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Article

Yiming Hu and Mingxia Xu

The purpose of this paper is to shed light on the deleveraging impact of the anti-corruption campaign since the 18th National Congress of the Communist Party of China…

Abstract

Purpose

The purpose of this paper is to shed light on the deleveraging impact of the anti-corruption campaign since the 18th National Congress of the Communist Party of China (CPC) on private firms with political connections, relative to those without political connections.

Design/methodology/approach

In this paper, taking the anti-corruption campaign employed from the end of 2012 as an exogenous shock, the authors design a quasi-experiment difference-in-difference approach to examine how the loss and failure of political connections impacts private firms’ debt financing.

Findings

The authors find that the loss and failure of political connections following the anti-corruption campaign since the 18th CPC National Congress causes the yearly new debt ratios of treatment firms with political connections to decrease, relative to those of control firms without political connections. This outcome is more pronounced for provinces with more cadres excluded in the anti-corruption campaign since the 18th CPC National Congress, which rendered politically connected firms susceptible to lose connections with central or provincial cadres. To explore the mechanism, the authors find that following the anti-corruption campaign since the 18th CPC National Congress, politically connected firms limit rent-seeking activities, whereas resource acquisition is weakened. The authors also find that the impact of the anti-corruption campaign since the 18th CPC National Congress on the debt financing of politically connected firms, relative to their counterparts, is more pronounced for groups with high levels of information asymmetry and for less explicit guarantee groups. Finally, politically connected firms are more likely to be dominated by internal funds in dealing with a loss of advantages in debt financing, compared with their counterparts without political connections.

Research limitations/implications

The findings in this study suggest that the loss or failure of previous political connections following Xi’s anti-corruption campaign make politically connected firms lose the advantages in debt financing through the rent-seeking, resource acquisition, information asymmetry, implicit guarantee channels, which provide new evidence for research on the impact of the anti-corruption campaign since the 18th CPC National Congress on private firms’ financing behaviors via the loss or failure of existing political connections.

Practical implications

The findings in the study will have some inspiration for policy makers and entrepreneur.

Originality/value

This study provides new evidence on the different impacts of Xi’s anti-corruption campaign on private firm’s debt financing between politically connected and unconnected firms.

Details

China Finance Review International, vol. 9 no. 4
Type: Research Article
ISSN: 2044-1398

Keywords

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Article

Yiming Hu, Ying Yang and Pengfei Han

The purpose of this paper is to examine the difference of credit enhancement of variously secured bonds issued by local government financing platform bond (LGFPB).

Abstract

Purpose

The purpose of this paper is to examine the difference of credit enhancement of variously secured bonds issued by local government financing platform bond (LGFPB).

Design/methodology/approach

The approaches to secure the bonds usually include mortgage, collateral, guarantee, etc.

Findings

Using a sample of LGFPBs issued during the 2007-2013 period, the authors find that all of the approaches to secure the bonds would increase the bond rating and that compounded approaches have a higher credit enhancement effect than single approaches. Among these approaches, the requirement of collateral has the strongest enhancement effect. Moreover, the authors find that the guarantee provided by a state-owned bank or enterprise increases the bond rating more than the guarantee provided by other local government financing platforms.

Research limitations/implications

The findings in this study suggest that the credit enhancement would be deeply affected by the approach used to secure the bond.

Practical implications

These results can help the local government make better decisions when issuing bond.

Originality/value

This study empirically analyzes the different credit enhancement approaches for securing LGPFBs for the first time and contributes to the literature regarding credit ratings of local government bonds.

Details

China Finance Review International, vol. 7 no. 1
Type: Research Article
ISSN: 2044-1398

Keywords

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Article

Yiming Hu, Siqi Li, Thomas W. Lin and Shilei Xie

Banks are the major suppliers of external funds for companies in China. The purpose of this paper is to examine whether Chinese banks exercise effective monitoring over…

Abstract

Purpose

Banks are the major suppliers of external funds for companies in China. The purpose of this paper is to examine whether Chinese banks exercise effective monitoring over borrowers in two lending decisions, including loan interest rates and loan renewals.

