Table of Content

18 July 2017, Volume 37 Issue 7

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HOW DOES SOCIAL CAPITAL AFFECT INCOME AND INEQUALITY——Empirical Evidence from 12 Provinces

LIU Qian1，SUN Kai-si1，HU Bi-liang2

2017, 37(7):  5-16. 

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This paper uses the 2002 CHIP data to study the effects of social capital on income inequality in urban areas. The main results show as follows: First, social capital can significantly raise income. Its marginal contribution increases with parents education, which is dependent from parents political capital. Second, using quartile regressions, Shapley value decomposition and Brown decomposition, this paper distinguishes the return deficit and capital deficit which link social capital distribution to income distribution. We find that social capital plays a less important role than education, industry and region in their contribution to the overall income inequality. Finally, this paper conducts various robustness checks and concludes that social capital is not an important factor that causes income inequality in urban areas during the time period covered by the survey.

THE ROLE OF INTERNAL CONTROL IN THE SEO: CHINESE EVIDENCE

WANG Liang-cheng1，CHEN Han-wen2

2017, 37(7):  17-30. 

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This study examines the role of internal control in Seasoned Equity Offerings (SEO) at Chinas stock markets, where government screens stock issue applicants. Owing to more severe regulation on public SEO than private SEO, most of firms chose to submit the application of private SEO, which the internal control quality is generally lower than those submitting the application of public SEO. However, high internal control quality is not helpful for public SEO applicants to obtain the approval from regulator, but for private SEO applicants. More importantly, internal control quality is contributed to the firms decision made between public and private SEO applications, that the firms with higher internal control quality is more likely to apply for public SEO. In addition, internal control quality is significantly positively correlated with postissue performance for private issuers, but not for public issuers.

HYMAN MINSKY AND THE MAINSTREAM: FILIATION AND DIVERGENCE

LI Li-li

2017, 37(7):  31-37. 

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In his academic career, from an original follower of mainstream economic paradigm, Minsky has gradually transformed into a present wellknown critic of the mainstream economics, and thus has long been marginalized by the mainstream. In 2008 this “Great Recession” has evoked the rediscovery of Minsky in mainstream community. However, since his vision, methodology and policy implications are essentially incompatible with mainstream economics, Minsky was doomed to be not really understood and learned by the mainstream and consequently is still hovering on the edge of the mainstream, even though the mainstream researches has appeared a tendency to close to Minskys insights.

INDUSTRY POLICY AND CLASSIFIED REFORM OF STATE OWNED ENTERPRISESL

IU Xiao-lu

2017, 37(7):  38-48. 

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From the perspective of industry development and natural monopoly, this paper studies the role of stateowned enterprises (SOEs) and problems of current industry policies. The analysis shows that SOEs play positive role in the implementation of industry development strategies and the regulation in natural monopoly industry. Strategies of industry development should balance administrative intervention and the market, separate government functions from enterprise management, and establish institutions that encourage innovation. In natural monopoly industries, policies should distinguish natural monopoly sector from competitive sector, and focus on limiting market power in the former one through mechanism design and price regulation.

GOVERNANCE OF PUBLIC BORROWINGS, AND INVESTMENT AND FINANCING OF LOCAL LISTED FIRMS——Initial Evidence from 247 Key Chinese Cities

SUN Gang1，ZHU Kai2

2017, 37(7):  49-63. 

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The paper utilizes 2013—2014 financial ecological environment evaluation indexes of 247 cities reported by financial institute at Chinese Academy of Social Science in year 2015 and explores the impact channels of governance of local public borrowing on corporate debt financing and investment efficiency of listed firms registered at these cities. Our results show compared to firms registered at regions with better governance of local public government borrowing, corporate leverage ratio for local SOEs measured by total debt, bank loan and longterm bank loan to total asset ratio is significantly higher than that registered at regions with poorer governance of local public government borrowing, but their capital investment efficiency is significantly lower, which means that corporate overproduction issue is obviously serious. The paper provides evidence that governance of local public government borrowing could to a certain extent contribute to the corporate debt financing and capital investment. Through government resource control and economic intervention, there bearing the risk of transferring local public “leverage” into corporate “leverage” by government offbudget borrowings. Our findings provide evidence and also specify the issue that whose “leverage” should be delevered firstly, which has important theoretical and policy implications for understanding microfoundation between governance of local public borrowing and quality economic growth.

