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JOURNAL OF ZHEJIANG UNIVERSITY 2014 Vol.44 Number 5
2014, Vol.44 Num.5
Online: 2014-09-10

Article
 
Article
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2014 Vol. 44 (5): 1-4 [Abstract] ( 262 ) [HTML 1KB] [PDF 24892KB] ( 694 )
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2014 Vol. 44 (5): 4- [Abstract] ( 171 ) [HTML 1KB] [PDF 0KB] ( 25 )
5 Philip Pettit
Three Kinds of Freedom

With the distinction between freedom as non-interference and freedom as non-domination, I identify three kinds of freedom, the first psychological or mental, the second ethical or moral, and the third political or social. It is important to distinguish these different ideals of freedom, not just for reasons of clarity, but also for reasons of policy. Just as the robot fits this minimal specification for being an agent, so will most animals, in particular human animals like you and me. We may be rather more versatile in the purposes we pursue, and better equipped in the sources of evidence that shape our representations, but still it remains true that we resemble the robot in normally pursuing those purposes according to those representations. But we human beings differ in one striking respect from the robot, and perhaps from all other animals. We often deliberate in the course of forming our representations and our purposes; we are not confined, like the robot, to responding more or less autonomically to the changes it registers in its environment. Our deliberative capacity is important because, as I shall argue, it is what makes room for the idea of the free will. Deliberation is an activity, sometimes described as reasoning, in which we intentionally think about the things we register in some representations with a view to letting them determine other representations we form, or purposes we endorse, or actions we pursue. Our interest here is in the practical deliberation that helps to shape action. In this deliberative process it is essential that you take each of the options under consideration to represent a live possibility: to be something you might choose. You conduct yourself according to more or less well-understood rules of evidence and argument, validated in exchange with others; these determine what sorts of considerations count in favor of what options, for example, and what weights they have in relation to other considerations. When you think that whether you take one or another option in a choice is up to how your deliberation goes, what you register is that whether you take it is up to you: that is, up to how you conduct yourself in deliberation. But you have to think that you have free will in making the choice. For to think that you have free will is just to think that what you choose is up to you; it is something of which you are in control. On this account, freedom in the will consists in the ability to make deliberatively conducted choices, in particular deliberatively well-conducted choices, you have that ability with respect to a future choice, and you think correctly that you can do this or do that. The difference between freedom in the will and freedom of the will is nicely caught in an analogy with playing the piano. Think of the old joke: ″Can you play the piano?″ ″I dont know, Ive never tried.″ This forces us to distinguish between the ability to play the piano that any normally equipped child or adult possesses and the skill of playing the piano that only comes with practice. Freedom in the will is an ability akin to the piano-playing ability of the normal child or adult. Freedom of the will is a skill akin to that which only the trained pianist achieves. And it is similar to a distinction that Henry Sidgwick took Kant to have overlooked. This is the distinction between autonomy in the sense of an ability and autonomy in the sense of an achievement. According to Sidgwick, Kant sometimes casts autonomy as the ability to reason that marks off human beings from other animals and sometimes as a skill or achievement that only some people exhibit: that of exercising their autonomy properly, resisting the impulses and temptations that would alienate them from themselves. To have freedom in the will is just to be able to exercise deliberative control in whatever choices are available, over whatever options are on offer. But of course you could have such freedom and yet be subject to my will in the matter of which choices are available, which options are on offer and whether you should continue to enjoy such a range of choice. Similarly, to have freedom of the will is to possess the skill of exercising deliberative control over whatever choices are available. But of course you could have such freedom, once again, and yet be subject to me in the same way. The lesson is that we must recognize a third kind of freedom: that which consists in not being subject to anyone else’s will in the exercise of deliberation and choice. This is what I describe as freedom for the will. What does it mean for you to be subject to my will in a given choice? Let the choice be defined by the range of options at your disposal: say doing X, Y or Z. And let it be granted that absent subjection to the will of others, you have all the personal, natural and social resources required for being able to do X or do Y or do Z. The question then is what might make it the case that you are subject to my will — or by extension, the will of any other — in the exercise of that choice. I will certainly subject you to my will if I remove any option in that choice, whether overtly or covertly, preventing you from making it, perhaps by resorting to sheer force or subtle agenda-fixing. Some contemporary thinkers hold that this is essentially the only way in which I can subject you to my will — or, alternatively, interfere in your choice. But their motivation is to make interference into a readily chartable, measureable evil and I think that this is insufficient to support the line they take. For it is surely clear — and is accepted on most sides — that I can also interfere in two other ways. Rather than removing one or another option, I can replace it by a penalized alternative, whether overtly or covertly: I can allow you to choose X or Y, as they are, but replace Z by Z-with-a-penalty. And whether or not I actually remove or replace an option, I can remove or replace it in your perceptions. Assuming I don’t actually remove or replace it, for example, I can misrepresent it, whether by misleading you into thinking it is unavailable or subject to a penalty or by manipulating you into thinking about it in a distorted, unappealing way. Thus there are three distinct modes of interference by means of which I can subject you to my will in a choice: I can remove an option, I can replace an option — in either case you may or may not be aware of what I do — or I can misrepresent an option. These forms of interference can vary in degree, since one or more options may be removed or replaced or misrepresented; the replacement may be more or less radical, depending on how severe the attached penalty is; and the misrepresentation may be more or less resistible, depending on the resources of deception or manipulation deployed. But still they all count as ways in which I may impose myself on you, restricting your capacity to exercise your will — to choose as you wish — among the options that define the choice. Or at least they count as ways in which I may impose myself, assuming that the imposition is not licensed or allowed by you: it is not subject to your own control and in that sense is arbitrary. Unlike the interference that his sailors practice with Ulysses when they keep him bound to the mast, this imposition is arbitrary in the sense of putting another’s will in control. Freedom in the will is presupposed by this account to both the other forms of the ideal. You cannot have freedom of the will without it, since you cannot be skilled in the exercise of an ability you do not have. And you cannot have freedom for the will without it, since you cannot be protected in the exercise of choices that it is not within your capacity to make. But you can have freedom of the will without freedom for the will. And equally you can have freedom for the will without having freedom of the will; no matter how weak-willed you are, there is room and call for enjoying protection against the domination of others. Each of those forms of freedom requires freedom in the will but neither variety requires the other. You can be ethically free and politically vulnerable or politically free and ethically lacking.

