Table of Content

16 March 2018, Volume 38 Issue 3

Previous Issue    Next Issue

WEALTH INEQUALITY, SUPPLYDEMAND ELASTICITY AND HOUSING PRICES

KUANG Weida1,CHEN Jing2,GE Yuhao3

2018, 38(3):  5-15. 

Asbtract ( )   PDF (10159KB) ( )  

Related Articles | Metrics

High wealth inequality and inflated housing prices are prevailing phenomena in recent China, while the existing literature neglects the interaction of wealth inequality and supplydemand elasticity on housing price. This paper develops a housing stock adjustment model to combine supplydemand elasticity and wealth inequality. Employing the UHS databases of Chinas 33 cities in 7 provinces over 2002—2012, we find that the Gini coefficients of household income and wealth have positive impacts upon housing prices, while the supplydemand elasticity negatively and positively influences housing prices, respectively. Additionally, the interaction terms of Gini coefficients of household income and wealth with supplydemand elasticity positively and negatively affect housing prices, respectively. To prevent housing bubble, the central and local governments should not only fight for wealth inequality, but also enhance land supply and housing supply.

HOUSING PRICE FLUCTUATION, IMPLICIT GUARANTEE AND BANKING SYSTEMIC RISK

SONG Lingfeng,NIU Hongyan,LIU Zhilong

2018, 38(3):  16-26. 

Asbtract ( )   PDF (11776KB) ( )  

Related Articles | Metrics

The credit priority of banking sector to the real estate industry leads to the accumulation of bank credit in the real estate industry, thus the real estate price fluctuations have increasing impact on the financial systemic risk. Based on the twosector contingent balance sheet framework of the banking sector and the real estate sector, this paper studies the risk transmission mechanism of the real estate sector to the banking sector from the aspects of assets and liabilities, and constructs the implicit guarantee ratio of the bank to the real estate sector as an indicator which measures the intensity of risk transmission. TVPVAR model is applied to depict the dynamic evolution path of relationships between housing price fluctuation and the systemic risk of the real estate sector and banking sector from 2002 to 2016.The results show that the real estate risk in China mainly affects the intensity of risk transmission from the debt transmission path through the banks credit behavior, and the banks credit behavior is the main factor influencing the intensity of risk transmission. There are obvious structural mutations in the impact of real estate sector risk on the intensity of risk transmission, and there are nonlinear acceleration characteristics of systemic risk deterioration in the banking sector. We propose the suggestions of stabilizing house prices, broadening the financing methods for real estate, reducing the financial dependence local government on land.


DOES CULTURAL IMPORT INDUCE EXPORT——Productlevel Evidence from China#br#

LIU Xiaoguang1, YANG Lianxing2

2018, 38(3):  27-42. 

Asbtract ( )   PDF (12821KB) ( )  

Related Articles | Metrics

The socalled “import inducing export” mechanism widely exists in traditional trade of goods. Considering the fact Chinese cultural trade has been in deficit for a long time, it is worth further investigation whether this mechanism exists in culture trade. Using HS 6bit code data of Chinese cultural trade during 1996—2013 and constructing dual margin indexes of cultural trade, this paper empirically finds that import has no significantly positive effect on the dual margins of export in cultural products. While import has certain insignificantly positive effect on exports expansion margin, it causes some negative impacts on exports intensive margin. This paper also finds that export price has a significant effect on promoting exports intensive margin, but it has a negative inhibition effect on exports expansion margin, implying the existence of low quality bidding mode in Chinese cultural trade. Various robust checks also verify the above conclusions. Therefore, “import inducing export” mechanism does not exist in cultural trade. How to strengthen the missing mechanism and eliminate the inhibitory effect of current export mode on highend export capacity is a key to rapid and sustained development of Chinas cultural trade.

LAND FINANCE AND LEVEL OF HOUSING PRICE

TANG Yunfeng,WU Qiqi

2018, 38(3):  43-56. 

Asbtract ( )   PDF (13050KB) ( )  

Related Articles | Metrics

Based on the dynamic system GMM model and STATA software and econometric methods, this paper studies the trend of housing prices in 15 big and mediumsized cities in China during the past 2009—2015. The main conclusions of this paper are as follows. First, local governments rely on land, finance and real estate industry to maintain local finance, and land finance is the fundamental reason for the rise in house prices. Second, under the background of economic downturn, local governments and local real estate enterprises conspire to manage land, and local governments try to stimulate local economy by making big land finance. Third, the central government has acquiesced in the behavior of local governments and real estate enterprises, because the choice of economic development is conducive to an increase in the level of utility of the central government. Therefore, the central government, local governments and real estate enterprises will form economic growth league organizations to jointly promote housing prices. Fourth, the behavior of real estate enterprises has an amplification effect on the high prices caused by land finance, and the effect is obvious in the east, middle and west regions. The contribution of this paper is to find the logical relationship between the behavior of real estate enterprises and land finance and housing prices, which provides new possibilities for finding measures to alleviate the rising prices of real estate.

