No.5,2014
Published on 17,
May
The Dynamic Mechanism Transform of China’s Industrial Economic Growth
JIANG Fei-tao1, WU Peng2, Li Xiao-ping3
(1. Institute of Industrial Economics CASS， Beijing 100836， China；
2. Institute of Economics CASS，Beijing 100836，China；
3. Institute of Quantitative & Technical Economics CASS， Beijing 100732， China）
Abstract: The dynamic mechanism of China’s industrial growth has already shifted to a
mechanism driven by efficiency instead of factor. Taking 2003 as demarcation line, the
contribution of investment expansion to economic growth significantly increased from annually
average 34.07% to 89.28%. While the TFP’s contribution substantially declined from annually
average 47.34% to -4.08%. At the same time, the growth rate of TFP declined from annually
average 4.6% to -0.05%, and the marginal capital output ratio declined from 0.61 in 2002 to 0.28
in 2012. It suggests that investment-driven industrial economic growth mode is face with the
rigorous problem of efficiency, and it bring into doubt the sustainability of its high growth.
Further research reveals that the rapidly deteriorating trend of China’s industrial growth
efficiency has been notable before the financial crisis. That means the financial crisis was not the
principal cause of the deterioration of efficiency, which only further exacerbate it. At the
grass-roots such efficiency loss stems from China’s state-led and investment-driven industry
development model. Therefore, the key is to straighten the relationship between government
and market, aimed at realizing the transformation to innovation- and efficiency-driven growth
mode. That is, government should build perfect institutional system for market, and positively act
on the base of respected the market mechanism and the market main body’s intention, then
improves the technological innovation and technology transformation.
Keywords: industrial economy; dynamic mechanism; the transformation of the economic growth
pattern
JEL Classification: L60, O29, O47.
The Urbanization and The Equalizaion of Per Capita Public Service
SUN Hong-ling1，TANG Wei-bing1，SHEN Yu-mou2
(1. Economic Reform and Development Research Center of Hunan Business college, Changsha 410205，
China ；
2 .
School of Economics and Trade of Hunan University,
Changsha 410006, China)
Abstract: This paper considers that the obstacle of urbanization is the financial system
actually but seemingly the househodd registration system through the newest difference analysis
between the resident population and the household population, because the shifting of rural
residents into town in the same provical finance have already no problem. The current two
hundred and seventy million migrant workers and the raising population about a toal populaiton of
four hundred million cannot enter the cities, because the local interest rigidity of the tax system
brings the urban and the rural dualistic structure so that the midwest rural population cannot
migrate to the east city. According to the calculations, the new dual structure lagges the
urbanization of our country by 29.58 percentage points, and depresses the consumption about 30
trillion yuan(2012), the loss is equivalent to half of the coast. Using “Chinese Statistical
Yearbook” data and consulting the financial balance method of Germany, the article advocates to
implement the “standard person" formulation allocation of the regional horizontal fiscal
equalization system combining the national conditions with international standards that let people
migrate freely with public service，it can solute the problem of gap, market segmentation and the
ecological environment through the improvement of the tax system and the role of "voting with
their feet" of market mechanism.
Key Words: urbanization; equalization of per capita public service; reform of tax system;
“standard person” formulation allccation
JEL Classification: H30 J61 R23
Expansion Deviation and Welfare Effect of Government Size
——New Hypothesis and Empirical Retest
WEN Yan-bing
(Zhejiang University School of Economics, Hangzhou, 310027, China)
Abstract：The paper proposed a new hypothesis of moderate size of government’s welfare effects, and
empirical test by using inter-provincial dynamic panel data of 2000- 2012 and SYS-GMM method. We
find, moderate size of government not only can conducive to economic growth, more conducive to improve social
welfare, There are three effects of the size of government, when the government is small, the growth
effect dominates, when government is large, the crowding-out effect dominates, and it is moderate, the Welfare
effect dominates. Government size affect social welfare and preset “inverted U”, expanding the size of
government in short-term can promote economic development and improve the social welfare, but is detrimental
to economic efficiency and social justice in the long-term, the moderate size of government is 0.2. The size of
government influence on social welfare is greater than the intervention of the government, due to the conditions
and level of development of each province are significant differences, to prevent the expansion of the size
of local government debt, excessive crowding the market and Macroeconomic instability, which because of local
government size excessive deviation from the modest level of 0.2. The article raise the alert and inspiration
for the size expand of the Chinese government at all levels in recent years.
