Summary： This paper applies the principles and methods of Marxist economics to investigate the formation mechanism of unequal distribution of income and wealth and its relationship with economic growth under the current capitalist mode of production. The analytic framework of this paper possesses the main characteristics of Marxist economics, including class analysis, labor value theory, and capital hiring labor. To incorporate the new characteristics of the contemporary capitalist system, we relax the assumption in the literature of “no savings in the working class”. The resulting conclusions support important arguments by Marx, such as “capitalists intend to take residual value as much as possible”, “accumulation, i.e., the capitalization of the residual value, is the capitalist-specific behavior”, “the only source of accumulation is the residual value,” and “the relative impoverishment of the proletariat”. These conclusions can partially explain the wealth and income distribution of the U.S. and other developed capitalist countries since 1940. Meanwhile, it provides significant implications for analyzing the causes and governance of the unequal distribution of income and wealth in the primary stage of socialism in China.
We assume two types of agents, workers and capitalists, to hold different initial capital endowments. The capitalists own the capital of the whole society, while the workers do not have any capital. The workers face “extreme poverty”. With the increase in labor productivity and economic growth, workers' possession of capital or wealth remains zero.
The capital or wealth of the whole society is owned by the capitalists and continues to grow, while the wealth gap between the two classes grows. Although the increase in labor productivity raises the physical salary of workers, the value of the labor force remains the same, and thus the capitalists continue to gain more residual value without raising the level of exploitation. This finding can better explain the long-term trends of worker wages among the major capitalist countries since the 20th century, especially after World War II. If we consider the basic economic assumptions, economic agents with high initial capital endowment always dominate in social and economic life. These agents have more income, consumption, and wealth and work less. Such situations do not change over time. This finding provides a theoretical basis for the “heritage-based capitalism” or “food-born” society as pointed out by Piketty (2014). The socioeconomic status of children under the capitalist mode of production largely depends on the socioeconomic status of their family. Finally, this paper points out that, unlike the definition of income and wealth distribution in Western economics, from the Marxist perspective the income, consumption, and wealth of economic agents should match with their labor supply.
The main contribution of this paper is as follows. It distinguishes the laboring process from the value formation process in commodity production and defines a more general linear homogeneous production function. This analytical framework leads to conclusions consistent with Marx's theoretical views, such as capitalist representative agents, the labor theory of value, the relative poverty of the working class, and the organic composition of capital. Moreover, it is easy to expand the analytical framework by introducing various macroeconomic policies. The policy implication of this paper is that, in the absence of government intervention, the free market economy based on private ownership increases the income and wealth gap between workers and capitalists, and deviates from just income and wealth distribution from the Marxist perspective. To solve the current inequality of income and wealth distribution at this development stage in China, we must fully explore the superiority of the socialist system. On one hand, we can replace labor tax with capital tax in a reasonable tax system by setting up a tax rate structure that achieves equal distribution of income and wealth based on the Marxist perspective. Progressive taxation of capital gains and real estate are examples of this. On the other hand, we must keep developing state-owned enterprises, making them bigger and stronger and improving their efficiency, so that they can be helpful in narrowing the gap between the rich and the poor.
Keywords： Economic Growth; Marxism; Income Distribution; Wealth Distribution; Capitalism

Summary： Since the reform and opening up, China has achieved more than 30 years of rapid economic growth. However, since 2012, China's economic growth has declined dramatically, alerting economics scholars and leading to the debate on whether China will fall into the “middle income trap”. As part of the East Asian economy, China's cultural background is similar to that of Japan and the Four Asian Dragons which have successfully escaped the middle income trap. Therefore, analysis of the acceleration and deceleration of economic growth of the East Asian Model can explain the evolution of China's economic development and provide a backdrop for dealing with China's economic slowdown.
