- Yingzi Zhu;Shangqing Yang;School of Economics and Management, Tsinghua University;
In the review article, we focuses on the intersection of macroeconomics and financial frictions, offering a systematic overview of how such frictions are incorporated into dynamic stochastic general equilibrium(DSGE) models. We examine how agency problems and information asymmetries give rise to credit constraints, liquidity limits, financial intermediation, and asset-price channels that jointly shape macro-financial fluctuations and systemic risk. The article highlights amplification mechanisms—such as the financial accelerator, the liquidity spirals and financial intermediary constraints—and clarify their micro-foundations based on contract theory. Based on the macro-finance foundation, we then review the development of consumption-based, investment-based(q-theory), production-based, and intermediary-based Asset Pricing models, emphasizing the links between macro-structural models and the development of asset pricing models. The paper outlines the modeling frameworks and evolutionary paths of macro-financial theories and microeconomic mechanisms, with an emphasis on theoretical and intuitive construction but not model calibration and empirical details, hence offering direct insights for modeling issues relevant to China.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1358K] - Guofeng Zhang;Junru Chen;He Li;School of International Trade and Economics, University of International Business and Economics;Postdoctoral Research Workstation of Beijing State-owned Capital Operation and Management Company Limited;
This paper contributes to the literature by identifying the casual effect of economic zones on firms' outward FDI. Using the data of Annual Survey of Industrial Firms(ASIF) merged with List of Chinese Firms' FDI, empirical results present the promoting effect of economic zones on firms' FDI and the mechanism of firms' productivity and financing constraints. After the robustness test, the results remain valid. Finally, this paper documents some heterogeneity of the effects across the types of economic zones, firms and FDI.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1175K] - Gongyan Yang;Yinrui Jia;School of International Economics and Politics, Liaoning University;Henan Provincial Branch,the People's Bank of China;
In recent years, China's international status has gradually changed from “benefactor” to “banker”, and its overseas spending has shifted from traditional aid to development finance. Based on the data of the Global China Development Finance Database and the survey of African enterprises of the World Bank, this paper uses China's six major productive raw materials and China's foreign exchange reserves as instrumental variables to empirically test the positive role of China's development finance in promoting the growth of African enterprises. These conclusions still hold under a series of robustness tests, including classification, form transformation and enterprise sub-simple analysis. At the same time, it is found that Chinese development finance has a greater impact on enterprises(especially state-owned enterprises) in countries with stable political and government institutions. Further mechanism analysis shows that Chinese development finance can improve infrastructure, relax financing constraints, and standardize market institutions to promote the development of African enterprises, and improve the labor productivity of enterprises. From the perspective of development finance, this paper clarifies China's positive role in the growth of African enterprises, which provides strong support for the effectiveness of “South-South cooperation” under the global development framework.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1157K] - Bin Zhang;Guangtao Xia;Institute of World Economics and Politics, Chinese Academy of Social Sciences;
Expenditure structure, industrial structure and some other key economic indicators of Chinese economy have experienced turning changes since the second decade of 21~(st) century. As for China's aggregate demand management, the investment stimulus implemented by local government has played a more prominent role than the interest rate policy and conventional fiscal policy. We set up a macroeconomic model with the above mentioned Chinese characteristic to analyze the impacts of the interest rate policy and local government investment stimulus on aggregate demand, and display the consequent variations in structural indicators such as the debt leverage, proportion of private investment and consumption rate. Our main finding is that China would achieve a lower debt leverage ratio, higher proportion of private investment and household consumption while effectively stimulating the aggregate demand once the authorities implement a more active interest rate policy rather than the local government investment stimulus.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1468K] - Chao Feng;Xueying Zhang;Haiming Liu;Shiqun Ma;School of Finance, Shandong University of Finance and Economics;
Based on corporate bond data issued by A-share listed companies in China, this article studies the impact of financial cycles on the design of restrictive covenant clauses in bond contracts. The study found that when the financial cycle is in a boom period, the number of restrictive covenant clauses in bond contracts is significantly reduced; when the financial cycle is in a recession period, the number of restrictive covenant clauses in bond contracts is significantly increased. Channel analysis shows that when the financial cycle is in a boom period, the financing constraints faced by companies are reduced, effectively reducing the use of restrictive clauses in corporate bonds; when the financial cycle is in a recession period, the financing constraints faced by companies are significantly increased, thus increasing the use of restrictive clauses in corporate bonds. Further heterogeneity analysis shows that the impact of financial cycles on the number of restrictive covenant clauses in bond contracts is more pronounced in non-state-owned, low-transparency and low-marketization companies.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1094K] - Xiangzhen Li;Shida Liu;Hao Wang;School of Economics and Management, Tsinghua University;National Council for Social Security Fund;
