2019 Vol. 34, No. 2

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Economic Theory and Exploration
Technological Progress Trigger Trade Friction with China:Based on Industrial Level
DENG Lu, LIU Wei-tao
2019, 34(2): 4-16.
[Abstract](583) [FullText HTML] (200) [PDF 1190KB](29)
Abstract:
Increasing trade friction with China is an inevitable phenomenon while China has been integrated deeply into global economy. Technological progress in a certain industry or product may bring comparative advantages to a country's export, but it will also lead to trade frictions between countries. Based on data of trade remedies towards China from 12 important trade partners from 1996 to 2014, this paper empirically examines the impact of trade frictions caused by technological progress in China's industries at industrial level.The results show that the higher the technological progress of the industry is, the greater the possibility that the industry will encounter trade remedies from other countries; the effects of technological progress on trade remedies are characterized by industry heterogeneity and country heterogeneity; the effects of technological progress on trade remedies are more significant in technology-intensive industries and emerging industries; industries with large imports and high import penetration are more likely to suffer real implementation of trade remedies; and developed countries are more sensitive to China's technological progress. In order to cope with frequent trade frictions, China should take advantage of WTO trade dispute mechanism, avoid using policies that easily lead to trade remedies, strengthen self-dependent innovation, enhance the cost-effective advantage of export products, and proactively explore more emerging trade markets.
Macroeconomic Effects of the Productive Factor Price Distortion in China:Simulation Analysis Based on DSGE Model
LI Yan, HUANG Ting-ting
2019, 34(2): 17-30.
[Abstract](320) [FullText HTML] (572) [PDF 1861KB](26)
Abstract:
Market-oriented reform of the price of production factors is the key to improving the socialist market economic system. This paper incorporates labor price distortion and capital price distortion into a DSGE (dynamic stochastic general equilibrium) model, and investigates effects of these distortions on several essential macroeconomic variables from the perspective of DSGE. The results show that: Firstly, as the positive distortion of the labor price approaches to 0, the equilibrium value of macroeconomic variables will gradually decrease, however, except the equilibrium of the employment, as the negative distortion of the capital price approaches to 0, the equilibrium values of other economic variables will gradually increase.; the positive distortion of the capital price has a greater impact on the equilibrium value of macroeconomic variables. Secondly, the shock caused by the positive distortion of the labor price as it approaches to 0 has a negative impact on the fluctuation of macroeconomic variables, but the shock caused by the negative distortion of the capital price as it approaches to 0 has a positive impact on the fluctuation of macroeconomic variables; the positive distortion of the labor price has a greater impact on the fluctuation of macroeconomic variables. Thirdly as the positive distortion of the labor price approaches to 0, the social welfare loss will gradually increase, but as the negative distortion of the capital price approaches to 0, the social welfare loss will gradually decrease; the positive distortion of the labor price has a greater impact on the social welfare loss.To promote the market-oriented reform of production factor allocation in China, it is suggested to reduce the government's improper intervention in the capital market and maximize the role of market mechanisms in determining the capital price.
Corporate Finance and Accounting
Does the Beauty Premium Effect Exist: Empirical Evidence from Executive's Excess Compensation
SHAO Jian-bing, FAN Cun-jian
2019, 34(2): 31-45.
[Abstract](387) [FullText HTML] (241) [PDF 1568KB](15)
Abstract:
Taking the listed companies on the GEM of China from 2009 to 2016 as the research object, this paper empirically tests whether there is a beauty premium effect in the excess compensation of executives. The results indicates that there is a beauty premium effect in executive's excess compensation; when the general manager's appearance superior to that of the chairman, vertical executive's appearance has a negative moderating effect on the beauty premium of executive's excess compensation, on the contrary, it is not significant. This paper also validates the differences in the regulatory effect of the executive's vertical pair of appearance on chairperson's beauty premium effect according to the chairperson's appearance grouping, and there exists significant beauty premium effect of the executive's excess compensation in different enterprises, industries and regions. The findings provide an interesting perspective for the future research on executive's excess compensation.
Institutional Investors' Holdings, Executives' Excess Compensation and Corporate Governance
CHEN Xiao-shan, LIU Hong-duo
2019, 34(2): 46-59.
[Abstract](453) [FullText HTML] (369) [PDF 952KB](142)
Abstract:
The existing literature is limited to the analysis of institutional investors as indiscriminate subjects, making it still unclear of which role institutional investors play in corporate governance such as a supervisor, collaborator or bystanders. Based on the perspective of individual heterogeneity of institutional investors, this paper takes China's 2010-2017 A-share listed companies as research samples and empirically tests the heterogeneous individual institutional investors' shareholding and executives' excess compensation to investigate the role institutional investors play in corporate governance. The results show tha: On the whole, the depth and breadth of institutional investors' shareholdings can help reduce the executives' excess compensation, and the latter's suppression effect is relatively more significant; on the individual side, the proportion of stockholders in securities investment funds is positively correlated with executives' excess compensation, while the proportion of institutional investors in broker companies, securities firms, social security funds and trust companies is negatively correlated with with executives' excess compensation; there is no evidence suggesting that QFII, financial companies, and banks' shareholdings are related with executives' excess compensation. The above results show that institutional investors in broker companies, insurance companies, social security funds, and entrust companies mainly act as "supervisiors"in reducing the agency costs of listed companies; securities investment funds are more likely to be "collaborators", while investors from QFII, financial institutions, financial companies, and banks mainly play the role of "onlooker".
