Sponsor(s): Development Research Center of The State Council
12 issues per year
Current Issue: Issue 01, 2020
Journal official website:http://www.mwm.net.cn/web/
Management World is supervised by Development Research Center of The State Council, and sponsored by Development Research Center of The State Council. It aims to reflect the multi-field and multi-disciplinary research on China’s economic and social management issues, and to provide services for China’s economic reform and development. Its scope covers fiscal and financial research, rural economics, macroeconomic management, public management, business management, industrial and regional development. The journal, included in CSSCI and JST, has been in the top list in the field of economic management for many years, and achieved a very high reputation from readers all over the world.
Tian Yuan,He Shaohua, Lu Jian, Jiang Dongsheng
Ma Xiaogang, Qiao Renyi, Li Jiping, Li Menggang, Li Peiyu, Zhang Xinmmin, Shen Bainian, Chen Dongsheng, Cheng Quansheng, Zhao Jie,Tuo Zhen
Potential and supporting policies of China’s economic growth between 2021 and 2035 from the perspective of international comparison
Management World,2020,Vol 36,No. 01
Analysis of the achievable goals of and the structural conditions needed for China’s medium and long-term economic growth is a basic work for the preparation of the 14th Five-Year Plan, especially at the historical intersection of the two centenary goals. China’s GDP per capita will be around 17000 international dollar in 2020 based on the data of the Penn World Table and the annual economic growth rate of China in the next 15 years is predicted to reach about 5%. A series of challenges need to be overcome in order to achieve the expected goal of economic growth in China. First, in order to maintain capital growth rate in the case of a long-term declining trend in the national savings rate, China needs to improve the efficiency of capital utilization and reduce the capital output ratio from the current level of about four times to less than three times. Second, in order to avoid rapid decline in the growth rate of the total labor force under the unfavorable circumstances, China needs to strive to stabilize the labor force participation rate and employment rate. Third, in order to maintain the growth of human capital under the condition that the consolidation rate of compulsory education and the enrollment rate of high school education are already high, China must rely on improving the enrollment rate of higher education and the quality of education at all stages. Fourth, the growth of Total Factor Productivity in China will be restricted due to the significantly deteriorating external environment for science and technology development, the obviously insufficient input intensity in basic research, the slower urbanization speed and the weakened incentive effects of labor reallocation. To overcome these challenges, China needs to deepen reforms and formulate relevant policies. The supporting policies include the following aspects. (1) It is to stick to the bottom line of investment rate, optimize the investment structure, accelerate the construction of modern information infrastructure, make better use of the strategic guiding role of national development plan and national capital, and direct more funds to the real economy and strategic emerging industries. (2) It is to implement a more active population development strategy, formulate a delayed retirement plan on the basis of scientific assessment, improve the supply mechanism of childcare services and elderly care services, and provide greater policy support for university graduates and migrant workers in employment and entrepreneurship. (3) It is to fully popularize free education at the senior secondary school level, increase the guarantee for the children of the agricultural population and the poor to receive basic education, increase investment in basic disciplines, give greater priority to the central and western regions and underdeveloped regions in terms of discipline construction, discipline evaluation and funding allocation, fully open social access to vocational education, promote the integration of education into industry, and encourage school-enterprise cooperation. (4) It is to strengthen basic research and original research, give more prominence to the key common technologies and leading-edge technologies in the implementation of major national science and technology projects, increase the intensity of national R&D investment to more than 3% gradually, continue to deepen the reform of the management system of scientific research institutes, and improve the efficiency of innovation input-output and achievement transformation. (5) It is to improve the mechanism for the integrated development of urban and rural areas, accelerate the establishment of the system that rural collectively owned land designated for business-related construction enters the market on an equal footing with and is subject to the same rights and prices as similarly designated state-owned land, coordinate the plans and construction of urban and rural infrastructure networks and public services, and comprehensively lift restrictions on granting residency except for individual megacities and supercities.
Management World,2020,Vol 36,No. 01
We proposed a new indicator to measure stock price overvaluation, the reference point ratio (RPR). Specifically, RPR refers to the ratio of the last trading day stock price to the highest stock price of the year. As the stock market is characterized by excessive volatility (Shiller, 1981a; 1981b; 1981c), the highest stock price usually means that the stock price is overvalued. As China’s capital market is still dominated by individual investors, the short-selling mechanism still has many restrictions and is not fully functioning, as evidenced by the asymmetric trading volume between the much larger scale of financing and the smaller size of margin trading (Chu and Fang, 2016; Hao et al., 2018). If the adjustment speed after the stock price reaches the highest point is not sufficient and fast, then RPR may be a reasonable measure of overvaluation. We used the ex-post crash risk to test the effectiveness of RPR in measuring the overvaluation. According to the theory of mean-reversion in asset pricing (Poterba and Summers, 1988; Kim et al., 1991), the overvalued state of stock prices cannot be maintained forever, and one possible adjustment is the crash risk of the stock price (Chen et al., 2001). We used the data of A-share listed companies from 2007 to 2018 as the sample to test whether RPR can predict the crash risk of the stock price. The baseline results show that RPR positively correlates with crash risk. We conducted further research in the following three aspects. Firstly, the impact of RPR on crash risk is more prominent for firms with fewer analysts following, more shares held by individual investors and higher stock liquidity. Secondly, the results above are robust after we control the commonly used indicators of overvaluation, two types of agency problems, and management’s bad news “hoarding” behavior. Finally, when the crash occurs, RPR affects investors’ responses to negative news. In the long term, the stock price will maintain “momentum” instead of experiencing a “reversal,” which indicates that RPR not only affects investors’ perception of the stock price overvaluation but also means the de facto overvaluation. The paper enriches the literature in the following aspects. First, we are among the first to propose RPR as a new measure of overvaluation. RPR enriches the measures of overvaluation from the perspective of the adjustment speed of stock price. Second, this article enriches the literature on market efficiency. According to the efficient-market hypothesis, if the market is weak-efficient, past information cannot predict future stock price (Malkiel and Fama, 1970). However, RPR can predict future crash risk, indicating that China’s capital market is still in weak efficiency. Third, it supplements relevant research on how investors react to bad news in the context of crash risk. This article points out that the anchoring effect of investors on stock price highest points will affect their responses to bad news. It enriches the understanding of the crash risk from the level of investor psychological awareness and enriches the application of the anchoring effect in China’s capital market (Chen and Li, 2016; Zhu, 2017). The paper has certain implication to improve the pricing mechanism of the capital market and reduce the systemic risk of the capital market. This article shows that when a company’s stock price reaches a high level, the overvaluation state of the company’s stock price remains for at least one year, indicating that the pricing efficiency of the capital market needs to be improved. Lower information transparency, more stocks held by individual investors and higher stock price liquidity will all strengthen the impact of RPR on the crash risk. All these results suggest that further improving the information disclosure environment of listed companies, increasing the proportion of institutional investors, and reducing the myopia of investors are conducive to maintaining the stability of the capital market.