Abstract：With the advance of modernization in the state governance，the orientation of improving the tax system has undergone a fundamental change. The basic clues of the change are “from adapting to the market economy system to matching the governance system” and “from establishing the basic framework of the tax system suitable to the socialist market economy system to establishing the modern system in line with the state governance system and governance capability”. Staring from the relationship between the modern state governance and the modern tax system，on the basis of systematically reviewing “the missing item” of the structure，functions and roles of the existing tax system，this paper evolves around two policy proposals which mean to increase the direct taxation of natural persons as the main focus to optimize the tax structure and to convert to the modern tax administration mechanism as the supporting measures，and comprehensively analyzes the whole new mind and the operating roadmap.
Key Words：Modern Tax System；Raising the Proportion of the Direct Taxes； Tax Administration Mechanism
JEL Classification：E62，H20，P35

Abstract：As a way of market allocation of resources， capital flow characterizes the degree of market progress， and is also subject to administrative barriers as well as market segmentation caused by government intervention in the background of Chinese transitional economies. This paper aims to investigate the influencing factors and mechanism of inter-regional capital flow from the perspective of tax competition. For a long time， the effect of tax competition on capital flow is a hot issue in public economics and investment theory research. Existing empirical researches mainly concentrated in areas such as capital formation and FDI. The former ignores the directionality of capital flows and the latter is confined to the homogeneity of investment forms. Inter-province M&A is a micro process of interregional(cross-border)capital flows， and is a growth path of firms based on location choices as well. Based on the unique micro perspective of inter-province M&A， this paper measures tax burdens and environment scores of 30 provinces using factor analysis， then investigates investment effect and firm growth effect of tax(environment)based on Logistic model using listed domestic companies merging unlisted companies between 2009 and 2011 as samples. It's been found that interregional tax competition affects firm's inter-province M&A behaviors significantly and then leads to inter-regional capital flows； Firms may not get tax saving benefits by merging firms which locate in a lower tax burden region， while regional environment has gradually become one of the motives for inter-province M&A. These findings are of enlightening revelations to enterprise growth region choices and can help local government correct competitive behavior.
Key Words：Tax Competition； Regional Environment； Inter-regional Capital Flow； Inter-province M&A
JEL Classification：G34， G38， H77

Abstract：BVAR uses Bayesian methods to analyse dynamic panel VAR system. The paper designs the BVAR framework of China macroeconomic system dynamic conduct mechanisms and analyses tightly combining China's macroeconomic system features， and makes the empirical studies. The results show that the BVAR can make the better analyses on China's forecasting error and impulse response error than that of VAR. BVAR overcomes VAR in China macroeconomic researches. Furthermore， The paper studies China's monetary policy dynamic mechanisms by comparing BVAR and VAR on the base of reliability researches，and finds the new conclusions.
Key Words：China Macroeconomic System； Dynamic Conduct Mechanism； BVAR； Monetary Policy
JEL Classification：E17，E31，E52

Abstract：This paper studies that dispersion of marginal revenue product of capital is increasing as the volatility of TFP is increasing， and the reason is adjustment cost. That means resource misallocation will be more serious if economic fluctuation is increasing. Therefore， reducing adjustment cost and economic fluctuation is the point of economic policy during the transitional period. We develop a dynamic investment model with adjustment cost and find that its TFP growth rate higher， the firm's investment rate will be higher， but there is an upper limit because of adjustment cost. So， their marginal revenue product of capital cannot be decreased to the average level by increasing capital scale because investment is constrained by adjustment cost. Meanwhile misallocation is caused by dispersion of marginal revenue product of capital. As expected， the empirical results imply that industries with greater TFP volatility have greater resource misallocation by Chinese firm-level database， adjustment cost which can be computed by calibration can strengthen this kind of relationship.
Key Words：Productivity Volatility； Adjustment Cost； Resource Allocation
JEL Classification：D21， D24， E22

