Based on the typical facts and the theoretical analysis, using of prefecture data from 2004 to 2015, this paper examines the impact of local debts on the regional economic growth. The study found that: (1) Local debts have an inverse U effect on economic growth. When the level of debt does not break the balance of debt, the positive role of local debts will lead to economic growth (by making up for the lack of financial resources or improving infrastructure). Once the debt level exceeds the debt balance, the local debts will curb economic growth. The findings are consistent with those obtained from existing literature on transnational data. (2) Different from the existing research, we also found that local debts have obvious regional differences in the impact on economic growth. Compared to the economically developed eastern region, the debt balance of the Midwest and Northeast is low, and the scale of local debts continued expansion in these areas are more likely to have a negative effect on economic growth. Factors like level economic development, fiscal condition, industrial structure, level of real estate development and urban agglomeration can explain why the eastern region has a higher balance of debt. The findings of this study provide new empirical evidence for understanding China's local government debt problems and formulating relevant policies reasonably.

This paper estimates the influence of the financial marketization process on the relative importance of the different transmission channels of monetary policy from the aspects of interest rate liberalization and shadow banking, by using the separation technology in the SVAR model. Results provide a reasonable empirical description of important features of Chinese monetary policy transmission. First, the quantitative channels represented by the credit channel are more important than the price channels like the interest rate and the exchange rate channel, which does not change along the progress of the financial marketization. Second, the process of the interest rate marketization mainly strengthens the effect of the interest rate channel, while weakens the other channels, especially the credit channel. Third, the development of shadow banking system relatively strengthens the asset price channel, and weakens the credit channel and the interest rate channel. This paper provides the empirical support for the necessity and effectiveness of the combination of price and quantity monetary policy regulation, under the condition that certain degree of friction still exists between financial and real economy markets. At the same time, it also shows thatin order to give full play to the interest rate liberalization reform and perfect price transmission mechanism of monetary policy, authorities not only need to strengthen the supervision of various forms of financial innovation, but also need for further market-oriented reform of the real economy.

Commercial credit is the foundation of credit system. Commercial bill is the most representative credit instrument invented on the basis of commercial credit. As credit system evolves, commercial bill has gradually developed such functions as exchange, payment, settlement and fund-raising. Under the conditions of an advanced market economy, the core function of commercial bills eventually evolves into fund-raising. The Chinese commercial bill market looks at the needs of the market-oriented transformation of China's economy. With unique advantages, commercial bill has become an important tool for SME financing. Yet the lagged and insufficient development of the market system should be adjusted with the times. Shanghai Commercial Paper Exchange, as an important institutional innovation, is a driving force of transforming the commercial bill market from a segmented, opaque, paper-based and offline traditional market to a national, secure and efficient electronic market. With the Chinese economy shifting from high-speed growth to high-quality development, it is necessary to further improve the commercial bill market infrastructure and system construction, and to strengthen its functions to serve the real economy, especially the fund-raising function for the SMEs.

Currently, high leverage has been the source of financial risks.Around the basic way to prevent and defuse the financial risks by deleveraging structrually,the parties have put forward a series of deleveraging measures. In this context, this paper establishes a Dynamic Stochastic General Equilibrium (DSGE) model, which includes the dual mechanisms of “Financial Friction” and “Balance Sheet Recession”, and discusses how central bank's tightening Monetary Policy influences the leverage ratios of SOE and PE. It concludes that, firstly, raising the policy interest rate will reduce the leverage ratio of SOE, but at the expense of the rise of PE's leverage ratio and a slight decline of output. Secondly, with the policy's interest rate rising, decreasing the linkage degree of Vertical Structure of Industries will both enlarge the falling margins of SOE and the whole non-financial enterprises' leverage ratios, but reduce the rising range of the leverage ratio of PE. Thirdly, the Monetary Policy, with consideration of the non-financial enterprises' leverage ratio, will help improve the social welfare, but its effect is faint. Based on the above,this paper argues that the promotion of economic deleveraging requires controlling the “currency”, and studying the feasibility of other policy options in-depth such as fiscal policy, macroprudential policy. In the process of promoting deleveraging, monetary policy should control the “overall gate of money” and macroprudential policy should put the risk at the “total mark”.

By constructing the interbank liquidity creation index and the non-interbank liquidity creation index respectively, we examine the impact of monetary policies on the reaction of bank liquidity in terms of growth rates and the structure as well, we explore the factors that influence commercial banks to carry out interbank business. We find that loose monetary policies would increase the growth of total liquidity creation but reduce the growth of interbank liquidity creation and enlarge the non-interbank liquidity creation. Moreover, we find monetary policies have heterogenous effects on banks. Loose monetary policies would reduce the growth of interbank liquidity creation for banks deeply involving into interbank business. Monetary policies also significantly alter the composition of banks' interbank assets. The banks involving more into interbank business tend to having higher risks. Finally, under the macro-prudential policy framework, we suggest improving the coordination of monetary policy and financial supervision, using multiple monetary policy tools for anticipatory adjustments and fine-tuning in time, further promoting the development of financial market and reducing the over reliance of banks on the interbank business.