Key Words： government size; expansion deviation; welfare effects; huge ministry system reform
The Research of R&D Cooperation and Anti-trust Control on Mixed Oligopoly
ZHANG Wei，YU Liang-chun
(school of Ecomomics Shangdong University, Ji’nan 250100 ,China)
Abstract: The firm’s property structure will impact the efficiency and welfare of R&D cooperation
under mixed ownership economy, and also impact anti-trust control standards of the collusion after
R&D cooperation. This paper uses mixed oligopoly to research these issues, the results show that R&D
investment level of the firm is positively correlated with the proportion of non-state-owned property,
but the relationship of consumer surplus and social welfare to the proportion of non-state-owned
property is inverted U-shape. When the proportion of stated-owned property is higher, the mixed
ownership firm has an incentive to be in collusion with non-state-owned firm, and this kind of
collusion will improve the total social welfare. When the proportion of stated-owned property is lower,
the mixed ownership firm also has an incentive to be in collusion with non-state-owned firm, but the
collusion will harm the total social welfare. In addition, the collusion under mixed ownership economy
is higher stability. These results indicate that we should use the rule of reason principle to judge the
collusion under mixed ownership economy.
Key Words: mixed oligopoly; R&D cooperation; collusion; anti-trust
The Influence of Firm Size on Productivity and Its Difference
----Based on the Empirical Test of Industrial Firms in China
SUN Xiao-hua，WANG Yun
(Department of Economics of Dalian University of Technology, Dalian 116024, China)
Abstract： Using the sample of Chinese industrial firms, the firm size distribution is
statistically analyzed and the total factor productivities between industries are compared. Based on
the semi-log model, the impact of firm size on productivity and its influence mechanism are
discussed. And then Shapley method is used to decompose and test the contribution of firm size to
productivity differences. The results are shown that in different industries of different factor
intensity, both the firm size distribution and productivity level have some differences; there is an
inverted U-shape between firm size and productivity, but firm size expansion is advantageous to
increase the productivities in most firms. For the firms in labor-intensive textile and
technology-intensive pharmaceutical industries, the firm size expansion increases the productivity
by economies of scale and technical innovation effects. While in the capital intensive
transportation equipment manufacturing industry, the mass production will weaken the driving
force of R&D activities. According to the results of Shapley value decomposition from different
kinds of industry, the contribution of firm size to productivity differences is all over 90%,
obviously higher than the other factors, indicating that firm size difference is the main reason for
the productivity difference.
Key Words： firm size; industrial firms; total factor productivity; Shapley method
Study on the Effect of the Industrial Pollution Treatment Investment on Regional
Employment
ZHAO Lian-ge, ZHONG Bo, WANG Xue-yuan
(School of Economics, Zhejiang Gongshang University, Hangzhou 310018, China)
Abstract: Industrial pollution treatment investment (IPTI) is an important means of compensating
environment negative externalities by corporation, which employment effect is entirely different from the
productive investment. Then, it is very worthy of discussion that whether China can achieve the “double dividend”
of regional environment improvement and employment growth through rearrangement of the scale and model of
IPTI. This article builds a regional labor supply and demand model which includes the IPTI variable. Theoretically
it is concluded that the effect of IPTI on regional labor demand depends on the tradeoff of its positive enterprise
competitive effect and negative production scale effect and the effect of IPTI on regional labor supply depends on
the increase degree of laborer utility. Based on a nondimensionalized pollutants changed IPTI intensity variable
and 1997 to 2011 China 30 provinces’ panel data and applied simultaneous equation regression estimation method
to do empirical research, we find that increasing the total intensity of IPTI can achieve regional employment
growth. Compared with the after-pollution industrial pollution source treatment investment model, the
fore-pollution “Three-Simultaneity” investment model has a more significant effect on promoting enterprise
competitiveness and laborer utility. The early stage of IPTI also has a significant positive effect on the current
regional employment, but weaker than the current investment. The employment effect of the IPTI in the eastern
region, where industrial pollution is more serious, is higher than the national average level. Therefore, different
regions in China, especially the China eastern region need to steadily increase the IPTI scale, encourage and guide
industrial corporations convert environment investment into the “Three-Simultaneity” investment model and
scientifically enact medium and long term IPTI plans, in order to relieve the contradictions between employment
and environment.
