Based on the firm-level micro data and highly disaggregated customs data from 2000 to 2007, this paper investigates the effects of RMB real effective exchange rate on Chinese manufacturing enterprises’ productivity. The results show that:(1) RMB real effective exchange rate appreciation has a positive net effect through capital and labor elements allocation effect, companies selection effect, scale economy effect and human capital enhancement effect on the manufacturing enterprises’ productivity, and the conclusion remains robust after the use of several tools to solve problems of endogenous variables; (2) The effects of RMB real effective exchange rate on enterprises’ productivity are significantly different among firms with different characteristics, including whether firms export or not, different mode of trade, different technology level and different ownership of enterprises; (3) As a factor that restrict the effect of RMB exchange rate on enterprises’ productivity, the stronger the enterprise financing ability, the greater the positive impact of RMB exchange rate on firms’ productivity.

This paper uses China Household Finance Survey (CHFS) 2011 to investigate how the homeownership impacts on people’s happiness. The paper finds that: first, homeownership improves the subjective happiness mainly by its residential attribute, but not by its investment attribute. The subsample of those with only one house obtains the same conclusion. Second, for the subsample of those with more than one house, homeownership improves the subjective happiness by neither its residential attribute nor its investment attribute. Third, when the ownership of the present-living-house is taken into the consideration, the homeownership cannot improve the happiness any more.

This article analyses the impact of macro variables on real housing price volatility under different levels of policy uncertainty by building a theoretical model on short-term Chinese real housing price volatility, and furthermore by applying LST-VAR Model and Generalized impulse response function on empirical study of Economic Policy Uncertainty Index provided by Baker et al. and macroeconomic data between January 1999 and March 2014. The theoretical model shows better microenvironment leads to real housing price growth; and the growth enlarges with the increase of policy uncertainty. Also, the impact of macro variables on real housing price volatility differs under different levels of policy uncertainty. The empirical study shows, impact of macro variables on real housing price is asymmetry under two difference scenarios of high and low policy uncertainty. High policy uncertainty will make individuals to delay their consumption and investment, and further depress house supply of real estate companies. Moreover, it will even cause market failure and lead to unnecessary volatility. Expectation of demanders and suppliers is also effected. This aviation in expectation leads to excess adjustments, and exaggerate house price volatility.

Based on the construction of Cournot model in which banking structure affects transmission efficiency of bank lending channel of monetary policy, by selecting the 5 large state-owned commercial banks, 12 joint-stock commercial banks and 105 city commercial banks, a total of 13 years of the unbalanced panel data from 2000 to 2012, and using the individual fixed effects empirical analysis, we get the following basic conclusion: the competitive banking structure is conducive to improve the transmission efficiency of bank lending channel of monetary policy. Moreover, the use of different banking structure indicators and system GMM estimation of expanded dynamic empirical model ensures the robustness of the empirical results.

This paper investigates the tax sharing rates among sub-provincial governments systematically. We start with describing the stylized facts of tax sharing among sub-provincial governments since the 1994 tax reform. Then we investigate the determinants of tax sharing rates. Our results show that for both province-level and prefecture-level governments, they hold higher shares if they have larger control over industrial firms in their jurisdictions. For province-level government, the more serious the economic inequality of sub-provincial regions, the lager sharing rates they have. The higher level governments tend to have higher shares on value-added taxes and lower shares on business taxes if their jurisdictions have a higher degree of industrialization. From the viewpoint of economic theory and empirical application, we believe that the tax sharing rates among sub-provincial governments can serve as an alternative index of fiscal decentralization.

Credit rating aims to improve market efficiency by supplying credible public information. But due to rating-shopping behavior under the issuer-pay model, the reliability and the creditability of CRAs could be questionable. Based on Chinese corporate bond data, the paper examines how credit rating affects debt issuance costs. Like existing literature, OLS analysis shows that credit rating has significantly negative effect on debt issuance costs. However, the naive analysis suffers from endogeneity bias, and hence its result could be misleading. To tackle the endogeneity problem, we treat the competitiveness between CRAs as the ideal instrument for bond rating, and instrumental-based analysis further outlines that the effect of credit rating on debt issuance costs becomes economically smaller and statistically insignificant. This implies that CRAs in China do not provide valuable information that strongly influences the cost of capital.

