CONTENTS
Supply Management and Current
Disequilibrium in Chinese Economy
---------------------------------------------------------------Liu Wei and Su Jian (4)
China's
Macroeconomy in the Great Depression
------------------------------------------------------------------Guan Hanhui (16)
Structure of Financing, Nonperforming Loans and M2/GDP
------------------------------------------------------Xie Ping and Zhang Huaiqing (27)
Economic Growth and China's Emerging as a Main Source Country of FDI
-------------------------------------------------------------------------Li Hui
(38)
China's Longrun Coal Demand: Impacts and Policy Choice
----------------------------------------------Lin Boqiang, Wei Weixian and Li Pidong (48)
Learning, Innovation and Core Competence:
Mechanism and Path
--------------------------------Xie Hongming, Luo Huiling, Wang Cheng and Li Xinchun (59)
Trade Remedy Effects of Antidumping Measures: Empirical
Analysis Based on China Data
------------------------------------------------------------------Bao Xiaohua (71)
The Paradox of Private Benefits of Control
and Excessive Benefits of Control: A New Theoretical
Explanation of Large
Shareholders' Expropriation of Small Ones
---------------------------------------------------------------------Liu Shaobo (85)
Liquidity, Life Cycle and Portfolio Choice
Heterogeneity
------------------------------------------------------Wu Weixing and Qi Tianxiang (97)
Control Allocation in Firm Financings and
Entrepreneur's Incentive
-----------------------------------------------------Yan Zhixiong and Fei Fangyu (111)
Reputation Effect of Investment Banks:
Research from Aspects of Market Share and
Service Quality
---------------------------------------------------------Xu Haoping and Luo Wei (124)
Urbanization and Cultivated Land Changes in
China
--------------------------------------------------------Zhu Lifen and Huang Jikun (137)
Econometric Analysis of Credit Constraints
of Rural Households and Welfare Loss
---------------------------------------------------------------Li Rui and Zhu Xi (146)
Book ReviewShen Liren-------------------------------------------------------- (156)
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Supply Management
and Current Disequilibrium in Chinese Economy
Liu Wei and Su
Jian
(School of Economics, Peking University)
Abstract:
Aiming
at the current features of the disequilibrium in Chinese economy, this paper
analyzes the limits and shortcomings of demand management policies, and, based
on the characteristics of supplyside policies, suggests the necessity of supply management in
adjusting both the longrun and shortrun macroeconomic fluctuations. We also investigates the basic
principles for combining demandside and supplyside policies in the management of China's macroeconomy.
Key Words:Disequilibrium
in Economy; Current Policies in Controlling Economic Fluctuations; Supplyside Policies; Demandside Policies
JEL Classification: E200,P240
China's Macroeconomy in the Great Depression
Guan Hanhui
(School of Economics and Management,
Tsinghua University；Center for China in the World Economy, Tsinghua University)
Abstract:
This paper looks back China's economy in the depression, analyzes sing economics theory and compares it with the
countries in Golden Standard, trying hard to account for historical reality.
The findings of this paper as follows: two factors played important role in China's economy of depression, one is Silver Standard, and the other is competitive bank
system. Silver Standard caused China's economy being different from those Gold
Standard countries. Unlike Western countries lived through the Great Depression
by adopting active finance policy, China's moneysupply had not decreased in
depression owing to competitive bank system, so bank crises did not swept
China,which was an important reason why Chinese economysuffered little in Great
Depression.
Key Words:Great
Depression; Macroeconomy; Silver Standard; Bank
System
JEL Classification:F129，F119，F015
Structure of Financing, Nonperforming Loans and M2/GDP
Xie Ping
and Zhang Huaiqing
(Graduate of school of PBC and The Research Department of PBC)
Abstract:
The
paper shows that the explanations to the high ratio of M2to GDP in China at
least make two questions clear.One is that the ratio of M0 to GDP has kept rising from 1980 to
1993,and kept being stable afterwards, but the ratio of M2 to GDP has kept rising ever since
1985. Few attentions have beo this phenomenon in the literature. Another is the
reason why the ratio of M2to GDP in China has been larger than that of other countries. We
argued that the large ratio of M2to GDP is the result of the financial system
of banking dominating and large amounts of nonperforming loans in the balance sheet of financial
intermediaries in China.
Key Words:Structure
of Financing； Nonperforming Loans; M2/GDP
JEL Classification:E410，E510，O160
Economic Growth and China's Emerging as a Main Source
Country of FDI
Li Hui
(Graduate School, Chinese Academy of Social Science)
Abstract:
After reviewing related theories and
literatures on China's outward investment, this paper discussed the position of
China in the IDP developing phase, got the conclusion that China has been at
the position between phase Ⅱ and phase Ⅲ, and expanded the IDP model through adding more related variables.