Key words: industrial pollution treatment investment; regional employment effect; labor supply and demand;
“Three-Simultaneity” investment
Congestion of Production Factors and Optimal Agglomeration Recognition
——Based on the Perspective of Heterogeneity
SHEN Neng, ZHAO Zen-yao, ZHOU Jin-jin
(School of Business of Soochow University, Suzhou215021, China)
Abstract: Industrial agglomeration has two sides, positive and negative externalities may occur at different
stages of agglomeration. The paper introduces the crowding effect caused by excessive agglomeration to analyze
the total factor productivity of manufacturing in China and use nonlinear threshold regression model to study
threshold characteristics of different types of industrial agglomeration and determine the optimal level of
agglomeration. The result show that the industrial agglomeration's effect on productivity is not monotone
increasing (decreasing), the influential coefficient in different industries and interval is different. With the increase
of industrial agglomeration, the impact on the industry productivity first increases and then decreases and presents
three nonlinear thresholds. According to the given tradeoff between agglomeration degree and productivity, the
paper presents the judgment standard of promoting, moderate and excessive agglomeration. There is phenomenon
of production input remains or out deficit in the excessive agglomeration region. Reducing the production factors
input or improving the allocation ratio of production factor can improve the industry productivity. The policy
implication is obvious: the synergies effect should become the target of industrial spatial layout. Government
should put forward different agglomeration lever based on the reality of industry characteristics and focus on
rolling revision adjusted to the optimal level.
Key Words: industrial agglomeration; threshold regression；crowding effect; scale effect
JEL Classification:CC4 LL5 RR3
IPO Pricing: Golden-mean Thinking or Group Polarization ?
LI Weian1,2，LIU Zhen-jie1,2，GU Liang1,2
(1.China Academy of Corporate Governance of Nankai University, Tianjin 300071,China
2.Business School of Nankai University,
Tianjin
300071,China)
Abstract： IPO pricing is may not only affected by pricing system, underwriter reputation, venture
investors’ participation, but also influenced by the IPO pricing experience of the board of directors. Based on
golden-mean thinking and group polarization we test the effect of the IPO pricing experience by directors of board
on the focal IPO pricing behavior by using data of the 742 corporate which going IPO during 2004-2012. And find
that when the average IPO pricing premium experience by directors of board is high, the focal IPO pricing
premium will be lower significantly; when the average IPO pricing premium experience by directors of board is
low, the focal IPO pricing premium will be higher significantly, which proved the effect of golden-mean thinking
in the process of IPO pricing of the board. Furthermore, the study proved that the duality and political association
of the chairman of the board will decrease the effect of golden-mean thinking during the IPO pricing decision. In
the perspectives of golden-mean thinking of China, the article provide theory explain for the IPO pricing behavior
of corporate, which have certain meaning for understanding the IPO pricing.
