The paper analyzes competitive equilibrium and economic efficiency in an OLG model with production loans and public capital (or public debt), and we show that there are the same characters in our OLG model as in a pure exchange OLG model. Furthermore, this paper concludes that, in an OLG model with production loans and government public capital (or public debt), (i) there exist two kinds of steady state path, one is golden rule path in which the rate of interest equals the growth rate of population, and the other is a classical “balanced” path in which the public capital or public debt is zero; (ii) the golden rule path is always Pareto optimal and social optimal, but the classical “balanced” path is not always social optimal and even not Pareto optimal in Samuelson case; (iii) the golden rule program is globally stable in the classical case and the classical “balanced” program is globally stable in the Samuelson case. Based the above results, this paper also discusses the role of the government in the economy.

On the basic assumption of the no-arbitrage triangular relationship among the related three spot foreign exchange rates, this paper uses the transition of the variance formula for the sum of variables in statistics and the quoted implied volatility prices from the OTC market to calculate the option-implied correlation between two exchange rates,in one, three, six and twelve months. Results of the comparison show that the implied correlation series predicts more precisely than both the historical correlation series and the EWMA correlation series.

In this paper the theoretical analysis shows that depending on the elasticity of substitution of the exports and imports, the relationship between the terms of trade and current account could be either positive or negative, but in the long run it is positive, that is, the HLM effects exist. The dynamic effects of monetary and productivity shocks are affected by the intertemporal elasticity of substitution and the intratemporal elasticity of substitution between the terms of trade and current account, etc. Empirical results show that HLM effects exist in Brazil, China, Russia and South Africa, while in India HLM effects do not in the long run. Through the empirical results it shows HLM effects do not exist in the 5 BRICs in the event of the monetary shock, the effects do except for india with the productivity shock. Permanent shocks (productivity shocks) play a big role in the changes of the terms of trade, but has a smaller impact on current account; temporary shocks (monetary shocks) has greater impact on the current account and less impact on current account, and whether HLM effects exist depends on the sources of the shocks.

In the past, the relationship between FDI quantity and economic development was mainly concerned, and the important role of FDI quality in the transformation of economic development mode was ignored. Based on the Chinese provinces panel data as samples, using FMOLS regression methods, respectively from two aspects: the national and regional, this paper empirically examines the influence of FDI quality on the transformation of the mode of China's economic development. The main findings are: in the overall level, quality of FDI has significant role in promoting China's economic development mode shift; At the district level, coastal and inland areas of FDI quality help to change the way of economic development, and the role of the strength of FDI quality in coastal area was significantly greater than that in inland areas. To change the way of economic development, our country should make full use of the opportunity of global economic integration, focused on FDI quantity expansion at the same time, pay more attention to the quality improvement.

Global value chains has become a significant characteristics of world economy, thus a new interpretation of binary marginal trade from the perspective of global value chains has important theoretical value. This paper builds a theoretical model to analysize the mechanism that financial constraints’ effect on firm’ value added trade, which reveals that financial constraints on the one hand inhibits the expansion of firm’ value added trade’ extensive margin by increasing the value added trade’ critical productivity, on the other hand promote the intensive margin of value added trade by substituting foreign intermediate input for domestic intermediate input. Using the database of China customs trade statistics and China’s survey of industrial firms from 2000 to 2006, this paper use Heckman two-stage model to analysis financial constraints’ effects on margins of trade in value added. The results show that: financial constraints plays significant negative impact on extensive margin of trade in value added, but positive effect on intensive margin. In addition, considering the different ownership, factor intensity, and industry financial dependence, financial constraints has heterogeneity effects on firms value added trade.

The cancellation of upper and lower limits on loan interest rates by the People’s Bank of China declared that Chinese market-oriented interest rate reform had been basically completed. By selecting a sample of Chinese non-financial listed company data from 2003 to 2015, based on the natural experiment of cancellation of upper and lower limits for loan interest rates, this paper undertook an empirical study how the process of interest rate marketization affected the enterprise’s investment decision and capital allocation efficiency. This study found that: (1) The interest rate marketization significantly inhibit the inefficient investment, especially in non-state owned enterprises; (2) Compared with the relaxation of the lower limit of loan interest rate, the relaxation of upper limit of the loan interest rate is more conducive to curb inefficient investment, showing the impact of asymmetry;(3) With the deepening of interest rate marketization, the value effect of enterprise investment shows a rising trend. Further tests show that the interest rate marketization not only significantly inhibited the inefficient investment, but also curb the radical liabilities. The results of this study provide theoretical evidence of how Chinese interest rate marketization influence the enterprise’s investment decision and capital allocation efficiency, at the same time, has certain reference significance on carrying out Chinese subsequent economic system reform, promoting the supply side reform and achieving the “Three Reduce, One Drop and One Supplement”.

The relationship between social health insurance (SHI) and private health insurance (PHI) has been a controversial issue in academia since there are remarkable differences in health financing system in different countries. Using the balanced panel data of 30 provinces from 2004 to 2014 in China,we employ a two-way fixed effect model to investigate such question. Our results show that the relationship between SHI and PHI varies greatly with the development degree of SHI. In regions with high development degree of SHI, there exists a significant inversed-U shape relationship between SHI and PHI. SHI promotes the development of PHI in regions with medium development degree of SHI. While, there has no significant relationship between SHI and PHI in regions which have low development degree of SHI. Based on the above conclusions, we argue that reasonable controlling the size of SHI has great significance for China to play a supplementary role of PHI.

