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Research on Foreign Direct Investment Risk of China’s Sovereign Wealth Fund

On 25/09/2013, in Finance, by rain

With the increase of foreign exchange reserves, the Chinese government established the China Investment Corporation (CIC) in September 2007, to explore the channels and ways of using its massive foreign exchange reserves and to improve the efficiency of management and profitability. However, there are many problems in risk management of CIC with lack of investment experience. All above is the background of this paper.Firstly, this paper analyzes the current situation of China’s Sovereign Wealth Fund. Compared with the Government Pension Fund-Global of Norway, Temasek Holdings and Australian Government Future Fund, this paper summarizes the experiences of these three SWF that CIC can refer to.Secondly, based on the existing research, this paper divides the investment risk of China’s Sovereign Wealth Fund into two parts:political risk and economic risk.Then, this paper selects three variables to measure the political risk component:the attitude of the government toward FDI, the degree of conflict for the country, and perceived corruption within the country; three variables to measure the economic risk component:gross national income per capita, inward FDI potential, and the inflation rate to construct the Foreign Investment Risk Matrix (McGowan& Moeller,2009) and Apply it to the four main countries (districts) of foreign investment of CIC:USA, Canada, UK and Hong Kong.Finally, this paper measures the exchange rate risk of these four countries (districts) using the commonly used VaR model. Adding the exchange rate risk to the economic risk of FIRM, this paper constructs the improved Foreign Investment Risk Matrix ana also applies it to the four countries (districts). In the end, this paper analyzes the situation of UK, for the verification of theory and reality.

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The Research on Marketing Strategy of China’s Sport Lottery

On 25/09/2013, in Finance, by rain

There are two major systems on the lottery market in our country, sports lottery and welfare lottery. Both of them make great contribution to the development of social public welfare, but that on the lottery market they had the homogeneous competition against the further development of the lottery market. Under the new situation that the government advocates the country and the society to do sports together, the development of the sports lottery is very importment. Because it is the imporment source of funds to the development of sports. In order to avoid the malignant competition with welfare lottery on the lottery market, the sports lottery’s popularity, reputation, loyalty and core competitiveness can continuously be improved through the innovative marketing activities.In this paper, firstly I dicuss the development course, the management system and the present situation of the sports lottery, and then I analyse the marketing’s macro environment and microcosmic environment of sports lottery. Secondly,I elaborate the present situation of marketing of sports lottery, and then analyse the reasons. Thirdly, I formulate product positioning strategy, communication strategy and crisis management strategies for the sports lottery. Finally, I put forward the corresponding measures for the protection of sports lottery’s marketing strategy. The results are revealed as the following:1,The development of sports lottery meets the requirements of Harmonious society and initially establishes a nationwide sales network, but also faced with the issues, such as single product,the market structure is irrational and the strong competition with welfare and illegal lottery.2,The constraints of the management system, issuance fee structure is irrational to use and the lack of specialized crisis management are the reasons to the status quo of the sports lottery’s marketing. 3, The sports lottery can develop marketing strategy through product positioning strategy, communication strategy and crisis management strategies. Through vigorously developing quizzes type sports lottery tickets, the related degree between the sports lottery and the Physical characteristics will be strengthened,the unique personality of sports lottery will be established and the core competitiveness of sports lottery will be built.4, By accelerating the legislative, establishing marketing awareness and costing the cost of the marketing into the issue of management of budget, the sports lottery’s marketing strategy can be effectively implemented.

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Empirical Research between Corporate Performance and Equity Incentive Based on SME Board Listed Company

On 25/09/2013, in Finance, by rain

2011 is the stock market downturn, but the enthusiasm of the equity incentives of listed companies is very high. To reduce the incentive costs or equity incentive can stimulate the company’s performance to struggle with the global crisis? On the one hand, the SME board listed companies are scrambling to launch equity incentive program, the other is the large number of equity incentive companies announced to terminate the equity incentive plan, and we want to find out the reasons for these.This paper attempts to proceed from the perspective of empirical research. Firstly, we want to find out whether the profitability changes after the equity incentives. Secondly, we use Principal component analysis method to determine the single dimension of variables to measure corporate performance. Thirdly, we use binary logistic regression to analysis the probability of the implementation of equity incentive, and how to ensure the implementation of equity incentive.The empirical studies showed that the SME board listed companies equity incentive is effective, for the rate of return on net assets and the company’s total market capitalization improved significantly, and corporate performance values obtained by principal component analysis also significantly increased. But the price-earnings ratio and inventory turnover rate did not show a significant improvement. In addition, corporate performance and is related positively correlated with equity incentive equity ratio and stock price volatility, negatively correlated with the Top Ten Shareholders proportion. Stock price changes on Secondary market is a main factor that effects probability a successful equity incentive implementation.At the end of the paper, we give some thoughts on how to make a successful equity incentive plan. We also give some advises on information disclosure system and professional managers system.

