China Economic Quarterly
Vol. 16 No. 1
October, 2016
CONTENTS
Papers
Market, Government and Polarization: A Theory of Inequality from the Perspective of New Structural Economics
……………………………………………………………………………Caihui Fu / 1
Endowment Restriction, Factor Substitution and Induced Technological Innovation：A Case Research on the Grain Producing Mechanization in China
……………………………………………………Xuyuan Zheng Zhigang Xu / 45
Population Aging, Family Planning Policy Adjustment and China’s Economic Growth
Wei Wang / 67
The “Dual” Structural Change in China and NonBalanced Growth
……………………………………Shan Pan Liutang Gong Shang-Ao Li / 97
How Government Spending and Opening up Affect Chinese Residents’ Consumption? On the Basis of the Exploration of Chinese Transformational Growth Mode Affecting Consumption
……………………………………………………………Tao Jin Xinyu Tao / 121
The More Beautiful, the Higher Earnings？The High Heel Curve between Appearance and Earnings
…………………………………………Jiqiang Guo Shulan Fei Ping Lin / 147
Does Anonymous Peer Review Promote China’s Economics Studies Progress? Research based on Difference in Differences Method
……………………………………………………Ruiming Liu Renjie Zhao / 173
An Extension to Stochastic Volatility Model: the Theory and Empirical Analysis of Chinese Stock Market
……………………………………………………Yufeng Zeng Xiuhai Xiang / 205
The Effects of Tournament Structure, Interim Performance Feedback and Unconscious Priming on Agents’ Behavior: Some Experimental Evidence
………Wei Yan Rundong Zheng Wenshan Dang Yongliang Cheng / 229
Does Investor Attention Affect Investors’ Behavior? Evidence from the“Dragon and
Tiger” List in China
……………………………………………………………………Xunan Feng / 255
Corporate Irresponsible Behaviors and Residents’ Selective Responses：Evidence from the Listed Firms
……………………………………………………Jisheng Yang Jianhui Yang / 275
Economies Agglomeration, Economies Distance, and Farmer’s Income Growth: A Study on Direct and Spillover Effects
………………………………Junqian Wu Jianqing Ruan Guangtong Xu / 297
News Shocks and Real Estate Market Anomaly in China
……………………………………………………Liu Yang Li Li Ting Wu / 321
The Transmission Mechanism of Midterm Policy Rate
…………………………………………………Guofeng Sun Zhiming Duan / 349
Regulation of Information Disclosure and the Patterns of P2P Lending in China
…………………………………………………………………Haiyang Zhang / 3471
Childcare, Public Service and Chinese Rural Married Women’s Nonfarm Labor Force Participation: Evidence from CFPS Data
……………………………………………………Ruixiang Xiong Huiwen Li / 393
Private Benefits of Control and the Foreignlisting Decision：Based on the Data of Domestic Company listed in Hong Kong
……………………………………………………………Feng Li Yan Dong / 415
Market, Government and Polarization: A Theory of Inequality from the Perspective of New Structural Economics
CAIHUI FU
(Peking University)
Abstract Via making a contrastive analysis on the different roles of market time preference heterogeneity and policy heterogeneity of development strategy on the polarization, this paper builds a theory of inequality. The market heterogeneity itself would induce and restrain the polarization. However, the more the development strategy by government deviates from the comparative advantage, the more policy heterogeneity becomes. If the preferential policy become too much, the balance mechanism would be destroyed to touch the warning line to evoke the polarization.
Key Words polarization, market heterogeneity, policy heterogeneity
JEL Classification O15, O20, O41
DOI:10.13821/j.cnki.ceq.2016.04.01
Endowment Restriction, Factor Substitution and Induced Technological Innovation：A Case Research on the Grain Producing Mechanization in China
XUYUAN ZHENG*
（Fujian Agriculture and Forestry University）
ZHIGANG XU
(Nanjing Agriculture University)
Abstract This study explains the influence mechanism of the difficulty of factor substitution which is constrained by resources endowment on factor substitution, using 1993—2010 panel data of national provinces, satellite remote sensing data of slope of cultivated land to take the empirical test. Studies show that rising labor costs will get farmers use machinery to replace labor, but significantly affected by the terrain conditions. The machine is easy to replace labor on the plain because of the low slop of land, which make the mechanization process faster than hilly. Research enriches the induced technological innovation theory, and has important policy implications.