Finace and Capital Markets
Media Attention, Capital Market Mispricing and Corporate Investment
HU Guo-qiang, XIAO Zhi-chao
2019, 34(2): 60-73.
[Abstract](456) [FullText HTML] (284) [PDF 1027KB](28)
Abstract:
Based on the perspectives of information asymmetry and behavioral finance, the paper employs the data from Chinese A-share market to examine that media attention plays dual roles of information and sentiment in stock mispricing, but both follow different paths. Media largely plays information role in relieving the undervaluation, while it implements sentimental functions in increasing the overvaluation. The results from mediation effect tests show that media attention significantly inhibit the decreasing of investments through relieving the stock undervaluation, but significantly exacerbates the investment expansion through aggravating the stock overvaluation. Further, this paper finds that media attention reduces the level of information asymmetry of the undervalued firms, alleviating the lack of investment caused by stock undervaluation, while increases the investors' irrationality of overvalued firms, exacerbating over-investment caused by stock overvaluation. In conclusion, this paper indicates that media has both governance and exacerbation effects on the efficiency of capital allocation through capital market misvaluation. The research helps us understand the function mechanism of media in the capital market, and provides references for how media as information intermediary in financial market improve the development of real economy.
Analyst Coverage and Corporate Environmental Governance:Evidence from Chinese Listed Companies
CHENG Bo
2019, 34(2): 74-89.
[Abstract](418) [FullText HTML] (244) [PDF 1034KB](20)
Abstract:
Taking the listed companies in Shanghai and shenzhen from 2007 to 2015 as samples, this study examines the function of the analysts' attention to corporate environment performance. By analyzing the mechanism of how the analyst as the capital market intermediary affects the corporate environmental performance, two competitive hypotheses are proposed: market supervision hypothesis and performance pressure hypothesis. The empirical results show that analysts' attention helps to constrain management's self-interested behavior at the expense of the environment, which urges the enterprise management to deal with the crisis of environmental legitimacy and obtain the recognition of environmental legitimacy, thus significantly improving the performance of enterprise environmental governance and supporting the hypothesis of market supervision.The conclusion of this paper not only enriches and expands the relevant literatures on analysts' attention and corporate environmental governance, but also provides some empirical evidence for the government to promote environmental governance through improving the capital market intermediary, and has some reference value for how to better motivate enterprises to fulfill their responsibilities in environmental governance.
Guangdong Business and Economy
The Ways of Economic Development Affecting the Public's Sense of Legal Identity: An Case Study of 9 Mainland Cities in Guangdong-Hong Kong-Macao Greater Bay Area
QIU Fo-mei, ZHENG Fang-hui
2019, 34(2): 90-101.
[Abstract](310) [FullText HTML] (223) [PDF 952KB](12)
Abstract:
Based on the strategy of high-quality development transformation and fully advancing the lawbased governance of the country in the new era, this paper explores the impact of economic development of nine cities in Guangdong-Hong Kong-Macao Greater Bay Area on the public sense of legal identity. It is concluded that economic growth, the increase of fiscal revenue of local governments and residents' disposable income can significantly enhance the public sense of legal identity; urban-rural income and population income gap have a significant negative impact on the public's sense of legal identity; the relationship between public income satisfaction and the public sense of legal identity is influenced by their social background. Therefore, In view of successful experience of Hong Kong and Macao in the rule of law more attention should be paid to the quality of economic growth regarding the promotion of the integration and development of the Great Bay Area, and should be paid to the structural contradictions in the region to effectively promote the sense of public access and legal identity through narrowing the income gap between urban and rural areas and between the population.
The Change Trajectory and Evolution Characteristics of Guangdong Total Factor Productivity in the Context of Opening up
LIAO Li-ping, WANG Fang
2019, 34(2): 102-112.
[Abstract](308) [FullText HTML] (113) [PDF 1926KB](10)
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Guangdong is the pioneer of China's reform and opening up. In recent years, the slowdown of economic growth in Guangdong has aroused concerns about the sustainable growth of export-oriented economy. In order to effectively play a role of opening to the outside world for the promotion of total factor productivity and the sustainable economic growth, this paper calculates the total factor productivity (TFP) of Guangdong Province from 1990 to 2016 by using the OLS regression method, and investigates the influence track and evolution characteristics of FDI, import and export dependence on TFP. The empirical results show that from the perspective of impact trajectory, with the increase of FDI, import and export dependence, total factor productivity shows an inverted U-shaped change trajectory, which rises first and then decreases; from the perspective of evolution characteristics, with the passage of time, the positive impact interval of FDI, import and export on total factor productivity is narrowing. Therefore, with the deepening of reform and opening up, FDI, imports and exports must be expanded from quantity to quality in order to effectively maintain its role of promoting total factor productivity.

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