This paper studies the optimal tax structure of the central government and local governments in the framework of fiscal decentralization. We prove that in equilibrium the optimal taxation of local government is consumption tax. Then we use numerical simulations to compare the output and social welfare in equilibrium when the central government levies consumption tax and capital tax, and find that the optimal taxation of the central government is also consumption tax. At the meantime, the local government gives transfer payments to the central government. And there is a fixed proportional relationship between the central government’s consumption tax and the local government’s consumption tax.

In this paper, a nonlinear system model with multidimensional states is built from the micro level, and resolved by a nonlinear model predictive control method. It is revealed that there is an obvious positive relationship between monopoly and inflation. The evidence from semiparametric estimation of the varying-coefficient panel data model shows that, monopoly behavior in a low-efficiency industry does have a significant effect on inflation while the effect for a high-efficiency industry is much weaker. The result has a significant implication for China’s macroeconomic control in maintaining the current growth and preventing potential inflation.

In this paper, we proceed from macroeconomic general equilibrium model to examine the central bank monetary policy rule of macro-regulation between economic growth and inflation, incorporating the equity price and real estate price and analyzing the main factors affecting the parameter of the rule and potential mechanism. The empirical results show that the parameter of the optimal monetary policy of the Central Bank is 0.144055, the Central Bank's monetary policy operations lean against the wind, that is, the central bank gives a higher weight on inflation target in setting monetary policy, meanwhile monetary policy of China leans against real estate market, but with the stock market. Further, from the point of the optimal rule, this paper examines the weight of China's monetary conditions index, according to optimal monetary policy rule, the weight of the monetary conditions index is 0.302876, reflecting the interest rate increases by 1%, the equivalent of exchange rate decreasing by 0.30%, implying that the effects of interest rate changes are less than exchange rate changes.

This paper studies the phenomenon of “negative efficiency spillovers” caused by state-owned enterprises (SOEs) under credit discrimination. By implementing the Malmquist index method, the total factor productivity (TFP) at China’s provincial level is calculated and is decomposed into technology efficiency and technology progress. Using China’s provincial panel data, we find that the share of SOEs has different impact on the two compositions of TFP. It promotes technology progress while hinders technology efficiency Moreover, the scale expansion of financial development improves both of the above two effects of the share of SOEs. Our empirical findings pass several robust checks.

In order to measure the risk of insurance stock index and Hushen 300 index, we introduce two different types of risk measurement, then we construct the model of VAR-BEKK-MVGARCH-DUMMY-T under the impact of financial crisis and natural catastrophes in the model. The study shows that (1) in total sample, it shows that both of the two risk types of insurance index are larger than the latter. Hushen 300 index does have mean and volatility spillovers effects onto insurance stock market, but this does not hold for the opposite; (2) financial crisis increase the volatility of insurance stocks, but has little effect on whole securities market, insurance stock is sensitive to natural catastrophes; (3) we find that financial crisis increase the correlation of the two indexes, while natural catastrophes decrease the correlation. Investors can, consequently, diversify natural catastrophe risk by additionally holdings of a market portfolio; (4)The spillovers effect is asymmetric under the impulse of financial crisis and natural catastrophes, and have some anomalies.

We use extended Lotka-Volterra model to analyze the interactive board-level relationship quantitively based on different periods. We find that firstly, the multilevel structure makes the security market more inclusive for all kinds of enterprises, improves the security market’s stability and strengthens its ability to resist negative impacts. Secondly, we find that the competition between Shanghai and Shenzhen Security Exchange plays a key role in determining the construction of the multilevel capital market system in China. Thirdly, the administrative suspension of IPO brings about negative impacts on the interactive relationship among different boards. After the restart of IPO, main board in Shenzhen Exchange tends to be in a better position and the firms on it tend to be similar to those on Growth Enterprises Market (GEM) board, which causes internal competition. Finally, we give some suggestions on how to build a harmonious multilevel capital market.

This paper examines the financial market information barrier effects of the separation of ownership and control of Chinese a-share listed firms over the 2003-2013 period. The results show that the separation of cash flow rights from voting rights and the nature of controlling shareholders have positive correlation with stock price synchronicity, while ownership balance and stock price synchronicity are negatively correlated. Furthermore, the nature of state-owned company can significantly reduce the positive impact of the separation on stock price synchronicity. The separation of cash flow rights from voting rights, and state-owned and low level ownership balance will reduce the level and effectiveness of financial disclosure, so as bring about synchronicity and reduce market efficiency.