Abstract：Based on the Annual Survey of Industrial Firms in China during 1998—2009， this paper studies on the dynamic changes of Chinese manufacturing enterprises in TFP. We first cleanup the database by constructing a panel data， processing capital and investment variables， and building input and output price indices， and then calculate TFP from the firm level in term of OP method and LP method. On the base of the calculation of TFPs， we further analyze China's economic restructuring issues from the aspect of resource allocation efficiency and explore factors affecting the efficiency of resource allocation according to ownership of the firms. We draw the following conclusions. First， on the whole， TFP of Chinese industrial firms grows relatively stable and shows a slightly declining trend. TFP growth rate of Chinese industrial firms is during 2%—5%， and average annual growth rate is about 3.83%. Second， the development of the firms is the main source of the TFP growth， while the space of further growth is shrinking， thus a new growth model relying on the improvement of resource allocation efficiency is required in order to promote the development of Chinese firms. Third， efficient of firms differs as the ownership of firms varies. Among all the firms， SOEs are the most inefficient， and efficiency of them is 43% lower than that of private firms， which shows that SOE reform is the key to improving the efficiency of resource allocation and to achieving endogenous growth.
Key Words：Manufacturing； TFP； Resource Allocation Efficiency
JEL Classification： D24， O47， F41

Abstract：We build a firm dynamic model with demand uncertainty in this paper. According to our research， if there exists higher uncertainty in demanding for the products of some promising industries， firms with higher efficiency in these industries tend to invest cautiously， and this provides opportunity for other firms with lower efficiency to survive， leading to lower market concentration and lower capacity utilization. As these industries get mature， the demand uncertainty tends to decrease and those firms with higher efficiency tend to expand. As a result， the firms with lower efficiency will exit gradually， and the market concentration and the capacity utilization will rise to an appropriate level finally. Therefore， when some promising industries are in their early development stage， it is natural for many firms to crowd in them. This is neither a market failure nor a government failure resulted from intervention by local governments. We also research the development history of the household appliances industry and the steel industry in China， and show that the most critical solution for harnessing the problem of excessive production capacity is to ensure fair competition and let the endogenous market mechanism play its role better.
Key Words：Excessive Production Capacity； Firm Dynamics； Market Structure； Industrial Policy
JEL Classification：D23， D43， E22， L23， L52

Abstract：Employing China's 281 prefectural cities' land leasing panel data from 1999 to 2011， this paper finds that land leasing is closely related to the political cycle. To be specific， on average， the land leasing areas of the preceding year of the Provincial Communist Party Congress is about 8.7% lower than other years. The land leasing areas of the year after the Congress is about 10.1% higher. Land leasing revenue also shows similar feature of political cycle. This finding is robust to various model specifications， especially controlling for the turnover of local leaders and their characteristics. We also find that secretaries and mayors tend to lease more land after they take office， but no evidence shows that they lease less land before they leave the post. The reason behind is that Provincial Communist Party Congress cycle is not exactly the same as the turnover of local leaders. The Congress is an expected political event， which will lead to different distorted reactions of stakeholders in regard to land leasing.
Key Words：Land Leasing； Political Cycle； Turnover
JEL Classification：H11， P26， Q15

Abstract：It has been demonstrated by a great deal of research that social security has profound influence on individual fertility decision and total fertility rate. However， relevant study about China is still rare due to the limitation(distortion)of one-child policy on fertility behavior. In this paper， we investigate the effect of the New Rural Cooperative Medical Scheme(NCMS)on fertility desire of China's rural residents. Based on two-period family decision model， we find that the NCMS with subsidy from government has both income effect and crowd-out effect. The former increases the fertility desire while the latter depresses it. Armed with the 2000—2009 longitudinal data from China Health and Nutrition Survey(CHNS)， we find that the crowd-out effect outweighed the income effect. That is， enrolling in the NCMS makes the fertility desire of women at child bearing age decrease by 3%—10%. Supported by both theoretical and empirical evidence， we think the establishment and popularization of health insurance can provide some opportunity for the relaxation of the one-child policy.
Key Words：Social Security； Fertility Desire； One-Child Policy； New Rural Cooperative Medical Scheme
JEL Classification：I13， I18， H40