2014 Vol. 44 (5): 5-17 [Abstract] ( 1401 ) [HTML 1KB] [PDF 2411KB] ( 1662 )
18 Xu Xiangdong
Isaiah Berlin's Conception of Liberty and Human Nature
No matter how we conceive and make sense of liberty at the level of philosophical reflection,it is our intuition that liberty primarily implies making decisions and choices based on one's own understanding,and being free from others'interference or constraint in acting .The very idea of liberty is thus from the very beginning related to the notion of value :it is not that liberty is needed or required in whatever we are doing or will do,but that it is needed or required only in what matters most to us .It follows that liberty is at least instrumentally valuable . However,further analysis shows that liberty may also be intrinsically valuable to the extent that it helps to cultivate and promote the self-perfection of our nature as human beings .Therefore,so long as we are interested in having a certain goal as that on which we start and pursue our life as a human individual,and undertake to pursue or achieve such a goal through the rational agency of our own,liberty will become indispensable to us . Isaiah Berlin's thinking about liberty almost runs through the whole of his academic career . However,some tensions can be identified in his doctrine of liberty,typically in his seminal and yet highly debated paper″Two Concepts of Liberty″and other related works .Berlin initially held that liberty simply consists in doing whatever one wants to do without being interfered by other agents (including other individuals and social institutions) . However,very soon he came to realize that the understanding of liberty will give rise to an intuitively implausible result :the less one desires,the more freedom one has .To avoid this result,Berlin turned to claim that liberty lies in being capable of freeing from obstacles to one's possible choice or activity .This fact shows that even when Berlin construed liberty in a negative sense,he did not take liberty merely as the power to escape from actual obstacles to one's actual choice or action .In Berlin's view,what he called″negative liberty″is mainly concerned with answering the following question :in what kinds of domain is one permitted (or should one be permitted) to do what one is capable of doing or to become what one wants to be,without being interfered by others ?Given this,it is not difficult to see that if Berlin also included counterfactual choice or action in his conception of negative liberty,this kind of liberty would include not merely the power to escape from all of the actual or possible external obstacles,but also the ability to set goals,deliberate and make choices .It follows,as it seems,that Berlin's conception of negative liberty cannot be so negative as some commentators have thought or suggested . This point needs our attention because it will help us to see the distinction and connection between these two conceptions of liberty as construed by Berlin . According to Berlin,the conception of positive liberty is by and large aimed at answering a quite different question :what is it,or who is it that determines the control or interference that can decide one's doing this rather than doing that ?It can be easily seen from the manner in which Berlin defined positive liberty that the notion of positive liberty bears an essential connection to the idea of autonomy . However,in accordance with an intuitively acceptable understanding of the notion of autonomy,insofar as choice or action is concerned,autonomy largely depends on which part of the agent's self is to be identified as possessing the supreme authority over the agent . The concept of autonomy accordingly presupposes the idea that any actual human individual does not yet possess a perfectly unified psychological structure or personality . However,this idea,properly understood,does not necessarily have any implication for politics .Human nature is imbued with a series of dualistic oppositions,for instance,opposition between sensibility and understanding,or between desire and reason,or between social ideals and personal aspirations,and the like .The issue of autonomy will always exist and persist so long as no perfect harmony or integration has been achieved between our motivational system and our evaluational system .It follows that the aspiration to positive liberty would never cease if there had already been some intelligible connection between the idea of positive liberty and the idea of autonomy .On the basis of a detailed examination of this connection as well as the essential features of human nature,the paper shows that while Berlin had powerful reasons to give a normative priority to negative liberty in the political society and its construction,he did not have to deny that the idea of positive liberty can serve as an important or even indispensable ideal of personal life .
2014 Vol. 44 (5): 18-30 [Abstract] ( 1291 ) [HTML 1KB] [PDF 2748KB] ( 14286 )
31 Zhang Guoqing
Leviathan, Freedom as Non-domination and Its Limits
More than 30 years after Isaiah Berlin gave his famous lecture on “Two Concepts of Liberty” in 1958, Philip Pettit suggested a third concept of liberty, “Freedom as Non-domination.” Pettit wanted to solve a problem that Hobbes encountered in his Leviathan when he tried to construct a theory of contract between the sovereign princes and their subjects (or between the state authority and its citizens), and to remove the 20th century’s anxiety as exposed by Berlin that “when the state power becomes stronger, the people have fewer rights.” Then, has Pettit been successful? It is an issue I want to discuss here. Firstly, Hobbes takes seriously private property, individual rights and security without taking seriously the responsibility of the state authority (or the sovereign princes) in improving the public interests or the common good. How does the state or its government distribute social resources fairly so that every citizen may enjoy his share of social and economical primary goods? It is one of the main subjects John Rawls wanted to explore. A Theory of Justice is a further attempt after Hobbes’ Leviathan at ending the natural law of the jungle. In Rawls’ original position, under the veil of ignorance, when all the parties make a contract as rational members, they don’t take the maximization of their interests as their first aim, but rather the maximum avoidance of the loss of their primary goods. According to Rawls’ conception, the principle of justice as fairness is a reversal of the natural law of the jungle. It is concerned with and regulates every member’s basic rights, liberty and interests. When Robert Nozick suggested that “Individuals have rights and there are things no person or group may do to them without violating their rights” (Nozick, 1974, p. ix), he was trying to replace Rawls’ conception of “primary goods” with his “holdings.” He believed that these holdings are desert, and they should not be interfered, changed or deprived by the state. Secondly, just like Nozick’s theory of “individual rights or holdings,” Pettit’s theory of “the freedom as non-domination” does not challenge Rawls’ theory of primary goods. His theory of freedom as non-domination does not readily apply to the realm of sovereign authority, but in a civil society, there is a lot of room to apply it. Pettit supplemented not only Berlin’s theory of liberty but also Rawls’ theory of primary goods. However, when he argued that the freedom as non-domination is an independent third type of freedom and took it as one of Rawls’ primary goods, Pettit did not prove it on solid ground. Thirdly, Pettit accorded a high status to the freedom as non-domination, and he even took it as the essence of freedom. He thought that in contrast with the freedom as non-interference, only the freedom as non-domination is real freedom and political freedom should be distinguished from social freedom. My view is that, in the political area, there is no space left for the freedom as non-domination; it is only in the social area that there is some room left for that freedom. According to the theory of the freedom as non-domination, there is no social desert for any social member, let alone the obtainment and maintenance of such social desert. So the conclusion of this paper is that even if there is the freedom as non-domination, its scope is very limited.
2014 Vol. 44 (5): 31-39 [Abstract] ( 1049 ) [HTML 1KB] [PDF 2118KB] ( 2129 )
40 Mao Dan Xu Jian
The Three Dimensions in Stoic Political Philosophy

