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Emerald Group Publishing Limited
Article Type: Editorial From: China Finance Review International, Volume 4, Issue 3.
In September 1983, the State Council declared that the People's Bank of China would act as the only central bank from January 1, 1984, since then 30 years have gone, which was also marked as the commencement of Chinese financial reform. As a traditional Chinese saying goes, a man should be steadfast at the age of 30. And accordingly, China, as a 30-year-old man, has achieved remarkable achievements from its financial reform. Chinese financial industry has already laid its own foundation and presented its competitiveness. The bank industry has run the best in the world. However, there exist many problems and troubles in China. The direct finance of Chinese market, including but not limited to capital market, security market, fund industry, is still far from our estimates. Compared to the well-developed countries, Chinese financial industry still has a long way to go. It is the duty of Chinese financial researchers to analyze the causes of the problems through theoretical methods and make suggestions accordingly; therefore we can boost the development of Chinese financial industry.
Five papers in this issue are of great significance, and most of these research results are based on authors’ meticulous study on important issues of Chinese economy and financial reform. The first paper entitled “Consideration in non-tradable shares reform: the compensation for benefit expropriation” describes the impact of shareholding reform and equity reform on the middle and small stockholders’ benefits. The paper, “Residential properties, resources of basic education and willingness price of buyer's – based on the data of districts and counties in Beijing, Shanghai, Guangzhou and Shenzhen” probes into how resources of basic education affect housing prices through “education capitalization.” The paper, “Can traders beat the market? evidence from insider trades” adopts the data of US market to investigate on how insiders’ trades are executed and whether and how outside investors can mimic and outperform insiders and reap substantial portfolio returns which withstand the adjustments of both standard factors and stock characteristics from the asset pricing literature. The paper entitled “The effect of idiosyncratic risk on firm decisions: under-investment or diversification?” deals with the study on effect of idiosyncratic risk on firm decisions. The last paper, “Are individual investors affected by attention? – evidence from the earning announcement effect in China” states relevant Chinese market data to prove that attention will largely affect investor's stock trading activities.
The authors believe that theoretical analysis and empirical research based on important issues of financial market will continually benefit our financial theory and financial policies. We are expecting more and more researchers devoting themselves to studying and researching financial issues.