Key Words：IPO pricing premiums; director experience; golden-mean thinking; group polarization
JEL Classification: Z13 G12 G34
Core Reconstruction of the Executive Compensation Incentive:
The View of Cost of Capital Constraint
WANG Ping,
ZOU Ying, HUANG Li-feng
(Accounting School of Capital University of Economics and Business, Beijing 10070,
China )
Abstract: The cost of capital is the first concept of modern corporation financial theory, a
scientific and reasonable executive compensation incentive system must be based on the cost of capital
constraint. The paper reconstructs the core idea of executive compensation incentive, and puts forward
the view of cost of capital constraint of executive compensation, that is, executive compensation is not
only constrained by the cost of capital on the total amount, but also sensitively constrained by the cost
of capital movement on the changes speed, and sticky constrained by the cost of capital movement on
the changes range. Using the cost of capital and its volatility as a benchmark to measure and evaluate
the quality of the behavior of the executives, integrating the change of shareholders’ wealth with the
rise and fall governance mechanism of executive compensation together organically, could maximize
the executive compensation incentive function. The paper takes 2009-2011 China's listing corporations
as samples to carry out an empirical test, the results show: there was a negative correlation between
China's listing corporation's executive compensation and cost of capital; executive compensation’s cost
of capital sensitivity is very significant; relative to the cost of capital, monetary compensation has the
downward stickiness, while equity compensation with upward rigid. Analysis also confirms, however,
the almost monotonous up characteristics of Chinese executive compensation will nearly removes the
incentive functions of the equity compensation, which should be corrected. Strengthen the
compensation incentive function from the dynamic perspective is a basic way of the executive
compensation mechanism optimization. The conclusions of this paper have important significance to
strengthen the cost of capital restraint mechanism in the designing of executive compensation system,
as well as further promote the compensation reform.
Key words: executive compensation; cost of capital constraint; sensitivity constraint; stickiness
constraint; shareholders’ interest
ndustry Policy, Ownership Type and Corporate Investment: Empirical
Evidence from Chinese Listed Firms
LI Wen-jing，LI Yao-tao
(School of Management, Jinan University, Guangzhou 510632, China)
Abstract: Research on China’s industrial policy’s impact on firm investment behavior is of
great significance to optimize China's industrial policy and to improve the China’s macro -control.
Using the sample of A-share listed firms from 2001 to 2011, and establishing FE model and simple
regression model, the study examines how the industrial policy impacts firm investment behavior and
the mechanism. The results indicate that industrial policy has no effect on the investment in the total
sample. Further analysis show that industrial policy promotes investment in private firms by helping
private firms
breaking the “China’s Project Approval Limit”, while investment in state-owned firms
do not change significantly at different period of industrial policy; but increasing investment is not
efficient in private firms, while state-owned firms do not. Finally, the study use a simple regression
model to find that industrial policy can help private firms breaking "Credit Rationing" to obtain
financing, which may be the underlying cause leading to low efficiency of investment. We argues that
the Chinese government should speed up the reform of system of project examination and
marketization of bank loan, and establish the industrial policy to guide private firms to increase
investment in their proper industries and ensure the implementation of preferential policies into
practice..
Key Words: industrial policy, investment, ownership type, investment efficiency, bank credits
JEL Classification: L50 M41 C33
Interative Effects among Managerial Elements and Management Promotion of
SOEs: a Multi-level Research based on Management System’s Network
Attributes
1
WANG Feng-bin ，ZHENG Xiao-jie1，CHEN Gong-hai2，WANG Cong1
(1.School of Business, Renmin University of China, Beijing 100872, China
2. Beijing G&G Human Resource Development Centre, Beijing 100088, China)
Abstract: One of the key tasks in enhancing large and medium enterprises’ core competence is improving
their management, which requires systematic, integrated and synergetic practices. Heeding the call for design
science research, the paper takes the thirteen managerial elements proposed by SASAC as nodes of network and
quantifies their structural characteristics by SNA, and then applies QCA to analyze their effects on managerial
capabilities both in the context of organizational field and specific enterprise. Different from the cohesive structure
which is proposed by the McKinsey’s 7S mode, managerial elements are found to be unequally connected,
resulting a core-peripheral structure. With their varying inward and outward network centralities, these elements
play different roles in the flow of resources. The system’s whole network structure and the position in which these
elements are located greatly impact their levels of managerial capability. Combining the managerial network
characteristics in specific organization with the institutional influence from situated organizational field in QCA,
the former tends to play a more important role than the latter in determining their levels of managerial capability.
These results demonstrate that, compared with institutional isomorphism perspective network connection
perspective enjoys more explanatory power, and thus reform policies aiming to management promotion should be
designed in accordance with each element’s current level and structural position in the hierarchically connected
network. This study provides practical guidance for raising large and medium enterprises’ management capabilities,
which emphasizes overall enhancement paralleled with breakthroughs in key elements, and deepens complexity
research on management systems.
Key Words: managerial promotion; joint reform; network structure; QCA; organizational field
JEL Classification: M10 M19 M20