After World War II, scholars came to accept and value stoic philosophy. However, compared with their other knowledge areas, the political philosophy of the stoics has been ignored in a sense, the fundamental reason for which is that the contemporary researchers have been to some extent influenced by Hegel’s view on philosophical history. In other words, with the decline of the city-state politics of ancient Greece, the stoics advocated that every person should withdraw into himself if he wants to seek tranquility and happiness. Therefore, it is necessary for us to draw a new picture of stoic philosophy to better reveal its political characteristics. In Zeno’s Politeia, all the wise in the world are citizens of a megalopolis, where the friendship and the common law were the dominant factors. Thereafter, universality constitutes the basic political dimension of stoic philosophy. Chrysippus claimed that the social impluse makes gods and sages construct together a city of love, which is the cosmos itself, and both are administered by common law. From Cicero’s time onward, it is regulated in cosmos-city that all men live or ought to live under the same canons of natural law, and they must treat each other equally, so that some philanthropy is possible and even fine. Stoic cosmopolitanism not only went well beyond the polis with which any classical political philosophy is concerned, but also profoundly affected the universalism in the Age of Enlightenment. However, the stoics did not develop a positive and revolutionary political tendency because of friendship or philanthropy and law in their cosmopolitanism. Instead, their philosophy has two other political features: reservation and compliance. In Stoa, sages are not only citizens of that ideal city, but also have obligation to participate in the imperfect political life. Nevertheless, unlike the classical political philosophy, stoicism considers practical politics itself as some indifference, so political participation is conditional. According to Seneca, political participation may become really inappropriate if the state suffers from serious corruption or if the sages lack necessary political influence or physical fitness. The reserved nature of stoic politics can also be found in its opposition to passionate participation in politics. Again in Seneca’s view, anger is the most dangerous passion, since it alone may bring catastrophes to the whole country. Anger can’t be controlled in the Aristotelian way; it must be eradicated thoroughly. Furthermore, reservation implies that what philosophers really care about is their moral progress rather than the outcome of things, the latter being decided by fate. Finally, compliance is primarily demonstrated in the stoic attitude to the second-good regime. Compliance is in theory the inevitable result of the stoic view of fate; in practice, it is related to the interactive relationship between the Stoic School and Roman power back in as early as the 2nd century BC. First, the Hellenistic Stoa had refused to acknowledge the second-good regime, and preferred to openly and sharply criticize the practical polity by resorting to the best-city pattern. But at the level of the whole universe, all the evils were considered to be in accord with the divine will, and hence there is no contradiction between critiquing existing societies and accepting the destiny. After entering Rome, however, the stoic philosophers had to gradually accept their state as the greatest ruler in the real world, and even claimed that its polity was the so-called second-good model.

2014 Vol. 44 (5): 40-49 [Abstract] ( 1088 ) [HTML 1KB] [PDF 2280KB] ( 8272 )
50 Wu Zongjie Yao Yuanyuan
The Implication of Zhou Dao to the Search of Meanings of the Grand Canal: Confucian Orthodoxy of Chinese Cultural Heritage

To inscribe the Grand Canal on the World Heritage List is facing challenges in the search and designation of its heritage meanings. Dominated by the Western-originated Authorized Heritage Discourse (AHD), efforts in giving meanings to the material remains of the canal failed in making sense of its fundamental cultural value. How the ancient Chinese spoke of and understood the Grand Canal in Confucian classical discourse are glossed over by globalized expressions such as tangible/intangible heritage, linear heritage or man-made water project, etc. In this paper, we attempt to rethink the value, representations, and meanings of the Great Canal as Chinese waterway cultural heritage beyond the manipulation of AHD. We turn to Zhou Dao, the road system of Zhou Dynasty (1046-256 BC), addressing how the ancient meanings as recorded in varied classical texts about this road system may shed light on the meaning-making of the Grand Canal in the present socio-political contexts. Firstly, Zhou Dao was not merely channels of communication or systems of transportation, but also and more importantly a ritual nexus that connected the sage-kings with their people in the kingdoms. It reflected the art of political governance through exemplifying virtues to educate the populace, and could be considered a ritual space of Dezhen (benevolent governance). This cultural significance of Zhou Dao may be helpful for us to reinterpret the Grand Canal beyond a means of communication. The earliest section of the canal Hangou constructed by the lord of the Wu State during 722-481 BC, was aimed at establishing the ritual order of Zhou Dynasty. In later generation, both Emperor Kangxi and Emperor Qianlong regarded their travel along the Grand Canal as a way of examining the custom and cultures of the people and practicing the ritual politics following the ideal sage-kings. This political vision was expressed by a poetic description of Zhou Dao in the Confucian The Book of Songs, both physically and spiritually depicted as the following: ″The way to Zhou is level like a whetstone, And straight as an arrow. The officers tread it, And the lower people see it.″ Secondly, underlying the construction of Zhou Dao, a unique Chinese way of conceptualizing space was at work, i.e., an understanding of the governance from the center of goodness to the four directions (Sifang Guan). Through the road system, the Dao and virtue embodied in the sage-kings symbolically flows from the center to the peripheral, from the sage-kings to the people. The ritual governance across the whole nation was materialized through its waterway as well as its road systems. From this cultural perspective of geopolitics, the meanings of the Grand Canal may need to be reinterpreted from Confucian ritual perspective of fostering qin (love) among the kings and the people. Emperor Yu's taming of the flood, which can be seen as the precursor of canal making and the moral access to the benevolent government of Wang Dao. Through Wufu, the five circles of love, around the kings, both geographically and culturally, the virtue-based spatial governance of the Grand Canal is constructed. With this ritual centre for people to respect, to follow and to be attracted toward, both Zhou Dao and the Grand Canal functioned to establish spiritual bonds within the four seas, based upon love and benevolence. Thirdly, the transmitting and remaking the meanings of the Zhou Dao across thousands of years deserves special attention in its uses of the past. The term Zhou Dao is derived from The Book of Songs. Through generations of diverse interpretation, annotation and edition of the Confucian heritage as text, Zhou Dao, operating as the source of meanings, transmitted the Way of Antiquity to inspire people how to manage and use waterway or road systems. From the endless interpretation of Confucian Orthodox, new meanings can spring and illuminate the present predicaments. As a result, the recordations of the Grand Canal scattered in divergent Confucian Classics, historical records, philosophical writings and other miscellaneous works. Understanding the indigenous meanings of the Grand Canal should not only rely on the factual interpretation of these recordations, but also the employment and inheritance of the Confucian Orthodox, which is a heritage practice by means of harnessing the past to create the future. With the interpretation of Zhou Dao in The Book of Songs, Yu Gong in The Book of History, and Hangou in The Commentary of Zuo, we seek to get the indigenous insights of the Grand Canal heritage in the perspective of Confucian Classics, and also expand the humanistic concern of Zhou Dao and the Grand Canal to the management of modern traffic and logistic systems. The paper is significant in that it stimulates us to dig deeply into the cultural meanings of Chinese heritage through careful studies of ancient texts so as to make the past relevant and reviving in the use of heritage today.

