Financial crises,debt overhang,and firm growth in transition economies

ABSTRACT

We examine the effects of the global financial crisis of 2008 and the European debt crisis of 2011 on the relationship between capital structure, investments, and performance for Eastern European companies. While the existing literature documents how firms’ investments are sensitive to the availability of internal funds and to debt holdings, we further investigate whether this investment sensitivity also translates in different levels of performance, and document that capital structure indeed has both a direct and an indirect effect, mediated by the capital expenditure channel. We show that firms with higher financial flexibility experience higher investments and returns on capital. Over-levered firms instead suffer from a debt overhang condition, forcing them to curb investments, and consequently experiencing lower performance. Overall, we provide evidence on the importance of capital structure and financial flexibility on investments and performance, showing the real consequences of the debt overhang condition on firm value creation. Firms should therefore aim at maintaining adequate financial flexibility in order to be able to pursue future profitable investment opportunities, and avoid the under-investment problem arising from a debt overhang situation.     

Measuring destocking performance of the Chinese real estate industry: A DEA-Malmquist approach

This paper aims to measure the evolution of destocking performance of the Chinese Real Estate Industry based on a DEA (Data Envelopment Analysis)-Malmquist approach, which is seldom used in this industry in existing literature. In 2016, the Chinese government introduced a unified national destocking policy to reduce real estate inventory to save the downturn in the real estate market, but the effect was less than expected and led to soaring house prices in first-tier cities. By analysing the destocking performance over the period from 2005 to 2015, we find the following: (1) It is impossible to use a unified policy to effectively address the national destocking issue because of the difference of DMUs' destocking efficiency, input redundancy and total factor productivity score changes. (2) With the current destocking performance and investment status, the government is still ignoring the existing commercial real estate problems. (3) The redundancy of firm assets and staff indicates that zombie firms may exist and risk future unemployment in the real estate industry. (4) Despite the recently repeated government interventions in this industry, destocking performance remains falling since 2008, and problems in other regions is more severe than in central cities. (5) The financial crisis triggered by the US subprime mortgage crisis has had a great impact on China's real estate industry. The destocking performance dropped sharply in 2008, forcing the Chinese government to introduce policies to stimulate the real estate market. Policy recommendations are also put forward based on the findings.     

Is heterogeneous capital depreciation important for estimating firm-level productivity? Evidence from Chinese manufacturing firms

This paper contributes to the existing literature on estimating firm-level production functions. Using Chinese manufacturing survey data, we employ the firm-level heterogeneous capital depreciation rate to measure firms’ investment and assess its role using Olley and Pakes (1996) (OP) production function estimation technique. Although there is some ongoing debate on the econometric soundness of the OP technique, we argue quantitatively that the heterogeneous depreciation rate muffles the measurement error associated with the key input demand investment. In our sample, it significantly narrows the gap of total factor productivity (TFP) estimates between the OP technique and a state-of-the-art estimation method that works without investment. We further reveal that the improved performance primarily originates from the dynamic evolution in the distribution of the capital depreciation rate.     

The determinants of capital intensity in Japan and the US

We estimate the determinants of capital intensity in Japan and the US, characterized by striking different paths. We augment an otherwise standard Constant Elasticity of Substitution (CES) model with demand-side considerations, which we find especially relevant in the US. In this augmented setting, the elasticity of substitution between capital and labor is placed between 0.74 and 0.90 in Japan, and around 0.30 in the US. We also find evidence of biased technical change, which is capital-saving in Japan but labor-saving in the US. These differences help us explain the diverse experience in the capital deepening process of these economies, and lead us to conclude that demand-side drivers, quite relevant in the US, may also be relevant to account for different growth experiences. A close look at the nature of technological change is also needed before designing one-size-fits-all industrial, economic growth, and/or labor market policies.     

高房价是否导致了区域高技能人力资本流出?

