Abstract： According to the viewpoint of Marxist political economy, there are two socialist principles of distribution which apply to different stages of development. The principle, “from each according to his ability, to each according to his work”, applies to the first stage of socialism, namely the stage of socialist construction, And the principle, “from each according to his ability, to each according to his needs”, applies to the second stage of socialism, namely the stage of communism.After the great discussion of the distribution according to work principle in late 1950s, in order to fit in with the construction of socialist market economy, China continues to explore the principle of distribution according to work.This paper tries to review the evolution of the distribution according to work principle in China from the perspective of history of economic thoughts.
Key Words： Distribution According to Work; Distribution According to the Contribution of Production Factors; Efficiency; Fairness; Shared Development; Common Prosperity

Abstract： From the demand side of national income accounting, proceeding literatures have always assured the econometrical nexus with nonlinearity between net export and economic growth.In this paper, by incorporating trade related factors into the extended economic growth accounting model, we theoretically offer multilevel criteria for the identification of the nexus with nonlinearity between net export and GDP.Based on our developed theoretical model and estimations with serial and crosssectional correlation panel data, we investigate the nexus with nonlinearity and regional heterogeneity between net export and economic growth by using the provincial panel data from 1995 through 2011.According to the mathematical specifications of nonlinearity, the critical point of transition in which net export on economic growth is positioned, meanwhile closed intervals of net export to promote economic growth is calibrated as well.As a result, the scale of economic openness determines the regional differentials from net export on economic growth intervals.The historical path of net export driving economic growth has been also revealed.The policy implication is that increase in import will not only bolster balanced international trade but also boost economic growth.
Key Words： Net Export; Growth Accounting; Open Economy; Econometrics

Abstract： This paper constructs an overlapping generation model with postponed retirement and endogenous fertility, and explores the effect of postponed retirement on fertility rate and economic growth.We find that postponed retirement can increase endogenous fertility rate in both neoclassical growth model and endogenous growth model.There are two channels through which postponed retirement can affect fertility.On the one hand, postponed retirement make the old people have more income, which in turn lowers individuals' saving and make individuals supple less labor and devote more time in rearing children.On the other hand, postponed retirement lowers capital stock, and individuals have to devote more time to working to maintain consumption level in the young period.In our model, the positive effect of postponed retirement dominates its negative effect.The impact of postponed retirement on economic growth depends on model specification.In neoclassical growth model, postponed retirement can increase economic growth through its positive effect on fertility rate.In endogenous growth model, positive effect of postponed retirement on economic growth through fertility channel is less than its negative effect through capital accumulation, and postponed retirement lowers economic growth.
Key Words： Postponed Retirement; Endogenous Fertility; Economic Growth; OLG Model

Abstract： According to the characteristics of industrial sectors, R&D spillover can be studied from two dimensions, namely vertical spillover and horizontal spillover, and vertical spillover can be further divided into forward spillover and backward spillover.This paper investigates the direct and indirect spillover effect of R&D capital.And we use the “Granted patent approval” and the “new product sales” as the proxy of R&D output in our analysis.We regard 33 industrial sectors of China between 1998—2011 panel data as the object, and analyze the features of these two dimensions R&D spillover.It is found that the asymmetry of vertical spillover effects and the forward spillover is not significant, with the significance of backward spillover and horizontal spillover for R&D capital.Furthermore, under the same analytical framework, we found the symmetry of vertical spillover exists for human capital when we use the “new product sales” as the proxy of R&D output.
Key Words： Industrial Sectors; R&D; Spillover Effect

