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The rate of return on venture capital investment of venture capital (VC) firms in China has been attracting increasing attention. We use robust multinomial regression models to analyze 56 exit projects of venture capital investment from 1999 to 2003 in China. The results show that the returns of state-owned VC firms are lower than those of non state-owned VC firms. Furthermore, the returns of the VC firms located in Shanghai and Shenzhen are higher than those in other regions. The capital scale of VC firms is negatively correlated with the rate of return. In addition, some variables, such as business duration, investment scale, investment duration and exit vehicle, are probably unrelated to rate of return on venture capital investment in China. [ABSTRACT FROM AUTHOR]

A comparison of Hong Kong and United States rate-of-return regulation indicates differences in the definition of the rate base and in the proportion of it permitted a fair rate of return, These differences imply that Hong Kong electric utilities utilize proportionately more fixed (less current) assets, and that these assets are financed proportionately more by equity (less by debt), than their United States counterparts. Our results support both these predictions, providing further evidence that since rate-of-return regulation is implemented by reference to "reported" results, comparatively minor differences in regulatory frameworks can have quite dramatic consequences for utilities' asset structure and financing mix. [ABSTRACT FROM AUTHOR]

Under the 1996-98 security regulations in China, the accounting rate of return on equity (ROE) has to be greater than 10 percent for three "consecutive" years for a firm to qualify for stock rights offers. Despite declining economic conditions during this period, the percentage of firms reporting ROE between 10 and 11 percent is about "three" times that for 1994-95. This unique regulatory environment provides a natural experimental setting for the empirical assessment of earnings-management behavior and its consequences. This study examines whether listed Chinese firms manage earnings to meet regulatory benchmarks and whether regulators and investors consider the quality of earnings in their respective regulatory and investment decisions. On the basis of a sample of listed Chinese firms from 1996 to 1998. we observe that managers execute transactions involving below-the-line items and use income-increasing accounting accruals to meet regulatory ROE targets for stock rights offerings. The firms that apply for, but fail to receive, regulatory approval manage earnings more significantly than do firms that receive approval and pair-matched control firms. Our market study also suggests that investors differentiate the quality of earnings and put less value on earnings suspected of a greater degree of management. Overall, our results imply that the regulatory bodies and investors to some extent make rational adjustments for the quality of earnings. [ABSTRACT FROM AUTHOR]

Does the rate of return from the Chinese real estate industry correlate with the intensity of competition among real estate firms? If China’s equity market performs efficiently, the rates of return of real estate firms should vary indirectly with their level of monopoly power. Greater monopoly power reduces earnings risk and leads to lower costs of capital. The authors analyze empirical evidence and indicate no relationship exists between returns and competition. Speculation may induce stock prices to deviate from normal values. Because normal values assume no speculation, Chinese markets are not likely to be economically efficient. [ABSTRACT FROM PUBLISHER]

This paper surveys the literature on the return to education and economic growth in China and offers new perspectives and estimations. The return to education has been rising since the reform. While the overall rate of return is still low compared to other countries, young workers and workers in the private sector enjoy significantly higher returns to education than the average. This indicates that the productivity-related traits such as education are more rewarded where market forces are functioning. Moreover, the return to education is non-linear in the sense that the return to secondary education or above is much higher. In addition, due to the spatial segmentation of labor markets in China, wide variations in return to education exist across regions. Studies at the macro-level show that the return to public education is much higher than return to private education. Using recent data (1982-2001) across provinces, this paper examines how education contributes to China's economic growth. It finds that the increase in educational attainment plays an important role in China's economic growth as well as the initial level of educational attainment. [ABSTRACT FROM AUTHOR]

This article presents the author's comments on the article "Market Consequences of Earnings Management in Response to Security Regulations in China," by In-Mu Haw, Daqing Qi, Donghui Wu, and Woody Wu. They examined the minimum 10 percent return on equity (ROE) requirement in China for stock rights issues that may provide firms with clear incentives to manage earnings. They found evidence that indicates persuasively that firms are responding to these incentives. However, the author describes some challenges in the investigation of earnings management.

The article presents comments and discussion on a paper presented at the Brookings Institute titled "The Return to Capital in China," by Chong-En Bai, Chang-Tai Hsieh, and Yingyi Qian. Olivier Blanchard questions the authors' high value of capital share, at 15 to 20 points above values in other countries, yet focuses his discussion on self-employment and the implication of the reported capital share for the computation of total factor productivity growth. Richard N. Cooper questions the paper's data, having little confidence in Chinese economic statistics, and comments that the authors employ more accounting than economic theory. Detailed comments and discussion are presented, as is feedback from William Nordhaus, Wing Woo, John Cochrane, and Gary Jefferson.

