The information set of The People's Bank of China (PBC) remains a secret even today. Using survey data in China from 2001Q1 to 2014Q4, this paper investigates the impact of inflation expectations of households and professionals on monetary policy with forward-looking monetary reaction functions. The empirical results suggest that central bank of China does react to expectations, especially to those of professionals. Central bank seems to hold a discretionary policy: when facing with increasing expected inflation rate,central bank will tighten money supply and vice versa. From the comparison of central bank's reactions to different agents, we conclude that the information set of central bank in China is quite close to those of State Information Center and BOC International Holdings Limited.

This paper uses panel data for 19 countries in the Eurozone from 1995 to 2014 to explore the effect of sovereign rating changes on economic growth in domestic countries and foreign countries. We also investigate the heterogeneous effect during the period of debt crisis. Empirical results show that sovereign rating upgrade results in increase of domestic economic growth rate while downgrade leads to decrease of growth rate. Compared with non-debt-crisis period, the negative effect of downgrades on domestic growth rate is less pronounced in debt crisis period. Meanwhile, downgrades in one country could transmit to other Eurozone countries and cause reduction of their economic growth rate. Upgrade does not show contagion effect. During the period of debt crisis, the contagion effect of downgrade is weaker. Furthermore, for countries with lower sovereign rating level and less frequent sovereign rating changes, the decline of downgrades' impact on domestic growth rate during debt crisis period is larger. This study has important implications for understanding the importance of sovereign credit ratings in affecting economic growth.

This paper provides a conceptual and empirical framework for evaluating the impacts of capital controls on economic growth. In a small open economy that relies on successful investment projects to provide capital goods, capital control can be beneficial, since borrowing short-term debt can be harmful for output growth. Using a panel dataset covering 78 countries from 1995 to 2010, we find that capital controls on short-term debt increase shares of equity and direct investment, and ultimately promote growth; regulations on equity flows impede growth by indirectly increasing bond share in capital stock; and restrictions on direct investment have insignificant impact.

The establishment of Shanghai Free Trade Experimental Zone (hereinafter referred to as FTZ) as the extremely important policy experiment to promote the reform and opening up, what is its performance and related effects of system innovation has been the very time that urgent to summarize and assess carefully. Based on this. Firstly, this paper analyzes the trade in goods import and export to the different impact of the establishment of FTZ, and further from the point of view of capital flows, and empirically examines the influence of capital flow in Shanghai with the foundation of FTZ in the sample period .We got the following conclusions: (1) FTZ establishment has a significant positive impact on the import of goods trade, but exports of goods trade is not significant, that is, the establishment of free trade zone has a significant negative impact on the net exports of goods trade. (2) based on the research of fuzzy breakpoint regression design and nonlinear double difference model, it is found that the establishment of free trade zone has a significant positive effect on the capital flow in Shanghai area. Decreased entrepreneur confidence will lead to an increase in capital outflows, and the FTZ has a certain extent impact. (3) Based on the investigation of non-parametric estimation for different width case, it shows that the benchmark result of marking variables is very steady. Meanwhile, in order to exclude the particularity of Guangdong, Tianjin, Fujian etc, we made a re-test by using the way of eliminating and extending the sample period to further verifies the accuracy of the foregoing conclusions.

Adjustment of deposit reserve ratio will directly cause changes in enterprises’ loan cost, and it may also generates heterogeneous changes in the loan rate of different types of loans. In this paper, by using loan-level data of a representative city in China, we examine the general and heterogeneous effect of deposit reserve ratio adjustment on SMEs’ loan cost. Empirical results show that increasing of deposit reserve ratio significantly increases the cost of SMEs’ bank loans. Further analyses indicate that the adjustment of the deposit reserve ratio (1) has a much larger effect on the cost of loans from joint-stock banks, city commercial bank and rural commercial bank; (2) has a larger impact on the loan cost of small, low credit-rating, and non-state owned enterprises; (3) affects the loan rate of short term, small size, and liquidity loans more. Findings in this paper provide a novelty view on the study of transmission mechanism of the adjustment of deposit reserve ratio, and also empirical evidence on the implementation of monetary policies such as differentiated deposit reserve ratio policy, and directional adjustment of deposit reserve ratio.

The existence of Special Financial Account (SFA) not only lowers the efficiency of using fiscal fund, but also makes it possible for local governments to intervene the market economy. Based on the 2005-2008 panel survey data collected by the People's Bank of China, this paper persistently tracks the operation status of 80 financial instructions in 27 counties located in Shanxi, Jilin and Jiangsu province. We found the evidence that local government can significantly affect the loan behavior of financial institutions by using SFA deposit. The more SFA deposit, the more loans from local financial institutions will be influenced. Such implied financial intervention by local government will cause a lower operational efficiency for local financial institutions. Furthermore, this intervention will cause more damage to branches of state-owned banks than to those Rural Credit Cooperatives (RCCs). As a policy implication, it should be an effective way to force local governments obeying market rule by the liquidation of SFAs.