Abstract： Chinese economy is facing large pressure from gross or structural over-capacity in multiple industries.This phenomenon can't be totally explained by shock in business cycle and expansive monetary or fiscal policy.It should also be analyzed from firms' competition strategy in capacity investment and industry organization policy.Using micro data in Chinese passenger-vehicle industry from 2000 to 2013, this study analyzes strategic motivation of thirty manufacturers' capacity expansion behavior in this industry.Main findings include that (1) a firm's probability to increase capacity investment positively relates to its rivals' expansion behavior, which proves the existence of “wave phenomena” or “bandwagon effect”; (2) there is no certain relationship between a firm's new capacity investment and previous industry-level capacity utilization or demand growth; (3) the government's regulation on capacity investment only achieves its goal in a certain period.Although “wave phenomena” or “bandwagon effect” is supported by the Probit model, there is no exact evidence that incumbents have used capacity expansion for market share maintenance or entry deterrence.Furthermore, calculation of marginal effect on capacity expansion of joint ventures and indigenous brands finds that capacity investment of this two kinds of manufacturers are motivated by obviously different factors.This study has important practical implication for the on-going supply-side structural reform.To avoid secondary distortion in the design of industry policy, policy makers should consider the micro reasonability in competition-driven excess capacity.Measures dominated by government such as merger and acquisition, closing down of outdated capacity only work as an early-warning mechanism and not interference firms' investment behavior.
Key Words： Capacity Expansion; Competition-driven; Wave Movement; Industrial Policies; Automobile Industry

Abstract： China's economy is facing unprecedentedly severe challenges, making it urgent to explore policy instruments to sustain economic growth.Using data from National Taxation Survey, this paper employs China's value-added tax reform in 2009 as an exogenous shock to identify how tax reduction impacts firms' behavior and performance, providing empirical evidence for the effect of tax reduction on China's economy.We find both short-term and long-term positive effects of tax reduction on economic growth.To be specific, the decline in effective value-added tax rate encourages firms' investment in fixed assets, especially for private business, non-export firms, and those in central China, but at expense of cutting employment slightly; The productivity of capital and labor improves after value-added tax reform in almost all kinds of firms, implying that tax reduction will boost economic growth even in the long run.This study can serve as guideline not only for general tax policy to stabilize the economy but for specific scheme of tax-cut as well.
Key Words： Tax Reduction; Firm Behavior; China's Economy; Value-added Tax Reform

Abstract： Using weekly data from 2009 to 2014, this paper studies the joint dynamics of a relatively market-oriented factor of local debt risk, i.e., the chengtou bond spreads, and treasury yields under the framework of the extended no-arbitrage Nelson-Siegel term structure model.The results show that the local government debt risk affects the treasury bonds through two channels: 1) “substitution effect”, i.e., as the safest asset in China, the treasury bonds with short-to-medium maturities enjoy a “fly-to-safety” effect with decreasing yields when the local government debt risk increases; 2) “compensation effect”, i.e., the local government debt risk may lead to systemic risk of treasury bonds such that treasury yields contain a significant component of risk premium due to local debt risk.Though the empirical results show that the “substitution effect” dominates the “compensation effect” within the sample period up to 2014, we still need to pay attention to local debt risk in real time to monitor potential outbreak of systemic risks.
Key Words： Local Government Debt Risk; Chengtou Bond Spread; Treasury Yield; Extended No-arbitrage Nelson-Siegel Model

Abstract： Default in debt markets has been the key to the recent global financial crises.The default risk of Chinese local government debts has drawn global attention and identifying the local governments' default risk and its determinants are essential for policy-making.Due to China's institutional context and data unavailability, any direct estimation of the default risk is not reliable.This paper takes a novel approach to identifying default risk from the vantage point of financial markets for quasi-municipal bonds, by decomposing the yield spreads into liquidity risk spreads and default risk spreads, and by exploiting exogenous shocks and difference-in-difference (DID) methodology.We find that the idiosyncratic local government default risks are not priced in, while the default risks of Chinese economy as a whole are priced in, suggesting pervasive soft budget constraint problem facing the local governments.The default risk soared after 2012The research sheds some light on the design of China's local government bonds and has general implication for other emerging market economies with opaque central-local government relationships and weak institutions.
Key Words： China's Local Government Debt; Soft Budget Constraint; Default Risk; Liquidity Risk

