Sponsor(s): Shanghai University of Finance and Economics
12 issues per year
Current Issue: Issue 12, 2019
Journal of Finance and Economics is supervised by Ministry of Education of PRC, and sponsored by Shanghai University of Finance and Economics. It aims to include research results on the major theories and practical problems in China’s reform and opening up and modernization of economic construction. Its scope covers all the major fields of Economics, including Public Economy, Finance, Accounting, Economic history, Regional Economics, Industrial Economics, International Economics. The Journal is included in CSSCI.
Journal of Finance and Economics,2019,Vol 45,No. 12
The housing price boom in China has attracted a large number of non-real estate companies to invest in real estate. In order to reverse this de-reality the investment structure, the government has introduced a series of regulations to stabilize housing prices, trying to guide companies to transfer funds from real estate to the real industry. However, corporate investment activities are not only composed of operational investment (such as the introduction of new equipment, the purchase of patented technology, etc.) and real estate investment, but also financial investment (such as bonds and stocks). Then, does the rise in housing prices inhibit financial investment or operational investment? Does the decline in housing prices really lead to a decrease in real estate investment? Studying the relationship between housing prices and the investment structure is the main purpose of this paper. This paper used the 2009–2017 data of listed companies to calculate the ratio of real estate investment, financial investment and operational investment for each company. Together with the housing price index, we compared the change of the investment structure caused by the rise in housing prices and the decline in housing prices. Besides, we did the group test and the interactive variable test to find the mechanism that triggered this change. The results of this study showed that when housing prices rose, companies did not significantly increase the proportion of real estate investment as expected, but increased the proportion of financial investment. When housing prices dropped, companies significantly increased the proportion of operational investment, and reduced the proportion of financial investment, but the proportion of real estate investment was still not sensitive to housing prices. Further analyses found that the impact of this effect on non-state-owned enterprises was more significant than that of state-owned enterprises. Besides, this effect had a significant performance in the group with high real estate investment but not the group with less real estate investment. Finally, controlling the impact of financial market returns, it was found that the reduction of financial investment was not caused by the decrease of financial market returns, but by the lack of operational investment. After further endogenous testing, similar conclusions were obtained. The policy implications of this paper may as follows. First, we should optimize the financing environment, establish the credit information system, improve the information disclosure quality, and strengthen the supervision of funds. Second, we should reduce taxes and fees, firmly support the market-based reform of interest rates, speed up tax cuts, and further reduce the related costs of enterprises. Third, we should strengthen financial market supervision, reduce arbitrage space, raise investment thresholds, and stabilize investment returns.
The cost of environmental pollution: impact of drinking water pollution on the medical expenditure of residents and medical insurance funds
Journal of Finance and Economics,2019,Vol 45,No. 12
To control medical expenditure is important to residents, medical insurance funds, and public finance. Based on China Labor Force Dynamics Survey in 2014 and 2016 in China, with the methods of the two-part model and the counterfactual framework, this paper examined the impact of drinking water pollution on the medical expenditure of residents, and the spending burden of medical insurance funds. The results indicated that firstly, drinking water pollution increased the outpatient and inpatient expenditure from residents, which also increased the outpatient and inpatient reimbursement expenditure. Secondly, drinking water pollution contributed almost 10% of the outpatient expenditure and 7.5% of the inpatient expenditure. Thirdly, residents with lower socioeconomic status suffer a heavier burden of medical expenditure due to drinking water pollution; the per capita outpatient expenditure and hospitalization expenditure of poor residents due to drinking water pollution were equivalent to 1.46 times and 1.34 times of non-poor residents respectively. Fourthly, in 2016, the medical expenditure contributable to drinking water pollution in China was about CNY 340 billion, which was equivalent to 7.4% of the total health expenditure this year, and the reimbursement expenditure from medical insurance funds due to drinking water pollution was about CNY 150 billion, accounting for about 12% of the expenditure of medical insurance funds.