Contemporary Finance & Economics

China’s Macroeconomic Tail Risks Evaluation and Interest Rate Rule Optimization

DENG Chuang, WU Jian

2024, 0(3): 3-16.

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Extreme event shocks often breed macroeconomic tail risks; in order to better integrate development and security, it is of great significance toclarify whether and how tail risk indicators can help to improve the macroeconomic management paradigm in the context of the world’s great changes. This paper assesses China’s macroeconomic tail risks based on the expected probability of downside economic growth and checks the researches on the applicability and superiority of an interest rate rule that takes tail risks into account. The results show that, firstly, China’s macroeconomic tail risks were in a low and stable fluctuation before the financial crisis, which increased during the financial crisis and tended to decline in the post epidemic era; secondly, the deterioration of the economic and financial situations has a significantly larger amplifying effect on tail risks than the mitigating effect of the improvement, and the accelerated divergence of the economic cycle and the the financial cycle has a more pronounced driving effect on the tail risks in the medium to long run under the intertemporal substitution effect, while the tail risks can be used as a monetary policy indicator to help judge the future economic and financial situation; thirdly, the effect of interest rate policy targeting only output and inflation may deviate from the expectation, and the framework of interest rate rules that focuses on the targeting of tail risks is conducive to the better realization of the policy objectives of stabilizing growth, preventing risks, and safeguarding the dual stability of economy and finance.

Consumption Upgrading Breeds Human Capital Dividend

WAN Jian-xiang, WANG Shan-shan, NIE Chang-teng

2024, 0(3): 17-29.

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Based on China’s urban level data from 2013 to 2020, this paper conducts an empirical research to explore whether consumption upgrading can affect economic developmentand how. The findings show that firstly, consumption upgrading has a significant and direct promoting effect on economic development, and based on the accumulation of consumption, it can breed human capital dividends for economic development from both the quality and structure of human capital; secondly, in terms of heterogeneity, the human capital dividend nurtured by consumption upgrading is relatively larger in the areas of population inflow and smaller in the areas of population outflow; thirdly, the threshold regression results show that, taking the education level of the labor force as the threshold variable, the threshold years for population inflow and outflow are different, with 12.31 years (vocational high school) and 8.67 years (junior high school), respectively. When the education years are greater than the threshold year, consumption upgradingis more able to promote economic development. Therefore, it is necessary to comply with the trend of consumption upgrading, cultivate growth points for medium to high-end consumption, leverage the accumulation of consumption to achieve human capital accumulation, strengthen talent cultivation, reasonably guide population mobility, and drive economic development.

Tax Sharing, Fiscal Incentives and Nonlocal Investment of Enterprises: A Quasi-Natural Experiment Based on 50/50 VAT Sharing

LI Hong-xia, ZHANG Ya-jing, MA Yan

2024, 0(3): 30-42.

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Fiscal incentives, as an important means of regulating the distribution of finance among governments, have a profound impact on the decision-making behavior of local governments. The tax sharing reform presents different fiscal incentive effects, triggers local tax competition that transmits to enterprises, and has a crucial impact on the coordinated development of regional economy. Taking the 2016 VAT 50/50 sharing reform as an exogenous shock variable of fiscal incentives, this paper empirically test how the incentive effect brought by the tax sharing reform affect the nonlocal investment of the enterprises by constructing an intensity difference model. It is found that an increase in the VAT sharing ratio will incentivize local governments to actively support local firms in retaining tax sources and discourage firms from investing in other places. Further research shows that the changes in VAT sharing ratio exhibit strong inhibiting effects across regions with higher fiscal self-sufficiency rates or lower fiscal self-sufficiency rates, which is greater in the lower groups. Local governments are more inclined to control the local state-owned enterprises with direct control and the enterprises with a higher proportion of investment in other regions. The incentive changes brought about by the reform will promote the acquisition of corporate credit and the increase of government subsidies. Thus, it is recommended that the centralized concentration of the mobile tax base be increased to weaken the local governments’ incentive to intervene in enterprises’ nonlocal investments, that an“empowerment-control”fiscal incentive mechanism be established to curb excessive inter-regional tax competition and market segmentation, and that the transformation of the local government from a“management-type”to a“service-type”government be promoted to reduce the intervention in, and control of, enterprises’nonlocal investments.

Government Procurement, Digital Economy Development and Industrial Structure Upgrading

ZHANG Xin-yan, XIE Lu-hua, XIAO Jian-hua

2024, 0(3): 43-55.

