Table of Content

20 November 2015, Volume 23 Issue 11 Previous Issue    Next Issue

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Investors Structure、Order Imbalance and Price Discovery:Evidence from Shanghai Commodity Futures Market WANG Wen-hu, WAN Di-fang, WU Zu-guang, ZHANG Lu 2015, 23 (11):  1-11.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.001 Abstract ( 1962 )   PDF (920KB) ( 2243 )   Save Due to investors structure imbalances, excessive speculation, insufficient hedge, the poor function of price discovery and the lack of global commodity pricing in Chinese commodity futures markets, based on account data of two kinds structure of investors of Shanghai Futures Exchange copper, aluminum, rubber and fuel oil futures contracts, the regression analysis method GARCH model and the Parkinson's volatility are used to analyze how the transaction behavior of different types of investors to affect the futures return, price discovery and price volatility in China's commodity futures market. The results showed that:(1) the order imbalance of individual investors and speculators implies its ability to find the best point of buy more or short selling is insufficient, their overconfidence, excessive speculation and herd behavior will exacerbate fluctuations in commodity futures prices; (2) the institutional investors and hedgers often show contrary trade intention to individual investors and speculators, they can better grasp the opportunity to buy and sell, and more willing to take risk positions, help to alleviate the fluctuation of commodity futures prices; (3) the change trend of commodity futures prices shows that institutional investors and hedgers have certain information advantage to be able to predict the future trend of commodity futures prices to a certain extent, their extremely optimistic or pessimistic order imbalance can transfer effective information and time signal to the commodity futures market. In other words, improving institutional investors and hedgers' ratio of trading volume (open interest) and optimizing the structure of investors, can effectively promote China's commodity futures market price discovery and reduce the volatility risk of futures price. In addition, large speculators trading activities can also ease the futures price volatility to a certain extent. Therefore, designing reasonable price limits and margin for different types of investors is to guide the trading behavior of different types of investors. Improving investors' structure in China's commodity futures market has important practical significance to perfect the function of price discovery and risk hedging in Chinese commodity futures market. References | Related Articles | Metrics

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An Innovation of Estimating Value at Risk of International Carbon Market:Conditional Autoregressive Value at Risk Models with Refinements from Extreme Value Theory ZHANG Chen, DING Yang, WANG Wen-jun 2015, 23 (11):  12-20.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.002 Abstract ( 2081 )   PDF (1076KB) ( 1491 )   Save The price of carbon assets fluctuates heavily because of the global economy, politics, energy, and so on, thus it has been of realistic significance to have research on the risk measurement of carbon market. In this paper, EUA and CER markets are taken as the research objects, and the performance of CAViaR model and GARCH-GED model in measuring the risk of carbon markets under the different prediction intervals and confidence levels are compared, finding that:(1) CAViaR model is better than GARCH-GED model in fitting and prediction; (2) CER market has greater uncertainty relative to EUA market; (3) when predicting 1%VaR, the CAViaR model is instable. In hope of a better prediction effect, this paper takes the combination of CAViaR model and EVT is taken to predict 1%VaR, finding that the prediction of EVT-CAViaR model is more steady and reliable under the high-risk prediction intervals and the CER market, therefore a conclusion can be made that this new method promises to partly improve the prediction accuracy of the extreme risk of carbon markets. References | Related Articles | Metrics

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The Effect of Investor Sentiment on Stock Pricing-An Empirical Study Based on A-H Shares of Cross-listing Companies LU Jing, ZHOU Yuan 2015, 23 (11):  21-28.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.003 Abstract ( 2646 )   PDF (815KB) ( 4495 )   Save The impact of investor sentiment on the stock price reflects irrational factors effect on the capital markets to the extent of asset pricing. Security investment fund's loss ratio in capital market is used to construct investor sentiment index and its effect on stock pricing of A-H shares of cross-listing companies in China is studied. The study shows that after controlling Fama-French three factors and other macro-economic variables, the investor sentiment has a significant impact on A-share market and H-share market, which means that the stock prices will rise as soon as investor sentiment is high and vice versa. Besides, investor sentiment on the A-share market can significantly forecast the price reversion in the next 12 months while investor sentiment on the H-share market can significantly forecast the price reversion in the next 6 months, which indicates that the impact of investor sentiment on Chinese mainland stock market has a longer persistence than that of Hong Kong stock market and that there are significant irrational differences and efficiency differences between the two markets. This study contributes to the literature and provides theoretical and empirical evidences to trading and regulatory systems of A-share market. References | Related Articles | Metrics