2014 Vol. 44 (5): 50-62 [Abstract] ( 811 ) [HTML 1KB] [PDF 3780KB] ( 1193 )
63 Wang Xiaochao
On the Root and Primitive Significance of Greek eimi
Language is the basic element of the development of culture, and is also the basic component of the theoretical philosophy. The Greek word eimi is such a gene of Western philosophy. It attracted great attentions of the Chinese philosophical scholars in the long-lasting discussions about ''Being,'' because a serial of philosophical and metaphysical problems in the later Western history, and even some fundamental problems of modern Chinese philosophy, originated from this word. Greek language emerged before 13th century B.C.. In the 17th - late 18th centuries, linguists assumed that Indian and European languages originated from a common primitive language, the Proto-Indo-European language, and thus Greek could be traced back to this primitive language. Different from Chinese language or other non-Indo-European languages, Greek is an inflected language, whose grammar is a specific assembly of forms of thinking, structures, inflections and suffixes. In the earlier discussions of the academic circles, some scholars confused the root and the stem of eimi, and some even advocated -re-inventing Chinese translations for eimi according to its inflections as a copula. In fact, ''root'' is a concept of etymology but ''stem'' is that of morphology. Words belonging to Indo-European language are assumed to have common sources which are rooted in proto-Indo-European. If we can clarify the root of eimi, then we can also apprehend the primitive significance of eimi. It is generally recognized that eimi has two closely related roots, es- and bhu-, which are ancient and independent notional verbs, including the meaning of ''to exist in somewhere''. C. H. Kahn holds that only es- is the only root of eimi, while bhu- is the root of verbs of ''to become,'' or ''to grow''. Despite the arguments on how many roots are involved, it is clear that eimi has more than one significance of ''to be'' (as a copula).  One of the oldest significances of the root es- is to signify location, meaning to occupy a position in some place, from which other general significances were derived. Many linguists believe that the independent and existential usage of es- is more primitive than its copula usage which is later and derivative. This dichotomy also influences the understanding of ''Being'' in the English-speaking world. It is doubtable of C. H. Khan's attempt to determine the primitiveness of eimi as a copula by the statistical frequency of it in Homer's works. To settle this problem, the genealogical method is more reliable. The emergence of copula is a later fact (than that of notional verb) in all sorts of national languages, and it is also a symbol of human's mind stepping into the logical stage from pre-logical stage.
2014 Vol. 44 (5): 63-68 [Abstract] ( 970 ) [HTML 1KB] [PDF 1442KB] ( 2361 )
69 Fan Dingliang Lv Yimin
The Historical Social Science :The Rise of the Leader of West German Historiographical Schools

The″Historical Social Science School″of West Germany,which mainly deals with critical social history,experienced its rapid rise in the 1970s .Besides the breakthrough in historiographical thoughts of its leading figures,the smooth operation of relevant academic activities also contributed to the rise of this School . There were three major driving forces behind its emergence,expansion and schooling . Firstly,Bielefeld University,as an institutional center,provided the organizational framework for the new historiographical school .Founded in 1969 and thus free of the shackles of the conservative tradition,Bielefeld University dedicated to facilitating the interdisciplinary research of humanities and social sciences and served as an ideal platform for the Historical Social Science School to carry out academic activities .In such a harmonious atmosphere,Bielefeld's historians turned the university into a center of communication network and the largest professional training base for the School .Secondly,the Vandenhoeck & Ruprecht press (V&R),as a social partner,strongly supported the academic publishing of the School .The V&R had enjoyed certain popularity within the academic circle of history and had no obvious political tendencies,which met the requirements of the historians of the new school .On the other hand,the V&R's editors also wanted to exploit the market for books on history . Therefore,it is natural and easy for both sides to be in agreement .As a result,the three most representative works of the School were,and are,all published by the V&R .The cooperation mode between the V&R and the Historical Social Science School presented brand new features .The former became the first German press that built its image by echoing some kind of new historiographical trends while the latter became the first German historiographical school that entered into such an intimate relationship with a certain press that it labeled with its own name .Thirdly,the series Kritische Studien zur Geschichtswissenschaf t and the journal Geschichte und Gesellschaf t,as showcases for thoughts,in an effective way promoted internally the cohesion and communication as well as externally the dissemination of the Historical Social Science School .In terms of the series Kritische Studien zur Geschichtswissenschaf t,its lineament was deeply influenced by the editor-in-chief's research areas,academic viewpoints and work networks as well as his personal relationships .It brought many research findings into the open,filled the gaps in the studies of social structures,social progresses and social groups,and thus helped the critical social history expand the boundaries and take root in the science of history . The journal Geschichte und Gesellschaf t,on the other hand,is not only a remarkable result of the historiographical reform after the Second World War in West Germany,but also a noticeable symbol of the establishment of discourse power of the Historical Social Science School .At the same time of pointing the way for the School,this journal also built a fixed communication platform for the members and thereby helped them establish and expand their own academic community .By taking advantage of these two different types of publishing,namely the book series and journals,this School formed an active editor-and-author circle which furthered its own continuous development . In a word,relying on its own institutional and social resources,the Historical Social Science School accumulated academic capital,formed academic communication networks,won itself honor,reputation and influence,and finally became the leader among West German historiographical schools . A close look at the Historical Social Science School from the perspectives of specialization and institutionalization reveals that external factors like research institutions,academic publications and professional journals play a vital role in the development of historiographical schools .