Abstract： This paper investigates the relation between banking market structure and TFP growth and how this relation depends on institutional environment and the depth of credit market over the period 1999—2012It extends existing literature by: (1) measuring banking structure at the provincial level in terms of HHI and CR4 based on data on largest commercial banks, joint-stock commercial banks, and city commercial banks; and (2) employing recent developments in stochastic hyperbolic distance function approach to derive TFP growth. We find:（1）In most cases, the negative relations between banking market concentration and TFP growth are not remarkably found.（2）Institutional environment and credit availability could remarkably affect the relations between HHI and TFP growth.When credit availability is high or the institutional environment is weak, the negative relations between HHI and TFP growth are less remarkable.When credit availability is low and the institutional environment is more protective, the negative relations between banking market concentration and TFP growth are remarkable at 10% level.
Key Words： Provincial Banking Structure；Total Factor Productivity；Hyperbolic Distance Function；Institutional Development；Credit Availability

Abstract： Country's comprehensive national strength increasingly depend on its intellectual property regime and technological innovation.Our paper examines how local IP rights enforcement affects corporate innovation and operating performance.We find that the enforcement of IP rights has positive effect on the firms' R&D investment and patent output.The main channels through which local IP rights enforcement affects corporate innovation are reducing the uncompensated R&D spillovers, as well as relaxing financial constraints for the companies requiring high external finance.We also show that the positive association between the companies' patent output and future earnings increases with local IP rights enforcement.These results provide meaningful policy implications for China's government to meet the challenge in transforming economic development onto the track of endogenous growth driven by innovation.
Key Words： Intellectual Property Rights Enforcement; Corporate Innovation; R&D Spillovers; Operating Performance

Abstract： This study analyzes the impact of family ownership structure on firm performance at both family level and individual level.The empirical results indicate that family ownership plays a critical role on firm performance at family level and there is a positive relationship between them.However, we also document a U shape relationship between the family ownership concentration among family members and firm performance, and performance would be better when the firm is held by sole family member.Lastly, we analyze the conflicts in family inheritance and find the inheritance conflicts would have a negative effect on performance and moderate the relationship between family ownership structure and performance.In general, this study suggests that the ownership structure should be rationally arranged at both family level and individual level in case of the negative effect of family conflicts.
Key Words： Family Firm; Ownership Structure; Firm Performance; Family Inheritance

Abstract： Stability maintenance policies play an important role in maintaining social stability at the same time， but also brought some severe social problems. Elites' abuse of power for rent-seeking will cause people's struggle. “Nibble effect” of redemption policy can help elites suppress mass protest， and strict stability appraisal system can eliminate “fuse effect” in collective actions of citizens， which ensure the successful implementation of the policy of redemption. Some people can take advantage of nonverifiability of information and “fuse effect” to put pressure on the government to ask for unreasonable profits. So local governments will agree with these requirements under severe pressure from stability assessment， which contribute to social moral hazard. Implementation of stability maintenance policies will cause the accumulation of social discontent， and society is caught by “stability paradox” which means “the more severe the policies is， the more unstable society is”. Through decentralized governance measures， such as rule of law， people can regulate the run of power and elimination of social instability basis and ensure the long-term stability of society.
Key Words： Stability Maintenance; Petitioning; Public Governance

Abstract： The research on the relationship between incomplete contract and international trade has become a momentous theoretical issue. In the institutional economics, as the research of transaction cost and property rights moves along, the theory of incomplete contract has developed. The incomplete contract leads to that: specific investment can't be written in contract in advance, and the earnings distribution is only through “renegotiation”, and this renegotiation leads to bilateral lock. In addition, incomplete contract also influence the execution of the contract, then the quality of institution. These characteristics of incomplete contract impact on international trade and international investment. This paper analyses the theory that the incomplete contract influences comparative advantage and trade volume, and explains the development; we will estimate the theory that the incomplete contract is the determinant of multinational corporation's choice, vertical integration or outsourcing.
Key Words： Incomplete Contract; International Trade; FDI; Enterprise Boundary