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The Effect of Government S & T Policy on the L&M-sized Industrial Enterprises’ R&D Investment of Zhejiang Province

On 25/09/2013, in Finance, by rain

With the development of science and technology, their importance in the development of economic is increasing. In order to occupy the commanding role in the innovation revolution, governments of most countries strengthen their technology spending and improve the management of science and technology. Based on the background of the world economies’depression and socio-economic transition period of china, how to quickly complete the transition of upgrading the industry, is a problem concerned by politicians and scholars, even Zhejiang province is one of the most advanced province in china with its unique private economy. Meanwhile, it is easy to result in market failure, since the scientific products have properties of public goods. Therefore, it is necessary to study the effects of government’s financial investment in science and technology on business investment.Based on the above background and the former research, this paper analyzes the necessary for government to intervene in innovation from five aspects:the properties of public goods, externalities, high risk, huge investment and state innovation system. This article improves the upgrading model of Grossman & Helpman and analyzes the effect of incentive policies, including direct funding, tax incentives, and the indirect investment, on the business R&D investment. In the Part of empirical research, this article uses the EG two-step analysis, which including construct co-integration test model and error correction model, to study the long-term and short-term effect of government fiscal incentives on business R&D investment, after the smooth test. In the part of extended analysis, this paper learns from the Guellec & Bruno model, measures the interaction between incentive policies, the relationship between polices and its subsidized rate, the optimal subsidized rate and the stability of the policy tools. The main conclusions are:government incentives tools do have effects on business R&D investment; there are relationships between different policies; There is an inverted U-shaped relationship between elastic of investment to institution and its funding rate; Besides, This paper also proved there exist the optimal funding rate and the more stable the polices, the more R&D fund will the enterprises invest.Finally, according to the above conclusions, the article proposes several advices:increasing the R&D investment of government, reasonable arrangements for the configuration of resources among policy tools, increasing the stability of polices, establish financial budget and broaden investment channels.

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The Research on the Internal Control Construction of Administrative Institutions in China

On 25/09/2013, in Finance, by rain

Internal control plays an important role in the management work of administrative institutions. Due to the particularity of administrative institutions, the complexity of domestic internal control, as well as the lack of awareness of the importance of internal control in both theory and practice, the construction of internal control in administrative institutions of China has generally lagged behind and there are many problems existing which have seriously restricted the working efficiency and effect of administrative institutions and imposed adverse effect on the accounting information quality of the administrative institutions. Therefore, it is urgent that the work of investigation and research into the internal control of administrative institutions of China should be paid attention to and strengthened, on the basis of which an internal control system that can meet the characteristics and the management mode of administrative institutions should be developed, what’s more, relevant laws and regulations should be improved.First part of this paper is exordium, which introduces topic background, topic significance, research method and content framework. The second part of this paper is literature review, which describes the origin and development of the internal control theory in administrative institutions of China and international public sectors. The third part is the China-foreign comparison, which has taken the United States, the United Kingdom, Japan, Netherlands, Australia and international organizations as examples, and compared the internal control of administrative institutions in China with that of international public departments from four aspects:responsibility subject, independence of internal audit, the evaluation standard system and the legal and theoretical basis. The fourth part of this paper is status analysis, where the five elements of internal control rules of American federal government which are control environment, risk assessment, control activities, information and communication and the monitoring respectively are taken as reference to analyze the existing problems of internal control of administrative institutions in China. This part has illustrated several problems existing in the internal control constructing of administrative institutions in China, which are defect of the internal control system, lack of internal control awareness, unreasonable organization structure, weakness in control and binding, and poor communication and supervision system respectively, and analyzed main reasons causing these problems. In the fifth part of this paper, the developing trend of the internal control of administrative institutions in China has been illustrated based on the existing government regulations and the macroeconomic conditions in China, and several policy suggestions are made. Finally, the conclusion is made that the internal control system constructing of administrative institutions in China should be improved as soon as possible, learning from the internal control rules in corporations which are relatively mature and the experience from the internal control system constructing of international public departments, combined with the particularity of administrative institutions and the real national conditions in China.