2014 Vol. 44 (5): 69-79 [Abstract] ( 847 ) [HTML 1KB] [PDF 3873KB] ( 1499 )
80 Chen Minghua
Power Transformation and the Response of New Religions: A Survey Focus on Site Dispute of Xuzhou Red Swastika(1921-1936)

The development of new religions had close connection with the local political power. In early period of Republic of China, the prosperity of some new religions could not be separated with the support of government officials and local powerful gentries and merchants. With the promotion of these officials, these new religions could pass the accreditation of government to get legitimacy. Meanwhile, those new religions were encouraged to establish branches throughout the country. However, once the old government was replaced, such kind of development pattern would be challenged. With the advance of the Northern Expedition, the old bureaucrats and gentries were impacted in some degree under the control of Nationalist Party. In terms of ideology, the new regime was hostile to all kinds of new religions. Thus without the protection from local political power, the new religions faced great challenges, and some of them failed to keep the house where they carried out various group activities. Therefore, how to validly keep the physical space for group activities became one of the key issues of new religions to resume their activities. In this case study of the site dispute of red swastika in Xuzhou, we explored how Red Swastika kept its own ''living space'' under the rules of Nationalist Party.  When Red Swastika (also ''Yuanhui'') was founded in Xuzhou, with the support from local gentries and merchants, it rapidly settled down in Zhang Xun Shrine, which had been the public property of Xuzhou government. However, with the establishment of Nanjing Government, new religions like Red Swastika were banned nationwide. Although luckily, Xuzhou Yuanhui was not be banned, its site, Zhang Xun Shrine, was reallocated, which was then taken as the schoolhouse of Affiliated Experimental Primary School of Girls High School Xuzhou (referred to GHSEPS). Xuzhou Yuanhui had to move to Diaolongbei part in the north of the Zhang Xun Shrine. Facing the adverse situation caused by the replacement of political power, Xuzhou Yuanhui and other organizations of Red Swastika were seeking new protection power actively. On the one hand, Yuanhui was constantly establishing relationship with military power of Nationalist Party and trying hard to get their supports through penetrating the battlefield relief system. On the other hand, Yuanhui actively joined the relief system of Nationalist Government as a charity organization, to tie the living conditions of each branches of Yuanhui with relief efficiency of Nationalist Government. As result, the new religion Red Swastika accomplished ''charity institutionalization'' successfully. With all above efforts, when property dispute happened between the branches of Yuanhui and the Nationalist Party or other organizations, Yuanhui could get the supports from relevant departments especially when they hold sufficient property evidence. The conflict between the Yuanhui to the Nationalist Party or certain other departments might become the benefit game among different government departments. Therefore, the risk of being impacted was reduced. When the President of GHSEPS tried to force Xuzhou Yuanhui to leave Diaolongbei, Yuanhui asked for the help of the finance department in Jiangsu province and the Ministry of Finance, and finally got their supports to ensure the right of belonging to the Diaolongbei site. Hereafter, with the successful experience of Xuzhou Yuanhui, other Yuanhui(s) not only improved the efficiency of charity activities and cooperated with the government in relief actions, but also encouraged the branches to purchase the real estate with property certifications to ensure retaining a ''living space'' under the Party-state system.

2014 Vol. 44 (5): 80-96 [Abstract] ( 690 ) [HTML 1KB] [PDF 4340KB] ( 2838 )
97 Wu Xiaobo Chen Ying
The Influence of SMEs' Organizational Ambidexterity on Performance

Organizational ambidexterity has become increasingly important in both management practices and academic researches. Although ambidexterity has addressed pursuing exploration and exploitation simultaneously in order to realize their complementary effect, there are two limits among the existing researches. Firstly, the meanings of exploration and exploitation have remained obscure. While exploration and exploitation are the core concepts of organizational ambidexterity, they have been put forward as two ways of organizational learning. Based on this, scholars have treated organizational ambidexterity as balancing the learning of technical knowledge and market knowledge respectively, leaving the interaction between these two domains underexplored. Secondly, the boundary of organizational ambidexterity calls for further understanding. Derived from the structur separation of big companies in Western countries, the mechanism of how to achieve organizational ambidexterity has been the focus in academic researches. In addition to structural ambidexterity, other scholars have discussed context ambidexterity and leadership ambidexterity as well. However, it is difficult for small-medium enterprises (SMEs) to achieve ambidexterity by these mechanisms. Moreover, pursuing exploration and exploitation simultaneously could even bring about the resource burden and internal conflict. In consequence, the empirical results about whether SMEs’ organizational ambidexterity is beneficial or not have been inconsistent. To overcome the above-mentioned shortcomings, this paper aims at exploring the effects of SMEs’ three strategies, i.e. specialization, single domain ambidexterity and cross-domain ambidexterity, on their performance. Specifically, the exploration and exploitation in this paper are two different ways of learning concurrently existing in the technical domain and the market domain. SMEs may explore or exploit both domains, and such kind of exploration and exploitation are termed as specialization strategy. While single domain ambidexterity means SMEs pursue exploration and exploitation simultaneously within the technical or market domain, cross-domain ambidexterity stands for balancing exploration and exploitation between domains, i.e., “technology exploration and market exploitation” or “technology exploitation and market exploration.” Based on a survey of 197 SMEs, the results reveal the different effects of the three strategies above. Firstly, SMEs’ specialization and cross-domain ambidexterity are positively associated with performance. Secondly, as to the single domain organizational ambidexterity, market domain ambidexterity is negatively associated with performance. Thirdly, the ambidexterity in the technical domain does not have any significant effect on performance. The Wald coefficient test illustrates a framework of how to balance exploration and exploitation for SMEs. On a whole, the results of this research imply that the single domain ambidexterity does not benefit SMEs. On the contrary, cross-domain ambidexterity is a source of competitive advantage.

2014 Vol. 44 (5): 97-109 [Abstract] ( 693 ) [HTML 1KB] [PDF 2337KB] ( 1391 )
110 Liu Jingjiang Liu Bo
Effect of Situational Regulatory Focus, Immediate Emotion and Need for Cognition on Decisions for Technological Entrepreneurship

