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.
The direct cause of Sino-US trade frictions lies in the fact that the US believes that China’s long-standing trade surplus has made China obtain the so-called “unequal interests.” However, China bears the environmental pollution loss caused by the production of a large number of trade products in the large volume of import and export trade. This paper used the real implied pollution emission model in foreign trade to account for the implied industrial pollution emission in import and export trade, and used the structural decomposition model to analyze the reasons for the change of the implied pollution emission in import and export trade from five aspects, namely, emission intensity, technical structure, import and export scale, import intermediate input, and import and export structure, combining with the ExternE model and Logistic model to account for economic losses caused by all kinds of implied pollution emission in the trade. The environmental cost of pollutants is included in the trade interest system to evaluate China’s real trade interest. It comes to the following conclusions. First, during 2007–2015, in addition to the V-shaped change in the implied emissions of smoke (dust), the closer industrial production links, technical links and the decreasing intensity of pollution emissions made the other implied emissions decrease year by year. This shows that the emission reduction strategy cannot be achieved at the expense of export scale, and we should focus on the intensity of pollution emission, the upgrading of trade structure and the terminal treatment of pollutants. Second, the import intermediate input for export should be eliminated from the import, otherwise, the import implied exhaust gas emissions of 23.08%–32.70% and the import implied effluent discharge of 23.49%–33.59% will be overestimated, which will lead to the overestimation of China’s real trade interests. Third, the loss of real welfare of the industrial sector’s export trade caused by the three industrial wastes is about 9% every year. The human health loss caused by the exhaust gas accounts for the highest proportion of the total export implied emission environmental cost, followed by the agricultural loss and waste water loss caused by the exhaust gas. Fourth, there is no directly inevitable relationship among the contribution rate of trade, the emission of industrial pollutants and the rate of economic loss. The marginal contributions of this paper are mainly reflected in four aspects. First, the implied environmental cost of net export is removed from the net added value of trade to examine a country’s real trade interests. Second, the research on trade implied emissions is further expanded to study the environmental costs and real trade benefits of trade implied emissions, and the research subject is also changed from single carbon dioxide emissions to general pollutant emissions. Third, the structural decomposition of the cross-period changes in the emissions of the implied pollutants of value-added trade is carried out in order to find out the impact mechanism behind them. Fourth, the research cycle is 2004–2014, which can make a more objective and in-depth analysis of the implied pollution cost and real trade benefits of China’s value-added trade under different international economic and trade relations before and after the crisis.
China’s economy has shifted from a high-speed growth stage to a high-quality development stage, which is the most distinctive feature of China’s economy in the new era. Industrial upgrading is the core and key to China’s future high-quality economic development. The overall change of the international pattern leads to China’s need to find more internal driving forces for economic development. In this context, the biggest innovation of this paper is to explore a new way to promote industrial upgrading relying on the integration of domestic market from the perspective of domestic market integration and resource allocation. This paper regarded the construction of the high-speed rail as a quasi-natural experiment. Based on the panel data of 2004–2016, a multi-period DID model was constructed to study the impact and mechanism of high-speed rail on industrial upgrading. This paper found that on the whole, the construction of the high-speed rail can significantly improve the rationalization and advanced level of a city’s industrial structure, and the estimation results are still robust after considering the assumptions and a series of factors that may interfere with the estimation results. The analysis of the impact mechanism showed that the construction of high-speed rail significantly promotes the flow of labor between cities, and promotes the rationalization and upgrading of industrial institutions by triggering economies of scale, technological innovation and capital labor allocation. Among them, economies of scale have the greatest contribution to the rationalization and upgrading of industrial structure, followed by technological innovation and capital labor allocation. Therefore, it is necessary to create conditions to exert technological innovation