Abstract:Employing a one\|step stochastic frontier analysis (SFA) approach, this paper examines bank efficiency in China, paying special attention to the static ownership effect, the selection effect and dynamic effect of governance changes. Bank efficiency has improved over the data period 1995—2008. The estimated average costs and profit efficiencies are 72% and 70%, respectively. Joint Stock Commercial Banks (JSCBs) and City Commercial Banks (CCBs) outperform State\|owned Commercial Banks (SOCBs), providing evidence for the ongoing bank ownership reform in China. The results suggest a strong selection effect for foreign investors. However, foreign ownership participation has a negative effect on profit efficiency in the long\|term. Initial public offerings (IPOs) improve bank profitability in the short\|term but decrease bank profit efficiency in a longer term. The research findings have important implications on future bank reforms in China in the aftermath of the current financial crisis.
Key Words:SFA; Cost Efficiency; Profit Efficiency; Banking; China

Abstract:The study of interplay and correlation among stock markets is very valuable to enrich market supervisors’ knowledge about the cross\|country transmission mechanism of information and financial risk; moreover, it also helps gain deep insight into market microstructure as well as informational efficiency in equity markets. Using the unified information spillover testing procedures proposed by Hong (2001, 2009), we investigate the dynamic linkages among China’s A\|shares market, the US stock market and the HK market to obtain the comprehensive picture of the relationships among these three markets. Report shows that (1) The US stock market plays a leading role among those three markets, with significant contagion spread from the US market into the HK market and to China A\|shares market. (2) A\|shares market was not independent of other markets. The shocks from other stock markets will make A\|shares market fluctuate, and on the other hand, A\|shares market also gains the power to shape other markets’ behavior. (3) The interplay among those three markets includes mean spillover, volatility spillover and extreme risk spillover, and the relationship can be nonlinear as well as linear.
Key Words:Financial Contagion; Information Spillover; Informational Efficiency; Subprime Crisis;  Granger Casualty in Risk

Abstract:This paper investigates the relationship between local government investment, administrative monopoly and economic growth based on Chinese provincial panel data from 1994 to 2007. The results show that the administrative monopoly has inverse U\|shaped effect on local economic growth and current administrative monopoly level promotes local economic growth significantly for most provinces; in addition, administrative monopoly has U\|shaped effect on local government investment and the relationship between them is still among the descending side. Currently, both administrative monopoly and local government investment boost the local economic growth and they have the substitution effect of each other. In the long term, however, administrative monopoly is harmful for the countrywide marketed scale effect as a whole. Political rents are in cost of economic efficiency. 
Key Words:Local Government Investment; Administrative Monopoly; Economic Growth

Abstract:There have been many theoretical and empirical studies on fiscal risk among academia and public sectors home and abroad. However few existing studies have explored how to evaluate and control fiscal risk from theoretical perspective compatible with Chinese experiences to ensure fiscal safety. This paper argues that, according to the generation mechanism, manifestation and transmission path of China’s fiscal risk, the risk scale can be reflected more reasonably based on liability default, arrear and quantitative risk position than prevailing linear\|weighted index method. The fiscal payment mechanism and calculation methods of contingent and implicit liabilities derived from this theoretical framework also provide new ideas of risk management aimed at containment of crisis brought by accumulative risk.
Key Words:Arrears; Risk Position; Fiscal Safety; Sinking Fund

Abstract:In recent years, there have been a large number of literatures about human cooperation action. All of these studies, however, are concentrated in the micro level. Since cooperation can promote efficiency and improve the utility of economic entities, what we concern is that what’s the accumulated effect of the entire community’s cooperation, and that to what extent the contributions are made by the overall cooperation actions to economic growth? Therefore, this paper puts the factor of cooperation into the economic growth theory using the standard economic methods. On the basis of the evolution of cooperation in a typical society, we put forward a dynamics equation of the degree of cooperation. Then, we incorporate the dynamic equation into the classical model to build up an economic growth model containing cooperation, which depicts the dynamic evolution process of cooperation and the economic growth.
Key Words:Economic Growth; Cooperation; Endogenous Economic Growth Model

Abstract：Cotemporary behavioral economics make it convinced that human being has fairness preference, but do not reveal why it exists. This paper develops an evolutionary explanation to it that fairness preference of human being origins from the process of earlier human being evolution. Based on an evolutionary game model and a stochastic evolution simulation model, this paper shows that, a) in a closed group, singular state society with fairness preference is stochastic evolutionary stable equilibrium, while dual\|state society with non\|fairness preference is also evolutionary stable but not stochastic stable; b) if the competitions among groups are considered, the only evolutionary stable equilibrium is the singular state society with fairness preference. The reasons are as follows, there is a tradeoff between cooperation opportunities and the cooperation benefit and fair behavior can balance the effects of cooperation opportunity and cooperation benefit on survival competition, and then becomes the behavioral paradigm with optimal fitness in survival competition at both individual and group level. 
Key Words： Fairness Psychology; Evolution; Evolved Psychological Mechanisms; Multi\|agent Simulation; Rationality