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Annuity Payment Models of Reverse Mortgage Loan Pricing

On 25/09/2013, in Finance, by rain

As China gradually entered into the aged society, it faces growing pension pressure.Housing reverse mortgage loan as a financial product which couldenhance self-protection ability of the retired elderly provides a solution to this problem.Pricing is the core problem when developing the housing reverse mortgage loan. in this paper,we use some developed countries(like America) experiences of operating housing reversemortgage loan as reference and do some exploratory research about Chinese pricing of thehousing reverse mortgage products, so as to promote it’s development, to improve theincreasingly serious difficulties of Chinese pension situation and to stimulate the healthydevelopment of the real estate market.First of all, this paper introduces research background, purpose, significance andsummarizes the related research at home and abroad.,then to introduce the housing reversemortgage loan concept, characteristics, loan payment terms, operations and its models inmany developed countries, like America, United Kingdom, Canada, and so on, then introduceseveral theories about its pricing. Secondly, introduce lifetime annuity pay model and mixedannuity pay model, the two pricing models based on different pricing strategies by insurancecompany and policy-holder; calculate weighted average to get the respective prices. At last,under the premise of reasonable assumptions set the case, calculate related undeterminedparameter, use the pricing models analysis of the case, through the case to validate the modelof rationality.

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The Effects of Real Estate Taxes on Housing Price

On 25/09/2013, in Finance, by rain

The real estate industry is the basic industry of national economy and national economy can not develop without the development of the real estate market. In recent years, China’s real estate market develops very fast and the housing price continues to rise, even become the exuberance phenomenon of the real estate. In case of the real estate bubble, the government has repeatedly implemented macroeconomic policy regulation, including monetary policy and fiscal policy. As an important means of fiscal policy-the real estate tax policy in the government’s macro-control has an irreplaceable role. The real estate tax is an important economic lever to intervene the real estate price and promote the real estate market to balance. It plays an important role to guide the efficient allocation of real estate resources. Because of the exuberance of the real estate market, the Government has repeatedly used the real estate tax policy to regulate the real estate market, but had little effect. How does the real estate taxes affecting housing price and how does the real estate taxes reform affect housing price efficiently has become a hot topic in academic.Firstly, this paper explains the existing property tax system fully and reveals the flaws of the current real estate tax, and then explains the need for property tax reform. Secondly, in theoretical research, the paper used the model of tax shifting and the model of asset price to study the relationship between real estate tax and housing price. In tax-shifting research, the paper analyzed the effects of real estate tax on housing market supply and demand and the effects of real estate tax on housing price in different conditions of supply and demand price elasticity. In asset price research, the effects of real estate holding tax and transaction tax on housing price were analyzed in the sequence of discrete time and continuous time series. Thirdly, in empirical research, the country’s 31 provinces (municipalities and autonomous regions) panel data in 1999-2010 year were employed to study the relationship between the real estate taxes and housing price in the general analysis perspective and consumer demand perspective. In the general analysis perspective, the net effect on the price of real estate taxes considered in the whole market point of view. In view of consumer demand, not only worry about the real estate taxes effects on house prices, but also local public expenditure effects was considered. By this study, the main conclusions go as follows: The China’s real estate taxes had negative effect on housing price in all, but individual tax has a positive effect on housing price;The effects of real estate taxes on housing price are regional differently and the effects in eastern is first, followed by central region and western;Increase local public expenditure will weaken the negative effect of the real estate taxes on housing price.Finally, based on theoretical analysis and empirical results, government’s tax policy and tax reform proposal were given.

