Citation
Wang, Y. (2015), "Editorial", China Finance Review International, Vol. 5 No. 4. https://doi.org/10.1108/CFRI-07-2015-0114
Publisher
:Emerald Group Publishing Limited
Editorial
Article Type: Editorial From: China Finance Review International, Volume 5, Issue 4.
I am pleased to introduce this issue of China Finance Review International to readers. Four out of five papers in the current issue have Chinese characteristics. Wang (2015) provides the evidence that increases in corporate tax aggressiveness can lead to increases in cash holding. This finding is certainly interesting as corporate tax avoidance and liquidity management are two important dimensions in the area of corporate finance but there is little evidence for their linkages. Another two papers dig out the relationships between return and trading volume in Chinese stock market from different perspectives. The return-volume relationships are an important financial issue because trading volume is a popular technical indicator for return forecasting. Chinese stock markets distinct from developed markets in many aspects. First, irrational investors account for a higher proportion. Qin and Zhu (2015) paper addresses this by investigating the role of heterogeneous investors. Second, Chinese markets are more frequently affected by macroeconomic policies. Wang et al. (2015) take into account this using a Markov regime switching method. They find that the return-volume relationships change significantly after a reform in 2005. Another interesting issue originates from their paper is that since policy changes have so strong effects on stock market, how to better predict Chinese monetary policies? This question can be well addressed in the paper of Wu et al. (2015). They find that introducing the factor of exchange rate, both the implementation effect and prediction ability of Chinese monetary policies improve. Additionally, this issue also includes an interesting paper of Li et al. (2015) on the cross-border merger which is one of the most important ways of international cash flows. The authors build a general model to explain some real-world issues.
I hope you find the papers in this issue as interesting and thought provoking as I did. Thanks for your appreciations in China Finance Review International.
Yudong Wang