Researchers have attempted to explain the East Asian Model from a structural perspective, with the view that East Asia's economic growth has experienced structural acceleration and structural deceleration. These concepts were first proposed by Yuan (2012), who argued that development of the service industry was the main reason for the decelerating of GDP growth in developed countries; subsequently, these concepts have been generalized. Cai (2013) believes that the decline of the demographic dividend in East Asian economies is the main reason for their conversion from structural acceleration to structural deceleration; and the Research Group on China's Economic Growth (2012, 2013), Shen & Teng (2013), and Lu et al. (2016) have extended the concept of structural factors. This paper argues for studying China's economic growth by the construction of a comprehensive structural system and depicts the effects of five economic structural indicators—industrial structure, population structure, investment and consumption structure, foreign trade structure, and urban-rural income structure. The paper analyzes the structural characteristics of the East Asian Model, comparing them with the structural features of China's economic development process to explain China's economic growth structure puzzle: the impacts of resource endowment changes and structural transformation on the path of economic growth since China's reform and opening up.
The arithmetic mean method was used to synthesize the five indicators into a comprehensive economic structure index. Panel data on prefecture-level cities were used to measure impacts on economic growth of the economic structure index, and the five indicators were analyzed at a micro level. The results showed an inverted U curve relationship between the economic structure index and economic growth; and they showed eastern, middle, and western cities at stages of the inverted U curve, forming the Wild Goose mode of a large country, which eases structural deceleration pressure. The five indicators all have had their own effect on economic growth.
The paper provides a new perspective on the reasons for China's economic deceleration and provides theoretical and empirical support for building on China's economic structure dividend, maintaining economic growth, and adjusting the economic structure. Although China has entered the channel of structural deceleration, the domestic Wild Goose mode can extend the time for the Chinese economy to shift from high-speed growth to medium-speed growth. China should give full play to the great powers of the Wild Goose mode of a large country and fully consider regional characteristics of economic development and economic restructuring when making policy decisions to continue the structural bonus of the middle and western regions and to be on guard against the risk of structural imbalance in the east.
Keywords： Structure Puzzle; Economic Growth; “Inverted U” Type Curve

Summary： Entrepreneurship is recognized as the strong driving force of China's economic development, and it is part of an important national policy for China's economic transformation. As China enters a “new normal” phase of slower growth, the Chinese government is determined to innovate in its institutional mechanisms to facilitate entrepreneurship. “Mass Entrepreneurship and Innovation” as part of the national strategy is of important significance to “adjust the economic structure, develop the new engine and achieve the innovation-driven economic transformation”.
While the effects of formal and visible institutional arrangements such as financial supports, tax incentives, and deregulation on entrepreneurship have been largely emphasized in the literature, the broader, less formalized sociocultural institutions associated with social norms remain unexplored. The effect of social norms on entrepreneurial activity is theoretically ambiguous. Empirically, it is difficult to measure social norms. In addition, existing studies have been mostly conducted in a small number of developed countries, which may limit theoretical generalization.
Integrating institutional theory and the entrepreneurial socialization perspective, this study explored whether and how national social norms influence individual entrepreneurial activity. We also explored the moderating effect of the national economic development level and examined how the main effect differs across countries. In addition, we explored the mechanism through which social norms influence entrepreneurial activity.
We constructed a unique dataset by merging individual-level data from the Global Entrepreneurship Monitor (GEM) Adult Population Surveys (APS) and country-level data from the GEM National Expert Surveys (NES), World Bank database, and Global Competitiveness Report. The resulting dataset consists of 615,116 individual observations in 62 countries from 2009 to 2013. We used the binary probit regression, multinomial probit estimation, ordered probit estimation, and the mediation effect analysis methods to test the hypotheses.
Our main findings were the following. First, supportive national social norms have significant positive effects on entrepreneurial activity. This implies that in countries with higher media publicity, social recognition, and respect for entrepreneurship, individuals are more likely to start new ventures. Second, the effects of social norms on entrepreneurial activity are greater than those of formal institutional factors. Third, the national economic development level moderates the effects of social norms on entrepreneurship. Social norms can exert greater influence over entrepreneurial activity in countries with a lower economic development level and non-OECD countries. Finally, four important mechanisms are recognized through which social norms can activate entrepreneurial activity: individual opportunity recognition, risk-taking attitude, entrepreneurial skill, and network.
Our study has made several notable theoretical contributions. First, we advanced the research on the informal institutional antecedents of entrepreneurship by focusing on the roles of social norms. Second, although studies have mentioned that informal institutions have profound effects on economic activities, little empirical evidence has been provided. We were among the first using comprehensive global data to provide empirical evidence on influence of social norms. Third, by showing that the effects of social norms vary significantly across countries, we underscored the interactive effects of social factors and economic factors in promoting entrepreneurship. Finally, we opened the black box of the relationships between social norms and entrepreneurship and advanced understanding of the internal mechanisms through which informal institutions influence entrepreneurship.