Using 5-minute high frequency data from the Chinese stock market, we employ a non-parametric method to estimate Fama-French portfolio realized jumps and investigate whether the estimated positive, negative and sign realized jumps could forecast or explain the cross-sectional stock returns. The Fama-MacBeth regression results show that not only have the realized jump components and the continuous volatility been compensated with risk premium, but also that the negative jump risk, the positive jump risk and the sign jump risk, to some extent, could explain the return of the stock portfolios. Therefore, we should pay high attention to the downside tail risk and the upside tail risk. [ABSTRACT FROM AUTHOR]

Focuses on the new rate-of-return formula developed by the U.S. Federal Energy Regulatory Commission, for secondary markets in the gas industry in the country. Utility of cash flow approach combined with dividend rates and projected earnings growth rates; Concerns associated with the low rate of investment for pipelines; Analysis of factors needed to attract and retain capital.

By using an extension of the Fama and MacBeth cross-sectional regression model, this analysis examines the relationship between stock returns and (i) a local beta, (ii) two global betas, and (iii) some firm-specific characteristics in the Chinese A-share market. The results of the analysis suggest that neither the conditional local beta nor the global betas has a significant relationship with stock returns in A-shares. Our findings indicate that firm factors, such as the book-to-market ratio and firm size, are important in explaining stock returns. However, the size effect is sensitive to the specification of the model. Finally, the results of sub-period tests indicate that the A-share market did not become increasingly integrated with either the world stock markets or the Hong Kong stock market over the period 1995–2002. [ABSTRACT FROM AUTHOR]

This paper examines the economic performance of 16 property companies in Hong Kong, and how well they do in comparison with Singapore property companies. The results show that Hong Kong property companies that diversified into other sectors appeared to perform better than those focused solely in real estate. Property companies in Hong Kong generally achieved higher rate of returns on their capital invested than Singapore property companies. Government financial assistance for private homeownership is believed to play an important role in the relatively better performance of Hong Kong's companies, particularly after 1997. Meanwhile, firms in Hong Kong are exposed to higher weighted average cost of capital due to higher business risks, in addition to higher interest rate stemmed from a linked exchange rate system. On the whole, property companies in both Singapore and Hong Kong do not perform well from an Economic Value-Added (EVA) perspective, but this does not necessarily mean that they are poorly managed. The empirical results show that the performance of a company is influenced dramatically by profits generated from the sale of non-property assets. [ABSTRACT FROM AUTHOR]

The article asks if China's investment rate, at 40% of gross domestic product, is too high or is the investment rate high because the return to capital is high. The article explores China's return to capital, compares it to that of other countries, and researches the allocation of investments across sectors and regions. The methodology of measuring the return to capital is calculated using aggregate output, capital stock, and share of capital. The article suggests that the return to capital has remained high in spite of China's high investment rates. The reasons for this high return are explored are attributed to output growth and the increase in capital share of aggregate income. Some questions regarding allocation of investment remain inconclusive.

Abstract: Although variable-air-volume system (VAVS) can save much energy compared with other kind of HVAC system (e.g. constant-air-volume system (CAVS), fan-coil system (FCS)), it demands more investment. The rate of return of variable-air-volume system, which is closely related to the energy-saving rate of the system, ought to be taken into account by the engineers in the course of design. China has a wide territory and different climates that will impact on the energy-saving rate of variable-air-volume system. To help the engineers have a good idea of the rate of return of variable-air-volume system in different areas of China, it is necessary to establish such program that can evaluate the energy-saving rate of variable-air-volume system compared to constant-air-volume system and fan-coil system. In this paper, the specific energy models of the primary equipments in HVAC system are established, and the evaluation program for the energy-saving of variable-air-volume system compared to constant-air-volume system and fan-coil system are expounded. The parameters in the energy models, which may impact the validity of the evaluation program, can be obtained from the field-testing data or the performance data provided by the product manual. One small office building is taken as an example, the year-round energy simulations of the three kinds of HVAC systems (variable-air-volume system, constant-air-volume system and fan-coil system) of the same building have been made, and the energy-saving of the variable-air-volume system has been evaluated in six cities of China by the program. The evaluation program can also be used to analyze the energy-saving of variable-air-volume system in medium and big office buildings. [Copyright &y& Elsevier]