Abstract：Domestic content protection(DCP)is one of polices that developing countries have been implementing to protect infant industry and to advance indigenous innovation. This paper empirically studies the impacts of DCP policies， on indigenous innovation in China's wind power technology industry. Employing the quantity and quality of Chinese invention patent filings as a metric for domestic innovation， and solar photovoltaic as the comparison technology， both Difference-in-Difference(DD)estimation and Difference-in-Difference-in-Difference(DDD)estimation find that DCP policies have significantly increased invention patent filings in wind power technology by Chinese， and the increase is driven by non-academic Chinese； meanwhile， DCP policies have not caused any decline in the Chinese invention patent filings' rate of being granted. Results from DD estimation show that， DCP policies have increased invention patent filings in wind power technology at the provincial level in 2005， 2006， and 2007 by 1.56， 2.70 and 8.15， respectively. Our findings provide empirical support for that China protects local products as a policy to advance indigenous innovation.
Key Words：Domestic Content Protection； Indigenous Innovation； Wind Power； Difference-in-Difference； Triple Difference
JEL Classification：O13， O31， Q48

Abstract：We study how political connection causes the change of performance of listed companies in GEM after IPO. Contrary to the insignificant impact of Issuance Examination Committee connection， we find that political connection， which is an informal but long-standing institutional arrangement， plays an important role in explaining the post-IPO performance change in GEM after controlling for industry environment and firms' operating characteristics. Further， the negative impacts of political connection can be shown：(1)Politically connected firms are more likely to engage in earnings manipulation whose unsustainability causes the post-IPO performance change；(2)Political connection inhibits firms' R&D investment and then weakens its post-IPO R&D innovation ability. We conclude that given a market with the government-oriented resources allocation， political connection is an important disincentive for firms sustainable growth ability.
Key Words：Growth Enterprise Market； Performance Change； Political Connection； Issuance Examination Committee Connection
JEL Classification：G34， G38

Abstract：Using a unique household-level dataset(including the household division contracts and genealogy)of Que family living in the Shicang village located in Zhejiang province， we investigate the effect of partible inheritance institution on fertility behavior. We find that： under the traditional partible inheritance institution， fertility level was significantly negative associated with birth order. The number of children decreased by 0.3 person for 1 unit lagged of birth order. Theory suggests that the partible inheritance institution leads to changes in property rights， and that different birth order has different fertility incentives. Ceteris paribus， lower birth order son， prone to “free rider” behavior， who could use the whole family property to raise their children， and therefore trend to have more children； higher birth order son， especially the one not yet reached the age of marriage and childrearing when partible inheritance worked， would control their fertility behaviors because of economic constrains due to the division of the whole family property. This paper not only presents new empirical evidence on whether or not existing population control in the traditional china society， but firstly provides a new mechanism from the partible inheritance perspective.
Key Words：Partible Inheritance； Birth Order； Fertility
JEL Classification：J13， N35， O18， Z13

Abstract：This paper analyzes the IOR(Interbank Offered Rate)of Shanghai qianzhuang(small native bank in Chinese history)during the period of 1912—1933. We argue that the IOR of Shanghai qianzhuang was the benchmark interest rate in Modern Shanghai's financial market. Through analysis of this IOR， we find that the stability of the Shanghai's financial markets was firstly improved after 1912， and then got much more improved and efficient after the year of 1927. This paper also finds that the average IOR in Shanghai was higher than that of Britain， but without the 29 highlevel months， IOR in Shanghai was no significant difference in the those of Britain and the U.S.， respectively. The internal reason plays a key role on the instability of the financial market， which was decreased gradually with the financial reforms and the growth of domestic financial market after 1927.
Key Words：Shanghai Qianzhuang； Interbank Offered Rate； Stability；T Test；
JEL Classification：N15，N25，E43

Abstract：The price-cost markup refers to the difference between a product's price and its cost， typically measuring market power and gains from trade. Since the increasing returns to scale and incomplete competition were incorporated into international trade theory， the policy of markup has received increasing attentions. After a review of the development of markup in international trade， this paper summarizes and discusses two main approaches to measure markup and five major factors that influences markup. Moreover， this paper dissects thoroughly the relationship between endogenous markup and gains from trade. Finally， the paper explores the insufficiency about the domestic study and the direction for future research.
Key Words：Markup； Market Power； Gains from Trade； Resource Misallocation
JEL Classification：F12