Table of Content

16 July 2021, Volume 41 Issue 7

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THE DYNAMIC REGULATORY EFFECT OF FISCAL POLICY AND MONETARY POLICY——Test of Autoregressive Model Based on Timevarying Parameter Vector

LI Cheng, DING Shunwen, LI Yifan

2021, 41(7):  8-22. 

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This paper clarifies the mechanism of dynamic macroeconomic regulation and control by the combination of fiscal policy and monetary policy, and reveals the “black box” mechanism of their coordinated influence on the economy and the ways of their combination in different stages of the economy. Using China,s quarterly economic data from 2004 to 2019, this paper constructs TVPSVVAR model to explore the effects of the two kinds of policies on macroeconomy. The results show that fiscal policy and monetary policy jointly control the liquidity “gate” to achieve interactive coordination. The combination of fiscal policy and monetary policy is timevarying, which promotes economic development in the same direction as a whole. The impact of the two types of policies on output is not always consistent with the theory, and there is still room to optimize the targeted operation at the structural level.

TAX REDUCTION AND INNOVATION OF HIGHTECH ENTERPRISES

SUN Wenhao, ZHANG Jie

2021, 41(7):  23-35. 

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Studying the impact of tax reduction on corporate innovation is of great significance for Chinas highquality economic development. Drawing on the 20082014 National Innovation Survey Enterprise Database of the National Bureau of Statistics, this paper uses dynamic panel threshold model and effective instrumental variables to study whether there is threshold effect of tax reduction of hightech enterprises on corporate innovation. The results of the study indicate that: firstly, there is a “size threshold” for hightech enterprises' tax reduction. Once the tax reduction scale exceeds the “size threshold”, the promotion effect of tax reduction on corporate innovation will be significantly weakened. Secondly, under the same conditions, compared with hightech enterprises with low R&D intensity, the tax reduction of hightech enterprises with high R&D intensity has stronger promoting effect on corporate innovation. Thirdly, under the same conditions, compared with the hightech enterprises in the underdeveloped regions, the tax reduction of hightech enterprises in economically developed regions has a greater promoting effect on corporate innovation. The government should set an upper bound for the scale of tax reduction, and the preferential tax rate of income tax should be linked with the R&D intensity of hightech enterprises.

INVESTMENTLED INDUSTRIAL POLICY, LOCAL GOVERNMENT FIXED ASSET INVESTMENT AND RURAL HUMAN CAPITAL——Estimation Based on the Dataset of China Family Panel Studies

PANG Xiaopeng, PANG Xiaodong, HUO Peng

2021, 41(7):  36-50. 

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This paper estimates the impact of investmentled industrial policy on rural human capital. A cohort differenceindifferences (cohortDID) identification strategy is utilized based on the China Family Panel Studies (CFPS2018). The results find that since 2008, local governments investmentled industrial policy has resulted in largescale investment in traditional infrastructure. This policy significantly reduced the possibility of rural schoolaged youth to complete high school education. The conclusion remains robust when instrument variable (IV) method is applied. Additionally, this study attempts to explore the mechanism of the above effects. On the one hand, investmentled industrial policy has induced an increasing growth in traditional infrastructure investment. Blooming opportunities for lowskilled jobs in the construction industry and other related industries enhanced the opportunity cost of achieving high school degree. On the other hand, an increase in lowskilled jobs caused the convergence of wages of labors with different education levels as well as the declining of the skill premiums in wages, which further lowered expected returns to high school investment. The conclusion of this paper has reference value for China to comprehensively integrate industrial policy that matching innovationled economic development model in the future 14th FiveYear Plan period.

LOCAL GOVERNMENT INTERVENTION, LAND PRICE DISTORTION AND INDUSTRIAL ENTERPRISE PRODUCTIVITY

WANG Bo, ZHANG Yaoyu, FENG Shuyi

2021, 41(7):  51-63. 