This article illustrates the application of specification tests for the selection of a stock return generating process (SGRP) in determining the type of market returns that is more suitable for developing a market model of stock returns in Thailand and Hong Kong, China. The first test is the J-test proposed by R. Davidson and J. G. MacKinnon. The test is applicable to the case of an individual stock. However, when estimating a market model for a group of stocks, the J-test results may be inconclusive. Several factors motivate the performance of the test. First, if equation is rejected by the data, then despite its popularity, the equally-weighted index should not be used in the empirical analysis because of specification errors. Second, if equation is rejected by the data, then there is further justification for the continued use of the equally weighted index. Third, if equations are not rejected by the data, then it affirm previous research in using either index. Fourth, since coefficient estimates for the two specifications are likely to differ, if they are to be used to form efficient portfolios, they should first correctly specify the market model. Finally, an accurate characterization of the market model is essential to a correct assessment of the cost of capital. To wit, an under-estimation of a stock's beta will lead to a downward bias in the cost of capital.

With the development of renewable energy market, Renewable Portfolio Standard (RPS) has become the targeted renewable energy incentive mechanism in China and it is under a government's long-term plan that RPS overtakes feed-in tariff gradually in recent years. Given this background, the decision-making model of electricity retailers to accomplish the obligation under RPS is constructed as a bi-layer portfolio selection model. In the inner-layer, both capital allocation of the retailers to purchase various kinds of renewable energy capacity as well as RECs are optimised. In the outer-layer, the capital investment portfolio of each risky and risk-free strategy is determined based on the Behavioural Portfolio Theory, with different mental accounts (MAs) with different aspiration points and threshold levels built to describe the investor philosophy of retailers during the decision-making process. The simulation results of a provincial electricity market in China demonstrate that the presented model can effectively assist electricity retailers in making their capital investment strategies under RPS with relevant market factors. In addition, the proposed model provides insights for policy makers to set key parameters involving the design of RPS by analysing behaviours of retailers, including required quota ratio and value of fines. [ABSTRACT FROM AUTHOR]

Focuses on capital investments made by China in its human capital as of July 1, 2003. Percentage of gross domestic product (GDP) of China invested for education; Amount of GDP devoted by China to physical capital investment; Benefits of human capital investment; Discussion of ways of increasing human capital investment and promoting economic growth.

With a persistent global economic slump, governments encourage economic growth by expansionary fiscal policies through tax cuts. Total factor productivity (TFP) is an important determinant of corporate development and economic growth. Taking China's 2008 Corporate Income Tax Reform as a quasi‐natural experiment, this paper uses data from China's A‐share listed companies from 2003 to 2018 and difference‐in‐differences analyses to identify the impact of corporate income tax (CIT) rate changes on TFP. The findings indicate that reducing the CIT rate positively impacts corporate TFP through two available channels: corporate investment and human capital investment. Additionally, the effects of reducing the CIT rate on TFP are primarily significant in non‐state‐owned, smaller and more financing‐constrained enterprises. [ABSTRACT FROM AUTHOR]

Based on a database of 200 listed firms from the Growth Enterprise Market of China, this paper employs regression models to investigate the significance of IPO capital expenditure to firms' operating performance. It suggests that a vast majority of pre-IPO money is spent on business development to promote operating performance in order to meet IPO requirements. After the IPO, most of the money is transferred to equity investments in order to increase the firms' market value quickly, which leads to operating performance decline and deterioration. [ABSTRACT FROM AUTHOR]

This study investigates the facility location problem of transnational personal computer (PC) manufacturing for the domestic market of China. An integrated supply chain-based spatial interaction model is formulated to determine facility locations of the transnational PC manufacturing centers and regional product distribution centers in China, with the goal of maximizing the potential rate of return on facility investment. The numerical results show that the Shanghai municipality is ranked highest for siting both the manufacturing and distribution centers for a transnational PC manufacturing enterprise. [Copyright &y& Elsevier]

Transportation investment has served as one of the most promising economic instruments to lower transportation costs and promote economic growth. To enhance the effectiveness and efficiency of such kind of capital investments, one critical issue is to gain a better understanding of the pathways that transportation investment would have to influence economic growth. By using a provincial panel data in China, this study attempts to investigate how transportation investments impact economic growth through a variety of pathways. Structural equation modeling (SEM) is applied to understand the relationship between transportation investment, investment in relevant sectors, industrial structure, employment growth, and economic development. It finds that investment in transportation sectors can promote economic growth through direct and multiple indirect pathways. The indirect pathways can improve economic performance through the investments in relevant sectors, growth of industry and employment growth. These impacts would be significantly changed under diverse spatial and temporal conditions. [ABSTRACT FROM AUTHOR]

