This paper investigates the effects of monetary policy across different regions in China. An MCSGVAR model is estimated for the 30 provinces of China from 1996Q1 to 2015Q4. It advances research in this area by explicitly modeling the determination of monetary policy as a function of nationwide output growth and inflation, as well as by taking into account the spillover effects among regional economic activities. Also, it provides more precise results by constructing and employing a quarterly series of real GRP for each province, as well as by considering structural identification of monetary policy shocks. The results suggest similar time patterns of regional economic activities in response to monetary policy shocks, but pronounced asymmetries with regard to the degree. Also, there appears to be a regional pattern to the heterogeneity. In cumulative sense, the effect of monetary policy on real output is the most noticeable in the northeast and the middle Yellow River region, similar across the middle Yangtze River, the northern coast, the southwest and the eastern coast region, while relatively modest in the southern coast and the northwest region. These results underscore the importance of accounting for regional heterogeneity when formulating and assessing national monetary policy.

Policy makers have stressed the criticality of the precise macro-control. In terms of fiscal policy, the implementation of the precise policy heavily relies on the scientific calculations of the fiscal multipliers. However, the quantitative research on China's fiscal multipliers is basically blank. Besides, current research usually ignores two important characteristics of China's economy: serious financial frictions and low benchmark interest rate. This paper simultaneously incorporates these two characteristics into the existing framework and systematically calculates the fiscal multipliers of output, employment, consumption and investment. The results show: The multipliers above are 3.44, 2.13, 0.78 and 5.77, respectively; Neglecting financial frictions and low interest rate will significantly underestimate the fiscal multipliers of China; Financial frictions and low interest rate interact with each other, resulting in their comprehensive effects being much higher than the summation of their respective effects.

This paper takes the influences of third-market competition and investment into the calculation of RMB effective exchange rate index. 29 Basket currencies are chosen by establishing the direct export and import competition index, third-market competition stress index as well as FDI and OFDI structure index with data from 1999 to 2016, and weights are assigned according to the spillover index estimation of basket currencies using daily exchange rate data from January 1999 to April 2017. To verify the effectiveness of the index calculated, this paper utilizes the Johansen cointegration and ECM method to estimate the export and FDI determination equations and compare the explanation power of different RMB effective exchange rate indexes. Result indicates that the RMB effective exchange rate we established is more efficient than the BIS and IMF ones.

Does higher mortgage leverage always pushes higher housing price? The existing literature does not give a conclusive answer to this question. This paper extends the optimal inter-temporal consumption theory model to allow mortgage leverage having nonlinear threshold effect on housing price. Applying the panel threshold model on Chinese provincial-level panel data over the period 2006-2015, our empirical research shows the response of housing price to financial leverage has double threshold effect but there is significant regional heterogeneity of this effect. Our research findings have important policy implications for real estate market regulation.

In terms of the influence of anti-dumping on foreign direct investment of enterprises, the previous studies often ignored the structural characteristics of OFDI. By building the relevant theoretical models and the binary margins of FDI, empirical analysis shows that the dual effects of anti-dumping on FDI varies significantly. When it comes to investment industries, anti-dumping promoted the expansion of investment scale and investment scope in the energy industry and metal industry to a certain extent, but to a certain extent suppressed the expansion of transportation industry. In terms of target countries, anti-dumping can significantly promote the growth of enterprises' dual marginal investment in developed and resource-based economies, but the promotion effect on investment in emerging economies is not significant. Therefore, as the anti-dumping against China enters the stage of “normalization”, enterprises should actively respond rationally and strive to minimize the negative impact of trade protection.

This paper investigates the effect of credit supply cycle on investment efficiency, how this effect differs in periods of different macroeconomic uncertainty and its mechanism. Results show that increasing credit supply will decrease the sensitivity of investment to investment opportunity, thus decreasing the investment efficiency. From perspective of reasons, credit expansion decreases credit resources allocation efficiency and enhances bigger firms and state-owned firms' investment to a larger extent. Furthermore, during the period of higher macroeconomic uncertainty, the negative effect of credit expansion on investment efficiency will be smaller. From the perspective of mechanism, during the period of higher macroeconomic uncertainty, credit supply expansion will make firms with more growth opportunities obtain more loans and increase firms' propensity for investment. This paper uncovers the impact of China's credit supply policy on firm investment efficiency and its mechanism, and has some implications for managing aggregate demand during new normal period.