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Developing the digital economy is an important strategic choice to achieve a new development pattern. Government procurement policies can work together from both supply and demand sides to provide strong support for the development of the digital economy, thereby achieving industrial structure upgrading. This paper makes use of the data of government procurement constructed with the micro governmentalprocurement order information to analyze the mechanism and specific effects of government procurement supporting industrial structure upgrading. The findings show that government procurement demand can directly affect digitalized governance, driving digital industrialization and industrial digitization, and thus have a positive guiding effect on industrial structure upgrading, especially on the rationalization of industrial structure. Further research has found that the higher the degree of focus on the urban governancelevel, the urban service level, the urban basic researches, and the scientific and technological talents, the more significant the promoting effect of government procurement demand on industrial structure upgrading. The stronger the entrepreneurs’ innovativespirit, the entrepreneurial spirit, and the innovative vitality of enterprises, the more obvious the driving effect of government procurement demand on industrial structure upgrading. Therefore, it is necessary to collaborate government procurement policies with digital industry development strategies to effectively leverage the “targeted” role of government procurement policies,improve urban service level and governance level to effectively leverage the role of government procurement as a “booster” for industrial structure upgrading, and increase the support of government procurement for the basic researches to effectively leverage the “fusion” role of basic research innovation in upgrading industrial structure.

A Study of the Macroeconomic Effect and Predictive Ability of the Term Structure of China’s National Bond Interest Rate

SUN Chen-tong, DANG Yin, MIAO Zi-qing

2024, 0(3): 56-69.

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The correlation and leading relationship between the yield curve of China’s national bonds and the macroeconomic indicators have received widespread attention from macro-control and financial markets, of which the nonlinear and time-frequency characteristics are waiting for extended researches. Based on the yield curve data of the national bonds from 2006 to 2022, this paper employs a dynamic NS model to study the fitting term structure of national bond interest rate. The findings show that the term structure of national bond interest rate presents certain cyclical fluctuation characteristics. With the extension of maturity, the yield curve shows a gradual convergence trend. The quantile vector auto regression model is utilized to study the nonlinear impact of the term structure of the national bond interest rate on the macroeconomic indicators under different economic levels, it is found that the level factor and slope factor of the national bond yield rate mainly have negative effects on output and inflation. When the macro-economy is at different levels, this negative effect has nonlinear characteristics, which is especially greater in the periods of high economic growth and high inflation. The wavelet phase spectrum method is used to explore the dynamic changes of the forecasting ability of the term structure of national bond interest rate to the macroeconomic indicators in the time-frequency dimension. It is found that the horizontal factor and the slope factor have stronger forecasting ability to output, while the forecasting ability to inflation has weakened after 2019. Therefore, in the future, the construction of the national bond market should be promoted, the monitoring of the term structure of the national bond yield rates should be strengthened, and the fiscal and monetary policies should be optimized.

Market Valuation Effect of Enterprises’ Emission Reduction Commitments: Empowerment or Negative Empowerment

CHENG Hong-wei, FENG Yi

2024, 0(3): 70-82.

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Enterprises are the main body of action to achieve the goal of carbon peak and carbon neutrality, and the emission reduction commitment provides an important reference for investors to observe the future emission reduction situation of enterprises. However, the existing studies mainly focus on the historically disclosed information, such as ESG and CSR, ignoring the impact of forward-looking information such as emission reduction commitment on enterprise evaluation. Based on this, the relationship between emission reduction commitment and stock return is investigated by taking Chinese enterprises that publicly disclosed questionnaires in CDP as samples. The results show that enterprises’ emission reduction commitments can effectively reduce the stock return required by investors, and reveal the enabling effect of emission reduction commitment on market valuation. The analysis of the mechanism and heterogeneity reveals that the emission reduction commitment can affect stock returns by providing future incremental information, alleviating information asymmetry and reducing corporate risks. And the degree of the impact varied with the intensity of regional environmental regulations, the level of corporate carbon emissions and the confidence level of such commitments. Further study reveals that the emission reduction commitments of enterprises have industrial spillover effects, which can significantly improve the level of information disclosure of the emission reduction commitment of the competitors in the same industry. The analysis of the economic consequences reveals that the emission reduction commitment can not only effectively constrain the subsequent emission reduction behavior of enterprises, but also help to expand the scale of subsequent equity financing with the reduced capital costs brought about by the emission reduction commitment. Therefore, the management should actively disclose the emission reduction commitment, so as to keep its word and keep its promise. The government departments should also standardize information disclosure standards and give full play to the valuation role of the forward-looking information in the capital markets.