The equity premium is a key indicator in capital investment decisions. However, few studies estimate the equity premium for the Chinese stock market. To shed more light on the subject, we use dividend and consumption growth models to estimate the expected equity premium in China from 2005 to 2017. Our evidence shows that the geometric mean of the expected yearly equity premium from the consumption growth model, 9.69 percent, is similar to that of the realized yearly equity premium from stock returns, 8.11 percent. The corresponding values are 0.74–0.68 percent for monthly data, and 2.49–2.28 percent for quarterly data. In contrast, the estimate of the expected equity premium from the dividend growth model is far higher than the realized equity premium. However, both the dividend and consumption growth models fail to explain the high fluctuations of the realized equity premium. [ABSTRACT FROM AUTHOR]

Although the extant literature on corporate finance has largely focused on capital investments, relatively less attention has been paid to identify how research and development (R&D) related investments are financed. This study empirically tests the relationship between the different financing sources used by firms and their intensity of R&D in the rapidly growing economy of China. Furthermore, we posit that the firm's choice to adopt the finance source for R&D will change if the firm is likely to be in financial constraints. This study finds out an empirical evidence that internally generated cash flows, bank debt, and seasonal public offerings (SPOs) stipulate a positive impact on R&D of Chinese firms, whereas the issuance of bond impacts it negatively. The study also confirms that financially constrained firms perceive the impact of financing sources on their R&D differently than non-financially constrained firms do. Results also slightly differ between high-tech and non-high-tech firms. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the venture capital (VC) industry in China. It has demonstrated a history of high growth with significant variations over time. The authors have examined the trends and determinants of VC investments in China over a 20-year period from 1995 to 2014. They find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. initial public offerings (IPOs), interest rate, price-to-earnings ratio, etc.). They also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk levels by allocating more capital to later-stage investments and securing more deals with later-round financings. However, after the 2008 global financial crisis, the China's venture industry has recovered faster compared to the US counterpart response. Design/methodology/approach: The authors first perform trend analysis of VC investments at an aggregate level, by stages of development, and across industry from 1995 to 2014.To test H1 and H2, the authors use multiple regression models with lagged explanatory variables. To test H3, the authors use univariate tests to compare the measures of VC investments at an aggregate level, stage funds ratios, stage deals ratios and financing series ratios during both a five-year and seven-year time windows around the 2007 A-Share stock market crash and the subsequent financial crisis. Findings: The development of the VC industry in China has demonstrated a history of high growth with significant variation over time. The authors find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. IPOs, interest rate, price-to-earnings ratio, etc.). The authors also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk by allocating more capital to later-stage investments and securing more deals with later-round financings. However, the China VC industry has recovered faster compared to the USA just after the 2008 global financial crisis. Research limitations/implications: There are also limitations in the study. The VC data in China in the earlier 1990s might not be very reliable due to the quality of statistics. Therefore, the trend analysis and discussions mainly focus on the time after 2000. Also, the authors cannot find VC financing sequence data for the analysis. Second, there is no doubt that the policy impact from Chinese transforming economic system and government policies on its VC industry is substantial (Su and Wang, 2013). However, they cannot find an appropriate variable to be included in the empirical models to consider this effect. Further study on this area would provide meaningful information. Third, although the authors have done comparison study between the VC industry in China in this study and the VC industry in the US documented in Ning et al. (2015) and discussed some interesting findings, more in-depth research in this area will be very useful. Practical implications: The findings have meaningful implications for VCists and start-up companies seeking equity financings in China. VCists should closely monitor macroeconomic and market conditions to make appropriate adjustments to their risk and investment strategies. Entrepreneurs seeking equity financings for their business could also monitor the identified macroeconomic and market indicators, which can help them with their timing and to negotiate a better equity financing deal. VC financing is more likely to succeed when key macroeconomic and market indicators become favorable. Originality/value: This paper contributes to the literature by testing the supply and demand theory on the VC market proposed by Poterba (1989) and Gompers and Lerner (1998) from the macroeconomic perspective using 20 years' VC data from China. The authors also examine how the 2007 A-Share stock market crash and the subsequent financial crisis affected VCists to adjust their risk levels and investment strategies. It provides useful information for international academia and policymakers to understand the quick rise of China VC industry. The authors also find that the macroeconomic drivers of VC industry are somewhat different under different economic systems. [ABSTRACT FROM AUTHOR]

The article presents abstracts to the contents of volumes 11 to 15 from 1990 to 1994 of the Strategic Management Journal. In volume 13, Number 6, from September of 1992, Nancy J. Adler, Richard Brahm, and John L. Graham compares negotiations between businesspeople from China and the United States. In volume 14's special issue for winter of 1993, Franklin Allen compares the U.S. capital investment system to that of Germany and Japan. From the issue from June 1992, Volume 13, Number 5, Terry L. Amburgey and Anne S. Miner discuss three types of strategic momentum.