Design/methodology/approach

Using a sample of Chinese public industrial firms from 2000 to 2005, the authors perform multivariate regression analysis to investigate whether banks adjust their loan interest rates and consider loan renewal decisions in response to borrowers financial performance. The authors also examine these bank lending decisions before and after 2003, when the major banking reforms started to take place in China.

Findings

A negative relation was found between the loan interest rate spread and the financial performance of borrowers. However, a negative relation was found between loan renewals and the financial performance of borrowers, consistent with firms in financial difficulties being in need of more funding and hence more likely to get its bank loans renewed. Additionally, it was found that the factors banks consider when making loan decisions vary before and after 2003.

Originality/value

The authors' findings suggest that Chinese banks play a limited role in monitoring and disciplining borrowers through adjustments of loan interest rates, and that their loan renewal decisions for firms with poor financial performance highlight banks' financing, instead of monitoring role in this transition economy. These findings provide empirical evidence on bank governance in a transition economy dominated by state‐owned enterprises. The paper contributes to the literature by constructing an alternative loan renewal measure using financial statement information.

Details

Review of Accounting and Finance, vol. 10 no. 4
Type: Research Article
ISSN: 1475-7702

Keywords

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Article

Yiming Hu, Xinmin Tian and Zhiyong Zhu

In capital market, share prices of listed companies generally respond to accounting information. In 1995, Ohlson proposed a share valuation model based on two accounting…

Abstract

Purpose

In capital market, share prices of listed companies generally respond to accounting information. In 1995, Ohlson proposed a share valuation model based on two accounting indicators: company residual income and book value of net asset. In 2000, Zhang introduced the thought of option pricing and developed a new accounting valuation model. The purpose of this paper is to investigate the valuation deviation and the influence of some market transaction characteristics on pricing models.

Design/methodology/approach

The authors use listed companies from 1999 to 2013 as samples, and conduct comparative analysis with multiple regression.

Findings

The main findings are: first, the accounting valuation model is applicable to the capital market as a whole, and its pricing effect increases as years go by; second, in the environment of out capital market, the maturity of investors is one of important factors that causes the information content of residual income less than that of profit per share and lower pricing effect of valuation models; third, when the price earning (PE) of listed companies reaches certain level, the overall explanation capacity of accounting valuation models will become lower as PE gets higher; fourth, as for companies with higher turnover rate and more active transaction, the pricing effect of accounting valuation model is obviously lower; fifth, the pricing effect of accounting valuation models in a bull market is lower than in a bear market.

Originality/value

These findings establish connection between accounting valuation and market transaction characteristics providing an explorable orientation for the future development of accounting valuation theories and models.

Details

China Finance Review International, vol. 6 no. 1
Type: Research Article
ISSN: 2044-1398

Keywords

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Article

Hanbing Fan, Yiming Dong, Dezhuang Hu and Lianfa Luo

This paper aims to examine whether labour unions influence labour conflicts and this mechanism is different in China compared with other countries.

Abstract

Purpose

This paper aims to examine whether labour unions influence labour conflicts and this mechanism is different in China compared with other countries.

Design/methodology/approach

This paper uses the data from the China Employer–Employee Survey that interviewed 1,208 firms and 10,087 workers in 2016 as the measurement of variables, and it uses Logit regression model to do the empirical research.

Findings

Unions cannot significantly influence labour conflicts. More active unions and unions whose leaders are appointed by the firms’ management are associated with a higher incidence of labour conflicts.

Originality/value

This paper finds a new mechanism that explains the relationship between unions and labour conflicts. The existing literature states that unions may increase labour conflicts via “monopoly power” and may also mitigate labour conflicts via “voice mechanisms”. This paper’s findings show that the positive correlation between unions and labour conflicts may be explained by the lack of “voice mechanism” rather than “monopoly power”. The findings imply that labour unions should represent the interest of workers to mitigate the increasing labour conflicts.

