This paper studies the impact of US Dollar interest rate cycle on China's economy and the dynamic adjustment of international reserves demand for a policy set of the forex market intervention rule and Taylor rule through a New Keynes DSGE model. The study found that, facing unexpected temporary interest rate shock, the fixed exchange rate arrangement through forex market intervention can attain exchange rate target, which makes Taylor rule better positioned to stabilize financial environment and reduce output volatility in the short run, and thus is better than other alternatives; while in the long run, when facing persistent interest rate shock, the managed floating exchange rate arrangement through forex market intervention can adjust exchange rate floating range in a “leaning against the wind” style under the monetary authority's discretion with much less welfare loss in terms of real economy as well as financial volatilities compared with other alternatives, thus can be an optimal policy alternative for China during its gradual opening up of capital accounts and currency internationalization.

Using the DID approach based on the quasi-experiment of nation-wide abolition of agriculture tax in 2005, this paper identifies the impact of fiscal pressure on the provision of public services at the county level. The empirical results show that fiscal pressure has negative effect on the county-level public education. Governments which suffered more fiscal revenue loss due to the agriculture tax abolition would tend to spend less on education. In addition, we also find that there is greater and more lasting negative effect in the long term. These basic results are robust to a number of specification tests on different fiscal shock index measurements, sample heterogeneity and other reforms which took place in the same period.

As the overall level of debt of China increases, it's more and more expected that the enterprise sector should decrease its financial leverage. However, according to the statistics, increase of debt to assets ratio of the company is not sufficient to explain the significant increase of the high leverage of enterprise sector. Based on empirical study of listed companies, this paper identifies that main reason for significant increase of the high leverage of enterprise sector is financial resources had been allocated disproportionately to companies with low value added ratio and low asset turnover since 2008, which caused by misallocation in ownership and industry. Therefore, the reform of the financial supply front is the key to debt risk prevention.

Based on the special background of the coexistence of “Migrant Worker Shortage” and “Employment Difficulties of College Students”, this paper studies the skill-biased effects of RMB exchange rate fluctuations so that we can grasp its influence on the employment structure of the enterprise under the premise of labor heterogeneity, and examines the adjustment effects of processing trade and competition mode. Using detailed employment structure data in “Chinese Economic Census (2004 & 2008)”, we find that, (1) exchange rate appreciation impacts on the employment of skilled worker negatively through the “Export-Orientation Channel” while positively through the “Imported-Inputs Channel”. (2) As the proportion of processing trade increased, the impact of exchange rate shock on the employment structure through “Imported-Inputs Channel” declines continuously until it tends to zero, while the impact through “Export-Orientation Channel” will decrease gradually only when the processing trade accounts for more than 40%. (3) Competition mode also has regulatory effect. The employment structure of enterprises with “price competition” is more negatively affected by exchange risk exposure index and this reflects the positive role of “quality competition”.

Considering the pollution as unexpected output, the environment effect of regional integration and its theoretical mechanism is discussed under a framework of extended growth convergence. Based on the data of the Yangtze River Delta urban agglomeration and the Pearl River Delta urban agglomeration form 2003 to 2014, this paper constructs a new method to measure regional integration, uses instrumental variable and difference-in-differences methods to estimate the effect of inter-provincial and within-provincial urban integration on the convergence of pollutants emission intensity. The results show that regional integration significantly promotes the convergence of emission intensity and reduces emission, with a more apparent role in reducing emission in recent years. The emission intensity shows conditional convergence.Economic growth convergence is an important reason for the emission convergence. The results imply that China should make full use of the double advantages of regional integration-regional coordinated development and the emission reduction, and further promote regional and urban integration, develop the economy of urban agglomeration, construct the development pattern of mutually symbiosis among cities, and realize emission reduction finally.

Based on the household data of CFPS 2010 and 2014, this paper investigates the effects of internet usage on household risky financial assets investment and finds significantly positive impacts. This conclusion is consistent when we use different measurements of internet usage as explanatory variables, or use different econometric models. This impact mainly exists in subgroups with higher income, higher education and urban hukou status. The mechanism shows that the internet usage decreases financial market frictions, which includes transaction costs, limited access, and social interactions.

This paper uses media data to decompose monetary policy changes into expected and unexpected components. We then analyze the impact of changes in monetary policy on equity returns. Furthermore, we also explore the economic mechanism through which monetary policy affects the stock market. We have some interesting findings: (1) on average, a hypothetical unanticipated 1% cut in the required reserve rate is associated with about 0.806% increase in the Shanghai composite index, and 0.831% increase in the Shenzhen composite index,and the effects of change in deposit rate is even larger. (2) we categorize monetary policy into different types regarding the sign of surprise and investigate the asymmetric effects on stock market. (3) The effects of unanticipated monetary policy actions on expected future excess return account for the largest part of the response of stock prices.