我国正处于由人口大国向人力资本强国转型的关键阶段,高技能人才资源已成为当今区域经济社会发展的第一资源;与此同时,我国已经历了一段房价全面上涨的时期,由房价高速上涨所导致的人才流出问题引起政府与公众的广泛关注。在此背景下,本文通过对大学生就业地选择的关注,考察了高房价对地区高技能人力资本流出的影响。本文的结果稳健地表明,高房价显著地提高了大学毕业生离开本地就业的概率;根据本文的估计,在2010年至2015年期间,房价的上升至少增加了区域高技能人才流出21.5%;特别地,房价的挤出作用对于较弱家庭背景的学生以及非一线城市更为严重,此外,高房价也影响了大学毕业生的职业选择。本文的研究结果指出了中国高房价可能影响长期经济社会发展的一个新的重要渠道;同时,通过对房价的关注,为地区与国家减少高技能人才流出,实现经济发展由要素驱动向创新驱动转变提供了新的启示。     

Incorporating active adjustment into a financing based model of capital structure

The conventional partial adjustment model, which focuses on leverage evolution, has difficulty identifying deliberate capital structure adjustments as it confounds financing decisions with the mechanical autocorrelation of leverage. We propose and estimate a financing-based partial adjustment model that separates the effects of financing decisions on leverage evolution from mechanical evolution. The speed of adjustment (SOA) is firm-specific and stochastic, and active targeting of capital structure has a multiplier effect that depends on the size of financial deficit. Overall, we find expected SOA from active rebalancing (30%) more than doubles what is expected from mechanical mean reversion alone (13%).     

东道国金融发展对中国企业对外直接投资的影响:二元边际与生产率门槛

文章基于中国上市企业2008-2015年对外直接投资数据，分析东道国金融发展在扩展边际和集约边际上对企业对外直接投资决策以及投资所需生产率水平的影响。研究发现，在不同生产率的企业中东道国金融发展的影响是异质性的。较高的金融发展水平会系统性地降低投资所需的生产率水平，进而促进中国企业对外直接投资的概率、次数和规模。进一步的研究还发现，在经济发展水平比中国高的东道国金融发展的生产率效应更显著，投资所需生产率下降得更多。尽管如此，高经济发展水平东道国的最低生产率门槛仍然高于低经济发展水平的东道国。控制了金融发展指标和企业全要素生产率的内生性后，结果依然稳健。     

国家高新区设立能够提升城市全要素生产率吗？——基于261个地级市TFP分解数据的路径分析

国家高新区是培育经济增长新动能，实现区域经济高质量发展的重要政策载体，文章利用2001-2014年我国261个城市面板数据，通过渐进双重差分法研究国家高新区设立对城市全要素生产率的影响。研究发现：研究期内国家高新区的设立对城市全要素生产率造成显著的负面影响；从TFP的分解项来看，高新区设立促进了所在城市规模效率提高，却抑制了技术进步和技术效率提高；异质性分析结果表明上述作用具有显著城市等级异质性，在高行政等级城市设立高新区对城市全要素生产率具有促进作用。进一步运用工业企业数据库、微观土地转让数据、城市专利数据等进行机制分析发现，企业间资源错配和土地价格扭曲降低了技术效率，而技术创新下降和产业升级钝化是抑制技术进步的主要机制。     

Entry and capital structure mimicking in concentrated markets: The role of incumbents’ financial disclosures

We examine whether the public availability of product market incumbents' financial disclosures leads to greater capital structure mimicking of incumbents by entrants. Exploiting a change in disclosure enforcement for German private firms in the mid-2000s, we find entrant-incumbent mimicking rises substantially in concentrated markets once incumbents' financial statements are publicly available. Additional tests exploring potential mechanisms are more consistent with interfirm learning underlying the effect than alternative channels. Our findings shed light on the effects of competitor financial statement disclosure on private firms’ initial financing decisions and highlight how capital structure dependencies among peer firms arise.     

论废除死刑的法律价值

我国的死刑制度历史悠久,改革现行死刑制度,对于我国构建和谐社会具有重要现实意义.我国死刑制度具有局限性,因此,废除死刑,构建合理的刑罚体系是十分必要的.