Editor's Note
The QJEM is a comprehensive academic journal in the field of economics and management, focusing on the major subject areas, as well as the interaction with other disciplines. The areas covered include accounting, organization and strategy, finance, marketing, economics, data science and artificial intelligence, information systems, public policy, etc. The QJEM Vol. 2, No. 1 has been issued on March, 2023.

1
How to Design Income and Commodity Taxes in a Multi-Sector Economy?—Enlightenment to China’s Tax System Reform

LI Wenjian (School of Economics, Zhejiang University)
WENG Xi (Guanghua School of Management, Peking University)
FU Chunyang (School of Economics, University of Chinese Academy of Social Sciences)
Abstract : In a dual economy with a continuum of endogenous wages, we provide both optimal income tax and commodity tax formulas with sufficient statistics. We treat the sector with higher income and lower substitution elasticity between labor factors as urban areas, while the other one as rural areas. We find that both commodity and income tax depend on wage elasticities with respect to labor inputs. Higher commodity tax rate should be levied on the goods produced by high-ability individual relative intensive sector, which in turn makes income tax flatter. Considering endogenous wages, labor mobility and commodity taxes, we generalize the standard optimal income tax formula. The numerical simulation is based on a survey data on urban and rural household income in China in 2007 and 2013. We find that urban commodity tax is always higher than rural commodity tax, while the difference is relatively smaller in 2013. Besides, given the substitution elasticity between labor factors in urban areas, the difference between the commodity tax rates of urban and rural areas are increasing with the decrease of substitution elasticity in rural area.
Keywords: Optimal Taxation; Tax Structure; General Equilibrium
2
Price Dispersion and Return on Investment—An Empirical Study of the Real Estate Market in Beijing
CHEN Xirong (School of International Trade and Economics, University of International Business and Economics)

SHEN Yifan (School of Economics and Management, Tongji University)
QIN Ziming, ZHU Shenghao (School of International Trade and Economics, University of International Business and Economics)
Abstract: This paper study the heterogeneous returns on investment and the price dispersion in the real estate market, using the pre-owned house transaction data in Beijing from 2008 to 2017. Results show that the returns to real estate investment have significant heterogeneity, and reveal that China’s real estate market has price dispersion. We also find that the distribution of house prices has a fat tail, and calculate the Pareto index. These results have important policy implications in the background of deleveraging and possible implementation of real estate taxes.
Keywords: Housing Price Dispersion; Heterogeneous Returns on Investment; Fat Tail
3
Will Cheap Labor Replace Automation Technology?—Evidence from the UK
LIU Qing (National Academy of Development and Strategy, Renmin University of China)

XIAO Baigao (School of Economics, Renmin University of China)
Abstract: Unlike much of the existing literature, which focuses primarily on the potential for automation technology to replace labor, we believe that progress in automation technology and the labor market are equally important. By taking advantage of the 2004 enlargement of the European Union and the subsequent influx of cheap labor from new member states into the UK, we find that occupations or industries that were more impacted by this influx are less likely to adopt automation equipment. Further analysis indicates that discrimination keeps the wages of immigrant labor below equilibrium, incentivizing firms to substitute automation with less expensive immigrant labor. To eliminate potential endogenous problems, we also use the same shock that Ireland experienced as an instrumental variable. Even when using robot installations as an alternative metric for the application of automation technology, the results remain robust. Our mechanism test reveals a larger substitution effect in occupations where the wage gap between immigrant and local labor is greater. Our findings highlight the importance of labor price in determining the adoption of automation technology, providing a valuable supplement to existing research on the relationship between automation technology and labor. This study also has important policy implications, indicating that in the promotion of intelligent manufacturing with automation as the core, policies relating to labor will, in turn, affect the adoption of automation technology.
Keywords: Cheap Labor; Automation; UK; EU Enlargement
4
Beyond Information: The Display Effect of Price History

ZHU Yongmin, ZHANG Zhe, LI Lingfang (Ivy) (School of Management, Fudan University)
CHEN Yuxin (Business Division, New York University Shanghai)
Abstract: As data visualization has become increasingly common, consumers’ decisions are more likely to be influenced by a visualized reality. In this paper, we demonstrate and explore how the effects of price history attributes on consumer purchase are sensitive to visual display through a series of experiments. The experimental results suggest that the effect of the direction of the last price change is sensitive to both visual magnitude of price change (VMPC) and visual length of time horizon (VLTH), and the effect of price change times is more sensitive to VMPC than to VLTH. Besides, when VMPC is small and VLTH is long so that price changes are less visually salient and less visually relevant to the current price, we find that a longer time horizon under such visual display has significantly positive effect on consumers’ purchase likelihood.
Keywords: Price History; Price Chart; Visualized Reality; Purchase Likelihood
5
The Impact of Matching Fund on Charity-based Online Crowd-funding:Dynamic Analysis and Empirical Evidence

