Finance & Trade Economics is supervised by Chinese Academy of Social Sciences, and sponsored by National Academy of Economic Strategy, Chinese Academy of Social Sciences. It aims to explore new situations and new problems appeared in economic reform and economic construction in China, and to put forward new ideas for theoretical research and practice services. Its scope covers finance, taxation, currency, international economy and trade economy, city and real estate, cost and price, circulation economy, industrial economy, service economy, tourism economy, information and e-commerce. The Journal is included in CSSCI.
The previous literature on the relationship between high-speed rails and regional economic growth has ignored the impact of high-speed rails on the regional economic gaps and the phenomenon of factor flow among regions. By analyzing the empirical facts of China’s regional economic growth pattern in the context of high-speed rails, and from the perspective of factor flow, this paper elaborated on the impact mechanism of high-speed rails on regional economic gaps in detail. Meanwhile, this paper studied the impact of high-speed rails on regional economic growth gaps through a qusai-natural experiment of whether to open high-speed rails and based on the data of China’s 287 cities in 2004–2014. According to the study, we found that high-speed rails had a significant positive effect on the regional economic gaps through the factor flow; that is to say, the opening of high-speed rails could widen the regional economic gaps and produce polarization effect. Besides, the opening of high-speed rails significantly expands provincial capitals’ economic gaps, but the effect on non-provincial capitals is not significant. At last, the impact of high-speed rails on the regional economic gaps is characterized by a significant time effect, and the polarization effect shows a trend of increasing and then decreasing.
Government subsidy on firms changes extensive and intensive margins of market, results in misallocation of resources between firms and reduces manufacturing productivity. Using panel data of Chinese manufacturing firms from 1998 to 2007, this paper studies the effect and mechanism of misallocation caused by subsidy on manufacturing productivity. Decomposition of manufacturing productivity demonstrates the resource misallocation between firms and decreases manufacturing productivity. Empirical research shows that government subsidy is an important factor inducing this resource misallocation. Subsidy changes extensive and intensive margins of market, distorts resource allocation between firms and reduces manufacturing productivity, and the resource misallocation is more serious in industries with higher proportions of state-owned assets. Specifically, subsidy hinders firms’ entry and exit in extensive margins, but helps the subsidized firms to expand the scale and crowd out the market share of unsubsidized firms in intensive margins. This paper implies that the government should take all firms into consideration in a frame of general equilibrium when developing subsidy policies.
Since the reform and opening up, in order to resist external risks and maintain economic growth, China has continued to use proactive fiscal policies, and policy design has increasingly emphasized the concept of countercyclical reality-guided decision. However, the effect of the implementation of fiscal policy is controversial and does not fully satisfy the countercyclical characteristics, resulting in a deviation from controlled objective. In order to clarify the cyclical characteristics of China’s fiscal policy effect, this paper introduced multi-spectrum analysis, and removed sequence trend components by maximum likelihood overlap discrete wavelet transform, to avoid expansion effect. This paper used a time variable parameters-structural vector auto-regressive model to analyze the relationship of China’s budget revenue and expenditure, with economic fluctuations. The results show that changes in China’s budget revenue and expenditure are pro-cyclical to business cycle. Specifically, one unit of change in China’s economic growth rate will result in changes in the budget revenue and expenditure by 0.7 and 0.05 units or more in the same direction. A unit change in the budget revenue will result in a change in budget expenditure by 0.9 units or more. This paper also proves that the pro-cyclical budget revenue is the main reason for pro-cyclical expenditure.
The number and scale of overseas mergers and acquisitions have increased significantly in recent years. Overseas mergers and acquisitions are different from local ones. When “going out,” enterprises are faced with challenges of cultural distance. What is the impact of cultural distance on the corporate value created via overseas mergers and acquisitions? This question falls into the categories of finance and sociology. In this paper, we took the overseas mergers and acquisitions of listed companies in China as samples to analyze and test the impact of cultural distance on the corporate value created via overseas mergers and acquisitions. The empirical results show the following. (1) Cultural distance between China and the target country has a significant negative relationship with corporate value created via overseas mergers and acquisitions. (2) Cultural distance has certain influence on the value creation fully through production efficiency, and partially through research and development, and taxation. (3) If Chinese companies hire executives who have overseas background, have experience in overseas mergers and acquisitions, or conduct mergers and acquisitions in the industry they are in, the negative impact of cultural distance can be reduced. This paper shed light on the influence of cultural distance on the corporate value created via overseas mergers and acquisitions, and provided practical guidance for Chinese companies on how to deal with cultural distance when they carry out overseas mergers and acquisitions.
