A Political-economic Analysis of China's Economic System Innovation
Zhang Daogen
Zhang Daogen, Research Professor, SASS
E-mail: zhangdaogen@sass.org.cn
This paper in Chinese was originally published in Academic Monthly, 2020 52(03).
Abstract: System innovation is the inherent driving power of China's rapid economic development since the reform and opening-up. China's economic system innovation is highly endogenous and path-dependent in essence and is close related to national conditions, history and development stage. System innovation usually takes an internal and top-down approach, which is a gradual process from quantitative change to qualitative change over time. Economic system innovation is not only restricted by productivity, but also profoundly influenced by historical and cultural traditions. Since 1978, China has reformed its economic system in progressive steps, which echoes with China's reality. The reform starts from the most vulnerable spots and the most marginalized regions of planned economy by circumventing or breaking through the existing rules and regulations, which is implemented from micro-level to macro-level step by step. Under a panoramic view for the innovation chronicle of China's economic system, China's economic system innovation should follow the right direction, persist in adopting a progressive approach, and advance the reform at all aspects in the future.
Keywords: Economic System; System Innovation; Political Economics
On the Expansion of Principal-agent Theory in the New Institutional Economics
Li Zhengtu
Li Zhengtu, Research Professor, Institute of Economics, SASS
E-mail: lzt@sass.org.cn
This paper in Chinese was originally published in Economic Theory and Firm Management, 2020 (06).
Abstract: Based on the theory of individual rational expectations, the principal-agent theory in the new institutional economics has designed a precise, sophisticated and refined principal-agent system, which effectively resolves the conflict of interest between the principal and the agent in modern firms and improves the operation efficiency of the firms. However, the practice of modern firms has proved that even though the principal-agent system is highly precise, sophisticated and refined, it still has not fundamentally solved the conflict of interest between the principal and the agent and the further improvement of the efficiency of firm operation. Therefore, it is necessary to expand the theoretical perspective from the theory of individual rational expectations to economic individual + social individual + family individual composite rationality, so as to realize the expansion of the theoretical perspective of principal-agent theory. Utilizing the new institutional economics research method and the bilateral symmetric trust mathematical model, this paper proves that based on the principal-agent system, further strengthening the bilateral symmetric trust between the principal and the agent can further resolve their conflicts of interest and improve the efficiency of firm operation. Based on this conclusion, the specific path of strengthening bilateral symmetric trust between the principal and the agent is optimizing the social trust environment system.
Keywords: Principal-agent Theory; Institutional Basis; Bilateral Symmetric Trust; Efficiency Improvement
Entrepreneurship and Transformation of Schumpeterian Growth in China's Economy
Zhou Dapeng
Zhou Dapeng, Associate Research Professor, Institute of World Economy, SASS
E-mail: zhoudapeng@sass.org.cn
This paper in Chinese was originally published in Academic Monthly, 2020 (07).
Abstract: The study on the internal mechanism for economic growth transformation and entrepreneurship cultivation is of great practical significance for realizing China's high-quality economic development in the new normal. According to endogenous growth theory, China's economy needs to shift from Smithian growth to Schumpeterian growth. In this process, entrepreneurship plays an important role. Entrepreneurship promotes economic growth translation through the knowledge spillover and transformation mechanism, the opportunity identification and realization mechanism, and the diversification mechanism. In conclusion, economic growth depends on innovation, and innovation depends on entrepreneurs. However, the insufficient accumulation of domestic entrepreneurial capital will affect China's smooth economic growth transformation. Studies have shown that creating a favorable entrepreneurial environment, increasing knowledge accumulation, and maintaining a balanced market structure are effective ways to promote the accumulation of entrepreneurial capital.