EXISTENCE, DRIVING MECHANISM AND IMPACT ON INVESTMENT EFFICIENCY OF HERDING BEHAVIOR IN P2P LENDING

HU Jinyan,SONG Weishi

2018, 38(3):  57-71. 

Asbtract ( )   PDF (14001KB) ( )  

Related Articles | Metrics

This paper studies the existence of herding behavior in P2P lending market, as well as its driving mechanism and influence on investors investment efficiency. Empirical results show that there exists remarkable herding behavior in Chinese P2P lending market after the failureofbid risk and the time fixed effects being controlled. Furthermore, the extent of herding behavior is closely related to borrowers information and investors profile. Results show that lowquality borrowers and lowriskaversion investors will intensify herding behavior, which means herding behavior is driven by the motivation of lowriskaversion investors to eliminate default risk by mimic previous investors investment direction. Finally, this paper finds that herding behavior helps investors improve their investment efficiency, presented as herding behavior increases the success rate of investment and assists investors to invest in the loan which has lower potential default risk.

CHINESE FIRMS WORKING CAPITAL AND TFP UNDER FINANCIAL CONSTRAINTS

ZHANG Dongyang

2018, 38(3):  72-84. 

Asbtract ( )   PDF (11305KB) ( )  

Related Articles | Metrics

Financial factors have been found highly important in influencing firms real activities and in promoting aggregate growth. Yet, the linkage between finance and firmlevel total factor productivity (TFP) has been overlooked in the literature. We fill this gap using nonlisted Chinese firms over the period 1999—2013 to estimate a TFP model augmented with working capital. We find that TFP is strongly and significantly associated with working capital for private and foreign firms, but not for SOEs. More specifically, an increase in working capital has a negative (positive) effect on TFP in firms with positive (negative) working capital. Furthermore, highly financial constrained private and foreign firms are more sensitive to working capital.


EQUITY FINANCIAL MARKET, GROWTH MODE AND BALANCED RATE: PERSPECTIVE OF EMERGING SECTOR AND TRADITIONAL SECTOR#br#

RUI Hongxia,ZHENG Jianghuai

2018, 38(3):  85-99. 

Asbtract ( )   PDF (14301KB) ( )  

Related Articles | Metrics

Based on the differences between the innovationbased emerging sector and the investmentbased traditional sector, this paper constructs the dynamic growth model and conduct Simulink analysis to explore the effect of equity financial market efficiency on the growth mode choice and longterm growth. The theoretical analysis shows that equity financial market efficiency has the growth effect on the innovative growth mode and the balanced growth rate under the threshold conditions. The equity financial market with efficiency higher than the threshold can significantly improve balanced growth rate and the contribution rate of innovation. The numerical simulation shows that on the whole, the efficiency of Chinas equity financial market is higher than the threshold value. But there are differences between the eastern and the western regions. The improvement of equity financial market efficiency will accelerate the innovations contribution to growth and structural adjustment of the eastern region, but the effect is not significant in the centralandwestern region.

WELFARE COST OF URBANRURAL ECONOMIC FLUCTUATIONS IN CHINA UNDER TWO DIFFERENT SHOCKS

YAN Meng

2018, 38(3):  100-109. 

Asbtract ( )   PDF (9133KB) ( )  

Related Articles | Metrics

The accurate measurement of welfare cost of economic fluctuations not only critiques different theories about the root of economic fluctuation, but also leads government and central bank to choose appropriate economic policies. Considering the standard model proposed by Lucas only assumes the impact of transitory shocks on welfare cost and ignores the impact of permanent shocks on welfare cost, this paper applies the Beveridge and Nelson method to decompose the consumption series and measures the welfare cost which caused by transitory shocks and permanent shocks. This paper further uses urbanrural consumption data to estimate the welfare cost of economic fluctuations in different provinces. This paper concludes that the permanent shocks cause more urbanrural welfare cost than the transitory shocks, hence avoiding the adverse supply factors which cause permanent shocks, it will be valid to reduce the urbanrural welfare loss and enhance urbanrural welfare level, which is consistent with supplyside structural reform.