Abstract:Aiming at the complexity of the service industries, this paper analyzes two types of factors and their influences, respectively “true” and “nominal”. At last, this paper forecasts the trend of services and emphasizes the importance of opening-up and reform in service industry.
Key Words:Service Industry; Growth; Reform and Opening-up

Abstract:In Marxian theory of surplus value, there could only exist zero-sum relations between capital and labor in the creation of value. This essay attempts to explain the possible plus-sum relations between capital and labor, without violating Marxian labor theory of value. For this purpose, two types of theories are introduced. The first is the theory of tacit knowledge and its application in the Marxist debate on capitalist labor process. The second is the Proportional Theory of Value Creation, which argues that labor productivity changes in proportion to the value product created in given length of time. The main body of this essay, investigates the value-creating process based upon technical change and the increase in the complexity of labor, and explains under what economic conditions the shop-floor workers’ claim to surplus would be warranted. The existence of such plus-sum relations of capital and labor can be considered as counteracting factor of the law of relative surplus value.
Key Words:Tacit Knowledge; Surplus Value; Plus-sum Relations;  Law of Proportional Relations

Abstract:Based on the extension and intension of quality of economic growth, this paper builds the index of quality of economic growth, which constitutes 28 basic indicators. Principal Component Analysis is used here to determine the weight of the target, Additionally, mean value treatment is also used to eliminate the index dimension and covariance matrix of basic indices acts as input variables, as a result, we can avoid the deviation caused by standardized methods and the correlation coefficient matrix. Measuring results from our study show that the quality of China’s economic growth has been improved to a certain extent in overall level and regional level from 1978 to 2007, but it is very different among the provinces and municipalities.
Key Words:Quality of Economic Growth; Quality of Economic Growth Index; Principal Components Analysis

Abstract:China’s decentralization with political centralization and economic decentralization promotes the China’s economy to grow rapidly and sustainedly, but brings in environment deterioration and frequent safety accidents etc. To alleviate these problems, the central government establishes the vertical management institution. We set up a model of contract theory to compare the vertical management institution and the jurisdictional management institution. We find that, the vertical management institution is superior in achieving vetoing the bad projects by regulatory authorities to the jurisdictional management institution and the vertical management institution can indeed mitigate the interference of local governments; but when the regulatory task is difficult to measure, the vertical management institution not only cannot change the situation of passing the bad projects by regulatory authorities in the jurisdictional management institution, but also weakens the incentives of local governments to promote economic growth, which is worse for the central government. We describe the conditions of establishing the vertical management institutions and give some implication for further development of administrative management system.
Key Words:Vertical Management, Jurisdictional Management, Local Governments, Accountability

Abstract:This paper investigates how financial constraints influence the export behavior of firms. Concretely, this paper uses account receivable as a proxy of financial constraints, and finds that Chinese firms generally face financial constraints when they export. Firms with less account receivable proportion are more likely to export. Future exporters have less account receivable proportion than other nonexporters before they start to export. This paper argues that less account receivable proportion lead to export, and not the reverse. Promoting firms’ export behavior by releasing their financial constraints has the advantage over export tariff rebates on both welfare effect and policy cost.
Key Words:Export FixedCost; Financial Constraints; Export Behavior

Abstract:This paper discusses the potential biases in inequality estimation in China, such as the income definition, reweighting, sampling bias, and regional differences in purchasing power parity. We try to eliminate such biases and re\|estimate the inequality measure, Gini coefficients for urban and national. We correct the sampling bias by estimating the up\|tail shape of income distribution by use of Pareto distribution and income information for the riches from Forbs list, Hurun list and compensation for CEO. The findings in the paper indicate China is more unequal if the sampling bias were eliminated. Resulting from the sampling bias in up\|tail of income distribution, inequality measures within urban, between urban and rural, and national wide are seriously underestimated.
Key Words:Inequality; Sampling Bias; Pareto Distribution

Abstract：The development trend of Chinas population aging brings great pressure on social security, health care and social welfare. Using Chinese Longitudinal Healthy Longevity Survey (2002—2005) data, this paper (1) defines elder\|care patterns in China from two aspects: living arrangements and means of financial support, and (2) examines how different elder\|care patterns affect health and subjective well\|being of Chinese elderly, and (3) investigates gender difference, urban\|rural difference and cohort difference in the association of elder\|care patterns and outcomes. It is found that married couples living alone with financial independence are the most advantaged group in terms of health and life quality. The evidence also suggests that the elderly may benefit from the development of institutionalized care.
Key Words： Elder Care; Health; Subjective Well\|being; Empirical Analysis

