Gunnar Myrdal, a Nobel Laureate in Economics, noted in his book <The Challenge of World Poverty--A World Anti-Poverty Program in Outline> that" Social inequality is clearly connected with the position, and it may best defined as the extreme lack of social mobility and the serious hamper on the possibility of free competition", " Social and economic inequality is a major cause of poverty in a country. From the perspective of planning, this means that greater equality is the prerequisite to make a country out of poverty".? Establishing a financial innovation mechanism that can meet the needs of the poor and achieving the equal status of the poor on capital gain can alleviate or even eradicate poverty. This paper describes a financial mechanism through which the poor can sell their own income rights to obtain funds for self-development so that they can get out of poverty status and an idea about establishing income rights trading markets.

What are the effects of policy reversals which were initiated by the US bureaucracy in response to the 2008 global financial crisis? Answering this question is challenging because US capital markets are relatively mature and policy reversals are far and in between in recent years. Specifically, the challenges include the one-time nature of these US policy reversals, the confounding effects of many programs targeting interrelated segments of the capital markets at the same time as well as possible endogeneity issues. China, on the other hand, offers a natural experiment to study the effects of policy reversals. In the last three decades, the Chinese government has initiated many policy changes to liberalize the capital markets and some of these have been reversed several times. Using hand-collected data of policy reversals targeting the Chinese stock markets from 1994 through 2009, we are able to address the first two challenges. To resolve any endogeneity issue, we focus on the impact of such policy reversals (targeted at the Chinese stock markets) on the Chinese repo markets, which trade market-driven interest rates. We find that the Chinese policy reversals are indeed effective in reducing the term spread, the volatility of the interest rate, and the volatility of the term spread. Our results suggest that the policy risk is systematically priced in financial securities, implying that policy makers can rely on financial market indicators to objectively evaluate their policy decisions.

对证券市场之间互动关系的研究，不仅有助于揭示市场信息的跨国（境）传播机制特别是国 际金融风险的传导机制，还可以增进人们对证券市场微观结构与信息效率的认识。本文应用 Hong（2001）、Hong et al. (2009）新近提出的信息溢出检验方法，详细考察并比较了我国A 股市场与美股、港股在次贷危机前后的互动关系，首次揭示了三者联动结构与信息传递的全 景图，包括互动的方式、方向、相对强度、当期影响与多期滞后关系以及时变性。研究结果 表明：（1）在三者的关系中，美股处于主导地位，并且对港股、A 股市场具有金融传染效应；（2） A 股市场不再是“独立市”，A 股不仅能够反映美股、港股等外围市场的重要信息，而且已具 有影响外围市场的能力；（3）A 股与美股、港股之间的互动关系体现在均值溢出、波动率溢 出、极端风险溢出等多个层面，既有线性关系也包括非线性关联方式。

This work investigates the shifting phenomena of the funds investment style under the ranking pressure, based on all the investment funds from 2006 to 2008 in China with the statistics methods. We find that there is the tendency that the funds develop the similar investment styles, and there is quite difference between the active styles and the declared styles. The investment style drifts can be found in the funds. The market expectation and performance ranking are the important factors which influence the drifts. The changes of funds managers is a good explanatory variable about funds style drift in Europe and the United States but not in our country. In addition, this paper reveals that there is a different degree of style drifts between the top and the bottom funds in the performance ranks, and the top funds are more active in the style drift than the bottom funds. Our conclusion is, the top ranking funds execute actively under the ranking pressure which is benefit for the fund investors.

In this paper,we analyse whether the Chinese A share stock markets exhibit excess volatility by employing the VAR methodology based on log-linear RVF of Campbell&Shiller(1989). According to the research result, relative to the intrinsic value implied by dividends,Chinese A share stock markets always exhibit excessive voltility for the period of 1994 to 2009. It is difficult to explain the stock market volatility puzzle of China's stock market , no matter we run constant excess return model or V-CAPM model. We try to explain the reasons by studying the stock market sentiment index, and find evidence of an interaction mechanism between investor sentiment and excess volatility. And One more meaningful result is that adding the stock market sentiment index to our model can provide extra explanatory power for the excess volatility of the stock market.

This paper examines the effect that venture capital (VC) has on the pay-performance relationship in listed Chinese firms. We find that VC has a significantly positive effect on CEO compensation and the pay-performance relationship, such effect particularly stronger in firms needing more managerial efforts and discretions (higher growth opportunity or higher levels of capital expenditure). In addition, we show that VC-backed firms with more managerial discretions are more likely to use stock options. The evidence suggests that venture capital investors use more sensitive compensation contract for top executives in Chinese when the need for managerial discretion is greater. Such compensation schemes by VCs enhance firm performance subsequently.