P2P lending interest rate is an important starting point of internet finance research in China. We analyze the typical characteristics of P2P lending interest rate and the interaction with the traditional financial market interest rates based on the stylized facts of the China's P2P lending interest rate and the mechanism of the volatility spillover between the China's P2P lending interest rate and the traditional financial market interest rates. The results show that China's P2P lending interest rate volatility has clustering and risk accumulating effect, and simultaneously leverage features is not obvious and bad news or good news have the equal effect on the net lending interest, and this means that strong risk in the net loan market but the risk awareness of market participant is not strong. The benchmark interest rate position of Shibor has been verified, because it has volatility spillover to both the net lending interest rate and the national debt interest rate, and the national debt interest rate has not volatility spillover to the net lending interest rate. The net lending interest rate is still in the early developing stage, and it has little effect to the other interest rates, and has not volatility spillover to the Shibor and the national debt interest rate. Finally, we put forward a series of targeted recommendations based on the results of the research.

Based on the survey data of China’s enterprises, this paper studies the association between financial constraints, the level of financial development and firms’ employment growth. Using the IV method to deal with the endogenous problem, theresults show that financing constraints on employment practice of companies have a significantly negative impact. In ceteris paribus, the difficulty of financing increases by one unit will reduce employment growth rate of full-time employees by 3.1%. In 2003, taking the credit crunch to control the economy by the Peole's Bank of China, as a natural experiment, we found that tight monetary policy has a great negative impact on the demand of enterprise employment; while the urban financial development will ease financing constraints of entrepreneurs, and then promote significantly for enterprises’ employment.

Based on the firm-level micro data and highly disaggregated customs data from 2000 to 2007, this paper analyzes the effects of the intermediate input imports on Chinese firms’ survival with the method of propensity score matching (PSM) and survival analysis. The results show that, intermediate input import is good for firms’ survival on the whole. Taking the quality of intermediate input and trade direction into account, we find that only high quality intermediate input import benefit for firms’ survival significantly, while low quality intermediate input imports raises the risk rate of the firms exiting market. Also, firms’ two way trade behavior increases survival time comparing with one way trade behavior, and processing trade increases survival time comparing with ordinary trade. Furthermore, the transmission mechanism test show that "cost-saving effect" and "technology spillover effect" are the two important channels for why intermediate input imports improve firms’ survival. Lastly, we further introduce heterogeneous industries into our study, and finds that compared with homogenous industries, the heterogeneous industries make higher improvement to firms’ survival. Also, the high quality of intermediate input and two-way trade mode can strengthen the above effect.

By using China Household Finance Survey (CHFS) data, the paper investigates the effect of financial literacy on household commercial insurance participation. The paper finds that financial literacy promotes households’ participation in commercial insurance market. The effect has no difference between rural and urban household. Moreover, people with higher financial literacy tend to expend more on insurance premium. Our findings suggest that popularization of the residents’ financial knowledge is an important means to promote the development of commercial insurance market.

In this paper, we put the risk dependence, consistency risk measurement and portfolio into an analytical framework, combined with Coupla-CVaR model and Mean-var portfolio theory to construct the investment portfolio model of Mean-Copula-CVaR, and effectively solve the consistency risk measurement and dependence. Using the Securities index, bank index and insurance index, we empirically analyze the differences of asset portfolio and the adequacy of risk measure among financial institutions on basis of linear dependence and complex dependence (Copula dependence).The results show that putting Copula model can more robustly and accurately predict the CVaR portfolio. However, there is no significant difference between different forms of Copula in this paper. The policy implication of this paper is that it is possible to underestimate the risk if we ignore the structure of complex risk dependence, thus affecting the effectiveness of asset allocation.

Based on a theoretical model and the Chinese Industrial Enterprises Database over 1998-2007, we analyze the effect of corporate income tax loss deduction on risk taking. We find that the higher levels of corporate income tax burden and investment risk a company is facing, the more significant the effect is, i.e., the more investment risks it will take. The empirical results are robust, but the effect is heterogeneous. Moderately relaxing the rules of corporate income tax loss deduction and being a good sleeping partner of firms can help the Chinese government promote investments, encourage innovation and entrepreneurship, and put forward reform of the supply side.

This paper investigates the rounding behavior in management earnings forecast. We find that public firms tend to round their management forecasts. On the contrary, the rounding is rare for actual earnings. Furthermore, we find management forecasts are more likely to be rounded based on larger divisor when the information uncertainty or industry competition is high. We also find that the magnitude of the rounding base is closely related with forecast quality: when larger divisor is used, the rounded forecasts are significantly more inaccurate and more optimistic. Besides, when larger divisor is used in the forecasts, the market reaction is weaker, and investors are more likely to have negative returns. The results of this paper provide important implications for the investors on understandingmanagement forecasts and making investment decisions.