Government Demand-Induced Innovation: Empirical Evidences from China’s Green Public Procurement Policy

DENG Ke-bin, LI Jia-qi

2024, 0(3): 83-96.

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The market-guided green transformation of industrial enterprises is considered a crucial approach to achieving sustainable economic development. Based on China’s green public procurement policy, this paper examines the role of government demands in guiding the green innovations of enterprises by using a multi-period double-difference approach. The result reveals that the government public procurement is the important source of demands in the environment protection products markets, and that the green procurement policy has effectively stimulated the development of green innovations in Chinese industrial enterprises. In this process, the increase in product market competition and the reduction of green R&D risks are the key mechanisms, and the demand pull effect is mainly reflected in the sample of enterprises sensitive to market competition and innovation risks. As an environmental policy focused on demand, the stronger the government’s purchasing power, the clearer the demand for green technology, and the shorter the distance to the final demand, the stronger the guiding role of the green procurement in green innovations. Further study reveals that although the effectiveness of the green procurement policies is significantly better than the similar environmental regulations, which can promote the overall green transformation of the industry, it mainly stimulates the diffusion of environmental technologies rather than breakthroughs. The above findings reveal the incentivizing role and the pathway of government green public procurement on corporate green innovations, indicating that the driving effect of government demand on market demand is an important reason why green procurement has become a powerful tool to stimulate innovations.

Analyst Attention, Employee Social Comparison, and Corporate Charitable Donations

WU Wei, GE Jian-hua

2024, 0(3): 97-110.

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The existing researches generally emphasize the role of stakeholders in promoting corporate social responsibility practices, while ignoring the potential conflicts among different stakeholders regarding corporate social responsibilities. When the external stakeholders (analysts) and the internal stakeholders (employees) of a company hold conflicting attitudes towards corporate donations, what changes do corporate charitable donations make? The empirical analysis of Chinese listed companies from 2006 to 2018 shows that although the analyst community is increasingly concerned about and anticipating the charitable performance of enterprises, when the internal employees find that their income is“treated harshly”through social comparison, they will develop a resistance attitude towards corporate donations. In this situation, enterprises will balance the internal and external interest demands to adjust donation amounts. The income gap between employees and corporate executive teams, as well as the income gap with the peers (the employees in the same industry and region), will both significantly weaken the positive impact of analyst attention on corporate donations. The above research conclusions reveal the potential conflicts in corporate social responsibility attitudes among different stakeholders and the triggering mechanisms of employee social comparison, which is beneficial for promoting the researches on corporate social responsibilities under the influence of heterogeneous stakeholder interactions.

Manufacturing Digitalization and Inter-Provincial Industrial Linkage

ZHAO Xiao-fei

2024, 0(3): 111-123.

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Under the background of anti-globalization, to promote the in-depth development of domestic production division based on the domestic market is an inevitable choice for China’s economy to overcome difficulties and achieve high-quality development. On the basis ofthe data of China multi-regional input-output table, this paper studies the inter-provincial industrial linkage from the perspective of manufacturing digitalization. The research finds that: firstly, manufacturing digitalization has significantly improved the inter-provincial industrial linkage, and a series of robustness tests have proven that this conclusion is robust and effective; secondly, manufacturing digitalization promotes inter-provincial industrial linkage mainly through the two paths of reducing the cost of inter-provincial intermediate trade and increasing the complexity of inter-provincial transfer technology; thirdly, from the perspective of intensive margin and extensive margin, manufacturing digitalization not only strengthens the intensive margin of inter-provincial industrial linkage, but also expands the extensive margin of inter-provincial industrial linkage, especially for the transregional extensive margin; from the perspective of regional strategy, manufacturing digitalization in the eastern regiondoes not have a significant industrial linkage effect on the central and western regions, but manufacturing digitalization in the central and western regions can promote their industrial linkage to the eastern region. According to the research conclusion, it is necessary to fully consider the inherent logic of industrial linkage in various regions, reasonably carry out the digital layout of the manufacturing industry, strengthen the construction of digital infrastructure in the central and western regions, and build an open, inclusive and high-quality digital system of the manufacturing industry, so as to drive the coordinated development of various industries and regionsand promote the benign operation of domestic circulation.