Keywords: Entrepreneurial Capital; Innovation; Knowledge Spillovers; Economic Growth
The Heterogeneity Factor and the Chinese Enterprise
Transnational M&A Behavior
—From the Perspective of Global Value Chain Layout
Liu Liang, Shen Guilong, Li Haokuang
Liu Liang, Research Professor, Institute of Applied Sciences, SASS
E-mail: liuliang@sass.edu.cn
Shen Guilong, Research Professor, Institute of China Studies, SASS
Li Haokuang, Doctoral Candidate, School of Economics, Shanghai University of Finance and Economics
This paper in Chinese was originally published in Journal of International Trade, 2020 (10).
Abstract: From the perspective of global value chain layout, this paper divided the objects of transnational M&A into three categories: resource expanding, product processing and technology servicing, and made empirical studies on the influencing factors, The results show that transnational M&A in resource expanding pays more attention to the domestic market scale and the effective expenditure of residents; transnational M&A in product processing attaches importance to the coordination between internal capital management and external capital operation, while transnational M&A in technology servicing emphasizes the difficulties of financing, future expectations of investors, and potential value of enterprises growth. In addition, further research shows that the implementation of the Belt and Road Initiative has significant moderating effect on transnational M&A behaviors of Chinese enterprises, and promotes transnational M&A in three different types. Based on the above research conclusions, this paper puts forward policy recommendations in order to support enterprises to go global and drive the construction of BRI through transnational M&A.
Keywords: Mergers and Acquisitions (M&A); Value Chain; Influencing Factors; Belt and Road Initiative
Factor Ownership Structure of Foreign Invested Enterprises and Income Belonging of Value-added Exports
Zhou Zhuo, Zhu Kunfu
Zhou Zhuo, Associate Research Professor, Institute of World Economy, SASS
E-mail: zhouzhuo@sass.org.cn
Zhu Kunfu, Associate Professor, Research Institute for Global Value Chains, University of International Business and Economics
This paper in Chinese was originally published in China Industrial Economics, 2020(01).
Abstract: In the era of globalized production, foreign invested enterprises (FIE) actively participate in the production and export of a host country, and benefit from the export of the country. The value-added export of FIE includes both the value added generated by national factors and the value added generated by foreign factors, which constitutes the factor ownership structure of FIE’s value-added exports. Studying the factor ownership structure of FIE’s value-added exports can help the academic community understand the pull effect of FIE on the value-added exports of national factors; moreover, it also helps the academic community clarify the distribution effect of factor income caused by FIE. In this paper, we use firm-level data to calculate the domestic value added (DVA) and national value added (NVA) of FIE’s processing trade. We find that the NVA accounts for 65.85% of value-added exports and the average deviation between DVA and NVA reached 34.15% from 2000 to 2013. The input-output table based on heterogeneous firms is further used to calculate the deviation between NVA and DVA for FIE engaging in processing trade and FIE engaging in non-processing trade in 2012, which was 30.13% and 25.32% respectively. This paper believes that the DVA can’t fully reflect the national factor income of FIE’s exports. Studying the factor ownership structure of FIE’s value-added exports can help the academic community better understand the actual national factor income of the host country’s trade in value added, and also provide scientific evidence for a government’s foreign trade negotiations.
Keywords: International Factor Mobility; Global Value Chain; Trade in Value Added; Value-added Exports; National Value-added Exports
The Evolution of the Yangtze River Delta Integration and Its High-quality Development Logic
Li Zhan & Zhang Yan
Li Zhan, Research Professor, Institute of Applied Economics, SASS
E-mail: zli@sass.org.cn
Zhang Yan, Assistant Research Professor, Institute of Applied Economics, SASS
This paper in Chinese was originally published in Journal of East China Normal University (Humanities and Social Sciences), 2020 (05).
