Basing on fiscal reaction mechanism, and combined with the specific features in China and the economic climate changes, this paper is committed to form the theoretical framework of government debt risk analysis, and discuss the fiscal space. At the same time, considering the economic uncertainty in China after the crisis, we analyze how to rebuild our country's fiscal buffers. The results show that China is in the early stage of “fiscal fatigue”,and using the second term function of government debt ratio may fit the reality of China’s financial response better. What is worth noting is that the fiscal space in China is reducing accelerately, specially there is a significant decline in 2010, and worse to worse the economic downturn in the economic slowdown will further reduce the fiscal space. Meanwhile, with the increase of the financial reserve ratio, the “vertical effect” that the fiscal reserve improve the fiscal response is offsetting the “horizontal effect” that increase the cost of fiscal adjustment acceleratly. What’s more, the marginal diminishing effect that the financial reserve improve fiscal response is not significant at this stage, and compared to the situation without financial reserves the fiscal space is raised by 8.85% when economic is dim, however, when in normal state is only 8.59%.

Based on the fifth and sixth national censuses, we analyze the impact of intergovernmental transfers on population flow. We use a spatial regression of discontinuity design to solve the endogenous problem. The results show that the more transfer payments a region gets, the more population flows out. Further study shows that the important reasons for the population outflowing including that transfer payments not only are used to expand the expenses of the local administrative and the scale of fiscal personnel, but also pay limited effect on the supply of public goods and jobs. Therefore, we think that it is necessary to further improve the efficiency of fiscal transfer payments.

Vertical administrative structure plays an important role in the construction of modern government. There are two major reforms of China's vertical administrative system since the reform and opening-up policy. The distribution of government power among different levels of government impact local government behaviors. In this paper, we empirically analyze the impact of two comparable reforms on expenditure size by using municipal panel data. Results indicate that the reform of “County Directly Administrated by Province” has significantly increased the scale of fiscal expenditure, but the effect of “County Administrated by City” reform on the scale of fiscal expenditure effect is not statistically significant. The results differ from different types inside reform, also different between the counties and municipal district. The reform is likely to lead to strategic behaviors of Prefectural-Level city and county governments, which may lead to expansionary expenditure.

Studying on the response of informal lending interest rate to monetary policy from time-varying perspective, this paper tried to provide some suggestions for monetary policy choice under the dual financial structure. Based on the modified IS - IM model, we concluded that the response of informal lending interest rate to monetary policy would be influenced by factors such as the substitutability between the formal and informal financial market. The empirical results showed that, the response of informal lending rate to monetary policy had obvious time-varying characteristics. While price-based monetary policy instrument could influence the movements of informal lending interest rate effectively in the short term, the policy effects had weakened in the long term. While quantity-based monetary policy instrument were temporarily “broken” in the early stage before the international financial crisis in 2008, the policy effect was significantly improved in the post-financial crisis period. The dynamic evolution of the substitutability between the formal and informal financial market could provide a reasonable explanation for these conclusions. We also concluded that, the movements of informal lending interest rate and interest rates of formal financial market were in the same direction, although the relationship was time-varying. Besides, the effect of interest rates of formal financial market on informal lending interest rates was decreasing with the increase of lag period.

Based on the panel data of 103 developing economies during the period of 1980-2014, this paperinvestigatesthe relationshipbetweenUS monetary policy and foreign exchange reserves of developing economies.Empirical results show that: the increase of federal funds effective rate will reduce the level of foreign exchange reserves of developing economies;otherwise it will increase the level of foreign exchange reserves. Empirical results also show that traditional macrovariables, financial variables and country specific variables are significant determinant factors of developing economies' foreign exchange reserves.

Using the method of ultimate controlling shareholder retrospective with 2010-2014 city commercial bank data,the article reveals the great difference of the local government’s financial holding model to the city commercial bank, and the difference is the result of the local government's endogenous choice based on regional endowments.Essentially holding pattern of the local government is the problem of optimal capital allocation driven by the economic growth,specifically the trade-off between inefficient SOEs and efficient private enterprises considering the former’s control benefit.As the first choice,SOEs’ capital requirement greatly affect local government’s holding pattern,and the requirement is determined by numerous factors such as proportion of state-owned economy,financial situation, financial competition.We find that:local government with low proportion of state-owned economy tend to exit control;when state-owned economy is high,local government with financial deficit tend to exit control,local government with low proportion of state-owned economy and financial deficit tend to increase control;local government with higher level of regional financial institutions monopoly tend to exit control.