This study has important implications for policymakers. Besides formal institutional arrangements, the government should be aware of the important role of social norms and should cultivate supportive social norms to facilitate entrepreneurship. Shaping social norms has a positive influence on promoting entrepreneurship. Our study is in response to the Chinese government's reform of mass entrepreneurship and innovation.
Keywords： Social Norms; Entrepreneurial Activity; National Economic Development Level; Informal Institutions

Summary： Around 250 million migrants live in Chinese cities and 8% of them come from rural areas. Among the rural migrants, around 20%are self-employed (Cao et al., 2014; Giulietti et al., 2012). Because most of these self-employed rural migrants work in urban informal sectors, good data is unavailable and so very limited research exists on this group of people. However, China has 30 to 40 million self-employed rural migrants who work and live in cities and all of them obtain employment on their own, so more research on them is essential. In particular, a significant share of the self-employed migrants hire laborers outside their families and can generate jobs for the society.
Research on Chinese migrants' entrepreneurship is very limited and largely has focused on rural migrants who return to the countryside and start a business back home (Chen, 2014). Research exists on self-employment in Chinese cities, though not usually distinguishing the self-employed entrepreneurs who hire laborers from the market and the self-employed who only hire family members. As a result, two opposing views about the nature of self-employed migrant workers have emerged. Some scholars believe that self-employment is primarily a refuge for those excluded from the formal labor markets (Arias & Khamis, 2008; Cao et al., 2013), while others insist that self-employment can also be regarded as a promising career pursuit for rural migrants (Ning, 2012; Wan, 2008). Both views can find empirical support from survey data. For example, some studies have suggested that older, less educated, less skilled, and female migrants are more likely to engage in self-employment (Ning, 2012; Xie, 2012), while others have shown that the self-employed people usually have higher incomes than the rural migrants who are wage earners (Giulietti et al., 2012; Meng, 2001). Moreover, compared to wage earners, self-employed migrants are more willing and able to settle down in cities on a permanent basis (Cao et al., 2014).
We have built a household choice model to characterize the choice of becoming a self-employed entrepreneur versus being self-employed without hiring laborers outside the family versus being a wage earner. We have proposed that a person's endowment of entrepreneurial capital is essential for such choices, because such capital helps to increase the marginal productivity of hired laborers, and a high endowment implies higher likelihood of becoming a self-employed entrepreneur. We have further argued that such entrepreneurial capital or spirit can be transmitted across generations; and in China, class origin classification in the 1950s has allowed researchers to identify the endowment of such entrepreneurial capital and its intergenerational transfer within a family. Based on survey data of around 2,000 rural migrants across 12 Chinese cities, we examined the determinants of career choices. We tested our hypothesis by using migrant family class origin as a proxy for entrepreneurial capital inherited from older generations and found those rural migrants with family class origin from among landlords and business owners in the 1950s are now more likely to engage in entrepreneurial self-employment. In the literature of intergenerational transfer of entrepreneurship, it is usually very difficult for researchers to distinguish the effects of physical capital transfer and the effects of entrepreneurial capital transfer. However, because the class origin classification movement in the 1950s generally had negative impacts on families' physical assets and formal education access for those identified as landlords and business owners, this research has helped to separate the two effects on career choices. We found that entrepreneurial capital can be transmitted across generations despite the negative impacts of their family class origins on physical capital accumulation and formal education access. The policy implication drawn from this research is that entrepreneurial capital is scarce in society and needs to be protected and promoted in the process of China's urbanization.
Keywords： Household Choice Model; Rural-to-Urban Migrants; Entrepreneurial Capital; Self-employment

Summary： How to control rising medical expenses by reforming the health insurance payment system is a question of concern in China in recent years. This paper studies social health insurance's optimal payment systems to hospitals. By viewing medical services as credence goods, we constructed a game-theoretical model with information asymmetry to discuss the repeated games among hospitals, patients, and social health insurance institutions. Social health insurance institutions and hospitals are long-run players in the game, and patients are short-run players. Social health insurance institutions and patients face moral hazard problems related to hospitals: overtreatment, undertreatment, overcharge, or undercharge. With patients heterogeneous in income, the social health insurance institution pays part of the medical expenses for patients and is in a monopsony position, determining payment system and price levels to hospitals.