and spillover effects and improve capital labor allocation. Further mechanism decomposition showed that high-speed rail construction has a more significant effect on the overall economic development level and the higher-level industrial structure of the city, and the higher-level changes in the industrial structure are mainly due to the optimal re-allocation of resources between cities; cities with relatively poor development base benefit from the optimization and re-allocation of resources within the city after the construction of the high-speed rail, and the level of rationalization of the industrial structure has been significantly improved. The findings of this paper on the facts and mechanisms for the promotion of the high-speed rail to promote industrial upgrading showed that high-speed rail construction will promote the deepening of industrial division of labor between regions, improve resource allocation efficiency, and urge new development impetus in production industry and economic development, but it does not mean that all cities can achieve the desired effect after the construction of high-speed rail. The construction of high-speed rail in China is accompanied by the general trend of industrial transfer and upgrading in developed regions. Compared with the existing poorly-developed regions, the high-speed rail has optimized the allocation of factors in cities with relatively good economic development. The large differences in the capital, technology and infrastructure of the region under the big country’s economy determine the particularity of China’s industrial upgrading. Based on the research findings, this paper proposes the following policy implications. In the historical process of large-scale construction of China’s high-speed rail, accelerated industrial restructuring, and transformation of economic development mode, it is necessary to coordinate the synchronization of high-speed rail construction and industrial transformation and upgrading, and continue to improve the efficiency of resource allocation by developing and optimizing high-speed rail networks to reform and innovate. Deeply excavating and continuously releasing the resource reconfiguration effect of high-speed rail construction will provide support for industrial upgrading and high-quality development under the new normal.
At this stage, China’s economy has shifted from a high-speed growth stage to a high-quality development stage. We must adhere to quality first, promote quality changes in economic development, accelerate the construction of a manufacturing power, and promote the construction of a trade power. Against this background, improving the quality of export products, cultivating new advantages in export competition, and realizing the conversion of export products from low-price competition to quality competition have become a problem that must be considered at present. Based on the perspective of supply-side structural reforms, this paper took the deepening of the value-added tax (VAT) reform as the starting point, and systematically analyzed the internal relationship between the VAT reform and the quality of export products. Then, using the quasi-natural experiment of China’s 2004 VAT reform in the northeast area and the data of China’s annual survey of industrial firms and import and export trade from 2000 to 2007, this paper investigated the impact of the VAT reform on the quality of export products through the method of difference-in-differences (DID) based on a comprehensive description of the evolution characteristics of quality of China’s export products. The results showed that first, the VAT reform has a significantly positive effect on export product quality and is conducive to the quality upgrading of export products. After considering a series of robustness tests, the conclusion is still valid. Second, the mechanism analyses and tests show that the innovation performance of firms and the quality of imported intermediate products are the main channels through which the VAT reform affects the quality of export products. Finally, the heterogeneity analyses show that the effect of the VAT reform on the quality of export products varies depending on R&D intensity, factor intensity and the form of ownership. Specifically, the effect is more obvious in low-R&D intensive firms, labor-intensive firms and non-state-owned firms. Based on the above findings, the main implications of this paper could be concluded as follows. First, the tax reduction policy has a positive effect on the improvement of quality of export products, and the appropriate expansion of the coverage of preferential tax policies is optional. Second, the government should make full use of the tax reduction policy’s guidance and motivation to stimulate firms’ investment and speed up technological upgrading, and take the improvement of innovation performance and quality of imported intermediate products as important paths for improving firms’ quality of export products. Furthermore, the formulation of tax policies should be more targeted and structured, and firms with weak R&D foundations, low technological levels and more constraints should be focused on.