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Auto-dependence Structure Estimating and Forecasting of Duration Based on Vine Copula YE Wu-Yi, LI Xiao-ying, MIAO Bai-Qi 2015, 23 (11):  29-38.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.004 Abstract ( 1903 )   PDF (3512KB) ( 1638 )   Save In this paper, the trading volume duration sequence derived from high-frequency tick-by-tick data is analyzed by Copula method. The auto-dependence structure of several consecutive trading volume durations is estimated by multivariate vine Copula, then, a new estimating method about conditional density function forecasting is also proposed. Moreover, a new forecasting method of the volume duration is put forward. Empirical results of Sinopec show that the predictive ability of our model is much better than that of EACD, which can also be demonstrated from the density forecasting test. References | Related Articles | Metrics

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Study on Response to Extreme Risk in Chinese Stock Market XIE Hai-bin, TIAN Jun, WANG Shou-yang 2015, 23 (11):  39-45.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.005 Abstract ( 1917 )   PDF (2222KB) ( 1854 )   Save The question whether or not investors in financial markets are rational is of great importance in finance. The rationality of Chinese stock market under extreme risk is investiated in this paper. Defining extreme risk as returns above (below) a specified threshold, a statistical indicator is proposed to investigate the market response to extreme risk. Based on daily prices of Chinese stock market index over January 1, 2002-October 28, 2013, our results demonstrate some interesting characteristics of Chinese stock market under the extreme risk:1. stock index is found to rebound in case of sharp fall in stock index;no such evidence is found in case of sharp rise in stock index;2. compared to bear market, stock index in bull market tends to rebound in case of extreme downside risk. Trading strategy based on extreme risk outperforms the simple buy-and-hold strategy, indicating the irrationality of Chinese stock market in case of extreme risk. The empirical findings demonstrate that investors in Chinese stock market is irrational and that extreme risk is an important factor in asset pricing. References | Related Articles | Metrics

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Measuring Malmquist Productivity Index:A Circular Global Approach Based on Double Frontiers Data Envelopment Analysis WANG Ying-ming, LAN Yi-xin 2015, 23 (11):  46-55.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.006 Abstract ( 2093 )   PDF (1194KB) ( 1633 )   Save Measures of productivity growth constitute core indicators for the analysis of economic growth. The data envelopment analysis (DEA)-based Malmquist quantity index has enjoyed widespread use in a production context. By using all the periods to construct a global benchmarking technology frontier, the double frontiers data envelopment analysis (DFDEA)-based Malmquist productivity index is extended to acquire a DFDEA-based global Malmquist productivity index, which can avoid the differences in evaluation results resulted from the arbitrary choice of frontiers and base periods. This global index integrates the information on both the optimistic frontier and the pessimistic frontier and can meet the requirement of circular test. This global Malmquist productivity index is applied to investigate the behaviors of the industrial sectors of Fujian province during the years 2001 to 2008. The application results have clearly shown that our approach is more comprehensive and more realistic than the traditional DEA-based MPI in measuring productivity index. References | Related Articles | Metrics

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Supply Chain Decisions with Endogenous Effort Toreduce Supply Uncertainty and Unit Production Cost HUANG He, HE Qing, XU Hong-yan 2015, 23 (11):  56-61.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.007 Abstract ( 1903 )   PDF (812KB) ( 1912 )   Save Considering supply risks and production cost uncertainty, the optimal decisions of a manufacturer and a supplier when either of them can initiate effort endogenously to enhance the supply reliability and reduce the production cost with certain probabilities is studied in this paper. Two dynamic programming models-the manufacture-initiated effort model and the supplier-initiated effort model-are designed separately. For each model, the impacts of the success probabilities on the optimal purchasing quantity are analyzed, on the optimal effort level, on the supplier's and manufacturer's expected profits, and on the expected total supply chain profit. By comparing the two models, It's found that whether the manufacturer's optimal effort is greater than that of the supplier depends on the revenue-sharing parameter. The optimal purchasing quantity in manufacturer-initiated effort model is not less than that in supplier-initiated effort model. And the expected profit of manufacturer is higher in the manufacturer-initiated effort model, but the expected profits of the supplier and the supply chain could be higher in the supplier-initiated effort model. References | Related Articles | Metrics

