between the financial cycle and the business cycle in China. On the whole, the spillover effect of financial volatility on economic volatility is relatively stronger, while the directional effect of economic volatility on financial volatility is relatively weaker. Furthermore, the counter-factual simulation analysis based on the time-varying parameter vector autoregressive model with potential threshold shows that the coordinated use of fiscal policy and monetary policy is helpful to realize the dual control goal of economic and financial stability. It is necessary to establish and improve the coordination mechanism between short-term efficacy of fiscal policy and long-term efficacy of monetary policy to suppress economic and financial fluctuations, and further strengthen the anticipatory adjustment and fine-tuning mechanism of the price-based monetary policy, so as to better deal with the internal and external financial shocks and achieve the coordinated and stable development of economy and finance.

Does the Construction of Low-Carbon Cities Enhance the National Health Quality?

LIU Wei-ming, YU Huang, JIA Li-jiang, SHAN Shun

2022, 0(11): 16-26.

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In recent years, a series of environmental policies, including the construction of low-carbon cities, are being gradually implemented, and the role of environmental policies in improving national health quality is increasingly and widely discussed. This paper conducts an empirical study with the data of cities above the prefecture level in China from 2006 to 2016. The findings show that the construction of low-carbon cities has significantly reduced the mortality of urban residents, the death rate of residents in pilot cities can be reduced by about five-ten thousandths on average, in which the improvement of air quality plays a very important role. The findings also show that the pilot policy of low-carbon cities is more effective in megacities, mainly because large cities have more effective innovation abilities and scale economies, and can quickly achieve green transformation and industrial upgrading. This shows that during the construction of low-carbon cities further attention must be paid to environmental health management and environmental health equality, and the goal of environmental quality improvement, steady economic development and national health quality improvement can be achieved through the implementation of stricter, scientific and flexible environmental policies.

Will Financial Vertical Imbalance Drive High Quality Economic Development?

ZHANG Min, MA Wan-li

2022, 0(11): 27-39.

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Deepening the reform of the fiscal system is not only an inevitable requirement for the modernization of national governance, but also an institutional guarantee for promoting high-quality economic development in China. In terms of the typical characteristics of China’s fiscal system reform, the rational control of vertical financial imbalance is a strong driving force to promote high-quality economic development. Therefore, this paper takes the vertical fiscal imbalance as the entry point, and uses the panel data of 31 provinces in China from 2004 to 2020 to empirically test the impact of vertical fiscal imbalance on high-quality economic development and its reasonable range. The findings show that fiscal decentralization in China has a significant threshold effect on high-quality economic development with the changes of the level of fiscal vertical imbalance. From the national level, the optimal fiscal vertical imbalance to promote high-quality economic development is in the range of [0, 0.8517], and there are differences in different regions. When the degree of fiscal vertical imbalance exceeds a certain threshold value, the negative effect of fiscal decentralization on high-quality economic development is significantly increased. Therefore, it is necessary to straighten out the financial relationship between governments and optimize the division of authority and expenditure responsibility, rationally control the level of financial vertical imbalance and continuously relieve the pressure on local finance, and improve the incentive and restraint mechanisms of the local governments to fully stimulate the enthusiasm for high-quality economic development.

Data Elements, Data Finance and Economic Growth

YANG Fei-hu, WANG Zhi-gao, YU Bing-wen

2022, 0(11): 40-52.

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The rapid development of the digital economy not only injects new impetus and vitality into the high-quality development of China’s economy, but also puts forward the requirements of the times for the production of high-quality data elements and the implementation of data finance in the digital economy era. By revealing the connotation characteristics, reasonable boundary and formation mechanism of data finance in the era of digital economy, this paper systematically explores the intrinsic connection between data elements, data finance and economic growth. It is found that the formation efficiency of data capital is positively proportional to the population size, consumption expenditure, etc.. There is an appropriate scale of data finance, and either too high or too low corporate tax rate is not conducive to the formation of data capital, and similar findings exist in the data licensing royalties. The higher the efficiency of data capital usage and the higher the efficiency of government spending on data capital, the higher the overall economic growth rate will be. The spatial flow and use of data capital will reduce regional economic development gaps and help achieve the goal of common prosperity. To this end, China should further improve the top-level institutional design of data finance, build a national platform for the opening, sharing and exploitation of government data, ensure the safety of government data opening and market operation, and give full play to the mechanism and effectiveness of data elements and data finance to promote the development of digital economy.

Digital Inclusive Finance and Carbon Emission Reduction: An Empirical Analysis Based on China’s County-level Data

WANG Shou-kun, FAN Wen-cheng

2022, 0(11): 53-64.