Withpanel data, this paper estimated model using PCSE method, and made a
forecast on the scale of outward investment in the near 5 years.
Key Words:Economic
Growth; Outward Investment; IDP Theory
JEL Classification:O490，F210
China's Longrun
Coal Demand: Impacts and Policy Choice
Lin Boqiang1, Wei Weixian2 and Li Pidong2
(1.Department of Finance, Economics College; 2.China Center for Energy Economics Research, Xiamen University)
Abstract:
This paper investigates the long run
equilibrium relationship in China's coal demand using cointegrating technique.
The paper also estimates the long run income elasticity, price elasticity,
economic structure elasticity and transportation cost elasticity of coal
demand; forecasts the long run coal demand and analyses its impacts and carries
out policy simulations on the coal demand under different growth rates for
various variables and offers policy suggestions. China's high economic growth
rate is the main factor of rapid increase in coal demand. The Granger causality
test indicates that GDP is the causation of coal demand. The policy implication
from the simulation shows that a small adjustment of industrial structure would
greatly impact coal demand and coal demand is very sensitive to transportation
cost.
Key Words:China's Coal Demand; Cointegrating; Policy
Simulation; Policy Choice
JEL Classification:C530，D430，D480
Learning, Innovation and Core Competence: Mechanism
and Path
Xie
Hongming Luo Huiling Wang Cheng
(School of Business Administration, South China University of Technology National Innovative Research Base of Philosophy and
Social Science on “New Industrial Development”)Li Xinchun
(School of Management, Sun YatSen University)
Abstract:
We examine the relationships among learning
orientation, organizational innovation, core competence and organizational
performance in this paper. The sample of this study covers 202 companies in
south China. We proved that learning orientation has positive indirect impact
on core competence by organizational innovation while the direct effect of
learning orientation on core competence is not statistically significant.
Moreover, a process of developing core competence is required in the chain of
organizational innovationorganizational performance,while organizational innovation has
positive indirect impact on organizational performance. And the model we proved
applies to hightech
industries while not to nonhightech
industries.
Key Words:Learning
Orientation; Technology Innovation; Management Innovation; Core Competence;
Organizational Performance
JEL Classification:M130,O310,O320
Trade Remedy Effects of Antidumping Measures:Empirical
Analysis Based on China Data
Bao Xiaohua
(International Business School, Shanghai University of Finance and Economy)
Abstract:
Using
a data set based on 8 digital tariff codes identified in China antidumping cases from 1997 to 2004, the paper examines the trade patterns of both countries
named in the petition and those countries not subject to the investigation, and
presents evidences on the trade remedy effect of AD actions. Empirical test
shows that AD measures in China have significant trade destruction effects on
the named countriesboth in import volume and import value terms. Not o
nly final affirmative decisions have such
an impact, the initiation of an antidumping investigation also does, which is
called a harassment effect. However there is substantial trade diversion from
named to nonnamed
countries, which offsetsome of the protective effects of AD actions. In
general, AD measures still effectively protect import competing domestic
industries, because it induces substantial import price increases both by named
and nonnamed countries.
Key Words:Antidumping; Trade Remedy; Trade
Diversion Effects; Harassment Effects; Trade Destruction Effect
JEL Classification:F130,L600
The Paradox of
Private Benefits of Control and Excessive Benefits of Control：
A New
Theoretical Explanation of Large Shareholders Expropriation of Small Ones
Liu Shaobo
(Institute of Finance, Jinan University)
Abstract：
The concept of private benefits of control
in present literature is defined as the expropriation of the small shareholders
by the large shareholders. This inappropriate definition distorts the nature of
the large shareholders expropriation and leaves us several unsolvable theoretical and
practical problems. This paper first of all makes amendments to the theory of
private benefits of control and large shareholders expropriation, points out and
proves that the private benefits of control actually are the compensation for
the cost of control, and are the risk premium of control. The benefits are
realized as the value increments by controlling the company and influencing the
corporate governance of thecompany and finally improving the performance of the
whole company. This has nothing to do with large shareholders expropriation. And the paper
further puts forward a new concept, i.e. excessive benefits of control, defines
its connotation and extension, analyzes the interest structure of large
shareholders. The paper points out the essence of large shareholders expropriation is to snatch the
excessive benefits of control. The paper also compares the concepts of private
benefits of control and the excessive benefits of control and analyzes the
differences between the two. Based on these the paper sets up a new analytical
framework and puts forward a new theoretical explanation to large shareholders expropriation of small
shareholders.