Based on the 2011 China Household Finance Survey(CHFS)data, this paper examines the impact of risk of social endowment insurance on financial assets investment of Households in China. The empirical results indicate that social endowment insurance significantly increase the possibility of holding risky financial assets and the ratio of risky financial assets, the marginal effects are 25% and 22% respectively. These results are robust after controlling the family income, demographic characteristics and the investment risk attitude. One important explanation is social endowment insurance can effectively reduce the uncertainty of the future. We further divide the sample into urban and rural families. The effect is very weak and not significant in the rural area, which indicates the security level and the role of promoting financial consumption of the new rural endowment insurance need to be improved.

Using a sample of 432564 lending transaction data in a Province of China during 2009~2014, this paper studies how the relationship lending and bank competition affect credit risk for SMEs on the condition of asymmetric information. We find the relationship lending has positive impact on the credit risk for SMEs, but the bank competition has negative impact. However, when the heterogeneity of SMEs is considered, the effect of relationship lending and bank competition on credit risk is different. From the influence of channel, the relationship lending could alleviate the adverse selection, but lead to hold-up problem and ultimately increase the credit risk for SMEs. The bank competition could relieve the hold up problem, reduce the loan cost and ultimately mitigate the credit risk for SMEs. It is important to improve competition mechanism and strengthen loan management in order to reduce the credit risk for SMEs.

In the light of drawbacks in prior studies which neglects financing costs as a part of adjustment costs, this paper proposes that financial constraints can affect firm cost stickiness. Using the Chinese Annual Industrial Survey Database, and selecting firm ownership, leverage, size, regional marketization index, regional financial development index, and the generated factors by using factor analysis to measure financial constraints, the results show that financial constraints matter to cost stickiness, which supports our hypothesis. The tighter financial constraints firms face, the less sticky SG&A costs are. This paper not only provides a new angle to reveal and explain firm cost management, but also help comprehensively understand the effect of financial constraints on firms, especially on SMEs.

This paper studies the impact of financial constraint on technical efficiency with the data from Chinese A-share manufacture firms between 2004 and 2009. Using both traditional measures of financial constraint (firm size, leverage and firm age) and the measurement estimated from the investment-cash flow model, we find that the financial constraint significantly impedes the technical efficiency improvement. By a natural experiment to tackle the endogeneity problem, our main conclusions still hold. Moreover, compared to state owned enterprises, the relief of financial constraint plays a larger positive role in raising technical efficiency for private firms. Our results imply that, reducing information asymmetry existing in financial markets to alleviate financial constraints faced by small-middle firms could help the improvement of technique efficiency and the upgrading of Chinese industry production.

Based on the data of Chinese stock market, household consumption, GDP per capita, price index and interest rate for about 100 years, we test if “The Equity Premium Puzzle” exists in modern and contemporary China. It is found that the risk aversion coefficients for modern investors from 1888-1938 are within the reasonable levels. But the risk aversion coefficients for modern investors from 1939-1947 and contemporary investors are above the reasonable levels, indicating the “The Equity Premium Puzzle” exists in these periods.Moreover, the risk aversion coefficient for modern investors from 1939-1947 is much higher than that for contemporary investors. It reveals that the war and hyperinflation in 1939-1947 stimulate the “Background Risk” for stock investment, leading to significantly higher risk aversion coefficients and the equity premium.

Based on the analysis of the value of going-concern and conversion options, we introduce two types of non-linear effects in traditional equity pricing model. The new model, considering tax friction, depicts the concavity between equity value and revenue: a company's equity value increases monotonically with its revenue, while marginal effect is in decline. Furthermore, theoretical model is tested by empirical study based on data of companies listed on A-share market in China. For a single industry, the described relationship between equity and revenue is verified. However, there is not a uniformed nonlinear co-integration relationship between different industries because of heterogeneity.

Three volumes “History of Financial Thought in Modern China”, which edited by professor ZENG Kanglin, have been published in 2015. It is not only a great event in the field of economic thought, but also a thankful event in the academic circles of finance. This monumental work, which accomplished by more than 80 scholars in 8 years, is a great cultural project of collective collaboration. This paper reviews this great book and proposed some personal opinions.