Continued development of the financial products market, has a considerable degree of impact on China's financial. At the same time, the interest rate liberalization is constantly advancing in the process. However, there’s still lack of researches of the effects that how do financial product and interest rate liberalization influence bank industry, especially of bank risk-taking. This paper will use the panel data of China’s 100 commercial banks in 2005-2014, and comprehensively analyze the impact of financial products and interest rate liberalization on the risk of China’s banks. Drawing the conclusions: (1) the search-for-yield effect of financial products has a significant negative impact on bank risk, and strengthen the effect of monetary policy stance; (2) the interest rate liberalization positively impact bank risk taking by promoting bank competition, expansion chance to take risk, and thus enhance the effect of monetary policy stance; (3) impact that financial products affect risk-taking of bank will be weaken by interest rate liberalization, and strengthened if monetary policy stance become loose. The joint effect of three factors will be positive to risk-taking of bank.

The influence of corporate’s debt on investment has been widely discussed by the academics, but the existing research explores this topic from the perspective of the total amount of debt. Using the data of Chinese A-share listed companies from 2003 to 2015, this paper discusses the relationship between the excess bank loans and over-investment. Empirical results show that the excess bank loans are significantly positive with over-investment, while the management entrenchment will increase the over-investment caused by excess bank loans. On the contrary, institutional investors will decrease the over-investment of excess bank loans. Besides, the less-frequent institutional investors who focus on firm’s long-term value will discourage the over-investment of excess bank loans more significantly. This article is the first to investigate the influence of excess bank loans on investment behavior, enriching the research field of the capital structure and corporate investment.

The hand of government support plays an important role in R&D “market failure”. Although it still lacks consistent and convincing empirical evidence about whether government subsidies have met government’s expectation, this paper provides a new empirical evidence for this problem by eliminating the noise from non-R&D subsidies and distinguishing between firms’ R&D self-financing investment and government innovation subsidies. We find that, despite government R&D subsidies and firms’ investment in innovation being positively related, firms increase R&D investment by significantly less than 1 unit even when the government gives firms 1 unit R&D subsidy. With the increase of government R&D subsidies, firms’ R&D self-financing investment is decreasing. This suggests that, R&D subsidies cannot really stimulate firms’ self-financing innovation, overall. Further studies show that firms’ industrial attributes, internal control and external legal environment play important roles in the incentive effects of government subsidies. For the firms which belong to the high-tech industry, are surrounded by better legal environment or have better internal control, government subsidies have the expected incentive effects on firms’ R&D investment.

China, with a vast region and diverse culture, gives us a chance to study the relationship between culture and finance. In this paper, we empirically research the impact of cultural diversity on enterprises’ innovation, with the former measured by the number of dialects and their difference in a city. We find that more considerable cultural diversity leads to more innovation output in private high-tech enterprises. The result is still robust after adopting instrument variables method and controlling the difference in education. What’s more, a more significant effect would appear in cities where have bigger diversity in different dialects, more tolerant, more population inflow and better intellectual property protection. This paper contributes to the understanding of non-institutional factors behind the unbalanced development among cities in China, and provides evidence from a rich-culture, non-immigrant country for international research about “culture and finance”.

This paper investigates into whether capital market investor attention as a whole is a scarce resource and how it allocates. Using the daily attention index from Hexun.com as a proxy for a firm’s investor attention, we find the magnitude of investor attention cause by a firm’s financial report is negatively related to the number of same-day financial reports. Further, firms with high market visibility are more likely to retain market attention, and firms have incentive to enhance distraction effect to avoid market attention when they have bad performance. The study provides direct evidence for the scarcity of capital market attention as a whole.

In this paper, we select stock message board in Guba East-money, and extract sentiment from messages using computer text processing methods. We examine the information content of China’s Internet stock message boards in the event of analysts’ neutral recommendations. We find that contemporaneous stock returns are significantly positively related with sentiment. And the number of messages significantly negatively affects stock returns of the day and next two days. We also find that the number of messages significantly positively affects contemporaneous price volatility, and it also affects the volatility of the day and next two days. Greater disagreement among the posted messages induces more trading volume on the next two days. Hence, this research can not only provide new insight into the mechanism through which stock messages boards affect market, but also provide helpful guidance for stock market regulators.

This paper mainly investigates the relationship between the equity investment of the listed companies and the government subsidies they can receive, based on the data from 2007 to 2014 of those companies listed on the Shanghai and Shenzhen stock exchanges.First of all, our research shows that the more equity investments a company has, the more government subsidies it will get.Secondly, we also find that state-owned companies can have more government subsidies if they have the same amount of the equity investments as private companies, Thirdly, the companies in the area with lower market-based degree can receive more government subsidies if they have the same amount of the equity investments as the companies in the area with higher market-based degree. In the further regression, we find that the subsidies received through equity investment will further dampen the performance of the companies. This paper explains the listed companies’ investment behaviors in an enterprise rent-seeking way, and giving a valuable reference to the rationality of the use of economic control by regional governments.