Scholars have formed a general consensus that entrepreneurs’ cognition, motivation and emotion influence their entrepreneurial process. Yet, existing knowledge on entrepreneurial decision-making behavior remains incomplete because little empirical evidence is known about how situational regulatory focus, immediate emotion and need for cognition jointly affect individual decision-making of technological entrepreneurship. According to the exploration-exploitation framework built by March (1991), technological entrepreneurship can be divided into two types: exploration-oriented technological entrepreneurship, and exploitation-oriented technological entrepreneurship. The goal of this study is therefore to examine the joint effect of situational regulatory focus, immediate emotion and need for cognition on individual decision-making of the two types of technological entrepreneurship. In this study, a 2 (situational regulatory focus: promotion vs prevention) × 2 (immediate emotion: negative vs positive) × 2 (need for cognition: high vs low) between-subject experiment was designed. Two dependent variables of the experiment are: the propensity of individuals to act on exploration-oriented technological entrepreneurship, and the propensity of individuals to act on exploitation-oriented technological entrepreneurship. A total of 80 undergraduate students participated in the experiment. The participants were asked to describe their ideal and ought selves to induce their promotion focus and prevention focus, respectively. They were also asked to see different film clips to induce their negative and positive emotions. This study also worked out its own decision-making scenarios for the two types of technological entrepreneurship. A multivariate analysis of variance (MANOVA) was employed in this study. The results revealed that individuals with promotion regulatory focus demonstrated a higher propensity to act on both exploration- and exploitation-oriented technological entrepreneurships than those with prevention regulatory focus. Individuals with positive emotion demonstrated a higher propensity to act on exploration-oriented technological entrepreneurship than those with negative emotion. Individuals with a high need for cognition demonstrated a higher propensity to act on both exploration- and exploitation-oriented technological entrepreneurships than those with a low need for cognition. The interactive effect of situational regulatory focus and immediate emotion significantly affected the propensity of individuals to act on exploration-oriented technological entrepreneurship, but it did not significantly affect their propensity to act on exploitation-oriented technological entrepreneurship. The interactive effect of immediate emotion and need for cognition significantly affected the propensity of individuals to act on exploitation-oriented technological entrepreneurship, but it did not significantly affect their propensity to act on exploration-oriented technological entrepreneurship. The most important theoretical contribution of this study is to help answer the question “why some people show a higher propensity to act on exploration- and/or exploitation-oriented technological entrepreneurship than others.” This study offers a more nuanced understanding of the individual decision-making behavior of the two types of technological entrepreneurship by focusing on the three critical but previously underexplored drivers (i.e., situational regulatory focus, immediate emotion and need for cognition). In addition to enhancing the current understanding of the effect of situational regulatory focus, immediate emotion and need for cognition on risk-taking behavior, this study provides an important theoretical insight into entrepreneurial decision-making behavior. This study has also taken one step forward in advancing research on regulatory focus, emotion, need for cognition, and entrepreneurial decisions, thereby stimulating more future research in these fields.

2014 Vol. 44 (5): 110-120 [Abstract] ( 737 ) [HTML 1KB] [PDF 1860KB] ( 1571 )
121 Qian Hongdao
2014 Vol. 44 (5): 121-123 [Abstract] ( 286 ) [HTML 1KB] [PDF 1078KB] ( 1019 )
124 Qian Hongdao Cui He
The Solution to the Problem of Objectivity of Empirical Legal Research in China : The Revelation of Max Weber's Methodology on Social Sciences

Research studies on the Rule of Law Index, the Judicial Transparency Index and the E-Government Development Index suggested that the empirical research methodology is practically being applied in Chinese legal studies with a strong presence and stance. The extensiveness of legal research objects determines the inevitability of the application of empirical research methodology while the function of legal theory to deconstruct law determines the presence of diverse legal research methodologies. The empirical research methodology not only compensates for the deficiencies of legal research methodologies in China, but also is more closely geared to the demand for the practice of rule of law. The China Rule of Law School of Practice, which takes the empirical approach towards its research, has increasingly drawn public attention. Chinese legal research methodologies are in the period of transition and empirical legal research methodology will become a conventional paradigm of legal research in China. Nevertheless, some scholars have reservations on the objectivity of empirical legal research methodology in terms of its subject, object and the shortcomings stemming from its quantitative and qualitative analysis. The solution to the problem of objectivity of empirical legal research can be inspired by Max Weber as his research on the objectivity of social science is typical. Weber took the view that the humanities and social sciences can be ″value free.″ The ″objectivity″ which Weber argued for is premised on value relevance, based on objective probability, and achieved by the application and transcendence of the ideal type. It is inevitable to apply the social science research methodology to legal research because of its objectivity and this inevitable application is due to the extensiveness of objects in legal research and the role of legal studies to criticize the law. The basic standpoint of the China Rule of Law School of Practice does not exclude the mainstream normative research|rather, it claims that two approaches complement each other. To achieve the ″objectivity″ of Weber's methodology in the empirical legal research in China, we should take China's current situation into account in response to Weber's methodology of social sciences. Firstly, we should correctly deal with the relationship between value relevance and value free while removing false value free. Secondly, we should explore the objective probability of causation in legal phenomena. Thirdly, we should solve the specific problems of objectivity in quantitative and qualitative research. The practical solution is to put emphasis both on verification and falsification, and on the accumulation of references and bibliography, and the logic of understanding and its practical application. It is the aim of China Rule of Law School of Practice to achieve innovation and transcendence on the foundation of Weber's methodology.  Weber has already provided a logic of explanation for empirical legal research in China. This kind of logic is a way to demonstrate the objectivity of the empirical research method. Chinese legal research should have its own unique features as far as empirical research is concerned. The China Rule of Law School of Practice has demonstrated the prospect of legal empirical research in China from one perspective. The unique research methodology advocated by the China Rule of Law School of Practice is based on practice, empirical evidence and experiments, which is beneficial to the exploration of the developmental path and the theoretical system of the Rule of Law in China.

2014 Vol. 44 (5): 124-138 [Abstract] ( 853 ) [HTML 1KB] [PDF 4257KB] ( 1852 )
139 Xu Chuanxi
From Practical Rationality to Rational Practice: Comparison, Comparative Law and the Practice of Rule of Law
Although they belong to different academic disciplines, anthropology and comparative law share a crucially important feature: comparison. They both focus on the study of the Other, so as to better understand the Self. The basic reason for which comparison is significant is: all individual life and human activity are a process of experience and trial and error; in order for the individual and ethnic group to survive and develop, we must pay attention to and study the Other, learning its experiences and avoiding its missteps. With respect to law, the legal systems, organizations, behaviors and notions of different ethnic groups depend primarily on and reflect such groups' experience, trial and error. In this regard, comparative law can enable us to learn lessons from other groups' experience, trial and error, remedy our own shortcomings, and thus benefit the progression of human activity from practical rationality to rational practice. Such an emphasis on practical rationality and rational practice coincides with such mainstream American schools of thought as pragmatism, as represented by Charles Sanders Peirce, William James and John Dewey. In the field of comparative law, because of its focus on specific matters, comparison within the branches of law best reflects the important transition from practical rationality to rational practice, and is thus in urgent need of establishment and reinforcement, so as to substantially help establish the rule of law. This paper then focuses on explaining the trend of development of China's practice of rule of law, namely, its transition from practical rationality to rational practice, and points out that an emphasis on practice is not only in accord with the gist of Marxist philosophy, but also agrees with China's long-standing cultural tradition. Members of the newly-emergent China Rule of Law School of Practice have devoted crucial attention to and/or participated actively in China's practice of rule of law. Aspiring to find an ideal road for China to realize the rule of law, this School has been focusing on China's practice of rule of law, with such methods as experiment and empirical research. With such characteristics, this School is in obvious agreement with American pragmatism, and therefore should pay close attention to and learn from the latter during its process of development and maturation. Such key words in this paper, including practical rationality and rational practice, should also become key notions of this School. As an academic community that wishes to make a genuine contribution to China's legal development, the major historical responsibility of this School should be to rationalize China's practice of rule of law. This will require this School to place greater emphasis on developing practical rationality and on decreasing or even eliminating blind, meaningless trial and error through induction, summary and design (including top-level design as well as comparison with the rule of law practice and theory of other countries or regions).
2014 Vol. 44 (5): 139-148 [Abstract] ( 931 ) [HTML 1KB] [PDF 2213KB] ( 1479 )
149 Chen Jianjun Yang Fei
Human Capital Heterogeneity and Regional Industrial Upgrading: An Analysis Based on the Latest Research Literature