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The Study of Overseas M&A of Bank in China

On 25/09/2013, in Finance, by rain

In 2006, with the end of the WTO transition period, China announced to grant national treatment to foreign banks. Foreign banks could compete full equally with domestic commercial banks by establishing subsidiary banks in China. This means that the foreign banks, especially multinational banks like Citibank, Standard Chartered have become strong competitors of Chinese commercial banks. At the same time, the high-quality customers of Chinese commercial banks—-large and medium-sized enterprises are or have been “going out” to open up overseas markets, and explore the road of international operations. In the face of competition from foreign banks and customers’demand for overseas service, international business strategy has become the inevitable choice of Chinese commercial banks. How to improve the operational efficiency of the target banks in overseas M&A is the primary problem that commercial banks in China exploring the international development road faced. Measuring M&A efficiency could serve Chinese banks better in the way of the cross-border M&A entering the international banking industry; enhance the comprehensive competitiveness of Chinese banks in international banking.The main line of argument in this article is:Whether the Chinese commercial banks could improve the efficiency of the target bank by overseas M&A, and how the overseas M&A could improve the efficiency of the target bank. First of all, before the study of M&A efficiency, this article define the basic concept clearly, and analyze motivation of overseas M&A as well as the efficiency theory of bank M&A on the basis of which evaluation system of the target bank is constructed, and evaluation method used in this paper is proposed. Then, five overseas M&A bank as examples are used in the evaluation model to analyze the case and conclude overall efficient in overseas M&A of commercial banks in China, but the prevalence imperfectness in late integration. Finally, the targeted policy recommendations about overseas M&A are suggested for Chinese commercial banks.

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The Internal Control Research of Chinese Financial Enterprises Refinancing Risk

On 25/09/2013, in Finance, by rain

With the world economy continued to improve, the global financial and economic integration has been further strengthened, each country closer cooperation in finance, and coordinate the development, interaction constraints are also more prominent global financial and economic integration has apparently become the subject of the world’s economic development has become the common trend of development of each country. The Greek government announced in October2009, the2009deficit percentage of GDP will reach12.7percent, rather than the original forecast of6%; debt balance share of GDP will be up to113%, far exceeding the Stability and Growth Pact prescribed ceiling of3%and60%, the Greek government worsening financial situation of the Greek stock market crash, the drag on the euro. In April2010, Standard&Poor’s Greek sovereign rating fell to “junk” status, further escalation of the crisis, in May2010, the EU and the IMF agreed to provide assistance to Greece amounted to1100billion euros, the crisis began slowly getting better. Also occurred in November2010in Ireland, followed by the debt crisis, debt crisis in Portugal in April2011. Not long after Italy and Spain have spread the debt problem, which broke out in the debt crisis in Europe. April26,2012, Standard&Poor’s Spain’s credit rating down two notches, saying that in the case of contraction in the economy and the banking sector in trouble, it is expected that the country’s government budget deficit deterioration than previously expected. S&P credit rating of Spain from A cut to BBB+, outlook will also be rated as negative, adding that Spain, the situation could deteriorate further, further deterioration in the European financial environment, lead to Europe’s economy may be second bottom.European debt crisis, many developed and developing countries suffer from this crisis, people realized the importance of financial risk management and manipulation system. Relevant aspects of the system in terms of financial risk have been developed, but there are many internal control problems should be solved. Further enhance and improve relevant aspects of the system, strengthen financial management has become a top priority of China’s financial sector work.Since China joined the WTO, with the rapid development of financial markets, information technology and financial innovation have been greatly improved, the rapid development of financial innovation in various industries around the world, three financial industry in2011China ranked the world’s top20this also makes refinancing in the financial industry to be frequent. In recent years, due to various reasons, there are a certain number of risky financial companies suffered huge losses, fundamentally speaking, China’s financial management system is not perfect, there are many places there is a big loophole, so the financial management the improvement of the system is particularly important.As a result, the internal risk control has become a financial enterprise is extremely important. Internal risk control is a management policy for the enterprise to achieve business objectives, is the production and operation activities to high-efficiency operation of the guarantee to protect the safety and integrity of the enterprise resource to ensure the accuracy of financial accounting information. reliability, consistency, and improve economic efficiency, promote the implementation of internal organizational planning and a series of coordinated measures and procedures general. The outbreak of financial crisis from the past to the present European debt crisis, underscoring the importance of internal risk control of financial enterprises. Therefore, this article named “The internal control research of Chinese financial enterprises refinancing risk “, focusing on the backdrop of the European debt crisis, China’s financial enterprises should be how to deal with internal risk control problems.Around the basic proposition of this article, it’s divided into five chapters, each chapter’s points are as follows:Chapter1:Introduction. This chapter focuses on the European debt crisis, China’s financial enterprises, financing the research background of internal risk control, the significance of the topic, Home and Abroad, research methods and framework for this innovation and inadequate.Chapter2:Theoretical analysis of Chinese financial enterprises refinancing internal risk control. This chapter first describes the internal control concepts and theories, and then describes the relationship between internal risk control and financial risk of internal control and the refinancing of the relevant theory, once again describes the main features of China’s financial enterprises refinancing and manner, and the last describes China’s financial internal risk control framework.Chapter3:Analysis of the status and problems of internal risk control in Chinese financial enterprises refinancing. This chapter first describes the current situation of China’s financial internal control risk, combined with theoretical knowledge of the previous chapter, data collation and qualitative analysis, analysis of China’s financial enterprises refinancing problems in internal risk control system.Chapter4:Financial enterprises refinancing Comparison and Enlightenment of the internal risk control. This chapter describes some developed countries, the financial internal risk control system and development of the control environment, risk mechanisms, characteristics and advantages of the successful experiences of these countries, financial internal risk control, and summarized on improving China’s financial enterprises revelation of internal risk control system.Chapter5:China’s financial enterprises refinancing internal risk control policy recommendations.The final chapter summing up before the concept and arguments put forward their own international financial enterprise policy recommendations, for our country today’s status quo, set to further improve China’s financial enterprises then finance internal risk control of the principle, China’s financial enterprises, re-financing internal the risk control mechanism and management system has many problems, put forward specific proposals from financial enterprises, organizations, internal risk control system and environmental protection system building.