Using samples of entrusted loans, this paper investigates how shadow banking works in China from the perspective of formal credit cycle. The paper shows that entrusted loan, one type of shadow banking, is a market reaction to credit shortage: firms are more likely to participate in entrusted loans, and issue more entrusted loans when credit crunches. Further evidences show that, on one hand, the probability and the size of loans borrowed by non-state-owned enterprises are significantly increased when credit crunches; on the other hand, entrusted loans tend to flow to the province who has bigger credit shortage when credit crunches. In addition, the default probability of entrusted loans is significantly higher than the non-performing loan ratio of commercial banks. Moreover, compared with state-owned enterprises, the default probability of entrusted loans obtained by non-state-owned enterprises is relatively higher. These results indicate that entrusted loan is a market solution to credit shortage. The credit crunches have encouraged the capital flow to financial constrained regions and enterprises via entrusted loans, while also exacerbating the risk of shadow banking. This paper sheds light on the literatures of shadow banking and helps us to understand the role of shadow banking in China's financial system and its risk implications, which is important for shadow banking supervision.

Using the prefecture level panel data during 2002-2012, we examined the specific influence and mechanism of land finance on regional innovation. The empirical result shows: (1) Reliance on land finance of local government significantly hinder the regional innovation; (2) The government spending preferences, the crowding out effect of enterprise innovation, and destruction of the institutional environment are main mechanism under the land finance model; (3) The influence of land finance on innovation has significant heterogeneity in regional and land transfer forms. Therefore, the establishment of innovative nation requires the further regulation on the behavior of local government and weakening the financial dependence on land resource.

This paper constructs a theory model to explain whether the relationship among different sectors in rural credit market is substitutive or complementary. Using a three-year panel data, this paper applies PSM-DID model to analyze the relationship among the poor village mutual fund, the formal financial sector and the informal financial sector in rural credit market. It's found that there exists substitutive relationship among these three financial sectors. The mutual fund substitutes for part of the informal financing. Especially, the substitutive relationship is much more significant in poor groups and in the situation of consumption lending. These findings provide some scientific basis to guide the development of the rural cooperative financial organizations and to improve the rural financial market to be more mutually complementary.

In recent years, stock dividends ratio is getting higher. How does listed company make decisions on stock dividends plan？ We explore the way of catering in manager's decision-making from internal and external angles. We conclude that: (1) From the internal, manager chooses own company's nominal price as the frame of reference in decision-making. Nominal price positively affects manager's intention of giving stock dividends and actual stock dividends ratio, which means that manager caters investor's nominal price illusion. (2) From the external, manager chooses other companies' stock dividends ratio as the frame of reference in decision-making. Peers' average ratio positively affects manager's intention of giving stock dividends and actual stock dividends ratio, which means that manager caters investor's reference point effect. (3) Nominal price and peers' ratio both positively affect manager's intention of giving stock dividends and actual stock dividends ratio. And, there exists substitution effect between these two frames of reference. These results imply that, to optimize the utility of decision, manager takes internal and external frame of reference into account simultaneously and has the incentive of dual catering. This paper expands the catering theory and provides new evidence for reference point theory. This paper fully reveals the mechanism of listed company's decision-making on stock dividends and has important regulation implication.

We propose that actively managed equity mutual funds tend to mark up their portfolio values at quarter ends. This approach is used by mutual fund family as a family strategy to coordinate fund performance within the family. We provide evidence that both the individual fund and its top holding stocks have abnormal return during the last few trading days at quarter ends, and experience a return reversal at the beginning of the next quarter. Further tests indicate that “high family value” funds (i.e., funds with larger size, older funds and funds with higher past performance) show higher abnormal return at quarter ends. We also find that funds with high cross-holdings exhibit higher abnormal return at quarter ends. These results indicate that holdings markup in mutual funds can be explained by fund family strategy.

Based on China's economic policy uncertainty index, this paper studies how economic policy uncertainty influences the company's trade credit supply decisions by using the quarterly data of listed companies from 2003 to 2015. The results show that economic policy uncertainty significantly reduces the trade credit provided by the companies. And its impact channel is through the deterioration of the company's external financing environment and operating uncertainty. Further research shows that the level of social trust, regional financial development degree and the company's market position can effectively alleviate the negative effects. Economic policy uncertainty also has a significant impact on the company's trade credit supply term. Our findings provide new evidence for the trade-off between cost and benefit when the firms provide trade credit under uncertain macroeconomic policy conditions, and contribute to the literature on economic policy and real economy, and are helpful to understand economic effect of economic policy uncertainty on corporate financial decision-makings.

Using A shares public corporates listing in SH and SZ, this paper examines how the market reacts differently to the dividend policy between high and low internal control quality firms. We find that when the internal control quality is high, the cumulative abnormal return has a significant positive association with the dividend policy. However, when the internal control quality is low, there is no significant association between the cumulative abnormal return and the dividend policy. These results only exist in state-owned firms and firms in fierce product market competition industries. Therefore, we conclude that investors have different attitudes toward the dividend policy of firms with different internal control quality. The findings of paper provide guidance to both the managers and regulators.