At the higher stage of economic development,employee will be more concerned about non-economic factors.This increasingly highlights the importance of human capital heterogeneity, which is reflected on individual characteristics by differences in skills,education and social status,and on regional characteristics by differences in quantity,quality and structure. Human capital investment and labor market segmentation are two sources of human capital heterogeneity. The role of human capital investment is to improve the skill levels of human capital. It will affect the overall structure and heterogeneity of human capital. Labor market segmentation will act on employee selection and human capital flows, which cannot be ignored in site selection of firms and regional industrial upgrading. In the framework of new economic geography, the heterogeneity of human capital reflects on the firm's cost function of production and the consumer's utility function, changing the spatial distribution of the industry, and leading to human capital intensity and industrial agglomeration.  Human capital heterogeneity promotes regional industrial upgrading by technological progress and regional industrial structure optimization. Human capital level determines regional technology selection, which in turn determines the path of technology progress. Human capital has threshold effect and can be used to measure the potential of regional industrial upgrading. The higher the level of human capital,the more favorable it is for independent R&D and industrial structure conversion. Human capital has different effects on the development of three industries. The higher the level of human capital,the faster the pace of the development of tertiary industry. Whether the type and structure of human capital dynamically match with industrial structure determines the effect of industrial structure optimization. Raising the level of human capital is bound to create more advanced types of human capital, bringing the growth of new industrial forms. Human capital structure optimization also helps industrial structure optimization. Current research on human capital heterogeneity,to be specific, its role on regional industrial upgrading is still in its infancy and therefore there is still much room for research. First,labor market segmentation brings in new heterogeneity of human capital. We should study how to eliminate labor market segmentation,and give full play to the role of different types of human capital on industrial upgrading. Second,different types of human capital maybe have different optimal proportions in the economy. There should be an optimal scale of investment for different types of human capital in the actual economic system. Third,the study of the roles of different types of human capital in regional industrial upgrading has significant value for the performance of regional human capital and the optimization of industrial structure and in the balance of different types of human capital investment as well. Finally,the effect of the spatial economy brought by different human capitals will have an impact on the economic development of adjacent areas. We should explore the mechanisms for inter-provincial coordination and interaction of human capital to achieve industry gradient transfer and industrial upgrading in the Chinese context of huge gaps between regions in their development and natural resources.

2014 Vol. 44 (5): 149-160 [Abstract] ( 720 ) [HTML 1KB] [PDF 2328KB] ( 2277 )
161 Liu Zhijun Wang Hong
Influential Factors on the Rate of Medical Insurance Participation of Migrant Population: An Analysis Based on China National Monitoring Data of Migrant Population

Currently, the purchase of medical insurance for the migrant population in China is mostly voluntary. As a result, the rate of their medical insurance participation has been relatively low and there exists a great internal disparity. The influential factors involving government, society and migrants themselves are all likely to have an impact on their actual participation in medical insurance.. Previous studies have yielded different and often conflicting conclusions about the specific effects of these factors. In order to find the truth and clarify the differences, the present study, based on the 2011-2012 National Monitoring Data of the Migrant Population, conducted a comparatively meticulous analysis of the factors influencing the medical insurance participation of migrants by means of descriptive statistics, cross-over analysis, logistic model analysis and multi-level analysis. The results are as follows: (1) The overall rate of medical insurance participation of the migrant population is about 69% while the rate of urban medical insurance participation is about 26%. (2) Overall, the rate of medical insurance participation for migrants is not high enough, and there is a large internal differentiation with an obvious Matthew Effect. Among them, especially those with low education or low income laid-off workers, people having no fixed jobs, housewives and migrant children, or those engaged in catering, housekeeping, domestic decoration, agriculture, forestry, animal husbandry, fishery and irrigation, have an obviously low rate of medical insurance. (3) The rate of insurance participation is significantly related with gender, age, marital status and other demographic characteristics, but their impacts are diverse. (4) The rate of participation is also significantly related with migrants’ family size, migration experience, willingness to settle down and their host provinces. (5) The migrants’ social participation and integration has a significant positive effect on their joining medical insurance, especially urban medical insurance with higher benefit. (6) The greater the proportion of migrant population in a community, the greater disparity in the rate of urban medical insurance participation among different genders, marital statuses, employment statuses and industries, and the smaller disparity among different occupations. (7) The quality of service and assistance provided by the community has a double effect on relations between the rate of medical insurance participation and the contributing factors. That is to say, the higher the quality, the stronger the correlation between the rate of urban medical insurance participation and the migrants’ education and their household registration type, and the smaller the difference among different employment statuses. Based on these findings, we argue that the rate of insurance participation should be examined from the community perspective as well as the individual perspective. Accordingly, several suggestions are proposed to improve the rate. (1) The service and assistance from community should go to migrants with special difficulties, especially those with low education or low income, and those unemployed or engaged in farming, construction, catering and retail. (2) The communities concerned should launch humanized propaganda and organize information activities related to medical insurance, especially communities with more migrants than residents, villages–in-city, communities in suburban areas, communities of small enterprise clusters and construction sites. (3) Improve and reform the content and methods of community service so as to attract migrants to participate in the self-management and self-service of the community. (4) Reform the blueprint of medical insurance system to increase the coverage of migrants’ unemployed family members; probe into the occupation-biased medical insurance policy to protect the medical insurance right for the most vulnerable migrants; and gradually balance the benefit rates among different types of medical insurance and eventually integrate all kinds of medical insurance at the national level.