Abstract: The integration of the Yangtze River Delta has started since the 1980s. Over the past four decades, it has gone through four stages, namely, planning coordination, elements cooperation, docking mechanism, and national strategy of integrated development with higher quality. The integration degree and level have been significantly improved, laying a good foundation for the national strategy to promote the coordinated development of provinces and cities. However, there are still existing challenges in the integration of the Yangtze River Delta, such as administrative barriers, insufficient legal support, low marketization degree of cooperation mechanism, insufficient function of central city and the undeveloped regional spatial connections. When economy development has changed from high speed to high quality, the Yangtze River Delta should strive to be the pacesetters in the coordinated development of regional economy in China. Therefore, it is necessary to break the restriction of administrative division so as to establish national leading institutions and market-oriented cooperation system and build a new system of regional integration. The Bay Area should function as an important platform and carrier for regional development. Starting with the joint construction of national strategic projects, we should establish a new mechanism for jointly building industrial projects to share the benefits of fiscal and tax revenue, and promote the high-quality development of regional integration.
Keywords: Integration of the Yangtze River Delta; Coordinated Development among Regions; High-quality Development; National Strategy
The Impact of Monetary Policy on Chinese Private Enterprises
— Perspective Based on Dynamic Adjustment of Capital Structure
Zhang Guangting, Hong Jiaping, Jin Chen
Zhang Guangting, Doctor in Economics, Assistant Research Fellow at Institute of World Economy, SASS
E-mail: guangtingzhang@sass.org.cn
Hong Jiaping, Master in Economics, Researcher at Shaoxing Central Branch of the People's Bank of China
Jin Chen, Postgraduate student at School of Economics, Fudan University
This paper in Chinese was originally published in Fudan Journal (Social Sciences), 2020 (03).
Abstract: Chinese economy is now shifting from high-speed growth to high-quality development stage, de-leveraging and risk prevention have become the focus of current economic work. However, the risk of high-leverage private enterprises is constantly exposed, which has become the primary problem in the process of deleveraging. This paper uses the micro data of listed non-financial enterprises from 2008 to 2017 to test the transmission effect of tight monetary policy on micro-enterprises. The empirical studies show that: (1) The tight monetary policy can significantly reduce the leverage rate of enterprises, the lower the money supply, the higher the real loan interest rate, the lower the level of capital structure of enterprises; (2) Monetary policy will also affect the speed of capital structure adjustment of enterprises. When the real loan interest rate rises, the speed of capital structure adjustment of enterprises will slow down; (3) The speed of capital structure adjustment of high-leverage private enterprises is three times that of high leverage state-owned enterprises, but this is mainly due to the active de-leveraging of private enterprises and the passive de-leveraging effect of financial institutions on private enterprises' borrowing and loan-breaking. The results of this study show that we should reduce the leverage rate of enterprises in a stable, orderly and classified way under the background of unswervingly promoting de-leverage. We should accelerate financial reform, improve the construction of financial markets, reduce the cost of capital structure adjustment, and promote the transmission of monetary policy more effectively.
Keywords: Monetary Tightening; Private Enterprises; Capital Structure
From Pastoral to Urban Areas: Determinants Associated with the Health Status of the Migrating Elderly
Fan Haobin, Tingyue Jia, Sarah Wilson, Xuanyi Nie
Fan Haobin, Assistant Research Professor, Institute of Urban and Demographic Studies, SASS
Email: hbfan@sass.org.cn
Tingyue Jia, Assistant Research Professor, Institute of Applied Economics, SASS
Sarah Wilson, Ph.D., John E. Walker Department of Economics, Clemson University, Clemson SC USA
Xuanyi Nie, DDes, Graduate School of Design, Harvard University, Cambridge MA USA
Abstract: Given the well-documented trends of population aging and urbanization, yet much less empirical evidence exists on the health status of the aged peasant group migrating from rural to urban areas. This study aims to fill the gap in the literature by examining the factors associated with the health status of this group. Using data from China Migrants Dynamic Survey (2015), we found that the associations of individual characteristics, social contact, migration, exercise, and income with health status vary across senior groups with different motivations for migration --- seeking a job in the city, taking care of children or grandchildren, seeking treatment, or living a city life.
Keywords: Senior Migration; Rural; Urban; Health
