Table of Content

16 October 2021, Volume 41 Issue 10

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THE PATH OF RMB TOWARD A LEADING CURRENCY: A REVIEW OF ITS HUNDRED YEARS OF GROWTH

ZHANG Jie

2021, 41(10):  4-18. 

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After more than 40 years of reform and openingup, with the rapid rise of Chinese economy, RMB, as a sovereign currency, is gradually stepping onto the world currency stageYet how to turn it into a worldwide leading currency in parallel with the major ones in the western world remains an issue of widespread public attentionThe paper argues that an objective evaluation of this issue requires an analysis from perspectives of both history and theoryA pure focus on theory tends to confine the Chinese choice to the path taken by American dollar and British poundBut if seen from a historical perspective, the feasibility of that choice will be greatly discountedHistorically, the Chinese currency system was shaped by its unique characteristics of an overlarge scale of economy and a currency made from cheap metal, which indicates that it was designed to serve domestic economy and people's livelihood, in contrast with some of the western currencies which were frequently used as a tool in foreign expansion and the establishment of world hegemonyUndoubtedly, the present RMB system cannot shake the influence of this traditionIn the process of the nearly one hundred years of national crisis and selfimprovement in modern times, the Chinese Communist Party, the creator of this system, has been fully aware of the importance of the independence of currency system and the stabilization of currency valueAnd its main target has always been more to serve domestic economy and people's livelihood than to pursue the internationalization of its currencyAccordingly, this has resulted in the asymmetry between the big scale of its economy and the limited international use of its currencyHow are we to objectively evaluate the asymmetry? Should it be considered as a dilemma or as a characteristic? The conclusion of my paper is that the growth of RMB into a worldwide leading currency is the natural outcome of rather than the premise condition for the rise of Chinese economyHence, we need to properly handle the timing of the internationalization of RMB, especially the rhythm of its international use, so as to explore a path unique  to China in this process

RESEARCH ON THE RELATIONSHIP BETWEEN INDUSTRIAL EFFICIENCYAND THE FORMATION OF CHINAS GROWTH POLE——Theory and Evidence from China's Prefecturelevel City Data

XU Jiabin, SUN Xiaodi

2021, 41(10):  19-38. 

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This paper elaborates the mechanism of industrial efficiency promotion on the formation of growth poleOn this basis, this paper selects three judging conditions: the level of urban regional contribution rate, the level of urban regional growth rate and the level of urban regional development, and uses the kernel density estimation method to screen and identify whether the 200 prefecture level cities in China can become China's economic growth poles during 2001 and 2018This paper empirically tests the effect mechanism of industrial efficiency on the formation of growth pole, and finds that the improvement of industrial efficiency can significantly promote the formation of growth pole, and its process mechanism is that the improvement of industrial efficiency directly promotes the formation of growth pole on the one hand, and indirectly promotes the formation of growth pole through the upgrading of industrial structure on the other handAt the same time, it is found that road infrastructure and Internet infrastructure indirectly affect the formation of growth pole by promoting industrial efficiencyPopulation size and local fiscal expenditure on science and technology also have significant positive impact on the formation of growth pole

THE INFLUENCE OF BANKING COMPETITIONON FINANCING CONSTRAINTS OF LISTEDMANUFACTURING COMPANIES

QIAN Zongxin, FU Penglu, CHEN Xintong

2021, 41(10):  39-49. 

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 This paper studies the influence of market competition in the banking industry on the financing constraints of listed manufacturing companiesTaking listed companies in the manufacturing industry as samples, this paper establishes a multiple regression model to verify whether the intensification of the banking competition will affect financing constraints faced by enterprisesThis article concludes that listed companies in the manufacturing industry face significant financing constraintsThe banking industry competition and financing constraints have a Ushaped relationship, namely as the banking competition intensifies, financing constraints firstly become looser but then become tighter

BANK COMPETITION AND ZOMBIEFIRMS' DELEVERAGING

LU Dong, JIANG Muzi

2021, 41(10):  50-64. 