SEOs play a fundamental role in the equity financing of NEEQ enterprises, in which venture capital is one of the most important participants. This paper selects the 2013–2016 SEOs of companies listed on NEEQ as the research sample, and examines the motivations and economic consequences of venture capital’s intervention. In general, this study finds that venture capital will prefer enterprises with better financial performance and innovation capability to participate in the SEO of NEEQ enterprises, which can support the conclusion of the ex ante screening function of venture capital. However, when the ownership concentration is too high, the possibility of venture capital’s intervention will be weakened, especially when the major shareholders also participate in the subscription. In addition, venture capital favors adopting the joint investment approach when confronting projects with high financial performance and innovation capability uncertainty, which reflects a more cautious style of investment in the NEEQ market. However, venture capital is restricted by its capability and willingness to invest after it enters the enterprise. It does not significantly enhance financial performance and innovation capability. Considering the unique market making and stratified system of NEEQ, this paper verifies the performance of the ex ante screening function and the absence of the ex post supervision function of venture capital. This paper not only reveals the motivation and economic consequences of venture capital’s participation in the SEOs of NEEQ enterprises, but also provides empirical evidence for China to promote innovation strategy with the NEEQ market, build and improve a multi-level capital market.
This paper develops a framework of public finance in state governance to elaborate the relationship between public finance and state governance, where fiscal system promotes public order, constituting state capacity pillar, and leads to the goal of state governance. The underlying principles of this theory are as follows. First, public order, a basic human need, guarantees the social and economic operation; second, the development of market economy disembeds market from society, differentiates interests and causes creative disruption, and the public order has been constantly impacted and reconstructed; third, the country’s governance relies on the support of state capacity, two pillars of which are market encouragement and mobilization abilities; forth, in order to construct a good public order, the goal of state governance is to build a society that is economically efficient, socially ordered and politically inclusive; and fifth, a series of institutional arrangements in fiscal expenditure, revenue, budget and fiscal relations between the central government and the local governments serve the purposes of promoting economic development and stability, social protection and control, right openness and safeguarding of authority from different aspects.
Financial deleveraging will affect economic growth and economic fluctuations, and the changes of financial structure and financial development may influence the relationship between financial deleveraging and micro-economy. Based on the GMM estimation method and using the panel data of 97 countries and regions from 1980 to 2015 as samples, this paper examined the effects of financial deleveraging on economic growth and fluctuations, as well as the impacts of the financial structure and financial development on the relationship between financial deleveraging and micro-economy. It showed that financial deleveraging had a negative impact on economic growth and would increase economic fluctuations. The development of direct finance represented by the capital market would weaken the effects of financial deleveraging on economic growth and fluctuations. However, the changes of the financial structure and the development of indirect finance represented by the financial intermediary had no significant influence on the relationship between financial deleveraging and micro-economy. The results implicated that in the context of deleveraging process, controllable and progressive measures should be taken in order to avoid systemic risks. At the same time, the policy authority should accelerate the development of the capital market in order to weaken the adverse effects of financial deleveraging on economic growth and fluctuations.
The economic practices which have left us with painful lessons have fully proved that for a long time, overdependence on the mode of joint operation had led to quite a few problems in the mechanism through which a large number of rentiers exploit small and medium-sized suppliers, and solidify their vested interests, hence missing out the historic opportunity for physical retail enterprises to boom and causing a rare and worrying industrial disaster in China. Self-operation is the basis of commerce. This is the essence and foundation of Karl Marx’s theory of capital, and also the cornerstone of innovation for China’s business circulation in the era of mobile telecommunications and the Internet. It is not outdated. Instead, it is highly targeted and critical. A review of Marx’s theory of capital is of strategic significance for us to reveal the genuine causes of the disaster in the commercial circulation service industry due to the long-standing joint operation, to establish a quality modern circulation system of the new era on the basis of reviving and innovating enterprise self-operation, and to realize the great goal of China’s transformation from a trader of quantity to a trader of quality. It also presents with concrete actions the best gift to commemorate the 40th anniversary of China’s beginning of reform and opening up.
