Accrual components and stock trading costs

This paper examines the relationship between accrual components and stock trading costs in China and finds that both abnormal and normal accruals are associated with these costs. Moreover, negative accruals, both abnormal and normal, have a greater influence on stock trading costs than positive accruals because of short-selling constraints in the Chinese stock market. Further analysis reveals that investors who are fixated on accruals are unable to separate positive or negative abnormal accruals from earnings in general.Additionally, investors overestimate the persistence of both positive and negative normal accruals. These findings constitute further evidence of the low degree of market efficiency in China. Chinese investors seem to overestimate firm value when abnormal and normal accruals are positive and underestimate it when they are negative, thus leading to an asymmetric effect on trading costs between positive and negative accruals in the face of short-selling constraints in the Chinese stock market.

Trade Benefits and Environmental Costs of GVCS: A Case Study of the BRICS

As the international trading system has developed with the division of Global value Chains (GVCS), the export trade of Brazil, Russia, India, China, and South Africa (BRICS) has grown rapidly. The resulting growth of carbon emissions has drawn wide attention from the international community, necessitating the comparison of the trade benefits and environmental costs of the BRICS participation in GVCS. Based on the Eora database, this paper constructs a decomposition framework for the calculation of export value-added and embodied carbon, based on a multi-region input-output (MRIO) model. The trade benefits and environmental costs paid by the BRICS’ total exports from 1990 to 2015 were measured and the imbalance was analyzed, along with the causes. The results show that the main value-added and carbon embodied in the BRICS’ exports originate from their own countries, and the domestic value-added content of the BRICS’ exports decreased while the foreign value-added content increased.

A PATH-DEPENDENT MODEL OF INVESTMENT AND EMPLOYMENT FLOW IN A LARGE ECONOMY IN A PROCESS OF INTEGRATION

This paper meant to analyze the spatial evolution of a large country in its process of integration with the world economy in general, and, to look into the possible effect of China′s accession into WTO on the future development of its spatial economy in particular. Through an approach of increasing returns, external economy, product differentiation and path-dependence, with foreign trade costs incurred by different regions within the large country discriminated, a model of investment and employment flow is developed as a simulation of a large country′s process of integration with the world economy. The modeling indicates that in the process of integration, as there exist differences in foreign trade costs among different regions within the large country, either the spatial economy of the country deviates from its symmetric structure in autarky and falls into a core-periphery relationship, or the effect of industrial agglomeration is reinforced, amplified and locked in, if the agglomeration had been started. The economic gap on either the aggregate or structural basis between different regions within the large country will increase rapidly as the integration proceeds.

Revitalizing the Global Trading System＂ What Could the G20 Do？

Since 2008, G20 leaders have repeatedly committed themselves not to resort to protectionism and to conclude WTO negotiations expeditiously. The jury is out on the extent to which they have lived up to the first promise,＂ they have failed to deliver the second. Anemic global trade growth rates since 2010 imply that trade has not been a driver of much-needed economic dynamism. This paper argues that the G20 should pursue a more ambitious trade agenda and that there is much that greater leadership by the G20 could do to reinvigorate the trading system. A first step would be to commit to concrete actions that can be implemented by individual governments on a concerted basis and that center on reducing trade costs and improving access to services for firms. The Chinese presidency should also seek to have the G20 commit to more effective monitoring and analysis of trade policy broadly defined （including subsidies and investment incentives） and the impact of the many preferential trade agreements involving China, the EU and the USA, the world＇s largest trading powers.

Measuring aggregate trade costs and its empirical effects on manufacturing export composition in China

On the basis of measuring the bilateral trade costs between China and 86 trade partners and the aggregate trade costs from 2000 to 2013,this paper takes China’s vertical specialization reality into account,to do an empirical study on the impact of China’s aggregate trade costs on comparative advantages and export share of 17 two-digit ISIC manufacturing industries,and to conduct these types of robust tests in order to eliminate endogeneity bias.The results show that China’s aggregate trade costs are declining,but it is still 1/3 higher than that of developed countries of 10 years ago;bilateral trade costs between China and some countries even rise instead;aggregate trade costs are the determinants,not only of‘global’and‘local’comparative advantages,but also of export share of China’s manufacturing products,and its effect is stronger in industries with higher trade cost intensity.Therefore,we should consider the product composition on trade cost intensity and domestic value-added value(DVAR),and reduce trade costs in order to promote the export of products with higher domestic value-added rate,and to realize the substantial transformation of foreign trade growth mode.

Has Global Division of Labor Increased Markup of Chinese Enterprises?

The paper calculates the number of production stages for measurement of production segmentation,and discusses and depicts the microscopic impacts and effects of production segmentation of labor division of the global value chain on enterprise markup.The DLW method is used to calculate the markup of Chinese enterprises,the fi xed-effect model is used to analyze the impact of labor division of the global value chain on enterprise markup,and an instrumental variable method is constructed to relieve endogeneity.The research findings show that enterprises have significantly increased their markup by choosing global production segmentation,international production segmentation and domestic production segmentation.Global production segmentation can significantly increase the markup of low-productivity enterprises,hi-tech enterprises and private enterprises.Particularly,low-productivity enterprises choose international production segmentation and hi-tech enterprises choose domestic production segmentation.Production segmentation can offset to a certain extent low markup of export enterprises and domestic-oriented enterprises caused by the“competition effect”.In addition,enterprises’“technological progress effect”and“trade cost effect”are two possible channels by which production segmentation facilitates the increase of markup.The paper enriches and expands the literature about the impacts of labor division of the global value chain on enterprise markup,the robustness is analyzed from the perspectives of enterprise heterogeneity,industrial&technical heterogeneity and structure,and the impact mechanism is validated through the intermediate effect model.Our important findings are of important implications for solving the“low markup trap”of Chinese enterprises and enhancing labor division of the global value chain of enterprises.