Key Words theory of induced innovation, agricultural mechanization, difficulty of factor substitution
JEL Classification O33, Q16, D13
DOI:10.13821/j.cnki.ceq.2016.04.02
Population Aging, Family Planning Policy Adjustment and China’s Economic Growth
WEI WANG
(Shanghai University of Finance and Economics)
Abstract This paper examines how population ageing and family planning policy adjustment affect China’s household’s saving, human capital investment and economic growth in a three period overlapping generation model with bilateral inter-generation transfer and parents’ selfinterest and altruism motivation. The main findings are as follows: under current reasonable parameters of China’s economy, the population aging has negative effect on saving，human capital investment and economic growth; the higher the transfer rate from adult children to old parent, the lower the economic growth rate, household saving rate and education investment rate; relaxing one-child policy will benefit economic growth, if the fertility rate will not rebound to a much high level; Our simulation results also shows that, as the longevity keep rising and the pressure of old-age support is increasing, fertility policy adjustment, although to a certain extent, can slow down the negative impact of population aging on economic growth but cannot fundamentally reverse it. It is extremely important to improve the speed of human capital accumulation and the efficiency of human capital investment for further coping with the challenge of population ageing.
Key Words relaxing one-child policy, population aging, economic growth
JEL Classification D91, J11, E21, O11
DOI:10.13821/j.cnki.ceq.2016.04.03
The “Dual” Structural Change in China and Non-Balanced Growth
SHAN PAN
（Jinan University）
LIUTANG GONG
（Peking University）
SHANG-AO LI
（Zhongnan University of Economics and Law）
Abstract We develop a dynamic growth model with two industries and three sectors in this paper. It characterizes the process of economic transition from agriculture to non-agriculture, from state to non-state sector, with the associated non-balanced sectoral growth during the recent thirty years in China. The model endogenously explains the source of dual structural change: since the elasticity of substitution between sectors is larger than 1, the difference in technological progress leads to the transition between state and non-state sectors., while the difference in factor income share leads to the transition between agriculture and non-agriculture sector. Besides, there is non-balanced sectoral growth in the Balanced Growth Path (BGP). Finally, we calibrate our model using the 1978—2011 data in China. The numerical simulation verifies the fitness of the model to the real economy.
Key Words “dual” structural change, sectoral heterogeneity, nonbalanced growth
JEL Classification E13, O11, O41
DOI:10.13821/j.cnki.ceq.2016.04.04
How Government Spending and Opening up Affect Chinese Residents’ Consumption? On the Basis of the Exploration of Chinese Transformational Growth Mode Affecting Consumption
TAO JIN XINYU TAO
（Xiamen University）
Abstract On the basis of Barro’s theoretical model, we build a theoretical model to illustrate that local government spending and opening up affect residents’ consumption. Then we make empirical analysis of it respectively at country level and region level, including the eastern, middle and western regions. We find that the direct and interactive effect of local government spending and opening up on residents’ consumption vary from region to region.
Key Words government spending, opening up, consumption
JEL Classification E21, F41, H53
DOI:10.13821/j.cnki.ceq.2016.04.05
The More Beautiful, the Higher Earnings？The High Heel Curve between Appearance and Earnings
JIQIANG GUO* SHULAN FEI
（Zhejiang University）
PING LIN
（Zhejiang University of Finance and Economics）
Abstract In this paper we distinguish the strikingly beautiful from the above-average and put forward a hypothesis of the high heel curve which describes the relationship between appearance (or physical appearance) and earnings. Unlike the previous literature, we regard appearance as a signal of interpersonal skills and explain the non-monotonic relationship between looks and earnings. We use two data sets, Shanghai Academy of Social Science 1996 and China Family Panel Study 2012, to examine the hypothesis and influence mechanism. The empirical analysis shows that the above-average gain the highest earnings after controlling their personal characteristics.
Key Words Physical Appearance, Signal of Interpersonal skills, The High Heel Curve
JEL Classification D31, J31, Z19
DOI:10.13821/j.cnki.ceq.2016.04.06
Does Anonymous Peer Review Promote China’s Economics Studies Progress? Research based on Difference in Differences Method
RUIMING LIU
(Renmin University of China)
RENJIE ZHAO
(Northwest University)
Abstract We use the panel data of 366 kinds of economic and management journals from 2003 to 2012 in China to evaluate the contribution of anonymous peer review institution to China’s economics progress with five indexes: impact factor, cited times, average citation rate, cited half-life, and immediately index. After doing many robust tests with DID method, we find that anonymous peer review institution has positive effect on impact factor, cited times and average citation rate of academic journals significantly, which is higher if this institution is implemented more strictly. What’s more, anonymous peer review institution has dynamic effects on academic progress, which will be more obvious in the long run.