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Matching the financial license information published by CBRC with the Chinese Industrial Enterprises Database, this paper investigates the mechanism through which bank competition influences zombie firms’ dynamic capital structure adjustmentThe results exhibit that by raising firms’ financing cost, bank competition has significantly accelerated the speed of zombie firms’ capital structure adjustment, especially the extent of deleveragingFurthermore, the impact of bank competition on the zombie firms’ deleveraging is more pronounced during easy monetary policy periodMoreover, zombie firms with lower level of soft budget constraints, higher dependence on external financing and smaller size have faster deleveraging paceThis paper focuses on the specific zombie firms’ deleveraging behavior under China's financial system which is gradually deepening openingup, and provides empirical evidence for how the competition mechanism of the financial market advances zombie enterprises’ deleveraging

CAN THE NOISE COMMENT IN STOCK NETWORK PLATFORMAFFECT THE STOCK PRICE SYNCHRONICITY

XIAO Zhengyan, XIE CongCHEN Yanbin

2021, 41(10):  65-80. 

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Stock price synchronization is an important index to measure the information efficiency of capital marketThe influence mechanism of stock price synchronization has always been a hot issue in financial researchThrough text analysis and machine learning, this paper measures the irrational noise in the comments posted by Chinese investors in the Oriental Fortune Forum, and tests the relationship between the noise in the stock network platform and the stock price synchronizationThe research finds that, first, the noise in the stock network platform will induce irrational investment decisions, thus reducing the synchronicity of stock price changesThe higher the proportion of noise comments, the lower the synchronicity of share price of listed companies, and there is an inverted Ushaped nonlinear relationship between the twoSecond, the increase in company stock news and announcements, the increase in analyst attention, and the improvement of external audit quality can all reduce the impact of noise in the stock network platform on stock price synchronizationThis paper focuses on the impact of the noise in network new media on stock price synchronizationThe conclusions are of practical significance for the regulatory authorities to strengthen the network information monitoring and for the listed companies to further improve the information disclosure channels

MARGIN TRADING, SECURITIES LENDING, AND PRODUCT MARKET COMPETITION 

ZHANG He

2021, 41(10):  81-96. 

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This paper studies the joint impact of margin trading and securities lending on product market competitionTheoretical analysis and empirical studies show that firms have become more aggressive in product market competition since their stocks were eligible for margin trading and securities lending, but their overall performance has declined accordinglyThis paper also finds that the trading mechanism mainly affects companies with low stock price efficiency or high intensity of margin tradingThe results imply that with the unbalanced development of margin trading and securities lending, good news from the product market tends to be over rewarded by the stock market, which induces firms to over react in product market competitionHowever, the improvement of stock price efficiency can be helpful to alleviate the above problems

THE CAPABILITYOPPORTUNITY FRAMEWORK:AN UNIFIED PERSPECTIVE FOR UNDERSTANDINGENTREPRENEURSHIP AND GROWTH OF THE FIRM

GUO Nianshun

2021, 41(10):  97-112. 

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Based on the tradition of exchange paradigm, mainstream economics emphasizes too much on incentive and contract, leading to its failure to provide effective theoretical support for understanding firm’s entrepreneurship and growth in the real worldThis paper reconstructs an unified theoretical capabilityopportunity framework, which is rooted in the production paradigm, mainly based on resource/capability theory and evolutionary perspective, and can be especially applied to understand entrepreneurship and growth phenomena in late development contextThis framework contains four basic propositions: (1) in terms of the entrepreneurship and firm growth, we essentially discuss the issues of organizational capability and market opportunity(2) The sources and types of capability and opportunity, as well as their systematic change process, directly determine the entrepreneurial choice and growth power of the firm(3)Capability and opportunity are both industryspecific and productspecific, and can only be generated during the continuous process of industrial production and managementOnly when certain types of capability and opportunity have been or can be created, can entrepreneurship and growth activities in the corresponding industry appear(4) The organizational capability and market opportunity in late development context will not be generated automatically just because of the existence of market economy systemNonmarket organizations, such as government and public research organization, act as key forces to shape capability and opportunity conditionsIn conclusion, the capabilityopportunity framework provides an new research perspective which is significantly different from mainstream economics, and especially helps to bridge the longstanding gap between entrepreneurship and growth research