2014 Vol. 44 (5): 161-174 [Abstract] ( 1298 ) [HTML 1KB] [PDF 2505KB] ( 10847 )
175 Tang Zhaoxi Xiao Wen
Technology Spillover, Energy-saving, Emission-reducing and Social Welfare: A Multi-stage Oligopolistic Game Model on CFP with Typical Competitive Strategies

China has become the country with the largest total energy consumption nowadays,and is also one of the largest county of coal reserves, coal-fired power generation capacity and electricity production in the world. Chinese regional electric power market structure, which seems to be oligopolistic competitive one, shows an important characteristic in the process of the market-oriented reform of Chinese electric power system. For thermal power firms such as coal-fired plants(CFP), one of the most important production decisions to make is how to allocate the operating costs among fuel costs, innovation expenditures for energy saving and those for environmental protection in order to achieve firms’ maximum profits and reduce pollutant emissions as well. The purpose of this paper is to study the market equilibrium, its influence factors and welfare implications of those decisions, and to show the policy implications which may throw light on the market-oriented reform of Chinese electric power system at present.  Based on D’Aspremont & Jacquemin (1988) classic model, we build a two-stage dynamic game model to examine CFP’s decisions in an oligopolistic market structure. On one hand, our paper both considers the firms’ innovation cost and technology spillover in the basic model. On the other hand, different from previous studies, we distinguish the heterogeneous innovations, according to the different innovation mechanism between energy-saving innovation andemission-reducing innovation in every CFP. This paper assumes that energy-saving innovation which reduces the marginal production cost and increase the firm profit would directly affect the CFP’s decisions, and this kind of innovation would also lower the resource consumption and be beneficial to the sustainable development of the economy. But for emission-reducing innovation, the environmental protection measure applied by the CFP necessary to the whole social welfare would reduce the short-run profit of the firm. Based on these two kinds of innovations above we construct the cost function of the firm in our dynamic game model. We solve and discuss CFP’s optimal innovation investment and optimal output of the dynamic equilibrium under three different typical competitive strategies respectively, examine the effects with respect to the ratio of innovation investments for energy-saving and for emission-reducing and the degree of technology spillovers. The main finding of comparative analyses is: (1) the optimal innovation investment and optimal output of the dynamic equilibrium both increase while the ratio of innovation investments for energy-saving and for emission-reducing grows. (2) the optimal innovation and optimal output of the dynamic equilibrium may both be impacted by the degree of technology spillovers but in different directions. We analyze the social welfare by comparing each equilibrium level of innovation and output under three different social welfare functions. First we define three kinds of social welfare functions respectively, (1) considering only the consumer surplus and the producer surplus, (2) consideringthe consumer surplus, the producer surplus, and the level of emission-reducing innovation, and (3) considering the consumer surplus, the producer surplus, the level of emission-reducing innovation and its spillover. The social welfare criterion we set is the distance from the social optimum level of innovation and output corresponding to the relevant social welfare function to the innovation and output of dynamic equilibrium with three different typical competitive strategies respectively. The finding of welfare analysis is that, no matter whether it is for the final product market or for the innovation one, considering innovations and their spillover channels of different kinds, more competitive market brings greater social welfare. This conclusion is not exactly the same as D’Aspremont & Jacquemin (1988) shows.

2014 Vol. 44 (5): 175-187 [Abstract] ( 870 ) [HTML 1KB] [PDF 2605KB] ( 1648 )
188 Sun Ke Jiang Yuexiang
An Empirical Study on the Financial Indicators of Credit Rating Transitions for Corporate Bonds with Fixed-income

In recent years, China’s bond market has achieved rapid development. At the same time, with the robust increase of bond offering, especially the growing offering of bonds without credit guarantee, the credit rating of corporate bonds changes at times and the downgrading of some corporate bonds did result in certain negative disturbance in the financial market. For this reason, more and more investors’ and supervisors’ attention has been focused on the credit risk of corporate bonds and the transitions of credit rating. How to predict the migration of credit rating is a central concern of investors and supervisors, and the most important point here is to find out the key indicators for such prediction. Current financial information may indicate the creditworthiness of an on-going firm because of its significant influence on the future performance of a firm. Current literature mainly focuses on foreign bond markets but in China, little discussion can be found in this aspect, not to mention systematic research. There are many differences between foreign bond markets and domestic bond markets, so whether the existing research conclusions based on foreign bond markets can be applied to Chinese markets deserves deep exploration. This paper tries to make an exploratory study on the financial indicators of credit rating transitions of Chinese corporate bonds with fixed-income and find out the key variables. By building the multinomial logistic regression model, the determinants of credit rating transition for corporate bonds with fixed-income are studied, and the empirical results are shown as follows: (1) Just like the conclusions of previous foreign studies, the results indicate that the current financial information may indicate the creditworthiness of an on-going firm because of its significant influence on the future performance of a firm. In addition, it appears that a relatively small number of independent variables could do a creditable job of predicting credit rating, the accuracy of which is between 51.2% to 64.3%. (2) The changes of both profitability ratios and solvency ratios may have statistically significant effects on the transition of credit rating. What deserves special attention is that downgrading and upgrading are sensitive to different financial ratios, which may be caused by the fact that the corporate bonds showing credit rating transitions have the characteristics of centralized maturity, concentrated industry and different fundraising objectives. . The changes of all the three solvency ratios in the negative direction may result in credit downgrading, among which the assets-liabilities ratio is the most important variable. On the other hand, among the three profitability ratios, only the reduction of main operation margins may lead to credit downgrading. By contrast, credit upgrading is mainly sensitive to profitability ratios. Enterprises with good profitability performance are more likely to achieve credit upgrading and firms with high ROTA and RONA will have a higher probability to achieve credit upgrading. (3) According to the empirical results of this study, the changes of operating capacity of the enterprise have statistically insignificant effects on credit rating transition. This result may be due to the limitation of data collection and there only one variable used to measure operating capacity. When more data is available, further analysis can be made. In sum, this paper has three main implications: (1) If issuer of corporate bonds wants to get a higher credit rating in the future, they should try to improve their profitability performance. (2) Portfolio risk managers may consider reducing the investment proportion of one bond or eliminate it from their portfolio to reduce credit risk if they see significantly negative changing of solvency performance of this issuer. (3) Supervisors need to pay attention to the negative changing of solvency performance and the profitability ratio of an issuer in order to conduct effective supervision. However, with the challenge of data collection, both the sample and the financial indicators under analysis are limited. Whether the empirical results could be generalized deserves further test when sufficient research conditions can be accessed. Further research can also take macroeconomic indicators into consideration to present more meaningful conclusions.

2014 Vol. 44 (5): 188-200 [Abstract] ( 800 ) [HTML 1KB] [PDF 2203KB] ( 1689 )
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