This article uses default data from 2014 to 2021 to study the recovery rate of credit bonds in China. The average recovery rate one year after bond default(as of the end of 2021) is 8%(11%), with an asymmetric bipolar distribution, concentrated on both sides of 0% and 100%. With different horizon, the gold recovery horizon for defaulting bonds is one year. The proportion of Existing bonds in assets is an important factor affecting the recovery rate. Besides, with or without guarantor, issued in the inter-bank market or not, state owned enterprise or not, publicly listed or not, short-term treasury rate and spread over long and short treasury rate significantly affect the default recovery rate. In terms of recovery rate prediction, machine learning models are significantly superior to linear regression models. Among them, the prediction of ensemble learning model is the best.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1350K] - Yuan Ma;Jie Jiao;Yinglu Deng;Pengfei Li;School of Economics and Management, Tsinghua University;PBC School of Finance, Tsinghua University;Institution of fin-tech research, PBC School of Finance, TsinghuaUniversity;Research Center for Intelligent Finance, PBC School of Finance, Tsinghua University;
The study belongs to the field of relationship between CEO risk preferences and corporate risk decision-making. Research in this field tends to suffer from endogeneity issues. This study innovatively introduces car accidents as an absolutely exogenous event and uses insurance policy data to measure risk preference indicators, thereby addressing the endogeneity problem in research on the relationship between executive risk preferences and corporate risk decision-making. The research question of this study is: Does car accident experience of company CEO and chairman affect the cognition of the CEO and chairman, and subsequently influence the R&D investment decisions of their companies? The research method of this study is to measure the cognitive indicator of executive risk preferences through the car insurance policy purchasing data of CEOs and chairmen, and then study its impact on corporate R&D investment. The conclusion of this study is that the personal experience of car accidents by CEOs and chairmen will increase their risk aversion, and the increase in risk aversion leads to a reduction in corporate R&D investment.This study innovatively uses the car accident events of the company's CEO to identify the impact of changes in the CEO's risk attitude on corporate R&D investment. The article uses very unique insurance and car accident data, measuring risk preference indicators with policy data, and using car accidents as an absolutely exogenous event, effectively solving the indicator selection and endogeneity issues in previous research on the relationship between executive risk preferences and corporate risk decision-making.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1540K] - Xiaoyan Wang;Shuang Yao;School of Accounting, Shanxi University of Finance and Economics;
Digital finance has not only changed the traditional financial service system, but also has an important impact on the innovation activities of micro enterprises. Taking Shanghai and Shenzhen A-share listed companies from 2012 to 2021 as a sample, this paper studies the impact of digital finance on corporate innovation choices, investigate the mediating role of product demand and financing cost based on demand side and supply side. The results show that digital finance can effectively promote both incremental and radical innovation. Moreover, compared with radical innovation, the development of digital finance promotes a higher degree of incremental innovation of enterprises. Further research finds that digital finance mainly promotes incremental innovation and radical innovation of enterprises by increasing product demand and reducing financing costs. Moreover, the promotion effect of digital finance on incremental innovation is stronger in enterprises with strong organizational inertia, and the promotion effect of digital finance on radical innovation is stronger in enterprises in growth and recession. The economic consequences show that incremental innovation is more conducive to improving the short-term performance of enterprises, while radical innovation is more conducive to improving the long-term performance of enterprises.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1144K] - Jialing Jiang;Rui Wang;School of Business, Beijing Union University;School of Finance, Hubei University of Economics;