This study examines the role of regional develop imbalance on China’s mutual funds investment behaviours after controlling for various firm attributes. Consistent with evidence from developed markets, we find that China’s mutual funds prefer large liquid stocks with better governance arrangement, higher visibility, growth perspective and prudent features. More importantly, our results show that macroeconomic conditions of stock locations affect mutual funds investment decisions. In particular, mutual funds overweight stocks from the emerging inland regions in response to the “development campaign of the western regions”, and they are able to pick out the “Western Stars” to obtain superior performance. Further investigation of stocks from the nine coastal regions suggests that there exists an “invest towards the neighbour south” phenomenon within the developed coastal regions. Although mutual funds are rational by investing into their southern neighbours, the reason of this anomaly remains a puzzle for further investigation.

Using quarterly data from 1998:Q1 to 2009:Q4 and monthly data from July 2005 to February 2010, this paper examines the impact of key monetary policy variables, including long-term benchmark bank loan rate, money supply growth, and mortgage credit policy indicator, on the real estate price growth dynamics in China. Empirical results consistently demonstrate that lower interest rate, faster money supply growth and loosening mortgage down payment requirement tend to accelerate the subsequent home price growth, and vice versa. These results suggest that Chinese monetary policy actions are the key driving forces behind the change of real estate price growth in China. We also show that hot money flow does not have significant impact on the change of home price growth after controlling for the money supply growth. Finally, a bullish stock market tends to accelerate subsequent home price growth.

Although asymmetry of information and positive externalities in venture capital provide the justification for government intervention, no one can guarantee that distortion of resource allocation does not exist when government correct market failures. From the point view of incomplete contract theory, government intervention could affect the achievement of contract for the unverified information and actions, leading to inefficiency of venture capital, therefore It is important for us to understand the performance of public policy which is how to improve how to improve the venture capital. To establish the sequential offer game model with moral hazard of entrepreneur, considering with the additional funds provided by the government and certification of quality as well as the spillover effects of venture capital. Under the assumption that the government has the ability to identify high-ability entrepreneur, the introduction of government leading fund and the arrangement of control can induce more specific investment of entrepreneurs. The preceding investment provide investors with additional information, therefore it is optimal. The non-government leading fund supported entrepreneurs will face with worse situation since limited funding and the requirements of capital preservation. Therefore government leading fund should carefully select the investment strategy.

We study how financial constraints affect the process of firm agglomeration and, in particular, the creation of conglomerates and firms with subsidiaries. We focus on the constraints related to the geographical segmentation of the debt market. We argue that conglomerates/firms with subsidiaries are born as the outcome of a process of agglomeration around less financially constrained firms. This has three major implications: a) conglomerates (firm with subsidiaries) should be less financially constrained than single-segment (no-subsidiary) firms, b) the headquarters – in general the seat of the aggregating company – should be the least financially constrained unit of the new entity and therefore firms with subsidiaries should be more likely to borrow at the headquarters level, c) if conglomerates (firms with subsidiaries) are less financially constrained than the average firm in the market, their Tobin’s Q should be lower than that of the single-segment (no-subsidiary) firms in the same industries – i.e., they should display a “conglomerate (firm with subsidiaries) discount”. We test these hypotheses employing a novel – and exogenous – geographical-based measure of financial constraints. We focus on the US corporations from 1997 to 2004. We show that firms headquartered in less financially constrained areas are more likely to be headquarters of conglomerates/firms with subsidiaries and that conglomerates/firms with subsidiaries are less financially constrained. At the moment of agglomeration (M&A) we document a significant negative relation between the difference in a degree of financial constraints between the bidder and the target and the probability of choosing the target as well as the value created in M&A. In the years following the acquisition Tobin’s Q of acquirers are decreasing relative to their peers which is consistent with the fact that access to lower cost of financing allows to implement projects with marginal Q lower than the average Q of existing projects. Next, we find that the less financially constrained is the headquarters compared to the subsidiaries, the higher is the percentage of the total financing that takes place at headquarters level. Finally, we document a strong positive correlation between the difference in financial constraints of the conglomerate (firm with subsidiaries) and the average degree of financial constraints of the single-segment (no-subsidiary) firms and the conglomerate (firm with subsidiaries) discount. Our findings suggest that conglomerates/firms with subsidiaries are less constrained because less constrained firms take over more constrained ones.