Abstract：This paper builds up a model for measuring the information asymmetric in the medical service market of China, and analyses the effects on attaining the medical service price caused by the asymmetric information between doctors and patients, based on the data in the CHNS database. The result shows that: (1) the degree of asymmetric information does have an important effect on forming the ultimate service price, and doctors possess more information and stronger bargaining ability; (2) in the medical service market, almost all patients have to receive a service price which is 26-61% higher than the standard one on average; (3) estimating the effect between years shows the final market price is about 26% higher than the standard one every year during 1989 to 2006, that means the reform of medical service in China is not helpful to solve the problem of “difficult and expensive medical treatment”; (4)the divergence is depended on various causes: living position; medical insurance possession; job; age and education. Our suggestions are as follows: it is necessary to reflect whether the ideas of current medical service reform fit for China since the reform and opening up. The government is required to take more part in price\|making process and plays an important role in price setting and market monitoring, so as to solve the hypocritical expensive service price and realize the public welfare.
Key Words： Medical Service Price；Information Asymmetric；Two\|tier Stochastic Model；Standard Price

Abstract：This article studies the reason of enlargement of compensation gap between management and ordinary employees. We find that there is severe geometrid effect in the compensation system in Chinas public companies. When the performance of company increases management share more pay increase than ordinary employees, but the pay increase of management not less than ordinary employees when the performance of company decreases. And when the performance of company increases, the sensitivity of pay to performance of management is larger than ordinary employees, but the pay of management is sticky and the pay of ordinary employees is not when the performance of company decreases.
Key Words：Compensation; Performance Based Compensation; Managerial Power；Geometrid Effect

Abstract：Using the distance from the firm to the earthquake epicenter as a measurement of the negative investor sentiment caused by the Wenchuan earthquake, this paper explores the Wenchuan earthquake as a unique natural experiment to study the effect on Chinas stock market. Consistent with the literature that investor sentiment can affect stock returns, this paper finds that firms located closer to the epicenter have lower stock returns in the 12 months following the earthquake (20086—20095). In particular, stocks within 500 KM radius of the epicenter have significantly negative abnormal returns, average -3% per month. In contrast, stocks outside of the 500KM radius of the epicenter have insignificant abnormal returns. In addition, for every 1000 KM increase in distance from the firm to the epicenter, stock returns increase 3% annually. Further analyses indicate that this anomaly did not exist before the earthquake, and cannot be explained by a systematic risk change or the actual economic loss caused by the earthquake. Overall, this paper provides evidence that the negative investor sentiment caused by the Wenchuan earthquake can affect Chinas stock returns.
Key Words：Stock Returns; Earthquake; Capital Markets; Psychological; Distance

Abstract：Stock price synchronicity is not only a common phenomenon around the world, but also a hot issue in finance. Based on the data from 1994 to 2004 in China, this paper investigates the relationship between stock price synchronicity and price momentum and reversals. Our results show that: firstly, there is a pronounced price reversal, but price momentum does not exist in China. Secondly, there exists a negative relationship between R2 and price reversals. Thirdly, stocks with higher R2 exhibit more pronounced reversals in the bull market, however, stocks with lower R2 exhibit more pronounced momentum effect in the bear market. This suggests that the R2 measure has different meanings in different market states. Thus, the two traditional interpretations can not fully explain our findings. We contribute to the literature by suggesting a new interpretation based on the interaction of information and psychology.
Key Words：Stock Price Synchronicity; Information Flow Model; Psychological Bias; Market State

Abstract:Since the 1980s, research about the network industry has always been on the neo\|classical economics of rational economic man assumptions. The general method is game theory. There are two direction of the research in accordance with the characteristics of the respective products, the direct and indirect network effects. The classical models found that the network externalities indeed affect consumers’ decision of joining which network, the firms’ decision of compatibility and the social welfare. In the last decade, the two-sided markets got a lot of attention. This paper sorts out the traditional network theory of industrial organization and recent progress, not only on the content of the study summarized, but also the idea of expanding the model with a summary way.
Key Words:Theory of Network Industrial Organization; Network Externalities; Two-sided Market