Based on the data from the China Household Finance Survey(CHFS), this paper selects instrumental variables to conduct an empirical analysis of the impact of housing wealth on the labor participation decisions and labor time of family members. The research results show that an increase in housing wealth significantly reduces the probability of family members' labor participation, also reduces their labor time, and decreases the labor participation of both men and women. Moreover, housing appreciation significantly reduces the number of family workers and the proportion of working people among the eligible labor force. The study also found that housing appreciation has a greater impact on the labor participation of individuals in first-and second-tier cities and high-income groups, but has a smaller impact on the labor participation rate of individuals with higher education. Further analysis revealed that the negative impact of housing appreciation on labor participation strengthens with age. Both the residential and investment functions of housing can significantly reduce the probability of family members' labor participation, and investment-oriented housing has a greater effect on the labor participation of family members. The labor participation decisions of families without their own housing are not affected. The results of the estimation after replacing variables, selecting other IVs, and selecting samples of married women show that the research conclusion is robust. The conclusion of this paper indicates that housing wealth has a significant inhibitory effect on the labor supply of family members. The formulation and adjustment of relevant policies need to fully consider the potential impact of housing on labor supply.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1189K] - Kebin Wang;Xiaolin Miao;Yongkang Hou;School of Public Administration, Xiangtan University;School of Economics, Yunnan University;School of Public Finance and Management, Yunnan University of Finance and Economics;
Optimizing the structure of fiscal revenues and improving the quality of fiscal revenues are important elements of a sound modern fiscal and tax system. This paper studies the impact and mechanism of public sector employment expansion on non-tax revenue growth. The results show that public sector employment expansion is an important driver of non-tax revenue growth and poor fiscal revenue quality. The mechanism lies in the fact that public sector employment expansion exacerbates expenditure pressure, which is manifested in the growth of fiscal expenditures, especially self-interested fiscal expenditures, such as administration, and thus pushes back the growth of non-tax revenues. Further, from the viewpoint of subcategories of non-tax revenues, public sector employment expansion will affect the market system transaction cost revenues such as confiscated revenues, administrative fees and special revenues, while revenues from state-owned capital operation and state-owned resource concessions, which should bear the effect of revenue growth in non-taxes, are unaffected. This paper provides policy recommendations to improve the management of non-tax revenues in order to enhance the quality of fiscal revenues from the aspects of strengthening the preparation and supervision, optimizing the structure of levy and management, and coordinating the main bodies of levy and collection.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1156K] - Yutang Shi;Xiaodan Wang;School of Economics and Management, Northeast Normal University;
Administrative approval reform, a cornerstone initiative for redefining the government-market nexus, is pivotal to empowering the market's decisive role. Drawing on firm-level registration data from the State Administration for Industry and Commerce and exploiting the quasi-natural experiment created by incremental administrative streamlining, this study systematically examines how such reform—and the resultant delegation of authority—affects urban entrepreneurial activity. Our empirical analysis demonstrates that administrative approval reform significantly enhances urban entrepreneurship, operating through three principal channels: reduction of institutional transaction costs, stimulation of technological innovation, and facilitation of talent agglomeration. Furthermore, the reform's entrepreneurial uplift is markedly stronger in higher-tier cities and those east of the Hu Huanyong Line, whereas no statistically significant heterogeneity emerges across cities with differing market potential. Finally, we provide new evidence that administrative approval reform also promotes high-quality entrepreneurship. Theoretically, these findings offer a novel vantage for understanding the institutional underpinnings of urban entrepreneurial vitality; practically, they furnish policymakers with robust empirical support for the design and refinement of administrative approval mechanisms.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1123K] - Jiping Chen;Chuliang Luo;Dandan Zhang;School of Labor Economics, Capital University of Economics and Business;China Center of Economic Research, National School of Development, Peking University;
Using the production function approach, this paper examines the evolution and determinants of labor market monopsony in China's manufacturing sector. We find that monopsony power slightly declined from 2008 to 2016 in China. There are significant variations in its magnitude and trends across industries and ownership types, and monopsony power across cities shows a clear convergence trend. By 2016, the wage markdown in China's manufacturing sector was 1.98, meaning that for every 1 yuan of revenue generated, workers received nearly 0.5 yuan in return, indicating that labor income remains relatively disadvantaged. Moreover, firm's monopoly power significantly reduces its monopsony power, whereas firm size, capital-labor ratio, and productivity significantly increase it. Additionally, we find that monopsony power lowers firm's labor income share by reducing both employment and wages.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1722K] - Kaixuan Chen;Shushan Zhang;Yutang Shi;School of Economics and Management, Northeast Normal University;
