Table of Content

16 November 2020, Volume 40 Issue 11

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INVESTOR RELATIONS MANAGEMENT AND CORPORATE RISKTAKING

YI Zhihong, DING Yanping, CHEN Qinyuan, YANG Shengzhi

2020, 40(11):  4-20. 

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The function of corporate governance should be reflected not only on improving corporate operating performance, but also on promoting scientific decisionmaking, reasonable risk control and thus on achieving longterm and stable development. Based on the data of Ashare listed companies in China from 2012 to 2017 and using a comprehensive survey of investor relations management collected by Nanjing University and Securities Regulatory Commission, this paper examined the impact of investor relations management on corporate risktaking. The research results show that: (1) Companies with effective management of investor relations are associated with lower levels of corporate risktaking, indicating that investor relations management has an independent governance effect, which can inhibit the risking behavior of companies. (2) The governance effect of investor relations management is more pronounced in firms with weaker internal and external monitoring mechanisms, showing that good investor relations management can effectively make up for the lack of internal and external corporate governance mechanism to a certain extent, which so as to have a governance effect on corporate risktaking. (3) The further analysis finds that investor relations management decreases corporate risktaking through the channels of inhibiting excess leverage and over investment, but meanwhile no evidence shows that investor relations management leads to underinvestment and thus brings the loss of investment efficiency. (4) Internal factors including CEO's financial background and secretary's professional ability and external factors including institutional investors' visits and the opening of online media platform exert a significant effect on promoting the level of corporate investor relationship management.

SERVICE OUTSOURCING AND INDUSTRIAL CHAIN LENGTH: EVIDENCE FROM CHINA

CHEN Qi, fei CAI Lu

2020, 40(11):  21-38. 

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 Based on the Antras et al. (2012) method, this paper uses Inputoutput tables of 30 provinces and autonomous regions of China in 1997,2002, 2007 ,2012 and 2017 to measure the industrial chain length of 17 sub industries at the provincial level, and analyzes the role of service outsourcing in extending the industrial chain length. The empirical results show that: firstly, on the whole, service outsourcing has a significant role in promoting the growth of China's industrial chain. Every 10% increase in service outsourcing can promote the growth of China's industrial chain by 0.62%. Secondly, from the perspective of service outsourcing, transportation and warehousing outsourcing has the greatest effect on the extension of industrial chain. Thirdly, the study of different regions finds that the service outsourcing has the greatest promotion effect on the industrial chain length in the central regions, followed by the western regions and the eastern regions. Fourthly, the study of different industries finds that the service outsourcing has an effect on the length of industrial chain in both the manufacturing industry and the service industry, but the promotion effect on the service industry is nearly 2.7 times of the promotion effect of the manufacturing industry.

HOW DOES FISCAL EXPENDITURE DECENTRALIZATION AFFECT GOVERNMENT EXPENDITURE BUDGET DEVIATION

CHEN Zhigang

2020, 40(11):  39-54. 

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Defined as the difference between government final accounts and the budget spending, expenditure budget deviation is directly concerned with the establishment of modern budget system and the effect of positive fiscal policy on improving quality and efficiency. The theory of budget maximization points out that local governments pursue the maximization of discretionary budget, which will lead to budget expenditure exceeding final accounts expenditure, while fiscal expenditure decentralization facilitates the conditions for local governments to pursue the maximization of discretionary budget. Therefore, fiscal expenditure decentralization is an important factor leading to the deviation of expenditure budget. Based on the provincial data and the aggregate data of cities and counties on fiscal budget and final accounts from 1994 to 2017, this paper finds that the higher the degree of decentralization of fiscal expenditure, the greater the deviation of government expenditure budget. Various robustness tests support the conclusion. Moreover, economic development and fiscal transparency can reduce the impact. Adjusting the authority between different levels of government, establishing a fiscal system in which the powers of governments are commensurate with their respective spending obligations and moderately strengthening central authority and expenditure responsibility will effectively reduce government expenditure budget deviation.

RETURNED EXECUTIVES AND INTERNATIONALIZATION OF ENTERPRISES——Empirical Study on China's Listed Hightech Companies

YAO Kai, WANG Yajuan

2020, 40(11):  55-71. 