Abstract：Using the firm level panel data of industrial enterprise from 2001 to 2007, this article analyzes whether the FMD was depressed the R&D investments of Chinese enterprise. The result indicates that: the higher the level of the area impacted by the FMD is, the more seriously the inhibitory effects induced by FMD which are impacting domestic enterprises R&D investment would be. The inhibitory effects of R&D investment, induced by the FMD, are significantly different among the enterprises with different characteristics. Rent\|seeking opportunities accompanying with the FMD may weaken or inhibit the R&D investment from the enterprise. FMD also had inhibitory effects  on the foreign R&D investment. Rent\|seeking activities  by the foreign enterprises may also be used to obtain Chinas low\|cost factor inputs and the rental income caused by FMD. FMD is one of the critical issues which caused the obvious gap of the competitiveness between local enterprises and foreign enterprises. Regulation, or Control, of the factor market from the local government, in many ways, would help them to maneuver resources for economic growth in a short term; however, it will significantly inhibit the R&D investment within the area. Promoting and accelerating the market\|oriented reform within the factor markets should be the main aspects of policy adjustment about national innovation strategy.
Key Words： Factor Market Distortion(FMD); Enterprise R&D;  Rent\|seeking; Barrage Effect

Abstract：Residual income is the residual in a Mincer wage equation. It is a measure of within group inequality among workers with the same characteristics, which accounts for more than 60% real income inequality. This study separates the impact of unobserved heterogeneity, stochastic income shock and their corresponding price effects on workers residual income inequality in a unified framework. Through which a persuasive explanation of the rising residual income inequality is offered. The results suggest that transitory income shock is the main source of residual income inequality, which accounts for more than 60% of its variance. However, the price effect related to workers unobserved heterogeneity is responsible for the successive rising of residual income inequality in recent years. Moreover, estimation results across different education groups indicate that more rapid growth of the price of latent heterogeneity for higher educated workers is of great importance in explaining the widening income gap between education groups. 
Key Words： Latent Heterogeneity; Stochastic Shock; Residual Income Inequality

Abstract：This paper studies the effect on domestic grain market integration of the policy abolishing Likin and collecting excise in 1931 If the presence of transactions costs is taken into consideration, price equalizing arbitrage activities are triggered only when localized shocks result in price differences which exceed some threshold. This analysis utilizes threshold error correction models to account for the threshold representing transactions costs across districts. Our results confirm the presence of thresholds and indicate a 40 percent decline in grain transactions costs across Wuhu and Shanghai. After the reform, almost all of the miscellaneous levies put on in earlier Likin system that were abolished, and market integration was greatly enhanced. The data of Shanghai and Tianjin flour market also indicates strong support for market integration after the reform. Therefore, the reform has lifted the restrictions on spacial market integration put by Likin, and promoted the development of spacial trade and domestic business sector.
Key Words： Abolishing Likin and Implementing Consolidated Tax; Market Integration; Threshold Effect

Abstract:This paper attempts to provide a new explanation on the puzzle of extraordinarily high household saving rates in China in recent years. We proposed a new hypothesis that the extreme poverty and shortage of necessities that one experienced at childhood help to foster his saving\|consumption habit of austerity. Using the CHIPs data, we testified this hypothesis adopting the Great Famine that happened in 1959—1961 as a natural experiment. Our results show that the famine happened long ago that influences indeed the household’s consuming\|saving decision, the more serious the famine that the head suffered was, the higher the household saving rate is. Considering the generation who suffered the great famine or “famine generation” is the main forces that produce and hold wealth, so their high propensity to save help to explain the overall high household saving rates.
Key Words:Economic Take\|off; Famine Experience; Household Saving Rate; Consumption Habit

Abstract:The relationship between time and space is very important to the socioeconomic researches. However, most studies on time until now are divorced from space, and the spatial researches also have a tendency to ignore the time factor, as a result, there will be lack of view of economic timespace and a unified analysis. In order to form a new framework of timespatial analysis, the paper takes the timespatial structure of economy as the object of study, emphasizes on the perspective of time, particularly the value of transportlogistics time (VOTLT) as the core variable, hoping to break through the weakness of the conjunction of economic analysis in time and space. The author has made the definition of transportlogistics time value, and proposed such research methods as the alternative model of time and cost, time distance and chain, the nonuniform values of time, the requirements of solidifying the relationship of time and space, the organizations adapting to the timespatial structure, etc. The further developments of economics and our social economy need to focus on the order of timespatial structure. 
Key Words:Transportlogistics; Value of Time; Time Distance; Timespatial Analysis