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In the context of China's transition to highquality development, an indepth analysis of the impact of local government land transfer intervention on enterprise productivity is of great significance. This paper uses land price distortion as a link to reflect the influencing mechanism of local government land transfer intervention on industrial enterprise productivity. A mediation effect model, based on the microdata of industrial enterprises from 2007 to 2014, is applied for the empirical analysis. The results indicate that the intervention of local government in industrial land transfer will lead to negative land price distortion, and therefore the decline in industrial enterprise productivity. Heterogeneity test by industries shows that, compared with laborintensive and technologyintensive industries, this negative transmission effect is more pronounced in capitalintensive industries. Therefore, the paper suggests to further deepen the reforms in marketoriented land resource allocation and the evaluation of local government performance.

THE SITUATION AND JUDGMENT OF THE FINANCE SHIFTING FROM REAL ECONOMY TO VIRTUAL ECONOMY IN CHINA

ZHANG Xiaobo

2021, 41(7):  64-80. 

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Based on the definition of finance shifting from real economy to virtual economy, this paper puts forward its judgment standard and degree range. An empirical study of 78 economies from 1990 to 2018 shows that from 2012 to 2014, China was in a mild state of finance shifting from the real economy to the virtual economy, from 2015 to 2018 in a moderate state, then back to the mild state in 2019, but the financial leverage is expected to rise again in the following five years. This indicates that China's microeconomy continues being faced with heavy pressure of systemic risk caused by high financial leverage and the future microcontrol policy orientation remains to focusing on maintaining the growth while reducing the leverage level. In view of this situation, this paper puts forward some suggestions as follows. First, a prudential supervision mechanism of finance shifting from real economy to virtual economy should be established, in which financial leverage should be used as a prudential regulatory policy tool and balanced financial leverage should be used as a standard, so as to guide finance to return to the standard function of serving the real economy in a forwardlooking way. Second, the current benchmark deposit interest rate should be reformed and the monetary policy of locking up shortterm liquidity and releasing longterm liquidity should be implemented, to eliminate the policy factors that may cause finance shifting from real economy to virtual economy.

CAN MONETARY POLICY PROMOTE BANK LOANS  TO SMALL AND MICRO ENTERPRISES——Research Based on the Macroeconomic Uncertainty

SHI XiaokunCHEN Wen

2021, 41(7):  81-97. 

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This study focuses on whether different kinds of monetary policy tools can promote bank credit to small and micro enterprises under macroeconomic uncertainty. First, this paper adds monetary policy into a bank assets portfolio model with macroeconomic uncertainty, demonstrating the theoretical relationship among macroeconomic uncertainty, monetary policy and bank asset allocation. Then, based on the panel data of domestic commercial banks from 2004 to 2018, this paper empirically tests the effect of bank credit result when using different kinds of monetary policy tools under economic uncertainty. The conclusions show that macroeconomic uncertainty can inhibit bank credit, especially for banks with large share of small and micro enterprise loans; compared with quantitative monetary policy, price monetary policy can more significantly reduce the negative impact of uncertainty on small and micro credit of banks, and interbank interest rate has the strongest effect. The conclusions are of great political significance as they can help solve the problems of choosing suitable monetary policy to promote bank credit to small and micro enterprises, to ease the problem of economic uncertainty and help the development of small and micro enterprises.

THE INCOME DISTRIBUTION EFFECT OF AGRICULTURAL MACHINERY SUBSIDY: EFFICIENCY, FAIRNESS OR BOTH

LIU Nian, CHONG Cong, WU Jingfang

2021, 41(7):  96. 

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Agricultural machinery subsidy is an efficiency enhancement policy with threshold effect, in which efficiency and fairness can hardly be obtained simultaneously. This paper analyzes the impact of agricultural machinery subsidy on agricultural production and rural labor transfer through theoretical model. Further, it studies the income distribution effect and mechanism by instrumental variable method and mediator method. The results show that agricultural machinery subsidy significantly reduces the Gini coefficient of farmers' income and improves the fairness of income distribution. The mechanism is that agricultural machinery subsidy improves the agricultural production efficiency, promotes the rural labor transfer, and improves the income of migrant workers, especially the relatively poor farmers, thus offsetting the threshold effect and making the income distribution effect of agricultural machinery subsidy both efficient and fair.