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Brief

China Industrial Economics is supervised by Chinese Academy of Social Sciences, and sponsored by Institute of Industrial Economics, Chinese Academy of Social Sciences. It aims to report researches on industrial economics and business management, and to reflect outstanding research results on Chinese industrial economy and enterprise development. The scope covers national economy, industrial economy and business management. The journal is included in CSSCI, and is the top journal in the field of industrial economics in China.
Editorial Board

Editor-in-Chief
Huang Qunhui

Deputy Editor-in-Chief
Shi Dan, Li Haijian

Environmental regulation, corporate profit margin and cost of regulation compliance heterogeneity of enterprises with different scales

LONG Xiaoning;WAN Wei

China Industrial Economics,2017,No. 06

In this paper, we analyze the impact of environmental regulation on the profitability of Chinese manufacturing enterprises to test the Porter hypothesis. That is, whether environmental regulation can promote innovation to improve the profitability of enterprises, so as to achieve a win–win situation between environmental and economic development. This paper first establishes a theoretical model to analyze how environmental regulation affects the return on sales of firms of different sizes. We find that environmental regulation can increase the return on sales of large-scale firms with lower regulation compliance costs, but will reduce the profit margins and number of small-scale firms with higher compliance costs. To test the applicability of the theoretical model, we will implement the CP standards as quasi–natural experiments, based on the data of China’s manufacturing enterprises from 1998 to 2007, using DID method to analyze the impact of the implementation of CP standards on corporate profitability. The study finds that the implementation of CP standards significantly increases the profitability of enterprises, but does not find the standard implementation in the short term to promote business innovation or increase corporate subsidies. Further analysis finds that the implementation of CP standards improves the scale of large enterprise’s profitability, reduces the profitability of small-scale enterprises. Finally, this paper, using the Tertiles industry–level data of China’s economic census in 2004 and 2008 and using DID method, finds that the implementation of CP standards reduced the number of small-scale enterprises. So we believe that the regulation compliance cost heterogeneity, which is caused by the difference of enterprise sizes, rather than the Porter Hypothesis can better explain the impact of CP standards on the profitability of China’s manufacturing enterprises. The findings of this paper help to promote understanding on how environmental regulation affects corporate profitability.

?Impacts of tax shifting power on policy effect of replacing business tax with value added tax: the test from the perspective of cash-cash flow sensitivity

QIAO Ruilei;CHEN Lianghua

China Industrial Economics,2017,No. 06

As value added tax (VAT) is easy to be shifted, the degree of policy dividend of replacing business tax with VAT that enterprises can acquire depends on enterprises’ tax shifting power. Firstly, this paper analyzes the action mechanism of replacing business tax with VAT on cash-cash flow sensitivity based on transaction cost theory in the new institutional economies, takes suppliers’ bargaining power and clients’ bargaining power as measurement indicators for enterprises’ tax shifting power, and analyzes the impacts of tax shifting power on policy effect of replacing business tax with VAT through formula derivation. Secondly, based on the constraints of cash source and use, this paper adopts systematic equations to examine the policy effect of replacing business tax with VAT, and the impacts of tax shifting power on policy effect of replacing business tax with VAT. At last, this paper studies the differences of policy effect of replacing business tax with VAT in enterprises with different ownerships and in different industries. The results indicate that replacing business tax with VAT can effectively reduce enterprises’ cash-cash flow sensitivity, and improve enterprises’ cash holding situations. The tax shifting power can change the policy effect of replacing business tax with VAT on cash-cash flow sensitivity, and the stronger the tax shifting power is, the stronger the policy effect of replacing business tax with VAT is. For non-state-owned enterprises and other modern service industry enterprises, the policy effect of replacing business tax with VAT and impacts of tax shifting power on the policy effect are very significant. The impacts of other terms related with cash flow should be comprehensively taken into account when considering the impacts of replacing business tax with VAT on cash-cash flow sensitivity. The conclusions of this paper provide effective empirical evidence and conclusions for the government’s timely adjustment and supplement for subsequent macro policies.

Origin of deglobalization wave and its trend from the perspective of historical comparison

TONG Jiadong;LIU Cheng

China Industrial Economics,2017,No. 06

Can Yangtze River Delta expansion boost common regional economic growth?

LIU Naiquan;WU You

China Industrial Economics,2017,No. 06

Financial development, shadow banking regional mobility, and back-feeding effect: empirical evidence from China’s entrusted loan data

QIAN Xuesong;XIE Xiaofen;DU Li

China Industrial Economics,2017,No. 06