Key Words： Private Benefits of
Control; Excessive Benefits of Control; Expropriation of Large Shareholders;
Corporate Governance
JEL Classification：G300,G320，G340
Liquidity,Life Cycle and Portfolio Choice
Heterogeneity
Wu Weixing and Qi
Tianxiang
(School of Banking and Finance, University of International Business and Economics)
Abstract：
What does the households portfolio composition in
China look like and
what kinds of factor affect their portfolio
choice? The paper summarized and analyzed the systematic differences in market
participation and portfolio composition across individuals with varying
characters in China using Probit and Tobit models. Firstly, we found that the
investment in illiquidity assets, especially real estate assets had significant
effects on the stock market participation and portfolio composition, where the
substitution effect dominates. Secondly, the Ch
inese households seldom hedge the risk of
their future cash flow by taking part in the stock market, that is, the lifecycle effect is trivial.
Thirdly, an increase in the wealth would increase the probability of households stock market participation and
the proportion of their wealth invested in risky assets.These results provide a
new policy perspective for the development of capital market andproperty
market, and give a clue on how to reduce the loss of households welfare due to the inefficient
portfolio.
Key Words： Portfolio Choice
Heterogeneity; Liquidity; Life Cycl
e; Substitution Effect
JEL Classification：G110, D910, D140
Control Allocation in Firm Financings and Entrepreneurs Incentive
Yan Zhixiong
and Fei Fangyu
(College of Economics, Shanghai Jiaotong University)
Abstract：
In firm financings,
entrepreneur cares about both pecuniary and nonpecuniary returns from the project while investor
is only concerned about monetary returns. Consider the constraint that the
bilateral financial contract is incomplete and entrepreneur is wealthconstrained, an initial
incentive contract in general doesnt solve their potential interest conflicting. As a result, the allocation
of control-who gets to make the critical decisions-is an important dimension of
the financial contract. AghionBolton(1992) concentrate on ex post eff
iciency, they show, contingent control is
an equilibrium control allocation in some circumstances. However, Hart(2001)
gives a good question: their model ignoresan important variable: effort.
Through introducing entrepreneurs ex ant effort, this paper explains why control shifts to investor
in bad state rather than good state. Furthermore, we find out that the extent
of financial constraint determines equilibrium control allocation of project.
Key Words： Firm Financing; Control
Allocation; Incomplete Contract; WealthConstraint
JEL Classification： G300, G390, M130
Reputation Effect of Investment Banks：
Research from Aspects of Market Share and Service
Quality
Xu Haoping(Fudan University) Luo Wei(Peking University)
Abstract:
This paper studies the reputation effect of
Chinese investment banks on ex-post IPO discount, growth of market share and
change in quality of issuing firms. While many previous studies used only
market share to measure reputation of investment banks, we use the ratio of
underwritten firms with the sharp decline in net income after IPO as a proxy of
service quality. The empirical results show thatthe two measurements work
interactively and effectively. The investment banks with large market share and
high service quality will not only decrease price discount in IPO but also get
more and better clients in the near future.
Key Words:Reputation;
Market Share; Service Quality; IPO Discount
JEL Classification:G240
Urbanization and Cultivated Land Changes in China
Zhu Lifen
(Research Center of the Economy of the
Upper Reaches of the Yangtze River,Chongqing Technology and Business University)Huang Jikun
(Center for Chinese Agricultural Policy, Chinese Academy of Sciences (CAS); And Institute of Geographical Sciences and Natural
Resources Research, CAS)
Abstract:
There has growing debate on the impacts of
urbanization on cultivated land in China. The overall goal of this study is to
provide empiricalbased
evidence on the determinants of cultivated land changes and the impacts of
urbanization on cultivated land based on landuse remote sensing data from 14 provinces of
eastern China provided by Chinese Academy of Sciences and a unique set of socioeconomic data collected by the
author. The result of this study shows that economic growth is major
determinant of cultivated land changes, the impacts of urbanization on
cultivated land depend on the modes of urbanization, after controlling the
effects of other factors, township and city expansions use much less cultivated
land than rural village development, which imply that urbanization may even slowdown
the declining trend of cultivated land in China.
Key Words:Urbanization； Rural Residence； Cultivated Land
JEL Classification:O150, R110, R140
Econometric Analysis of Credit Constraintsof Rural
Households
and Welfare Loss
Li Rui and Zhu Xi(School of Economics &
Management, BUAA; Antai College of Management,
SJTU)
Abstract：
Using recent survey data of Chinese rural
households, we have attempted to estimate the extent of credit constraints of
rural household as well as itswelfare loss. Results reveal that 70.92% of rural
households are rationed out of credit markets; that the credit constraints have
statistically significant impact on the welfare loss of rural households; that
the expenditure of education a
nd feeforservice,
the land scale and the balance of financial capital have statistically
significant impact on money demand, and that the education, land scale,
“relation”, geographic place have statistically significant impact on the
supply of money.
Key Words： Rural Household; Credit
Constraint; Welfare Loss; Econometric Analysis
JEL Classification：R200，Q140，D610
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