It is important to investigate the correlation between housing price and household consumption to gain an understanding of the behavior of the economy and effectively handle the consequences of economic development. In the last two decades, the accumulation of housing wealth by Chinese households has not been effectively transmitted to their final consumption. We discovered that the sustained increase in household wealth and housing-ownership rate in China has been accompanied by a decrease in consumption rate. We also identified a negative correlation between housing price and household consumption for both the homeowners who own one housing unit and those who own two units of housing. We investigated this phenomenon in China both theoretically and empirically by capturing the dual nature of housing as a consumption good and an investment vehicle. We found that the demand for second housing units is motivated by increasing housing consumption demand rather than pure investment needs. To explain the mechanisms that drive household-consumption behavior, we also explored the effects on household consumption of China’s educational system, marriage market and ageing society, as well as future housing-market uncertainty. The implications of government intervention in the housing market are discussed. [ABSTRACT FROM AUTHOR]

This paper explores the effects of capital controls and policies regulating interest rates and the exchange rate in a model of economic transition applied to China. It builds on Song, Storesletten, and Zilibotti (2011) who construct a growth model consistent with salient features of the recent Chinese growth experience: high output growth, sustained returns on capital investment, extensive reallocation within the manufacturing sector, sluggish wage growth, and accumulation of a large trade surplus. The salient features of the theory are asymmetric financial imperfections and heterogeneous productivity across private and state-owned firms. Capital controls and regulation of banks' deposit rates stifle competition in the banking sector and hamper the lending to productive private firms. Removing such regulation would accelerate the growth in productivity and output. A temporarily undervalued exchange rate reduces real wages and consumption, stimulating investments in the high-productivity entrepreneurial sector. This fosters productivity growth and a trade surplus. A high interest rate mitigates the disadvantage of financially constrained firms, reduces wages, and increases the speed of transition from low- to high-productivity firms. [ABSTRACT FROM AUTHOR]

Intergenerational income mobility is the extent to which children's incomedepends on their parents. The increasing of intergenerational income mobilitycan relieve the social pressure caused by the income gap and provide the incentivefor hardworking and human capital investment. Using microdata and economicempirical technique, this study analyses the time trend and structuralmechanism of China's intergenerational income mobility in 1988-2005. Theresults suggest the intergenerational income mobility improves in the early period,then becomes stable and even shows a deteriorating sign recently. Humancapital, social capital and wealth explain more than 60 per cent of the intergenerationalincome mobility in China, with wealth contributing the largest proportion.Promoting education equality, eliminating the labour market segmentationand deepening the market-oriented reform are suggested to help improve theintergenerational income mobility in China. [ABSTRACT FROM AUTHOR]

The present paper performs a development accounting analysis to investigate the sources of China's interprovincial income inequality over the period 1982–2005. We estimate a Cobb–Douglas aggregate production function with various specifications. Using the estimated parameters, we conduct a development accounting analysis as well as a variance decomposition. Our results suggest that differences in physical capital intensity and in total factor productivity are both important sources of cross-province income differences, each accounting for roughly half of the variation in income levels. Differences in human capital explain only a small amount of income differences across provinces. The results are robust to whether or not the assumption of constant returns to scale is imposed. The interaction between factor accumulation and total factor productivity is also discussed. [ABSTRACT FROM AUTHOR]

Peng, F., 2020. Design of a strategic investment and financing mode for an emerging marine industry. In: Gong, D.; Zhang, M., and Liu, R. (eds.), Advances in Coastal Research: Engineering, Industry, Economy, and Sustainable Development. Journal of Coastal Research, Special Issue No. 106, pp. 21–24. Coconut Creek (Florida), ISSN 0749-0208. The strategic, emerging marine industry is a combination of China's strategic emerging industry and the marine economy, which is mainly led by high and new technology. Therefore, the characteristics of the strategic emerging marine industries determine that the development of this emerging industry requires capital investment and a perfect investment and financing mode. The marine strategic, emerging industry is a key component of China's rapid development, which is a key link to maintaining rapid economic development in coastal areas. The marine industry has a very important role in China's economic development strategy, which requires the study of marine strategic emerging industries. By promoting the development of the marine industry, China will develop and use marine resources more effectively. However, there are still many problems in the investment and financing mode for China's strategic, emerging marine industries, which are likely to cause a break in the capital chain of emerging industries. Therefore, this article first analyzes the investment and financing mode and main body of the strategic marine emerging industries. By combining the life cycle of emerging industries, this article has developed investment and financing models for different life cycles. [ABSTRACT FROM AUTHOR]