Details

International Journal of Conflict Management, vol. 29 no. 4
Type: Research Article
ISSN: 1044-4068

Keywords

Content available
Article

Zhizhou Wu, Yiming Zhang, Guishan Tan and Jia Hu

Traffic density is one of the most important parameters to consider in the traffic operation field. Owing to limited data sources, traditional methods cannot extract…

Abstract

Purpose

Traffic density is one of the most important parameters to consider in the traffic operation field. Owing to limited data sources, traditional methods cannot extract traffic density directly. In the vehicular ad hoc network (VANET) environment, the vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) interaction technologies create better conditions for collecting the whole time-space and refined traffic data, which provides a new approach to solving this problem.

Design/methodology/approach

On that basis, a real-time traffic density extraction method has been proposed, including lane density, segment density and network density. Meanwhile, using SUMO and OMNet++ as traffic simulator and network simulator, respectively, the Veins framework as middleware and the two-way coupling VANET simulation platform was constructed.

Findings

Based on the simulation platform, a simulated intersection in Shanghai was developed to investigate the adaptability of the model.

Originality/value

Most research studies use separate simulation methods, importing trace data obtained by using from the simulation software to the communication simulation software. In this paper, the tight coupling simulation method is applied. Using real-time data and history data, the research focuses on the establishment and validation of the traffic density extraction model.

Details

Journal of Intelligent and Connected Vehicles, vol. 2 no. 1
Type: Research Article
ISSN: 2399-9802

Keywords

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Article

James Yiming Zhang, Jing Wu, Gregor v. Bochmann and Michel Savoie

The purpose of this paper is to present the benefits of using the Lagrangian relaxation (LR) and subgradient methods in scenario studies for wavelength division…

Abstract

Purpose

The purpose of this paper is to present the benefits of using the Lagrangian relaxation (LR) and subgradient methods in scenario studies for wavelength division multiplexing (WDM) network planning. The problem of WDM network planning for a given set of lightpath demands in a mesh topology network is to select lightpath routes and then allocate wavelength channels to the lightpaths. In WDM network planning, a scenario study is to find out the network performance under different lightpath demands and/or different network resource configurations.

Design/methodology/approach

A scenario study must solve a series of related static WDM network planning problems. Each static WDM network planning problem is an optimization problem, and may be formulated as an integer linear programming problem, which can be solved by the proposed Lagrangian relaxation and subgradient methods. This paper uses the Lagrange multipliers that are obtained from previous scenarios as initial Lagrange multiplier values for other related scenarios.

Findings

This approach dramatically reduces the computation time for related scenarios. For small to medium variations of scenarios, the method reduces the computation time by several folds. The proposed method is the first method that effectively considers the relations between related scenarios, and uses such relations to improve the computation efficiency of scenario studies in WDM network planning.

Practical implications

The method improves the efficiency of a scenario study in WDM network planning. By using it, many “what‐if” type of scenario study questions can be answered quickly.

Originality/value

Unlike other existing methods that treat each scenario individually, this method effectively uses the information of the relation between different scenarios to improve the overall computation efficiency.

Details

COMPEL - The international journal for computation and mathematics in electrical and electronic engineering, vol. 28 no. 6
Type: Research Article
ISSN: 0332-1649

Keywords

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Article

Wei Wang, Chunxiang Zhao, Xinfeng Jiang, Yiming Huang and Sihai Li

Against the background of the enormous economic transition China is undertaking, government intervention over corporate behavior is a frequent and, arguably, necessary…

Abstract

Purpose

Against the background of the enormous economic transition China is undertaking, government intervention over corporate behavior is a frequent and, arguably, necessary measure. Among the most serious problems facing China, economically and reputationally, are environmental issues. So, how is the government intervening in the environmental performance of Chinese enterprises? And how are Chinese enterprises responding? These are the questions to be answered in this study.