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Digital inclusive finance has played an important role at the micro-levels such as residents’ income, consumption and entrepreneurship, profoundly changing residents’ production and living patterns. The findings of this paper based on the county data in China from 2014 to 2017 show that digital inclusive finance has a significant carbon emission reduction effect. The result of the heterogeneous analysis reveals that the carbon emission reduction effect of digital financial inclusion varies in intensity with the geographical location and socioeconomic characteristics. Specifically, this effect is more pronounced in the eastern region, the regions with higher material capital, the regions with larger population size, and the regions with higher education levels. The result of the mechanism analysis shows that the digital inclusive finance can achieve the carbon emission reduction effect through three channels, i.e., the structural adjustment effect at the level of industrial development, the land leasing area reducing effect of the polluting industries at the level of local governments, and the technological innovation effect at the level of corporate development. The result of the expanded analysis shows that digital inclusive finance can alleviate the imbalance problem of carbon emissions among counties, which helps to alleviate the inter-regional resource mismatch to a certain extent. In the future, The governments should further promote the construction of digital infrastructure, boost the application of the new types of digital technologies to the development of digital inclusive finance, so as to promote the transformation of China’s economy from high-speed development to high-quality development.

The Impact of Digital Finance on Market Monopoly: Digital Dividends or the Stronger always Strong

FAN Meng, ZHANG Yun, LI Bao-wei

2022, 0(11): 65-75.

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Digital finance has a heterogeneous impact on enterprises of different sizes, which may change the market monopoly by affecting the relative market power of enterprises. In the context of the rapid development of digital finance, exploring this change in market structure is of great significance to fully understand the role of digital finance and maintain the market order. This paper conducts an empirical analysis based on the heterogeneous enterprise model with the panel data of listed companies from 2011 to 2020. The findings show that in the monopolistic competition market digital finance has weakened the pricing ability of enterprises by reducing the necessary capital barriers for heterogeneous products, thereby reducing the corporate cost plus rate and their absolute market power. This weakening effect of digital finance on the cost plus rate is heterogeneous, i.e., stronger on small-scale companies and weaker on large-scale companies, which strengthens the market power of large companies relative to small companies and promotes the formation of market monopoly. The results of further research show that digital finance has a relatively greater impact on industries with higher necessary capital barriers and the degree of market monopoly in the western region. It means that, in the process of encouraging the development of digital finance, attention should be paid to the support and protection of the disadvantaged enterprises in the key industries, so as to prevent the disorderly expansion of capital taking advantage of the digital finance.

How Can Green Innovative Enterprises Break out of the“Green Trap”: The Roles of Serendipity and Green Legitimacy

WANG Jian, HUANG Qun-hui

2022, 0(11): 76-86.

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Green innovative enterprises often fall into the“green trap”, but the existing research literatures seldom pay attention to how to break out of the“green trap”. Therefore, taking 206 manufacturing enterprises in the eastern coastal area as samples, this paper constructs a mechanism model of the impact of green innovation on enterprise performance by combining the serendipity and the green legitimacy. Then it analyzes the adjusting role of the orientation of means in it. The findings show that green innovation has no direct impact on corporate performance, but it can indirectly exert a positive effect on corporate performance by promoting serendipity. The orientation of means plays a positive moderating role between green innovation and serendipity. Under the effect of green legitimacy, green innovation can bring about the improvement of corporate performance. This research conclusion can promote the development of the serendipity theory in China, and provides important enlightenment on how companies can break out of the“green trap”.

Research on Equity Restriction Mechanism of Mixed-Ownership Reform of State-Owned Enterprises: A Double Case Analysis Based on Eastern Air Logistics and Yanchang Shell

JIANG Xu-han

2022, 0(11): 87-99.

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In present China, the reform of corporate governance structure is the key problem of the mixed-ownership reform of SOEs（state-owned enterprises）. With the reform of SOEs entering the deep water zone, how to distribute the control power and how to coordinate the relationship between state-owned capital and non-state-owned capital become the focus of the attention of SOEs and private enterprises. This paper selects the Eastern Air Logistics Co., Ltd. and Yanchang and Shell Petroleum Co., Ltd. from the typical cases of mixed-ownership reform of SOEs to conduct a double case analysis, in order to analyze and refine the governance mechanism of equity restriction in the process of mixed-ownership reform of SOEs, with a view to providing reference for future mixed-ownership reform. The findings show that integrating the concept of“clear rights and responsibilities, checking and balancing”into the equity structure and corporate governance mechanism is conducive to achieving mutual benefits and common development. It is necessary to establish the legal status and scope of power and responsibility of the Party committee in corporate governance, give full play to the function of“gatekeeping and orienteering”of the Party committee, and control the reform direction of SOEs. Furthermore, the market-oriented employment mechanism and the core employee restriction mechanism can reflect the breakthrough of mixed-ownership reform of SOEs in the“rule by man”, providing replicable and propagable experience for the comprehensive deepening reform of SOEs.

Research on the Co-Governance Mechanism of Data Utilization and Data Security

WANG Shen, XU Heng

2022, 0(11): 100-112.

