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.
Recent “off real to virtual” in China has drawn much attention in academia. Both domestic and foreign studies have shown that increase in economic policy uncertainty (EPU) would restrain the investment of enterprise entities. Is corporate financialization the result of economic policy uncertainty rising? This paper uses the empirical quarterly data of all “A” share listed enterprises from 2007 to 2015, to empirically answer the question. The results show that, in general, increase in EPU would restrain financialization trend. In terms of region and industry, the negative effect of EPU on corporate financialization is more pronounced in the middle and western regions, and industries of intense competition. Further analysis shows that EPU will not only impact enterprises’ financial investment scale, but also will affect financial assets structure. Enterprises would reduce the investment level of speculative financial asset, and increase long-term value reserving financial investment in consideration of financial market risk and business risk. Finally, the paper also finds that, enterprises’ financialization trend with lower financial constraint, is more sensitive to the rise of economic uncertainty, which suggests that speculating is the essential motives of enterprises’ financialization in China, rather than precautionary savings. The paper provides some reference for government to lead corporate investment back to real sector.
This paper investigates the effects of CNY exchange rate movements on manufacturing firm’s export product quality based on the perspective of vertical specialization using Chinese firm-level data from the National Bureau of Statistics of China and Chinese customs data over the period of 2000–2006. The empirical results are as follows. The appreciation of the CNY exchange rate improves the firm-destination quality of export products and the increase of vertical specialization will help to enhance the positive impact of exchange rate movements. By controlling the influence of vertical specialization, it shows that the impact of CNY exchange rate changes on the quality of export products will vary with firm’s total factor productivity, ownership, financing constraints as well as industry factor intensity and industry competition level. The higher the TFP of the firms is, the stronger the positive impact of the exchange rate on the quality of the exported products is. Foreign-owned and weak financing constraint firms or the firms who are in labor-intensive industries or more competitive industries will be affected in the same way. Empirical tests on the impact mechanism are as follows. The influence of exchange rate changes on the quality of differentiated products is quite different and the impact of CNY exchange rate on the firm-destination quality of export products is achieved by encouraging firms to adjust differentiated quality products. Vertical specialization moderates the influence of exchange rate changes through cost effect, quality effect of imported intermediate inputs and category diversity effect of imported intermediate inputs.
More and more brands choose self-deprecating humor as a response to brand misconduct. However, little literature in the field of response strategies after brand misconduct has examined the impact of brand self-deprecating humor on consumers’ attitude so far. This paper explores the brand self-deprecating humor as a response strategy to mitigate the negative attitude of customers after brand misconduct. One pre-experiment and four experiments revealed that the interaction of humor and self-deprecation would effectively alleviate the negative brand attitude of consumers. Specifically, the brand self-deprecating humor response allows consumers to perceive the brand standing in the consumers’ position, safeguarding the interests of consumers, and taking the responsibility. In addition, humor allows consumers perceive brand to be more capable. Therefore, brand self-deprecating humor response after brand misconduct enables consumers to perceive the that brand has capability and willingness to take the responsibility and to correct mistakes, thus shortening perceived distance between consumers and the brand, and alleviating the negative attitude to the brands with misconduct. The results also demonstrated that the mitigating effect of brand self-deprecating humor response on brand’s misconduct was only effective in the conditions of capable misconduct, as the effect would disappear in case of integrity misconduct. The findings of this study fill the gaps of the existing literature on brand misconduct, and provide a new communication strategy for the brands after making mistakes, which offers important theoretical contribution and managerial implications.
In recent years, the global economic cycle has shown an obvious accelerating trend, the varied external environment leads to the effectiveness of quantitative and price-based monetary policies changing with the different economic goals of central banks in different periods, and constant parameter model could not capture the time-varying effects of the quantitative and price-based monetary policies. Therefore, in this paper, we construct a factor-augmented vector autoregressive model with time-varying parameters and stochastic volatility (SV-TVP-FAVAR), analyze the different economic goals’three dimensional impulse responses to the quantitative and price-based monetary policies, and construct volatility index to study the effectiveness of quantitative and price-based monetary policies. It is found that, first, in the period of recession, the PBOC wishes to promote economic development; the quantitative monetary policy is more effective if reducing inflation and improving the public economic development are the main aims; and the price-based monetary policy is more effective if promoting output, raising the level of employment, promoting private economic and promoting financial market development are the main aims. Second, in the period of prosperity, as the PBOC wishes to control the economic fluctuation the price-based monetary policy should be taken if controlling inflation fluctuation and public economic fluctuation are the main aims; and the quantitative monetary policy should be taken if stabilizing output fluctuation, employment fluctuation, private economic fluctuation and financial market fluctuation are the main aims. In addition, the volatility component decomposition shows the good nature of the model in this paper, and finds that the shocks of monetary policy in the special periods are the main reason for the fluctuation resulting from macroeconomic regulation of monetary policy.
With reference to De Loecker et al. (2016), this paper measures export markup of Chinese multi-product exporters, solving the problem of unobservable factor input at the product level. Based on stylized facts, the paper elaborates the mechanism of input trade liberalization affecting multi-product exporters’ product markup. Marginal cost reduction effect and quality upgrading effect are the two main channels. Notably, input trade liberalization may have heterogeneous effects on markup adjustment between core and non-core products within multi-product exporters. Further, this paper puts forward econometric models based on above mechanisms. Using firm-product level data, this paper investigates empirically the overall and heterogeneous impact of input trade liberalization on the adjustment of firm product markup. The results show that input trade liberalization significantly raises overall products’ export markup, and its effects on markup adjustment are more profound among core products with the highest export value than non-core products. The empirical mechanism tests prove the two channels of marginal cost reduction effect and quality upgrading effect. Chinese multi-product exporters invest more in enhancing the quality of their core products. This quality-based competence also leads to a more significant quality upgrading for core products than non-core products. Therefore, firms adjust markup of core products more than non-core products. The above results have important policy implications for uncovering product performance adjustment and resource reallocation within multi-product exporters, and developing new competitive advantages for Chinese exporters.