Our conclusions are as follows: (1) To encourage hospitals to be honest in prescription and treatment, optimal payment systems should permit hospitals to obtain profits. (2) The optimal price in a prospective payment system (PPS) has a simple and explicit form, while efficient prices in a retrospective payment system (RPS) depend on specific forms of the social insurance institution's objective function and patient income distribution functions, putting a higher requirement on the social health insurance institution's ability to collect information. (3) PPS will be better than RPS if the patient's copayment/coinsurance is low enough, while RPS will be better than PPS if the variation of treatment costs is large enough, or if hospitals are too short-sighted.
 Our model interprets phenomena of health insurance payment systems in China and developed countries. Patients' copayments/coinsurance are very low in developed countries, which makes PPS more suitable, and it could be implemented for all diseases. China's basic medical insurances are organized by governments. With the gradual decrease in the coinsurance ratios of China's basic medical insurances, there has also been a trend towards PPS in China. However, Chinese patients' coinsurance ratio with basic medical insurance is high compared with that of the developed countries; thus the relative optimality of PPS and RPS may depend on specific types of diseases and medical services, and a special mixed payment system has emerged in China. Our model is also consistent with the following criterion for selection of diseases for PPS adopted by basic medical insurance institutions in China: “less complications, mature technology for diagnosis and treatment, quality and cost stability”. Our model also explains the trend of increasing numbers of diagnosis-related groups (DRGs) in Medicare with the cost variation within a group decreasing.
If the product quality is difficult to observe in advance, hospitals may reduce service quality under the fixed price of PPS. The health economics literature uses altruism to circumvent this problem partly, assuming that the quality of medical services is a direct element in the utility function of physicians. Nearly all theoretical studies based on the altruism assumption conclude that some form of mixed reimbursement (for the same case/patient) is optimal. Yet mixed reimbursement is rarely observed in practice. Our dynamic model explains the mechanism of PPS from the perspective of repeated games and reputation, without the altruism assumption.
Policy implications of this work include that due to information asymmetry, the social health insurance agencies should not set PPS price down to the average cost of treatments, but should use a reputation premium to avoid hospitals' moral hazard. In addition, PPS price should remain relatively stable.
Finally, most physicians in China are employees of hospitals. We ignore the difference between physicians and hospitals in the basic model. However, our conclusions are robust if we model explicitly such differences in repeated games among physicians, hospitals, patients, and the social health insurance institution.
Keywords： Health Insurance; Moral Hazard; PPS; Repeated Games

Summary： The relationships between capital markets and the real economy are the focus of financial economics research. Current studies suggest that the impact of capital market mispricing on the real economy may have both a bad side and a good side. How can we identify the mechanism of capital market mispricing influencing the real economy? This paper studies whether capital market mispricing affects industrial structure adjustment in the real economy, the impacts for overvaluation and undervaluation, the specific mechanism of influence, and how to use this influence to better promote the upgrading of the industrial structure in China.
Based on a sample of listed companies in China from 2000 to 2014, we constructed panel data of industrial mispricing by following the decomposition of the market-to-book ratio in Rhodes-Krof et al.(2005) and built the matching panel data of industrial structure change by measuring the influence of industrial structure on economic growth (Krüger, 2008; Liu & Zhang, 2008). Because we care about the industry-level influence of mispricing on the industrial structure, we focused on industrial-level mispricing in the decomposition of the market/book (M/B) ratio.
The specific research steps were as follows: First, we studied the overall influence of mispricing on industrial structure change. Second, we divided the mispricing into overvaluation and undervaluation, and divided the adjustment of the industrial structure into the capital change effect triggered by the capital input, the capital efficiency change effect caused by productivity changes, and the capital efficiency interaction effect caused by the joint impact of capital input and productivity changes. Then we tested the effects of overvaluation and undervaluation on the three parts of the industrial structure adjustment to clarify the specific mechanism of mispricing affecting industrial structure adjustment. Finally, we proved the robustness of the results by using the exogenous events' impact as natural experiments, i.e.,securities margin trading impact and industrial policy impact, to control the endogeneity.