Opening up of Producer Services and Green Development of Manufacturing Enterprises

ZHAO Chun-ming, LIU Shan-shan, LI Zhen

2024, 0(3): 124-138.

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Promoting high-level opening up and green development is an important goal of China’s high-quality economic development. Based on the matching data of the China Industrial Enterprise Database and the Pollution Emission Database, this paper theoretically analyzes and empirically examines the relationship between the openness of the producer service industry and the green development of enterprises. The findings show that the opening up of the producer service industry will significantly reduce the pollution emission intensity of enterprisesand promote the green development of enterprises. The analysis of the influencing mechanism shows that improving the end governance capacity and management efficiency of enterprises are two important ways for the opening up of producer services to promote the green development of enterprises. The heterogeneity analysis shows that the effect of opening up the producer service industry on reducing corporate pollution emissions is more prominent in the industries with higher pollution intensity, and a stronger effect can be seen on improving the environmental performance of the enterprises with higher financing constraints and higher energy consumption. In addition, the opening up of the producer service industry has a greater impact on the emission reduction effect in areas with a higher level of co-aggregation of the manufacturing and service industries. Further research reveals that the opening up of the producer service industry is not only conducive to the dynamic replacement of the entry of low-pollution emission intensity enterprises and the exit of high-pollution emission intensity enterprises in the industry, it will also help realize green technology innovation, green product innovation, energy utilization efficiency improvement and energy input structure optimization of manufacturing enterprises. In the future, the government needs to rationally formulate and implement step-by-step opening policies for the service industry, optimize the spatial layout of regional service and manufacturing industries, guide the embedded integration of producer services industry and manufacturing industry, and empower the green production and green innovation development of the manufacturing industry.

Major Customers-Suppliers Duality and Enterprise Supply Chain Resilience

GUO Chun, LUO Jing-bo

2024, 0(3): 139-152.

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In general, the major customers and suppliers of enterprises are regarded as two independent entities, however, what impact will it have on the resilience of a company’s supply chain if a major customer also serves as a supplier? Taking China’s A-share listed firms from 2009 to 2021 as samples, this paper explores the impact and mechanism of the major customer also serving as a supplier on firms’ supply chain resilience. The findings show that the major customer also serving as a supplier can significantly reduce the supply chain resilience, and the negative media coverage will exacerbate this effect, while trade credit supply and effective internal control can mitigate this damaging effect. The mechanism analysis reveals that due to the fact that it is more convenient for enterprises to engage in related party transactions and promote their earnings management behavior, serving as a supplier by a major customer can further reduce the resilience of the enterprise’s supply chain. The analysis of economic consequences shows that due to the fact that serving as a supplier by a major customer can reduce the resilience of a company’s supply chain, serving as a supplier by a major customer can increase the company’s financial difficulties, reduce its market value, and increase the likelihood of receiving non-standard audit opinions. To this end, it is necessary to strengthen the supervision of the major customers who also serve as suppliers, so as to curb the opportunistic behaviors of the major customers who also serve as suppliers.

Information Disclosure Supervision by Industries and Analysts’ Behavior: Evidences from the Industry Information Disclosure Guidelines

ZHANG Jia-hui, ZHAO Ling

2024, 0(3): 153-164.

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The current regulatory model for information disclosure of listed companies in China has shifted to a sub industry regulatory model. So, what is the impact of the industry specific information disclosure regulatory policies on the attention of analysts? Taking the A-share non-financial listed firms from 2010 to 2020 as the samples, this paper explores the impact of industry specific information disclosure supervision policies on analyst attention. The result shows that industry specific information disclosure supervision policies can increase analyst attention. The mechanism testing reveals that the regulatory policies on industry specific information disclosure have increased the information supply for analysts and the information demand of institutional investors, thus attracting more attention from analysts. The heterogeneity analysis reveals that the positive impact of the regulatory policies on industry specific information disclosure on analyst attention is more significant in large enterprises, those enterprises with poor internal governance and higher R&D investment, and those with severe information asymmetry in the industry. Further analysis shows that the regulatory policies on industry specific information disclosure can improve the quality of earnings forecasts of analysts. Therefore, the regulatory authorities should steadily promote the implementation of the regulatory policies on information disclosure by industry and strengthen the supervision of non-financial information of listed companies; the listed companies should attach importance to the disclosure of industry operational information and transmit true information to the outside world; the investors should fully utilize the industry operational information disclosed by enterprises to improve the scientificity of their investment decisions.

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