| With over ten years' development, China's securities market has become an important and burgeoning one with a considerable scale and active trade volume. But, in comparison with the developed financial market, China's financial system and market structure has not been perfect yet, especially, China's present securities market still adopts long position mechanism. The mechanism is bound to emerge accumulative cost effect. The accumulative cost effect is bound to cause excess speculation of stock market and results in financial risk agglomerating at the exponential speed. Stock market crisis has become an inevitable fact. Having experienced rising suddenly and sharply from 1999 to 2000, China's stock market began descending deeply in 2001. To some extent, the descent is caused by accumulative cost effect.For guaranteeing the national financial safety and protecting from eruption of financial crisis, and in accordance with the characteristic of China's stock market, this paper tries to analyze the unilateral market's operating regulation and the possible economic consequences. In addition, this paper explores the accumulative cost effect of China's capital market with method of qualitative and quantitative analysis, especially, quantitative analysis. Generally speaking, this paper studies the theoretical framework of accumulative cost effect of China's capital market with modern statistical and econometric methods in terms of rational expectation theory and any other related theories. Upon this framework, this paper makes use of real data of China's securities market to analyze the problems of financial risk; bubble economy and stock market cycles that are caused by accumulative cost effect.The paper is divided into five parts:Part one: First it introduces the background and the purpose of this paper; next, it summarizes the related research achievements and theories in and beyond China. Finally, using the related theories and methods, it expounds the research idea and method as well as the innovation of this paper.Part two: It describes what the accumulative cost effect is and draws an accumulative cost function. It also offers special function forms of accumulative cost under different conditions.Part three: It analyses the relationship among accumulative cost effect, financial risk and bubble economy. Long position mechanism of our country causes accumulative cost effect. When accumulating to a certain extent, it will result in financial crisis. This kind of risk that caused by accumulative cost has characteristic itself and further spreads to form a bubble economy, if not being controlled. The paper studies the relationship between accumulative cost effect and bubble economy under boundless credit. In general, under boundless credit, resources are boundless. Institutional investors possess enough capital to control the stock price. So, institutional investors raise the stock price limitlessly in order to cancel the accumulative cost. In this way, the stock bubble is caused and it will endanger the security of national economy.Part four: Continued from part three, this part researches accumulative cost under limited credit. Generally speaking, under limited credit, resources are limited. Institutional investors cannot cancel accumulative cost through raising the stock price limitlessly. When the cash flow chains break, the stock price is sure to drop, this forms the stock market cycle. In order to test and verify the conclusion of theoretical analysis, part four makes use of real data of China's securities market to analyze credit condition's influence on market liquidity and stock market cycle. Not only can positive analysis test and verify theories, it can also depict attributes, transmission process and track of risk as such. Thus, it forms a basic judgment of operational situation of China's securities market.Part five: In the light of the conclusions from the above analysis, and taking our country's practice into consideration, this final part puts forward a few... |
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