The results showed that the mispricing of the capital market significantly affected the industrial structure adjustment. The impact was asymmetrical; only overvaluation significantly affected the industrial structure adjustment, while the undervaluation had no effect. The mechanism was that overestimated industry attracted capital and increased capital investment, which generated the capital change effect and brought industrial expansion. The overvalued share price did not influence the capital efficiency effect and the capital-efficiency interaction effect. This means that the industrial expansion of overvaluation occurs because it attracts capital, not because it leads to higher capital efficiency. Therefore, the capital changes caused by mispricing are not related to production efficiency and are not necessarily changing the inefficient industry into an efficient industry.
The theoretical contribution of this paper first may be revealing that the capital market may affect the real economy. Contrary to the role of capital allocation correcting asset price under the rational hypothesis, we found that the mispricing of the capital market can influence the adjustment of industrial structure and ultimately affect the real economy. Second, we have extended the study of capital market mispricing to the macro economy. This paper reveals that company-level mispricing significantly impacts the macro economy and empirically supports that market participation accompanying securities price changes can affect the real economy. Third, we have proposed the specific influence mechanism of mispricing impacting the industrial structure.
The findings of this paper imply that the overvaluation of stock price is not always unfavorable. Allowing overvaluation of emerging industries with high productivity is good for industrial upgrading. This paper provides a theoretical basis for guiding industrial structure upgrading and fostering strategic emerging industries.
Keywords： Capital Market; Mispricing; Adjustment of Industrial Structure

Summary： In 2016 the Chinese government issued The Outline of National Innovation-Driven Development Strategy, which aims at changing China's economic growth impetus from factor-driven to innovation-driven and promotes enterprise upgrading. Because tax burden directly affects enterprise cash flow, theoretically it has important influence on the innovation ability and upgrading level of enterprises. However, the literature lacks empirical research on effects on the micro level.
Using the data (2005—2015) from the annual report of the listed companies in the National Equities Exchange and Quotations (NEEQ) for the small and medium-sized enterprises (SMEs) of China, this paper examines the influence of firms' tax burden on their innovation ability and upgrading level and probes the approach to tax reduction facilitating firm innovation and upgrading under the pressure of public expenditure.
In the design of variables, this paper measures a firm's innovation ability by its R&D input, including R&D funding and staff, and evaluates its upgrading level in terms of innovation output and growth status, which represent upgrading quality and quantity, respectively. Among innovation outputs, two kinds of indicators are employed: (1) the number of annual authorized patents (including patents for inventions) and (2) the ratio of the final book value of intellectual property to total assets. A firm's growth status is represented with such indicators as operating profit ratio, cost-profit ratio, rate of return on total assets, and return on equity.
Using generalized method of moments (GMM-IV) regression estimates for our empirical analysis, we found that both the overall tax burden and the direct or indirect tax burden are significantly negatively related to firms' innovation ability and output, but the negative effect of indirect taxes is greater than that of direct taxes. Although the overall tax burden and the indirect tax burden are significantly negatively related to business growth, direct tax burden has been shown to be significantly positively related to it. Further study has revealed that it is innovation (R&D) ability that results in impacts of the types of tax burden on enterprise upgrading. In the short term, the increase of a firm's R&D input lowers not only its direct tax burden (under a tax incentive such as a super deduction) but also its growth indicators such as real return on equity and operating profit ratio, which consequently makes direct tax burden positively related to firm growth. Meanwhile, with the increase of innovation output and operating receipt, indirect taxes based on sales proceeds increase. Therefore, further reduction of tax burden on enterprise innovative activities in the long run is beneficial not only to enterprise upgrading, but also to sustainable growth of tax revenue.