GIFTED, SKILLED OR ASSOCIATED——Empirical Evidence on the Forecasts of Securities Analysts in China

ZHANG Zong-xin1，YAO Pei-yi2

2017, 37(7):  64-76. 

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Using earnings forecasts provided by security analysts ranging from 2001 to 2013, this paper concentrates on the phenomenon that security analysts improve their performance with experience. Empirical tests come to three main conclusions: Firstly, security analysts do significantly improve their performance with experience. Secondly, those ‘new fortune’ honored analysts perform no better than ordinary ones, namely, there is no evidence of gift difference. Thirdly, the observed performance improvement attributes to the close association between security companies and the listed firms (i.e. ‘associated’) rather than to the enhancement of ability to predict (i.e. ‘skilled’). The research not only enriches related empirical studies on the performance improvement of analysts, but also sheds light on the inner mechanism of the observation, which is of great significance to understanding the learning process of the analysts, protecting individual investors and constructing a rational security market in China.

THE MEASUREMENT AND THE INFLUENCES OF ASHARE STOCK MARKETS MISPRICING

GUAN Wei，ZHANG Xiao-long

2017, 37(7):  77-86. 

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This paper testifies the efficiency of DACCR model which is based on catering theory. We find that the DACCR model is eminently effective in Ashare stocks mispricings measurement. In order to find which variable influence Ashares mispricing level, this paper builds SVAR model to search which economic variable influence DACCR greater and which variable could explain DACCRs changes more. The model results show M2 and financing structure make greatest influence on DACCR in a long term (more than one year), which also explain the DAACR changes mostly.

THE IMPACT OF INTERNET USE ON WAGE AND WAGE DISTRIBUTION——Based on CHNS Data#br#

LI Ya-nan1，XIE Qian-yun2

2017, 37(7):  87-100. 

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Whats the impact of internet use on labor market? Using China Health and Nutrition Survey (CHNS) data from 2004 to 2011, this paper adopts ordinary least square regression and propensity score matching method to estimate the effect of internet use on wage. The results show that there is a positive wage premium to internet user, especially to people with a high school diploma. By using the FFL decomposition method, this paper also analyzes the impact of internet use on wage distribution. The results show that the expansion in internet use between 2004 and 2011 reduced the wage inequality, but widened the wage differences between middle, high wage earners and low wage earners. In addition, the results show that the decrease in the rate of internet use reduced the wage inequality, which was particularly helpful for reducing the wage gap between high wage earners and middle wage earners. Based on the previous research, this paper evaluates the effect of internet use on wage and wage distribution quantitatively. The results above enrich the existing research literature and provide useful policy suggestions for formulating information industrial policy and reducing wage inequality.

THE LONGTERM RELATIONSHIP AND INFLUENCE MECHANISM BETWEEN AGGREGATE INVESTMENT AND FUTURE RETURN RATE——An Empirical Analysis Based on Bayesian Estimation Methods

ZHANG Bin，GE Wei

2017, 37(7):  101-112. 

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This paper uses quarterly data of Chinas listed companies between 2000—2015 and utilizes Bayesian estimation methods in an attempt to study the longterm relationship between aggregate investment and future return rate. Especially, this paper explores the influence mechanism from the perspective of investor sentiment. The empirical results show: firstly, increase in aggregate investment in short term lead to a decline in future return rate. Secondly, under the situation that aggregate investment can be expected to lead to cash flow impact, investor sentiment factors can explain the negative effects between aggregate investment and future return rate.