Stabilizing employment is the government's top economic priority at this stage. Considering the opening of public data open platform by the government as a quasi-natural experiment scenario, the paper examines the impact of public data openness on the employment of corporate labor force using A-share non-financial listed companies as the research sample from 2010 to 2021. The study finds that public data openness significantly enhances the labor hiring capacity of enterprises, and the effect is sustainable in the long run. The mechanism test confirms that the core logic of public data openness to enhance the labor hiring capacity of enterprises lies in the scale expansion effect. Specifically, public data openness provides enterprises with data on changes in the market, allowing them to increase their physical investment and thus expanding the scale of their production; and public data openness highlights the superior transparency and governance effectiveness of localities, facilitating the entry of new enterprises and thus expanding the demand of the labour market. Heterogeneity analysis finds that the employment stabilizing effect of public data openness is more pronounced in regions with a higher degree of market segmentation, high-growth firms and digital industries. Further analysis found that there is also a significant impact of public data openness on employment structure. Openness of public data makes the change of industrial employment structure dominated by the increase of employment in the tertiary industry and the decrease of employment in the primary industry, and the change of skill structure is dominated by the increase of the proportion of production-type employees and the decrease of the proportion of service-type employees. This paper quantitatively evaluates the employment stabilization effect of data element openness, and provides lessons for advancing employment stabilization.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1114K] - Xiruo Wang;Anran Tan;Tao Hu;Zenan Wu;School of Economics and Management, Beijing Jiaotong University;Department of Economics, Duke University;School of Economics, Peking University;Sustainability Research Institute, Peking University;
This paper presents a dynamic two-stage tournament model that incorporates heterogeneous contestants and a hierarchical career ladder with accelerated promotion. The firm can use accelerated promotion—which enables fast-tracked employees to enter into the finale with certainty—to motivate employees' effort incentives. Our study explores the optimal job ladder design and hierarchical organizational structure for accelerated promotion. The results indicate that the optimal policy depends on the organization's objective and the distribution of employees' abilities. When organizations aim to maximize the aggregate effort from all employees, an accelerated promotion mechanism is less likely to be adopted when employees' abilities are on par. However, when there is a substantial disparity in employees' ability, organizations should prioritize promotion of lower-ability individuals to foster competition—which echoes the traditional wisdom of “leveling the playing field” in the contest literature. When organizations aim to maximize selection efficiency—i.e., to select employees with higher innate abilities—we show that promoting high-ability employees should be prioritized in order to reduce uncertainty throughout the selection process. Our findings generate practical and policy implications for organization design and provide novel insights into organization's optimal promotion policies. Our results shed light on the importance of manipulating the competitive balance among employees in the promotion process, especially in situations where there is a significant variance in employees' abilities. Our paper contributes to the literature on organizational design and human resource management, offering guidance for designing effective promotion policies that align with organizational objectives and foster a fair and competitive environment.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1275K] - Jun Luo;Jinshan Liu;Jiaqi Huang;Ronghao Shi;School of Economics, Zhejiang University of Finance & Economics;School of Economics, Zhejiang University;
Under the assumption of rational people and limited common pool resources, individuals will extract as many common pool resources as possible in order to maximize their interests. Marine resources are typical common pool resources. As the number of marine catches increases year by year, the marine environment has been severely damaged. In order to protect marine biological resources and reduce the occurrence of excessive extraction, this paper employs the method of experimental economics to study the individual's extraction behavior of common pool resources by setting up a two-stage experiment in the selection of resources entering the common pool and the number of resources extracted. We also introduce two important factors, information and risk, in the experiment, and study the individual's common pool resource extraction behavior in the face of various risk changes. The experimental results show that the process of information disclosure and risk changes will affect the selection of individual resources and the number of resources extracted to a certain extent. The conclusion can provide policy enlightenment for public governance. For example, disclosing the information on the number of resource extractions can help individuals adjust the number of resource extractions, and formulating corresponding resource management policies according to weather changes can prevent individuals from misjudging risks and leading to irrational extraction behaviors.
2025 03 v.12;No.47 [Abstract][OnlineView][Download 1317K]
2025 03 v.12;No.47 [Abstract][OnlineView][Download 237K]