In the context of the existing literature, our innovation and contributions were mainly as follows. First, this paper takes into account the impact of all tax burdens borne by firms in China (including government charges and tax characteristics), comprehensively expanding on the literature which mainly has focused on individual taxes such as income tax and value-added tax. Second, this paper reveals the impacts of tax burden categories on innovation ability and enterprise upgrading level. The study found that the negative effect of indirect taxes on enterprise innovation and upgrading is greater than that of direct taxes. Regarding indirect taxes, the negative effect of value-added tax and government charges on enterprise innovation is rather significant, while excise tax and resource tax have no obvious negative effect. Regarding direct taxes, the negative effect of the social security contribution on enterprise innovation is greater than that of income tax. Third, through studying the transmission mechanism of impacts of tax burden on firm upgrading, we found that innovation ability is the key factor resulting in impacts of tax burden on firm upgrading.
Keywords： Tax Burden; Direct Taxes; Indirect Taxes; Innovation Ability; Enterprise Upgrading

Summary： The literature shows that increased innovation investment is linked to higher stock price crash risk, because managers are loath to disclose innovation information (Aboody & Lev, 2000; Kim & Zhang, 2015). The higher the risk of stock price collapse, the greater risk compensation investors require. This paper addresses the relationship between innovation and stock market performance in the growth enterprises market (GEM) in China where the institutional environment does not resemble that in other countries. Chinese companies can capitalize R&D expenditures that meet capitalization criteria following the accounting standard requirements promulgated in 2006. Under the requirements, capitalization can signal the success of innovation investment. In addition, in Chinese GEM development, listed companies are obliged to disclose the progress of new technology and major R&D changes in a timely manner, which helps to reduce information asymmetry.
In terms of external effects, disclosure of R&D information provides the necessary conditions for investors to focus on innovative enterprises. Investors' attention drives up the stock price based on the impact of investor purchasing preferences and can improve transmission efficiency of enterprise information through accumulated investors' information. When investors are concerned about a certain kind of stock, they spend more time and energy to interpret the information released by the enterprise and the market, which is helpful in improving information efficiency. At the same time, the success of innovation can bring excess returns for investors. The potential high yield of innovation is attractive to investors. Investors' preference for innovation helps to push up the stock price.
Companies listed in the China GEM are famous for high growth compared to the companies listed in the China Main-Board Market. Innovation is one of the most crucial factors to promote enterprise development and expansion. Innovative enterprises in GEM are more able to get investors' attention. In the context of accounting standards for R&D investment and the requirement of R&D information disclosure in the China GEM, this paper discusses a possible mechanism through which innovation investment reduces the risk of stock price crash and increases excess returns by attracting investors in the GEM based on the new perspective of investors' attention.
Drawing on the sample of firms listed in GEM during 2009—2014，this paper analyzes the relationship between innovation investment and stock market performance and explores the potential mechanism. The relationship is discussed between capital market performance of innovation and management decision making behavior.
Among the findings in our studies, the first was that increased innovation investment in GEM firms is associated with lower stock price crash risk and higher abnormal return. Second, investors' attention is superior to performance improvement and plays a bigger role in the influence mechanism. Third, company management takes advantage of investors' attention to adjust R&D investment and then reduce their share. Fourth, the link between R&D investment and stock market performance is more pronounced for firms with a high level of capital innovation investment or firms in the bull market.
Our findings are a departure from the existing foreign literature. Strict supervision of innovation information disclosure in the China GEM should follow from our conclusions. Moreover, innovative enterprises receive increasing attention under the strong support of governmental authorities. This research provides new empirical evidence for the developing countries in their transition phase.
From the viewpoint of investors, innovation decisions may be distorted by managerial opportunism, which may constrain sustainability of innovation inputs. When a company suddenly engages in overdisclosure of R&D information, it may be pursuing a good R&D project; however, the management may be attracting investors' attention for short-term stock price considerations. Only enterprises with dedicated innovative capabilities can improve performance and help investors to receive sustained excess returns. Future research may aim to identify further misleading factors to help investors screen for high-quality enterprises.
Keywords： Innovation Investment; Crash Risk; Abnormal Return; Investors' Attention；Management Sales

Summary： The impact of short selling and margin trading in financial markets has attracted the attention of investors, policy makers, and academic researchers for a long time. The literature widely documents positive effects of short selling and margin trading on informational efficiency of stock prices. Both short selling and margin trading have been found to improve the overall efficiency of price discovery by allowing price to promptly and fully incorporate market information. Interestingly, most of the current studies on short selling and margin trading have focused on their impacts on information content of stock price and how stock price reacts to market information, rather than on the corporate information environment. Probably due to the endogenous nature of the research question, it is hard to convincingly argue for or against corporate information environment change when constraints on short selling and margin trading are imposed or lifted.