This article puts focus on the expressway securitization while ABN is designed with expressways’ earning rights as its underlying assets. The issuance size and coupon rate of ABN are decided by the expected revenues of expressway and term structure of interest rate. The ABN’s interest rate risks are discussed in the end.

Using the approach of Experimental Economics, we designing an experiment to study financing behavior in an anonymous market and test the pecking order theory and market timing theory. Results suggest that market timing theory predict people will behavior according to the market timing is supported while the pecking order theory only being supported in condition of no more than 50% wealth constraint. We also find financial behavior is a strategic behavior in which the degree of return volatility plays a role of moderation and the decision of investors play a partial mediation role.

In this paper, we study the relationship between national culture and earnings management. Using data of joint-ventures in China from year 2005 to 2007, we find that culture will affect earnings management after controlling for various country, institution, and firm level factors. In specific, firms from countries with higher level of individualism have higher level of both income-increasing and income-decreasing earnings management, while firms from countries with higher level of uncertainty avoidance have higher level of income-decreasing earnings management. This effect is even more significant in foreign-dominant firms. Further study shows that the effect of national culture on earnings management is not affected by level of marketization, while it is ameliorated by years since firms enter China. The results help us understand what roles national culture plays in joint-ventures’ business decisions, and provide guidance in drawing foreign investment and joint-ventures regulation.

Focusing on a firm’s customer characteristics and following the customer may improve the quantity and quality of the analysts’ information on the covered firm, thus may enhance the analyst’s forecast accuracy. The empirical evidence based on “firm-level” analysis shows that both the analysts’ forecast error and dispersion of a supplier firm are significant negative with the firm’s stable relationship with its customers. Further analysis shows that, the above positive effects are more prominent when the supplier produces nondurable goods, has a weaker position in the industry, sell higher goods to the stable customers or has a good relationship with customers. And the impact of the stable relationship with customers on analyst forecasts behavior may derives from the effect that the stable relationship can bring higher profitability and profitability persistence. All of these results suggest that stable customers are an important information source of the analysts. Even through don’t follow a covered firm’s customer, the stable relationship with customers may also improve the analyst forecasts, consistent with the “signaling effects”. The empirical evidence based on “firm-analyst-level” analysis show that compared with the analysts who do not following a covered firm’s customer, analysts who followed provide more accurate earnings forecasts for the supplier firm. And this positive relationship exists only in the stable relationship group. What’s more, in the subsample which the analysts follow the covered firm’s customer, the analysts’ forecast error is negative with the stable relationship. All of these results imply that following a covered firm’s customer does provide some material incremental information, consistent with the “supply chain knowledge spillover effects”. Based on these finds, our study may enrich the customer and analyst literatures.

This paper proposes the mechanism that company names influence investors’ decisions and firm values, originally constructs an evaluation system of company names that reflects investors’ information processing experience by taking domestic investors’ thinking patterns and information processing habits into consideration, then evaluates the names of listed Chinese A shares firms during 1992 to 2009, and draws the following conclusions through empirical research. Short, fluent company names consisted of familiar words and carry auspiciousness are much more popular among investors. Hence these companies enjoy a larger investor base, see higher liquidity in their stocks, and get higher evaluations. Company names can not only affect the equilibrium stock prices and firm values directly through their influences on the demand curves of stocks, but also determine firm values indirectly via investor base and stock liquidity affected by them.

Recent financial crises have propelled economists to reflect on the relationship between asset bubble and the real economy. Last few years have seen an emerging strand of literature on this. This paper surveys these developments with a unified framework. Asset bubble affects the efficiency and the volatility of the real economy. Financial development plays a crucial role in these relationships. Financial development affects theemergence of asset bubble. Asset bubble can either “crowd in” or “crowd out” real investments. Quality of institutions will reinforce the effects of financial development. Financial development and institutional quality also affect the flow of capital in an open economy, leading to more complex effects on the growth and volatility of the real economy. This paper is particularly relevant for emerging economies with financial underdevelopment that are facing financial liberalization and structural changes. The survey ends up with some policy implications for China’s financial development and reform.