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Brief

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.
Editorial Board

Editor-in-Chief
Fan Liming

Deputy Editor-in-Chief
Lu Rong

Network infrastructure and the diffusion of technological knowledge: evidence from a quasi-natural experiment

XUE Cheng;MENG Qingxi;HE Xianjie

Journal of Finance and Economics,2020,Vol 46,No. 04

After nearly 40 years of rapid development, the Chinese economy has entered a crucial period of transformation from old to new. The Internet, as a new driving force for economic development, will undoubtedly promote a new round of technological and industrial changes. In this context, it is of great theoretical value and practical significance to answer the question of if and how network infrastructure can affect information transfer and the diffusion of technological knowledge in micro-enterprises. This study uses the “Broadband China” strategy as a quasi-natural experiment and finds that the network infrastructure construction can not only promote the diffusion of technological knowledge within companies but also promote the diffusion of technological knowledge between companies. The paper further finds that when the technological level of a listed company is high, the geographical locations of its subsidiaries are scattered, and the network infrastructure of its subsidiaries is relatively complete, network infrastructure has a greater positive effect on the diffusion of technological knowledge within the company. Similarly, network infrastructure has a greater influence on the diffusion of technological knowledge among companies because of the high technological level of listed companies and the large number of Internet users. The research in this paper shows important academic value and practical significance. (1) Preliminary studies have shown that infrastructure has an important impact on company operations. Most studies focus on transportation infrastructure, and this research on network infrastructure is a further supplement to the literature on infrastructure. (2) With regard to research on network infrastructure, academics mainly focus on its macro-level influence. Few scholars have tested how network infrastructure affects the diffusion of technological knowledge at the micro-enterprise level, especially from the internal and external aspects of listed companies. (3) With regard to the research on innovation, previous studies have found that the development of macro factors such as infrastructure has an important impact on the innovation activities of companies. This paper considers other subjects associated with listed companies as the object of its research, studies the role of network infrastructure in the diffusion of technological knowledge, and expands the literature on innovation. (4) This paper uses the “Broadband China” strategy as an exogenous event to solve the problem of causal inference between network infrastructure and economic growth. (5) This research is of great significance to the practice of public goods supply such as the Internet.

Does import trade liberalization affect firms’ output volatility?

PENG Shuzhou;LI Xiaoping;NIU Xiaodi

Journal of Finance and Economics,2020,Vol 46,No. 04

Since its accession to the WTO, China has actively promoted trade liberalization. It is undeniable that trade liberalization has brought excellent products, production technologies and solutions from all over the world. However, it is also important to note that with the deepening of trade liberalization reforms, a large number of high-quality foreign products flood into the domestic market, making the production and sales activities of domestic firms inevitably affected by the impact of import factors, which has a profound impact on the stability of firms’ output growth path (i.e., output volatility). This paper uses China’s accession to the WTO as the research background, using Chinese micro data to test the relationship between trade liberalization and output volatility. First, we use the residual regression method to calculate the annual fluctuation index and window fluctuation index of the output growth rate of manufacturing enterprises in China from 1998 to 2013. Second, we combine the product tariff data of WITS products and the input-output table to calculate the import trade liberalization index of China’s manufacturing industry. Finally, we use multiple econometric analysis methods (including fixed effect/difference-in-differences/panel IV) to systematically evaluate the causal relationship between trade liberalization and output volatility, and then demonstrate the mechanism. Input-trade liberalization has a significant stabilizing effect on the output volatility of Chinese manufacturing enterprises. For every 0.01 unit of absolute change in input-import tariff, the volatility of enterprise sales will decrease by 0.785%, and the volatility of total output will decrease by 0.896%. In terms of the impact mechanism, due to cost-saving effect and factor market diversification effect, input-trade liberalization can effectively improve firms’ intermediate input cost and intermediate input source, and thereby smooth the output volatility. On the other hand, output-trade liberalization has not significantly affected the output volatility. This may be because of the influence of China’s unique large economy, such as large market size or export expansion; the competitive effect of trade liberalization has been gradually weakened, so it does not show a significant effect. The main contributions of this paper are: First, it helps us understand the relationship between import trade and output volatility at a micro level. Second, based on the existing research, we can have a more comprehensive understanding of the effect of trade liberalization on the performance of firm behavior. Third, trade liberalization is divided into two levels: output-trade liberalization and input-trade liberalization, so as to better identify how import trade liberalization affects firms’ output volatility.