The China Securities Regulatory Commission (CSRC) introduced a structured pilot program in March 2010, when 90 constituent stocks from the Shanghai Stock Exchange 50 Index and the Shenzhen Stock Exchange Component Index were made eligible for short selling and margin trading. After seeing its successful operation for over a year, the CSRC expanded the program and substantially increased the number of eligible stocks in the pilot program to 899 in September 2014. Using this important policy change as a natural experiment, we investigated the information governance effects of short selling and margin trading.
In this paper we apply the quality of management earnings forecasts and the quality of financial analysts' forecasts as proxies of the corporate information environment. Using data of the Chinese stock market from 2009 to 2014, we studied the differences between the corporate information environment of firms that are eligible and those ineligible for short selling and margin trading, along with the changes in the corporate information environment before and after the approval of short selling and margin trading for particular pilot firms.
Our study has shown that short selling and margin trading significantly improve both the internal and external information environment faced by firms. In terms of the internal information environment, the introduction of short selling and margin trading greatly improves the quality of management earnings forecast disclosures. The tendency of voluntary disclosure of nonmandatory information and bad news and the timeliness and accuracy of earnings forecasts for pilot firms after program implementation are significantly higher when compared to nonpilot firms and pilot firms prior to inclusion in the pilot program. Improvements in the external information environment are supported by greater analyst forecast accuracy and smaller forecast dispersion. Specifically, average error and standard deviation in financial analyst forecasts have been found to be significantly smaller for pilot firms than for their peer firms not in the pilot program. Furthermore, after firms were included in the pilot program, analyst forecast error and dispersion in these firms were significantly decreased.
Given the recent extensive debate on the pros and cons of short selling and margin trading and various policy considerations since the financial crisis in 2008, our research provides important empirical support with respect to the effects of short selling and margin trading in stock markets. Our findings have indicated that short selling and margin trading have direct impacts on the corporate information environment, and they might serve important roles in explaining the improved informational efficiency of stock prices and market liquidity when short selling and margin trading constraints are relaxed. Our findings have important policy implications as China continues to expand its short selling and margin trading program. We suggest that Chinese regulators further expand the scope of the pilot program and further relax trading constraints, which would be more conducive to improving the quality of the stock market.
Keywords： Margin Trading; Short Selling; Information Disclosure; Management Forecast; Analyst Forecast

Summary： With outstanding quality and clean features, electricity is a secondary energy which is accessible most conveniently in cities. Due to the impact of the fog and haze, China has promoted the transition of urban energy consumption toward electricity in recent years. Some proposals, such as replacing coal with electricity and replacing oil with electricity, are provided to make electricity the core of the end-use energy system. China has made great progress in renewable energy power generation recently. However, based on the current conditions of resource endowment and technology development, the renewable energy sourcing supply is still mainly generated by coal in the present and is expected to continue in the future.
China is still in the process of fast urbanization. In this stage, urban electricity intensity is jointly influenced by changes of population structure, industry structure, land use structure, and spatial region structure. This paper analyzes their impacts from the perspectives of city size and spatial agglomeration.
The literature mainly includes study of variation trends and influence factors of electricity intensity. Lin et al. (2010), Zha et al. (2012), Herrerias & Liu (2013), Ouyang & Lin (2014), and Xie et al. (2015) found that the variation of China's electricity intensity fluctuates, with a declining tendency based on industry structure, technology improvement, and energy price. No research has analyzed the impacts of city size and spatial agglomeration on urban electricity intensity. This study attempted to research this field and determine the effect of city size on electricity intensity. Most of the literature has been based on province-level data sets, with few studies addressing the energy efficiency of electricity using prefecture city or smaller-scale data.
The study is in two sections. First, using the data of 267 prefecture cities from China's 31 provincial administrative regions during 2003 to 2013, we built a dynamic panel data model. The estimation methodology was based on the GMM approach of Arellano & Bover (1995) and Blundell & Bond (1998). Discussions on the relationship between city size and electricity intensity were based on analyses of prefecture-level data. Second, we introduced the important indicator the spatial Gini coefficient, which illustrated the value of spatial agglomeration in the provincial administrative regions. Using the data of China's provincial administrative regions from 2003 to 2013, we established another GMM-based dynamic panel data model. The results revealed the relationship between spatial agglomeration and electricity intensity.