SHEN Ji, YE Lei, WANG Chong (Guanghua School of Management, Peking University)
Abstract: How to attract participation and elicit contributions in charity-based online crowd-funding has remained a challenging problem for a long time. Leveraging on corporate or individual funds to set up a matching fund mechanism has been widely adopted as a popular approach to motivate lenders’ donations. This study examines how the matching fund mechanism affects individual lenders’ contribution, theoretically and empirically. On the one hand, the classical tenet of public economics claims that each individual relies on peers to contribute more and enjoy the project. Hence, an outsider’s contribution via the matching fund mechanism should decrease individual lenders’ contribution due to the “free-riding” problem. On the other hand, the “strategic complements across time” effect in the framework of dynamic provision of public goods results in more contributions from individual lenders. Our theoretical model illustrates that which of the two opposing effects dominates hinges crucially on the intrinsic quality of a project. When the endogenous completion time of a project is short, it has high intrinsic quality and getting matched is more likely to crowd-in individual lenders’ contribution. Otherwise, for a project with low intrinsic quality, getting matched may crowd-out individual lenders’ contribution. Using real-time data from Kiva.org, a well-known charity-based crowd-funding platform, we find that the empirical results provide supportive evidence for the theoretical predictions.
Keywords: Charity-Based Crowd-Funding; Matching Fund; Public Good Provision; Continuous-Time Game; Crowding-in and Crowding-out Effect
6
From Two-sided Market to Multi-sided Market—The Influence of Platform Expansion on its Pricing Strategies

WANG Yong, ZHANG Weiyi (Institute of Economics, School of Social Sciences, Tsinghua University)
YAN Jiaqi (The People’s Bank of China)
Abstract: In contrast to traditional firms, platform firms expand primarily by extending market boarders to attract different types of users. This expansion strategy is affected by the platform’s market power and the affiliation status of their users. This paper studies the influence of platform’s expansion on its pricing strategy in the case of monopoly platform and oligopoly platform. We found that when the platform extends market boarders, the increment in the user scale by the cross-network effect will make the monopolistic platform tend to maintain the price of its original users. Oligopoly platforms, whether the user is single-homed or multi-homed, can attract a larger scale of user group brought by the cross-network effect, although the price of platforms with extended market boarder is higher than that of platforms without extended market boarder.
Keywords: Two-sided Market; Platform; Market Extension; User Affiliation
7
Policy-Driven Innovation—The Case of China

XIAO Mo (Eller College of Management, the University of Arizona)
YUAN Han (School of Business, Sun Yat-sen University)
Abstract: Government policies are often difficult to measure. This is especially true in China, where local governments have numerous, formal or informal, policy tools at their disposal. This paper propose a measure of pro-innovation policy effort by counting the number of articles mentioning “专利” (patent) in each official provincial newspaper and deflating it with a proxy for the number of total articles. We then examine the effect of such policy measures on the patenting activities of listed firms from 2001 to 2010. To deal with policy endogeneity, we adopt an instrumental variable approach that leverages on the possibility that provincial-level disaster relief activities compete for governmental attention and resources devoted to innovation. Our results show that innovation policies increase the number of patent applications filed by listed firms without reducing their quality. This effect is most salient on the extensive margin. Non-state-owned enterprises (SOEs) are more responsive to innovation policies, partly because they are more likely to be on the extensive margin.
Keywords: Innovation Policy; Patents; Local Governments
8
One Ti Multiple Xiang: Environment Change and Organizational Adaptation

ZHANG Jianjun,WANG Tiemin (Guanghua School of Management, Peking University)
WANG Yue (Jesse H.Jones Graduate School of Business,Rice University)
FENG Hanye (Shenzhen Guangzhiyuan Enterprise Management Co., Ltd)
Abstract: How do organizations adapt to environmental change? Borrowing the concept of Ti (essence) and Xiang (faces) from Buddhism and building on the case analysis of Wangsu, we identify the elements of stability and change. The stable elements are established during the process of the firm’s founding and development, including identity, business model and core competency, which compose the Ti, while the Xiang are products or services the firm chooses as an adaptation to the environment. The Ti affects Xiang through enabling and constraining, while the change of Xiang provides feedback to the Ti through reinforcement, enrichment, and adjustment. One Ti multiple Xiang captures the general rule of organizational adaptation.
Keywords: Environment Change; Organizational Adaptation; One Ti and Multiple Xiang; Case Study
9
Public Attention, Environmental Law Enforcement and Pollution Prevention
—A Experiment Based on the Central Environmental Protection Inspections in China

LANG Yongchun (Guanghua School of Management, Peking University; Business School, The University of Hong Kong)
CHEN Yuyu, WANG Yulu (Guanghua School of Management, Peking University)
Abstract: Pollution prevention and control is an important issue facing developing countries. Finding and evaluating effective environmental protection policies is the focus of environmental economics. This paper uses the difference-in-difference method to identify the overall impact and mechanism of the first round of the Central Environmental Protection Inspections (CEPI) in China. We find that the first round of CEPI led to significant improvements in AQI, PM2.5, PM10 and SO2 in the inspected cities, but there were no significant changes in CO, NO2 and O3. CEPI functions through two mechanisms: bottom-up public attention and top-down environmental law enforcement.
Keywords: Central Environmental Protection Inspections; Public Attention; Environmental Law Enforcement
10
Monetary Policy Evolution of Advanced Economies:A Review for 2008-2022

XIAO Xiaolin (Guanghua School of Management, Peking University)
Abstract: This paper reviews the monetary policy evolution of advanced economies during 2008-2022, which is a special period with radical changes, and covers two global crisis: the 2008 Global Finance Crisis and the 2020 Covid-19 Pandemic. This paper provides a comprehensive analysis regarding three dimensions of monetary policy evolution of advanced economies: monetary policy implementation, monetary policy mandates, and policy tools and transmission channels, and particularly unconventional monetary policy like “Quantitative Easing”, conducted by central banks of advanced economies since the 2008 Global Finance Crisis. In the end, The paper also provides inspirations and suggestions to China, based on the multiple challenges and downturn pressures the Chinese economy is facing right now.
Keywords: Monetary Policy Implementation; Unconventional Monetary Policy; Evolution; Inspiration