Design/methodology/approach

This paper sampled listed companies on China’s Shanghai and Shenzhen Stock Exchanges. The data were collected from the HeXun corporate social responsibility report, CSMAR and WIND databases. A Tobit model was used to conduct the main 2SLS regression analysis, and the robustness tests followed the propensity score matching method.

Findings

The analysis shows that environmental performance is positively related to the government subsidies a company receives. The “Eight-point Regulation of the Centre” crack-down on social corruption introduced in 2012 has weakened rent-seeking overall, but rent-seeking behavior through the cloak of corporate environmental performance has become more serious. As a result, non-polluting and state-owned enterprises are significantly less concerned about their environmental performance, while polluting and private enterprises are more motivated to become good environmental citizens.

Practical implications

This research provides a greater understanding of the drivers behind environmentally-responsible behavior in Chinese companies. These insights can be used by policymakers and environmental regulators to incentivize a more widespread ground-swell of change across the gamut of Chinese business.

Social implications

Environmental policy and practice informed by research-driven recommendations can not only make valuable contributions to the health and well-being of Chinese society but also, as a significant contributor to climate change, environmental reforms have global benefits.

Originality/value

This study explores the motivations behind rent-seeking associated with environmental investment. The findings expand the research horizon of relevant literature on corporate political rent-seeking and deepen the understandings of the economic consequences of corporate investment into environmental practice. The results provide empirical evidence for the Chinese government to implement environmental regulations based on incentives beyond simple profit-making.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

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Article

Yiming Tang, Xiucun Wang and Pingping Lu

– The purpose of this paper is to examine how Chinese consumer attitude mediates factors that influence their purchase intention toward low-displacement vehicles.

Abstract

Purpose

The purpose of this paper is to examine how Chinese consumer attitude mediates factors that influence their purchase intention toward low-displacement vehicles.

Design/methodology/approach

This study utilizes online survey data in China, multiple regression and recursive regression models.

Findings

Consumers’ environmental concern, perceived effectiveness belief and functional value positively affect their attitude toward such products. Consumer attitude positively affects purchase intention. Consumer attitude fully mediates the influence of environmental concern, and partly mediates the effect of perceived effectiveness belief, and functional value on purchase intention. Consumers’ awareness of government policy is not associated with attitude or purchase intention.

Originality/value

This is a first empirical study to systematically examine Chinese consumer attitude's mediation effect on factors influencing their purchase intent toward low-displacement vehicles in China.

Details

Asia-Pacific Journal of Business Administration, vol. 6 no. 2
Type: Research Article
ISSN: 1757-4323

Keywords

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Article

Ying An, Xiaomin Sun, Kai Wang, Huijie Shi, Zhenzhen Liu, Yiming Zhu and Fang Luo

Why do some employees choose to prolong their working hours excessively? The current study tested how core self-evaluations (CSEs) might lead to workaholism and how…

Abstract

Purpose

Why do some employees choose to prolong their working hours excessively? The current study tested how core self-evaluations (CSEs) might lead to workaholism and how perceived job demands might mediate this relationship.

Design/methodology/approach

Insights from the extant literature underpin the hypotheses on how CSEs would affect the development of workaholism through perceived job demands. A sample of 421 working people in China completed the online surveys, and the mediation model was tested using Mplus 7.0 (Muthén and Muthén, 1998–2012).

Findings

This study found that different components of CSEs influence workaholism in different ways. Specifically, generalized self-efficacy positively predicts workaholism, whereas emotional stability negatively predicts workaholism. Moreover, most aspects of CSEs (generalized self-efficacy, emotional stability and locus of control) influence workaholism via perceived job demands, specifically via perceived workload but not via perceived job insecurity.

Originality/value

The current study is the first to explore how individuals' fundamental evaluations of themselves (i.e. CSEs) relate to workaholism. The results are helpful for the prevention and intervention of workaholism in organizations.

Details

Personnel Review, vol. 50 no. 1
Type: Research Article
ISSN: 0048-3486

Keywords

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