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The value of data element can bring about both great value and risks to the development of digital economy. The use of data has some invisibility, and the specific behavior in the process of developing and using data is not easy to be clearly identified in the short term, which gives rise to the motivation of digital economy enterprises to abuse data in order to seek higher returns. At this time, the use of data in more large-scale will damage data security and even reduce social welfare. By building the regulatory mechanism of regulators on the scope and scale of data used by digital economy enterprises in the data environment with incomplete information, this paper tries to find the balance point and corresponding equilibrium conditions of data value and data security. The incentive compatibility mechanism of regulators in the asymmetric information environment can stimulate the proper use of data and achieve data security by adjusting the weakening scale of data used by digital economy enterprises and eliminating the moral hazard motivation of the latter to abuse data. However, the implementation of the mechanism to prevent data abuse will reduce the scale of data used by enterprises at the same time, which is not conducive to the value spillover of data elements. Therefore, in order to coordinate the coexistence of data security and data value, and promote the effective operation of the co- governance mechanism of data use and data security, regulators should improve the information structure by adjusting the identification of abuse, and achieve the regulatory preposition by adjusting the punishment of abuse, so as to help data governance out of the dilemma of “once you manage, you will die; once you let go, you will be in disorder”.

Digitalization, Institutional Environment and High-Quality Development of Manufacturing Industry

SHI Yan-xin, XIONG Tian-ren

2022, 0(11): 113-124.

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The high-quality development of manufacturing industry is crucial to promoting China’s transformation from a large manufacturing country to a manufacturing power. And the construction of digital facilities and the application of technology are the important engine to drive the transformation of the traditional manufacturing industry to the modern advanced manufacturing industry. With the in-depth carrying out of the “Digital China” strategy, the impact mechanism of digital level and institutional environment on the high-quality development of the manufacturing industry needs to be further clarified. Based on the panel data of 31 provinces in China from 2012 to 2019, this paper establishes a nonlinear regression model of digitalization level, institutional environment and high-quality development of manufacturing industry, so as to conduct an empirical study on the relationship between the three. The results show that the digitalization level has a significant positive effect on the high-quality development of manufacturing industry, that the institutional environment has a U-shaped moderating effect on the relationship between the digitalization level and the high-quality development of manufacturing industry, and that there are regional differences in the contribution of digitalization level to the high-quality development of manufacturing industry. Therefore, it is recommended to continuously improve the level of digitalization according to regional characteristics, and at the same time, to firmly and gradually optimize the institutional environment, which in turn will effectively contribute to the high-quality development of the manufacturing sector.

Can Carbon Emissions Trading Policy Promote the Level of Corporate Cash Holdings?

ZHANG Rao, YANG Xiao-wei

2022, 0(11): 125-136.

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Financial resources are an important guarantee for enterprises to implement macro-control policy goals and conduct business operations. Thus it is of great significance to explore whether the carbon emissions trading policy will affect the financial resources of enterprises. This paper constructs a PSM-DID model based on China’s A-share listed companies from 2009 to 2017 to study this issue. The results show that the implementation of the carbon emissions trading policy has significantly improved the cash holding level of the pilot enterprises. The result of the test of the impact mechanism shows that the carbon emissions trading policy affects the cash holding level of pilot enterprises through two paths, i.e., the precautionary motivation and the transactional motivation. Further test reveals that the improving effect of carbon emissions trading policy on cash holding level of pilot enterprises is more significant in the enterprises with investment preference, the enterprises in the industries with higher degree of product market competition, or the pilot enterprises with weak market power. Therefore, the government should continue to promote the carbon emissions trading policy and improve the carbon emissions trading markets, and provide green resource support to relevant enterprises. Enterprises should increase their sensitivity to the dual-carbon policy, improve the level of cash holdings and fund utilization efficiency, so as to achieve low-carbon and benign development.

The Impact of Enterprises Digital Transformation on the Tunneling Behavior of Controlling Shareholders

YAO You-fu

2022, 0(11): 137-148.

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Digital transformation gives enterprises new development momentum and digital supervision opportunities. Then, is digital transformation conducive to the suppression of controlling shareholders’ tunneling behavior? Taking China’s A-share listed companies in Shanghai and Shenzhen stock exchanges from 2011 to 2020 as samples, this paper investigates the impact of enterprises digital transformation on controlling shareholders’ tunneling behavior. The findings show that enterprises digital transformation can significantly inhibit the tunneling behavior of controlling shareholders. The mechanism test shows that this inhibiting effect of digital transformation on controlling shareholders’ tunneling behavior is achieved mainly by strengthening the effectiveness of corporate internal control and improving the market information environment. Further tests reveal that the inhibiting effect of digital transformation on controlling shareholders’ tunneling behavior is more significant in the enterprises with weak equity balance, the high-tech enterprises and the enterprises located in the regions with poor legal supervision. Therefore, it is necessary to effectively promote the corporate digital transformation, so as to prevent the controlling shareholders from encroaching the interests of the medium and small shareholders.

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