Since the reform and opening up, with the rapid development of manufacturing industry, China has now become a veritable “world factory.” However, the quality of China’s manufacturing products is unsatisfactory, with the problem of excessively low-quality products and scarce high-quality products. At the same time, China’s ever-widening income gap has drawn more and more attention from all walks of life. Based on these two facts, this paper attempts to examine the impact of income distribution on the quality distribution of manufacturing products from the demand side. The theoretical analysis shows that the influence of income distribution on the distribution of product quality is affected by the population size in the economy and the fixed cost of the enterprise, so the direction is not certain. By setting the lognormal income distribution function, the numerical analysis shows that when the population is large and the firm’s fixed cost is small, the increase of the Gini coefficient of income distribution will improve the quality of the frontier products. On the contrary, when the population size is small, and firm’s fixed costs are high, an increase in the Gini coefficient of income distribution will lead to a lack of demand for high-quality products, which in turn cannot cover the fixed costs required for the production of high-quality products and reduce the quality frontier. However, under any condition, an increase in the Gini coefficient of income distribution will result in product quality concentrating toward the lower end of the quality spectrum. The results of this paper are of some enlightenment for the upgrading of China’s industrial structure, that is, steadily pushing forward the reform of income distribution and building olive-type income distribution pattern and other measures can effectively promote the upgrading of the national demand structure and form a supply-side structural reform, which is more conducive to promoting industrial restructuring and upgrading.
The traditional research on the economic effect of transport infrastructure mostly focuses on the static economic effect of the infrastructure construction, this paper aims to find how the traffic infrastructure influences regional economic efficiency through influencing the evolution of enterprises. With the help of detailed data of Chinese highway construction since 1998 and the Chinese industrial enterprises database, we explored the role of the highway construction in entering, exiting and productivity of enterprises, which are the indispensable elements of the evolution of enterprises. Moreover, we distinguished the contributions to regional economic efficiency of each evolution process by the DOP decomposition, thus we could find how the highway construction influences regional economic efficiency through these processes. The main conclusions of our paper are as follows. Firstly, the highway construction improves the total factor productivities and the possibility of entering the market of manufacturing enterprises, while decreasing the possibility of exiting. Secondly, the productivity of existing enterprises are of the greatest importance in improving regional economic efficiency. The highway construction is beneficial to the enterprise growing effect, but is detrimental to the resource allocation effect, enterprise-entering effect, and enterprise-exiting effect, showing that the highway construction promotes the entry of inefficient enterprises, and does not eliminate backward ones. State-owned firms gaining more benefits in the highway construction may be the culprit of negative effects above. To a certain extent, the research of this paper deepens the understanding of the highway influence on the economic efficiency mechanism and has important reference value for the formulation of investment plan of the transportation infrastructure in the future.
Based on review and research on evolution of corporate governance with Kuhn’ paradigm theory analysis in science philosophy, this paper puts forward the proposition that corporate governance is developing into intellectual capital dominating paradigm from financial capital dominating paradigm. During the long period of industry economy’ development after the first Industrial Revolution, financial capital was always the scarcest resource and took the most important role in corporate operating and M & A activities. Financial capital dominating paradigm which aims to maximize shareholder value and abides by the principle of “one share, one right” has gradually matured under the guidance of the faith that capital employs labor. With the rapid development of knowledge economy, the faith, objective and principle of financial capital dominating paradigm are changed by new cases in practice. Both the dual-class share structure adopted by more and more companies and the Alibaba partnership indicate that intellectual capital is exceeding financial capital in corporate governance, which leads to the forming of intellectual capital dominating paradigm. “People-oriented” thought stands in the core of new paradigm’s faith. The new paradigm empowers intellectual capital to keep control in pursuit of maximization of company value and helps to achieve synergy and win-win of the two kinds of capital. In the evolution process of corporate governance paradigm, the innovation of science and technology is the fundamental driver and the capital market plays a catalytic role. The natural law that social value is continuously optimized not only provides theoretical basis but also reveals the historical inevitability of the evolution.
The purpose of this study is to investigate whether China’s increasing outward foreign direct investment can help to improve the resource misallocation. Based on the measurement of regional capital mismatch index and labor mismatch index, and the application of provincial panel data in China, this paper builds the static and dynamic panel model to study the influence of outward foreign direct investment on resource misallocation in China. It is founded that there are a certain degree of capital and labor misallocation in every province of China during the period of investigation, and there is a significant difference in the degree of misallocation between regions. In addition, there is a certain path dependence of resource misallocation, which means that the past level of misallocation has an impact on the current resource misallocation. We also find that outward foreign direct investment can improve the misallocation of capital and labor resources in China significantly, thus improving the efficiency of resource allocation. This result is still robust in exchange for different resource mismatch indexes. Further studies have found that there are regional differences in the role of outward foreign direct investment in the allocation of resources mismatch. The difference between the level of overcapacity and the direction of misallocation will also affect the estimation results. The implication of this paper is that the government departments should actively encourage enterprises to go out for overseas direct investment in the context of the Belt and Road Initiative, to improve the domestic misallocation of resources and to promote the transformation and upgrading of economic development mode.