The relationship between city size and electricity intensity appeared in our results as an inverted U shape. With the growth in city size, urban electricity intensity has increased. But with city size expansion over the population threshold of 746.84 million urban electricity intensity decreases. Furthermore, spatial agglomeration has had inhibiting effect on electricity intensity. When the spatial Gini coefficient increases by one standard deviation, electricity intensity decreases by 1.08%, indicating that the clustering of population and economic activities in large cities helps to reduce electricity intensity.
According to the results, we suggest that during the process of urbanization, the government should promote population and industry clustering, the development of which is specialized and industrialized, into big cities. A series of policies referring to population, land, and fiscal taxation should be properly introduced. These policies could help energy conservation and emissions reduction and support the sustainable development of the economy, society, and environment.
Keywords： City Size; Spatial Agglomeration; Electricity Intensity

Summary： Like the Pigou Theory, the Coase Theorem has become a tradition, but a new, mainstream one. The core of the Coase Theorem is that property rights of scarce resources should be assigned to more-capable ones. This is the “institutional structure of production” that Coase addresses, in this paper called the “Coase Tradition”.
The “Coase Tradition” has two shortcomings: first, the replacement of transaction costs and second, the relevance of property definition. Coase emphasized that property rights should be assigned to the more-capable beneficiaries or those who can reduce the transaction costs. But the problem is, who are they? Is it free to find such people? Coase replaced the zero transaction costs hypothesis with zero discovery costs. First, according to the Coase Theorem, arrangements of property rights is associated with transaction costs, and thus it is proper to substitute one arrangement with another. However, this leads to a dilemma: changing property rights causes expectation instability, and maintaining the original arrangements may sacrifice potential benefits. Second, when the property is associated with a variety of resources instead of a single one, which one should be assigned? Coase does not consider these questions. Third, in Coase's “Cattle-Cat Story”, the property owners are explicit: cattle feeder and farmer. But if externality problems exist, it is difficult to clarify or recognize the beneficiary or damaged beneficiaries. Coase did not discuss how to assign property rights appropriately or how to discover the more-capable assignees under the above situations.
Important to consider is the possibility of reducing transaction costs by assigning property rights to the more-capable people and whether transaction behaviors and transaction institutions can be ignored. Mainstream property rights theories usually have assumed that markets implement transactions automatically when property rights are clearly defined and stable. However, the land tenure system in rural China determines that transaction cost minimization cannot be realized through the Coase definition of property rights. This paper shows that, land rights titling and certificate issuing solidifies farmers' property rights. It will strengthen the land anthropomorphized, and induce significant endowment effects. Instead of promoting the circulation of farmland, they depress this process. The Coase Theorem fails to consider the indivisibility of anthropomorphized property, and it has become necessary to find a new path for the transaction of this kind of property.
Defining and implementing property rights are separate issues. The implementation—especially with the transaction of property rights—depends on the degree of property rights separation of the subjects and objects. Thus we have extended the Coase Theorem to the area of property rights transaction, calling it the “extended Coase Theorem”. That is, it is necessary to search for a more proper transaction configuration to improve the overall welfare if rights adjusting is not feasible and transaction methods have caused various costs.
Based on a case study of Sichuan province in China, we have concluded as follows. First, set up the land stock cooperatives by taking the land operation rights as stock shares, thus avoiding the endowment effect and achieving a scale effect (land rights transaction configuration). Second, form a competitive agricultural entrepreneurial labor market by training more professional managers to avoid the “insider control problem” and to improve operating performance (knowledge management transaction configuration). Third, induce competitive roundabout investments and improve the efficiency of labor subdivision by introducing productive agricultural services (service transaction configuration).
The Coase property rights theory has been followed by academic researchers for a long time, and it is time for it to be extended. It is also necessary to integrate the production institution structure and the transaction institution structure.
Keywords： Coase Theorem; Farmland Circulation; Anthropomorphized Property; Endowment Effect; Transaction Configuration