This paper investigates the effects of leasing out rural land on relieving the debt burdens of rural households. After controlling for the rise of borrowing demands and the abilities of getting loans caused by the increases of income and wealth, our results show that rural households leasing out rural land are less likely to borrow money and borrow less money, and have less asset-liability ratios and more net wealth, which implies that leasing out rural lands is an effective method to reduce the debt burdens of rural households. Furthermore, the effect is found to be more significant for low-income households and households residing in the middle and west China. Also, leasing out rural land can more significantly reduce the business debt burdens compared with the consumptive debt burdens.

Short selling system implemented in 2010 is an important institutional innovation in Chinese capital market. This paper studies this arrangement's spillover effect from perspective of banks by using DID design. We find that the implementation of short selling system motivates banks to provide loans with higher amounts, longer maturities and lower likelihood of being secured. Further analysis indicates that the above relations are more significant when banks are concerned about borrowers' information risk and credit risk or borrowers' information risk and credit risk is high. And banks' performance significantly increases after their borrowers' stocks are in the list of the program. The above findings mean that short selling has spillover effect on banks' loan decision. In other words, short selling reduces borrowers' credit risk and information risk and banks also correspondingly make appropriate adjustment to their loan decision.

Using three dimensions of financial development measures—stock market size, banking sector size and banking sector marketization, we find that the stock market development has a larger impact on innovation than the banking sector variables, especially on the number of invention patents. The mechanism behind the finance-innovation nexus is that the stock market development mitigates external financial constraints and increases the innovation output of high-tech firms. This positive impact is stronger in regions with higher intellectual property protection. Further analysis shows that technological innovation could significantly increase firm value in the next five years. The policy implication is that the direct financing together with proper intellectual property protection helps promote innovation and enhance firm value.

The interdependence of commercial banks' risks has become urgent research topics currently. This paper measures the time-varying covariance coefficient by using DCC-MGARCH methods. Meanwhile, we try to build Beta indicators, with the stock price variables of listed banks to quantify the spillover risk measure its extent effects. The market discipline mechanism can increase higher required return on banks with systemic risk, showing intrinsic leveling mechanism of the market, but the failure at tail risk pricing reminds the necessary of regulators' liquidity and approporiate monetary policy in order to avoid the systemic crisis. At the same time, with the macro-level and bank-level data analysis of the main determinants of the risk of spillover of the banks, we use Shapley decomposition approach to decompose the contribution structure of systematic risk. Conclusions are drawn that the risk of spillover Overall, commercial banks have some pro-cyclical characteristics, ΔCoVaR indicators of joint-stock commercial banks are more significant; and macro variables are the key factors that determine ΔCoVaR indicators, capital adequacy ratios, liquidity ratios, and Beta Index are indicators the key decision variables. This shows that different indicators have strong complementarily in monitoring various risk factors.

Using a unique hand-collected panel data on 50 nonlife insurers and 57 life insurers over the period 2009-2014, we examine the impact of investment business on the risk level of nonlife and life insurers from multiple dimensions, respectively. The results show that the investment business for nonlife insurers improves the solvency capacity with no bad effects on liquidity and bankrupt probability. In contrast, the investment business for life insurers increases the likelihood of bankruptcy and exacerbates the surrender rate. To reduce the risk of insurers, the regulatory authority should encourage nonlife insurers to develop investment business to reduce the risk, and restrain life insurers’ aggressive investment behavior and curb the overheating tendency of investment-based products.

How does career concerns influence managers' information disclosure decisions is a hot issue in finance research. Using a sample of Chinese A-share listed companies during the period of 1999-2014, this paper investigates how CEOs withhold firms' bad news during their tenure and the possible methods of bad news hoarding. Our results show that: CEOs hide more bad news in early years of their tenure and a year before their departure. This effect is more pronounced in non-SOEs. CEOs take “big bath” and expose bad news hidden by last CEO in their first year of tenure. In addition, earnings management is a channel through which CEOs hide bad news. Further analysis shows that only non-family CEOs in family firms have career concerns to withhold bad news. Overall, our study reveals the dynamic change of firms' information disclosure policy during CEOs' tenure. This paper has important implications on how to restrict CEOs' information disclosure management and reduce stock price crash risk.

This paper examines the relation between internal control quality, the number of analysts following, accuracy of analyst earnings forecasts and forecast dispersion. Using a sample of A-share listed firms from 2007 to 2016, we find that: First, firms with better internal control attract more analysts. Second, analysts forecast accuracy is positively related to internal control quality. However, this positive relation only exists in the overestimated subsample. Third, forecast dispersion is not significantly related to internal control quality. This study not only contributes to the literature on both analyst behavior and internal control, but also offers valuable implications to regulars.