With the coming intelligent era and increasing demand for financial data analysis, deep learning has become the foreland in financial filed, especially in the prediction of financial market movements, text information processing and trading strategies improvement. Deep learning contains deep neural networks, deep belief networks and other structures. They extract deep features through the layered structure, strengthen important factors and filter the noise, which is of great significance to improve forecast accuracy. The applications and the variable optimization technologies of deep learning improve the forecast and analysis method in financial filed, make empirical research paradigm shift from linear to nonlinear and the concern from significance of parameters to the structure and dynamic characteristics of models, and also contribute to enriching financial and economic theories. It is important and difficult to build models with suitable structure and steady effect to capture the effective characteristics of financial data and interpret economic meaning with deep learning. The future research about deep learning in financial filed can be from these aspects, such as digging deep economic significance, refining the general analysis framework and exploring the applicability for heterogeneous information.

Based on the concept of path dependence and new structural economics, this paper tries to reveal the logic of regional differences of internet finance development and carry out empirical researches with data from prefecture-level cities. Internet finance is sustaining innovation based on traditional finance, which results in path dependence. As a logical result of regional differences in traditional finance, eastern cities take the leading position in internet finance in general. Mid-western areas where traditional finance is less developed are trapped in path dependence, however, these areas have potential comparative advantages in internet finance development, because insufficient supply of traditional financial services has left much broad market for internet finance development. Local governments in these areas can make the best use of the situation, and focus on alleviating the crucial constraints such as talent shortage, to promote these areas to get rid of the lock of path dependence and achieve the potential comparative advantages. This paper shows that, although it is crucial that market should play a decisive role in allocating resources for the sustainable and healthy development of internet finance, without strong supports from traditional finance, it is necessary for finance achieving corner overtaking that an effective government works in good coordination with an efficient market.

Underwriting in Chinese stock market has the characteristic of ‘local oligopolies’. Utilizing selection bias adjustment model, this paper investigates the local relationship underwriting in China. We find that, firstly SOEs and investment banks with poor reputation are more likely to engage in the local relationship underwriting, and local relationship underwriting takes place more frequently in the less market-oriented regions. Secondly, local relationship underwriting can significantly reduce IPO underpricing and improve the issuers’ financial performance, which means that local relationship has played a certification role and investors have the ability to identify such relationship capital. Thirdly, using territorial jurisdiction and ownership as the relationship intensity measurement, we find an inverted U-shaped relation between the local relationship intensity and IPO underpricing, and only when the local governments serve as the issuers’ final controller can the positive performance effects be observed. Our findings have important policy implications for improving the quality of underwriting services in Chinese stock market.

We investigate the effect of stock market on firm innovation via the lens of initial public offering (IPO) using a uniquely matched Chinese firm-level data. We find that IPO leads to an increase of firm innovation activity. The impact of IPO on firm innovation varies across corporate governance structure, financial constraint, and ownership. We suggest that IPO boosts firm innovation via relaxing their financial constraint. Our results further illustrate that IPO makes a firm better at building a bigger innovation team and improving their innovation efficiency after IPO. We also find that governance arrangement aligning the interest of managers and shareholders can counteract the negative effect of IPO on innovation induced by principle-agent problem.

Using a firm-level data set of Chinese enterprises in 2005 from a World Bank survey, this paper investigates the effect of eating and drinking on corporate export in China. We find that eating and drinking can alleviate the detrimental effect of external financing constraint on both corporate export participation and quantity, and the effect varies with ownership type. Compared to state-owned enterprises, the effect is more pronounced for private firms. This result can explain why for a long time, although private firms are discriminated in the credit market, they are still playing significant roles on China’s exportation. After using instrumental variable and PSM method to weak the endogeneity of eating and drinking, the above results still hold. Further evidences show that the helping hand of eating and drinking for private firms is more pronounced in regions with less bank competition and low marketization. Those results suggest for a developed financial system and a pro- market mechanism, which is the key to curtail corruption in China.

The geographical rotation of chief justices of Higher People’s Court in 2008 as a natural experiment of judicial independence promote, this paper investigates the net effect of judicial independence on strength and the credibility of law enforcement in listed companies of China. We found that:(1) the judicial independence not only significantly increases the probability of identifying and prosecuting securities unlawful actions of companies, but also enhances the negative market reaction to companies when the violations are disclosed, (2)compared with private enterprises, these effects are more significant in state-controlled firms which are protected by local judicature; and (3) the effects are more significant in companies listed in a better legal environment than companies listed in a poor legal environment. (4) The effect of independence of judicial is reflected in strength and the credibility of law enforcement, and its deterrent effect reduces the firm's tunneling related party transactions. Finally, this paper shows that judicial independence promote the protection of investors by influencing regulators, investors and companies, enriching and developing the literature about economic consequences of judicial independence around the world.