Key Words Anonymous Peer Review, Difference in Difference, Academic Progress
JEL Classification A11, O31, P27
DOI:10.13821/j.cnki.ceq.2016.04.07
An Extension to Stochastic Volatility Model: the Theory and Empirical Analysis of Chinese Stock Market
YUFENG ZENG
(Fudan University)
XIUHAI XIANG*
(Fudan University)
Abstract In the setting of the modified mixture distribution assumption model, we develop a general theoretical model for the new SV model with two factors, which contains microstructure economic explanation. Choosing high frequency data of actively trading stocks in China for calibration, we find that the results are consistent with the theoretical assumptions, and stochastic volatility is positively correlated with new information arrival process and the liquidity. We then use the efficient method of moments to identify the adequacy of the models and find that the performance of the new SV model is better, the scores of t ratio of which indicates that the macro fundamental factor controls the persistency of the volatility, while the market micro-structure factor leads to the fat tail.
Key Words the mixture distribution hypothesis model, the information arrival process, liquidity
JEL Classification G14, G12, G11
DOI:10.13821/j.cnki.ceq.2016.04.08
The Effects of Tournament Structure, Interim Performance Feedback and Unconscious Priming on Agents’ Behavior: Some Experimental Evidence
WEI YAN* RUNDONG ZHENG WENSHAN DANG
(Chongqing University)
YONGLIANG CHENG
(China Construction Seventh Engineering Division Traffic Co. Ltd)
Abstract We study the effects of tournament structure, interim performance feedback and unconscious priming on agents’ behavior in real-effort experiments. The main findings include: First, the tournament structure of 1/3 winning ratio can urge agents to improve the level of effort and reduce sabotage level, and thus create more benefit for principals. Second, interim information feedback cannot improve the effort level of agents effectively, but it can reduce sabotage level of agents. So the agents achieve better performance under the condition of interim information feedback. Third, in the case of 1/3 winning ratio, agents ranked top in the last round suffer more sabotage in the next round. However, in the case of 2/3, the low-ranking agents in last round suffer more sabotage in the next round. Fourth, positive unconscious priming cannot reduce sabotage effectively, but negative unconscious priming can significantly increase the agents’ sabotage behavior.
Key Words tournament structure, interim performance feedback, unconscious priming, agents’ behavior, experiment
JEL Classification J01, M12, M50
DOI:10.13821/j.cnki.ceq.2016.04.09
Does Investor Attention Affect Investors’ Behavior? Evidence from the “Dragon and Tiger” List in China
XUNAN FENG*
（Southwestern University of Finance and Economics）
Abstract Using the “Dragon and Tiger” sample from 2006 to 2010 in China, We study the effect of investor attention on stock return over short and long horizons. We find that investors are significantly influenced by attention shock and that information cascade further strengthens this effect. If the “Dragon and Tiger” event happened with relative stock price up or the dominated buying behavior from large institutions, investors are more prone to buy immediately and the stock return revert quickly in a longer horizon. These findings not only make contributions to the relationship between investor attention and assets prices, but also have important implications for investor protection in China.
Key Words investor attention, information, investor behavior
JEL Classification G34, G14, G12
DOI:10.13821/j.cnki.ceq.2016.04.10
Corporate Irresponsible Behaviors and Residents’ Selective Responses：Evidence from the Listed Firms
JISHENG YANG*
(Huazhong University of Science and Technology)
JIANHUI YANG
(Post-Doctoral Research Workstation of China Investment Securities)
Abstract In this paper we try to analyze the characteristics of residents’ responses and market supervision effects by examining the market performance of firms, after the exposure of their irresponsible behaviors. We find that residents’ responses are selective towards different corporate social irresponsibility. The residents respond positively to product quality and safety accidents as their rights and interests are affected directly; however, the residents respond indifferently to environment pollution accidents despite of their social harm and strong external effect. These selective responses can help firms make use of their financial strength or market status to weaken social supervision effect. Therefore, the market has no restriction on environment pollution, and environment protection should depend on administrative regulation from the government.
Key Words corporate social responsibility, residents’ selective response, environmental pollution
JEL Classification D03, M14, C12
DOI:10.13821/j.cnki.ceq.2016.04.11
Economies Agglomeration, Economies Distance, and Farmer’s Income Growth: A Study on Direct and Spillover Effects
JUNQIAN WU
(Southwestern University of Finance and Economics)
JIANQING RUAN* GUANGTONGXU
(Zhejiang University)
Abstract This paper studies the direct and spillover effect of economic agglomeration on farmer’s income with the spatial Durbin model. The results show that economic agglomeration has a significant positive direct effect on farmer’s income. Economic agglomeration from other areas, together with the economic distance, has a significant positive spatial spillover effect on farmers’ income. The total effect of economic agglomeration is also positive and significant. Compared to the spatial Durbin model, the traditional model not considering the spatial spillover effect overestimates the direct effect of economic agglomeration on local farmers’ income but underestimates the total effect.