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Study on Rural Financial Development in Poverty Areas of Western

On 25/09/2013, in Finance, by rain

Finance is the core of modern economy,the financial deepening and economicdevelopment,complementary and mutually reinforcing and inseparable. Building anew socialist countryside,urban and rural development, to break the urban-rural dualeconomic structure,promoting the “three rural” Sustainable development can not beseparated from the strong support of the rural financial services. The rural financialreform and development is the premise of the comprehensive development of China’srural economy and security, remodeling and improvement of the rural financialsystem is the key to development and reform of rural finance.The Chinese Communist Third Plenary Session of the policy in favor of building a”modern rural financial system,the rural financial system must have the perfectcompetition in the market structure. Clearly stated in the “12th Five-Year Plan” todeepen reform of rural credit cooperatives to encourage regions where conditionspermit County Community Bank, the development of rural micro-financeorganizations and microfinance,and expand rural effective collateral range.Since the western development, the rural economy of the ethnic minority areas in thewestern region has been considerable development,people’s living standard has beengreatly improved,but the rural financial services are increasingly unable to meet theneeds of rural economic development. The existence of the national rural areas”financial repression” has its universality and particularity. The contradiction betweenthe national rural areas “rural” the huge demand for capital and the supply of ruralfinancial system,”financial deepening” still a large gap and in rural areas,there aremore problems. Therefore,from the current situation of China’s financial system, thewestern minority areas of rural finance is the weakest areas in the entire financialsystem in China,is also the most urgent areas.It is to work in rural finance is about to spread throughout the country, the onlycomprehensive reform of rural finance pilot counties-Tiandong County focus onobject-depth and comprehensive investigation and study, in order to seek someWestern Ethnic Poor areas of rural financial reform and effective methods andmeasures. This article first Tiandong County financial developments, introducing Tiandong County’s economic and social overview of the problems before the pilotreform of rural financial Tiandong County; Secondly,a comprehensive reform ofTiandong County financial analysis: including the pilot reform of policies andmeasures, the main results achieved by the pilot reform,and the existence of the pilotreform; again,the least square method (OLS) on Tiandong economic development andthe factor inputs quantitative relationship between the empirical analysis, regressionanalysis Tiandong County,the main factors that affect economic development;Finally,to the successful completion of the rural financial reform goals and tasks,andbreak a path of financial development in the law of the Tiandong village,and topromote sound and rapid development of rural financial,for the western nationalpoverty region to provide the reference model and the measures and proposals.