Investors’ attention is limited. When investors have limited access to information resources, those events that attract investors’ limited attention in the stock market could usually affect their investment decisions. Some literature argued that to some extent, if a stock is listed on today’s top ranking list, the listing event could create a short-term momentum in its price. Since the ranking list can be noticed by anybody, the individual investor who possesses fund dominance could create the same kind of listing event artificially and manipulate other investors’ attention. To clearly test and examine this motivation, this paper firstly explained the theoretical mechanism of how fund-dominant accounts profit from pumping up the stock price and selling it in the next day by taking advantage of investors’ attention. And then, this paper chose China’s A-share stocks which are listed on the top ranking list only because its price movement deviation hit 7% on that day as the sample, and the time span is from January 2015 to July 2019. Thanks to the availability of account-level data from a China security company, a name list of suspicious speculative fund-dominant accounts was found. Through the empirical test of the relationship between the speculation of these fund-dominant accounts and the selling decision of the next day, this paper has the following findings. First, there indeed exist speculation and price manipulation activities driven by fund-dominant accounts which can be concluded as a “one-day tour” trading pattern. Second, when the stock is listed on the top ranking list, the higher the dominance of a fund-dominant account speculation, the stronger the positive relationship between the speculation intention and the next day’s selling decision. Third, the information disclosure mechanism of the top ranking list can capture the accounts which conduct stock speculation and have a strong tendency of “one-day tour.” From the perspective of the causes behind the attention events in China’s stock market, this paper studied the speculation behavior of fund-dominant accounts, and provided micro evidence for the research on investors’ attention, asset pricing and trade-based price manipulation. Also, this paper contributed to the research on the public information disclosed by stock exchanges, and provided implications for the supervisor and the stock exchange to further improve the governance system of the stock market.
The growth enterprise market (GEM) has been positioned to serve innovative and growing small and medium enterprises (SMEs) since its establishment in 2009. Although the profitability and cash flow of these enterprises may be lower than that of mature enterprises in the main board market, they have huge potential for growth. However, traditional valuation models, such as the dividend discount model and the residual income model, do not consider growth as a factor; thus the valuation of GEM enterprises will be seriously distorted if we use such traditional valuation models. The real option model (Zhang, 2000) endows growth with the same important pricing function as earnings and book value. Since investors highlight the growth of rapidly expanding enterprises, managers have incentives to manipulate growth during the initial public offering (IPO) (Fedyk, et al., 2017). However, previous research ignored post-IPO growth and related economic consequences of growth management during the IPO. We examined whether there is manipulation of growth of China’s GEM enterprises during the IPO. If so, the growth of listed enterprises will decline after the IPO year since the use of discretion over accounting items. We also examined whether declining growth can be countered through the external expansion strategy of M&A. This paper selected enterprises that went public during 2009 and 2017 in the GEM as the main research sample, and models discretionary sales as the abnormal change in accounts receivable adjusted by propensity score matching (PSM) to measure growth management. The results are as follows. (1) GEM enterprises exhibit positive and significant growth management in the pre-IPO year, which is not found for non-GEM enterprises. (2) Growth management of GEM enterprises is positively associated with the frequency and the amount of M&A over one year after the IPO (year + 1). (3) The closer we are to the date of expiration of the lockup period, the more significant the positive correlation between the IPO growth management and M&A of GEM enterprises will be. (4) M&A helps to support firms’ growth listed on the GEM with pre-IPO growth management. We also found that the higher the proportion of shares sold off by managers and large shareholders after the expiration of lockup, the more significant the positive association between the IPO growth management and future M&A will be. This paper makes three primary contributions. First, it contributes to the literature on IPO growth management and real economic activities caused by the abnormal level of discretionary growth. It was found that growth is a fundamental variable in corporate valuation of GEM enterprises at the time of IPO, which provides empirical evidence for the real option model. The finding showed that the IPO growth management of GEM enterprises is independent from earnings management, which enriches the limited literature that examines the use of multiple accounting choices to achieve a specific objective. Prior research mainly investigated the motivation of growth management of high-tech enterprises, and there is no literature directly examining how growth management affects enterprises’ real economic actions. This paper found that IPO growth management of GEM enterprises can affect M&A during the post-IPO year, thereby extending the related literature. Second, it supplements the literature of M&A. Previous studies on M&A mainly started from the perspective of institutional environment and executives’ self-interest. In contrast to these, this paper focuses on the growth management based on accounting manipulation of IPO enterprises, and explores the linkage mechanism between accrual-based discretionary sales (growth management) and transaction-based real activities manipulation (M&A), so as to enrich and supplement the literature of M&A. Third, it increases investors’ and regulators’ understanding of growth management and its economic consequences. It helps to give insight into the relationship between IPO growth management and subsequent growth exhaustion, and various market anomalies in the GEM. Thus, this paper has both academic implications and practical significance for efficient resource allocation.