Key Words economies agglomeration, farmer’s income, spatial spillover effects
JEL Classification O11, R11, Q12
DOI:10.13821/j.cnki.ceq.2016.04.12
News Shocks and Real Estate Market Anomaly in China
LIU YANG* TING WU
(Central China Normal University)
LI LI
(Hubei University)
Abstract Based on the empirical research indicating that there exists real estate market anomaly in China during period of 2001—2014, our study quantifies the expectation-driven cycles for housing market fluctuations by estimating a New Keynesian model. We find that (1) News on technology shock significantly contributed to the abnormal booms in housing price from 2002—2012, and the persistent bust since 2013.(2) Expectations of credit shock and unanticipated interest shock accounted for the situation of “quantity decreases but price untouched with control measure”. (3) Expectations of credit crunch resulted in “the tune rising more” by substitution effect, housing price run-ups would suppress consumption at that time.
Key Words news shock, real estate market, market anomaly
JEL Classification E17, E21, R21
DOI:10.13821/j.cnki.ceq.2016.04.13
The Transmission Mechanism of Mid-term Policy Rate
GUOFENG SUN
（The People’s Bank of China）
ZHIMING DUAN*
（Peking University）
Abstract Based on the two-sector decision making mechanism inside China’s commercial banks, we establish a three-stage game theory model to analyze how the medium-term policy interest rate affects the amount and interest rate of commercial bank loan, and how it affects money market and the bond market accordingly. We introduce the market factors into commercial bank balance sheets, and establish the microcosmic basis of monetary policy transmission mechanism. We find that central bank medium-term policy interest rate has a significant effect on the amount and interest rate of commercial bank loan, which is superior to central bank short-term policy rates.
Key Words mid-term policy rate, game theory, two-sector decision making model
JEL Classification E43, E52, G21
DOI:10.13821/j.cnki.ceq.2016.04.14
Regulation of Information Disclosure and the Patterns of P2P Lending in China
HAIYANG ZHANG*
（University of International Business and Economics）
Abstract P2P lending is developing rapidly in recent China. While the prevailing pattern of “safety promise” is considered as the radix of risk in this industry, little is known about its institutional foundation. We find that China and the UK have the same pattern of “safety promise”, but the US has a different pattern of “no promise”. Such differences haven’t been explained by existing literatures. In this paper we build a model and find that platforms will not cover investors’ lost when borrowers default if information disclosure is strictly regulated, while platforms have to cover investors’ lost if the information disclosure is not regulated.
Key Words internet finance, information disclosure, P2P lending
JEL Classification D82, G2, L86
DOI:10.13821/j.cnki.ceq.2016.04.15
Childcare, Public Service and Chinese Rural Married Women’s Non-farm Labor Force Participation: Evidence from CFPS Data
RUIXIANG XIONG
(Xiangtan University)
HUIWEN LI*
(Shanghai University of International Business and Economics)
Abstract This paper investigates the negative effect of childcare on married women’s non-farm labor force participation, and then explores the role of kindergarten and primary school played in reducing this adverse effect, using the 2010 CFPS cross-sectional data. The linear instrumental variable model and the bivariate probit model both show that childcare has significantly negative effects on married women’s non-farm labor force participation, while kindergarten and primary school help to reduce this negative effect. The results reveal that there is still an abundant supply of female labor force working on the farm owing to childcare, while local public service of childcare in the village helps to transfer them to the non-farm sector.
Key Words childcare, public service, nonfarm labor force participation
JEL Classification H41, J22, O12
DOI:10.13821/j.cnki.ceq.2016.04.16
Private Benefits of Control and the Foreign-listing Decision：Based on the Data of Domestic Company listed in Hong Kong
FENG LI* YAN DONG
（Southwestern University of Finance and Economics）
Abstract In this paper we investigate the impact of private benefits of control on the foreign-listing decision. Based on a theoretical model and data of domestic company listed in Hong Kong, we find that the relationship of cash flow ownership of control and probability of foreign-listing showed U-shape. Controlling shareholders are less likely to choose to list in foreign market when cash flow ownership gets larger under the joint effect of private and cash flow benefit. However, when cash flow ownership is large enough, controlling shareholders are more likely to choose foreign-listing because of more benefit from increased value of company while private benefit is getting lessened.
Key Words private benefits of control, ownership structure, foreign listing
JEL Classification C25, D21, G32
DOI:10.13821/j.cnki.ceq.2016.04.17