Exchange bond market has two kinds of trading systems: auction trading and block trade. Due to trading volume threshold of block trade, retail investors' transactions are restricted to auction. This paper investigates the price gap between auction trading and block trade of the same bond on the same day, in order to identify the demand effects of retail investors on bond pricing. The results show that the price is significantly higher and the high-yield bonds are traded more frequently under auction, which indicate the investors using auction may exhibit the behaviors of yield-chasing and fundamentals ignoring. In addition, the price gap is larger for bonds with more retail demands (such as higher coupon rate and higher awareness). These results demonstrate that the demand effects of retail investors for high-yield bonds is the main reason why the price is higher under auction. Further evidence proves that the persistence of price gap is mainly due to the limits of arbitrage rather than liquidity premiums. Finally, “The Yunan Chengtou Bond Crisis” as an exogenous shock is studied and consistent results are obtained.

In order to encourage the enterprises and employees entering the enterprise annuity, the Chinese government issued the income-tax-deferred policy on the enterprise annuity in 2014. In this paper, we build models,and compare the pension level of the tax-deferred and non-tax-deferred enterprise annuity using numerical simulation. Further, the influence of the investment rate of return, the actual wage growth rate, the retirement age and the contribution rate on the pension level of tax-deferred enterprise annuity are analyzed through parameter sensitivity analysis. The result shows that the pension level of the tax-deferred enterprise annuity is significantly lower than that of non-tax-deferred enterprise annuity. But the negative effect varies according to different genders, different income levels and different contribution rates. The higher the income level and the contribution rate, the greater the scale of this negative effect. Also, the negative effect for the male workers is greater than that of the female workers. The findings indicate that higher the return on investment, postponing the retirement age and increasing the contribution rate would improve the old-age security level for employees, which is consistent with the ongoing reforms of China.

In the context of the latest reform about state-owned enterprises (SOEs), focusing on the “Compensation reform program of central SOEs managers” in 2014, this paper constructs a principal–agent model under asymmetric information and examines the impact of ex ante pay limit on competitive and monopolistic central SOEs. Empirical results show that: 1) The pay limit indeed reduces managers' monetary compensation and the gap between management and other employees in central SOEs; 2) Competitive central SOEs have significant negative cumulative abnormal returns which is consistent with the intervening hypothesis, while monopolistic central SOEs are not affected according to the neutral hypothesis; 3) In terms of mechanisms, when corporate governance is weaker, industry grows faster and is more competitive, or the degree of marketization in the region is higher, pay limit leads to greater loss in firm value, but these effects only exist in competitive central SOEs. Considering the different effects on competitive and monopoly central SOEs, this paper suggests that executive compensation regulation in SOEs should follow the classification and precise supervision rules.

The paper examines the relationship between Chinese listed companies’ annual report risk disclosures and cost of equity capital. Based on the risk disclosures data of A-share companies from 2007 to 2014, we find that: firstly, the changes in cost of equity capital positively associate with the changes in textual risk disclosures, even when we try to control the endogenous problems. The results indicate that risk disclosures are useful for decreasing the cost of equity capital, supporting the heterogeneous perspective. Secondly, the negative relation between risk disclosures and cost of equity capital tends to happen to the companies that the information environment is better and fundamentals risk is lower. Thirdly, the paper also finds that the increases in risk disclosures associate with increased market reaction and decreased heterogeneous beliefs and information asymmetry. Besides, the information asymmetry plays a role of partial mediation in this relationship of risk disclosures and cost of equity capital. Finally, the increases in risk disclosures are also associated with the increasing possibilities of conducting SEO and issuing bonds, and the decreases in discount rate of bond. This paper uses Chinese specific data to explore the relation between risk disclosure and cost of equity capital.The findings show different evidences comparing to foreign studies and complement prior research on the relationship of information disclosure and cost of equity capital.

Using a sample of 1198 Chinese IPO firms, this paper explores the impacts of IPO firms' paying overdue taxes on underpricing and the reasons based on the asymmetry information theory for the first time. The results show that (1) IPO firms paying overdue taxes are associated with higher IPO underpricing, which is 7.8% higher (more than 20 million Yuan less financing on average) than counterpart firm. (2) Testing on three types of asymmetry information theory, i.e., the signal theory, the “winner's Curse” theory and the principal-agent theory, we find that only the principal-agent theory helps partially explain the positive correlation between IPO firms' paying overdue taxes and IPO underpricing. The reason is that these firms have weaker motivation of supervision on underwriters, rather than lack of effective incentives compensation for underwriters. Further study finds that the positive association between IPO firms' paying overdue taxes and IPO underpricing are more prominent in the issuers employing low-reputation underwriters and information environment with less transparency (i.e., small and medium enterprises board and growth enterprise market board, the region with stronger tax enforcement).