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The influence of returned executives on enterprises internationalization has two different effects: resource effect and cultural conflict effect, which determine the final influence of returned executives on enterprises internationalization. This paper takes the hightech listed companies in China from 2011 to 2017 as the sample, and makes an empirical analysis on how returned executives affect the internationalization of enterprises and the moderating effect of corporate absorptive capacity and CEO duality. The results show that: (1) Returned executives are significantly and positively correlated with enterprise internationalization. (2)The absorptive capacity of enterprises significantly strengthens the positive relationship between returned executives and enterprises internationalization. (3)CEO duality weakens the positive relationship between returned executives and enterprises internationalization. (4) Executives with both overseas working experience and overseas education experience have the strongest promotion effect on enterprise internationalization, and executives with only overseas education experience have the weakest effect in promoting enterprise internationalization. (5) There is a significant and positive correlation between returned executives and enterprise internationalization in the eastern regions, while there is no such correlation in the central and the western regions. (6) In complete competitive markets, there is a significant and positive correlation between returned executives and enterprise internationalization, while in monopolistic competitive markets, the correlation of returned executives and enterprise internationalization is positive, but not statistically significant.

YOUNG EXECUTIVES AND STOCK PRICE CRASH RISK: EVIDENCE FROM THE AGENCY CONFLICT VIEW

LI Wengui, YAN Han

2020, 40(11):  72-86. 

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From the perspective of stock price crash risk, this paper analyzes the economic consequences and mechanism of the young executives' risk preference. Based on the theoretical deduction of “individual cognition view” and “agency conflict view”, using the data of Chinese Ashare nonfinancial listed companies, this paper finds that young executives will significantly increase the risk of stock price crash, and this negative impact mainly exists in private enterprises. Further tests find young executives choose more risky investment projects that could rapidly increase their personal returns in investment decisions. At the same time, the aggravating effect of young executives on stock price crash risk is more pronounced for firms where executives receive compensation, and the stock price crash risk will obviously decrease with the higher proportion of independent directors. These findings indicate that the risk preference of young executives at individual cognitive level is distorted by the agency conflict in the pursuit of selfinterest maximization, which provides empirical evidence for the “agency conflict view” of young executives' risk preference.

IS REGULATION AFFECTED BY POVERTY ALLEVIATION——Empirical Analysis on Regulatory Sanctions

2020, 40(11):  87-100. 

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Using data of the firms punished by China Securities Regulatory Commission (CSRC) from 2001 to 2015, this paper investigates whether security regulation is affected by poverty alleviation in China. The results show that firms registered in less developed areas receive less serious punishment. That is, regulators will weaken the supervision on firms from economically backward areas, which proves that poverty alleviation effect exists in security regulation. Further, this paper finds that compared with administrative penalties, nonadministrative penalties are more likely to be used as poverty alleviation tools. After controlling the endogenous problems, the above conclusions still hold. Our findings preliminarily reveal the existence of poverty alleviation effect in security regulation, extending the selective enforcement research. Besides, the analysis framework and conclusions of this paper have important reference value for multilayer security market reform in China.

CAN MORTGAGE OF FARMERS' HOUSING PROPERTY RIGHTS STIMULATE THE RURAL FINANCIAL MARKET——Empirical Evidences from Bank Loan Data

QI Hao, WU Benjian, MA Jiujie

2020, 40(11):  101-112. 

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Expanding the scope of collateral is an important way to alleviate the financial difficulties in rural areas. Therefore, the mortgage of farmers' housing property rights is expected to make a difference and become an important direction of rural reform in recent years in China. Taking advantage of the mortgage of farmers' housing property rights in 59 pioneer counties during the period of December 2015 to December 2017, this paper investigates whether the mortgage of farmers' housing property rights increase the agriculturerelated loan by using 1024 rural credit cooperatives and rural commercial banks data during 20102016. This paper holds that, at present, farmers' housing property rights are faced with problems such as difficult value evaluation and difficult disposal of collateral, so it is difficult to act as loan collateral. The results show that the mortgage of farmers' housing property rights did not increase the supply of agriculturerelated loans and could not stimulate the rural financial market. The above results remained robust after considering the alternative effect of the mortgage of farmers' housing property rights had on the other mortgage methods, the mortgage of farmland use rights and the reform of “three plots of land”. The government should make greater efforts to complete the supporting measures for the reform of rural housing property rights mortgage loan, explore and expand the scope of the transfer of farmers' housing property rights. Therefore, the value of housing property rights can be better achieved and the problem of mortgage disposal can be better alleviated.