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Inventory Management with Selling by Internet Auctions and Purchasing by Reverse Auctions LIU Shu-ren, TANG Pei, HUANG Ying-na 2015, 23 (11):  62-69.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.008 Abstract ( 1862 )   PDF (858KB) ( 1668 )   Save In this paper, an inventory management with selling by Internet auctions and purchasing by reverse auctions is studied in the context of e-commerce. The considered inventory management has the following two characteristics. One is that the retailer sells products by Internet auctions, another one is that the retailer makes procurement management by reverse auctions. For the single-period case, it is shown that the retailer's expected revenue is a strictly increasing and concave function of the purchased quantity under Internet auctions, leading to the retailer's optimal procurement strategy and the suppliers' optimal bidding strategy. For the multi-period case, the optimal control model is first constructed for the retailer by using Markov decision processes. Then, the retailer's optimal procurement strategy is obtained and the suppliers' Bayesian-Nash equilibrium bidding strategies are similar to the base-stock policy. These results not only show the effect of auction mechanism on optimal procurement strategy for the retailer, but also provide an important reference for managers to manage inventory under selling by Internet auctions and purchasing by reverse auctions. References | Related Articles | Metrics

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Supply Chain Optimization and Coordination Based on the Mobile Commerce Platform XIAO Yong-bo, CHEN Bing-yao, RONG Li-song 2015, 23 (11):  70-79.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.009 Abstract ( 2414 )   PDF (6835KB) ( 1803 )   Save The wide adoption of the third generation (3G) network has provided ample opportunities for the development of mobile commerce(MC). An increasing number of firms are considering developing applications on the MC platforms to expand their market. The paper considers a supply chain which consists of one retailer and one platform service provider. The retailer seeks to exploit additional market that would otherwise be missed through the MC platforms owned by the service provider. Suppose the commission charged by the service provider is in proportional to the selling quantity,and the service provider needs to determine his/her marketing effort by considering the potential service revenue from the induced market depending on the platform network externality.Based on a Stackelberg game,we investigate the optimal commission decision for the retailer and the optimal marketing effort decision for the service provider are investigated, characterize the structure of the optimal decisions,and develop a piecewise commission contract to coordinate the supply chain. Numerical experiments show that the coordination between the retailer and service provider has great potential in improving the performance of the entire supply chain. Our research provides useful managerial insights for online retailers to conduct new business models on MC platforms in the information age References | Related Articles | Metrics

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Flexible Procurement Price Policy and Profit-Risk Analysis in Supply Chain MU Yin-ping, LIU Li-ming 2015, 23 (11):  80-87.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.010 Abstract ( 2519 )   PDF (7308KB) ( 1716 )   Save Due to the price fluctuation of the raw materials, supply chain firms need to relieve the risks of the profit decrease through the procurement price flexibility mechanism. In this paper, a supply chain consist of a supplier and a manufacturer is considered, where the manufacturer buys the raw material from the supplier at the beginning of the lead time and the supplier delivers the raw material to the manufacturer at some time later. By designing a procurement price flexibility contract, the risk relief of the contract on the supplier and the manufacture's profit is analyzed. Using the Stackelberg game, mathematic models are developed to analyze the optimal procurement quantity of the manufacturer and the optimal contract parameters of the supplier. Also the optimal results change trend with the change of the price flexibility contract parameters is discussed. Using variance of the profit the risk undertaken by the supplier and the manufacturer respectively is and measured the change of the risk with the change of the price flexibility parameters is analyzed. The results show that supply contract with proper parameters can improve the profit and relief the profit risk of the supplier and the manufacturer respectively. References | Related Articles | Metrics

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Investment Model of Capacity Structure with the Consideration of a Sudden Disturbed Demand and a Loss-Aversion Manager BAO Xing 2015, 23 (11):  88-95.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.011 Abstract ( 1870 )   PDF (1214KB) ( 1267 )   Save Manager seldom shows completely rational when giving investment decision of a certain operation system. In this paper, two types of manger, who are risk-neutral and loss-aversion respectively when deciding an operation system's capacity structure which is a mixture of flexible and dedicated operational capacity are reinvestigated. Furthermore, the investment decision is considered when operation system might face an sudden fluctuated external demand, with a characteristic of drifting-upwards mean and extended/converged variance. A basic and extended newsvendor model is presented to compare the different decision of different managers mentioned above, and mathematic proofs are also presented as well. Results indicated that, under the influence of some critical parameters, which are the probability and distribution parameters of sudden disturbance on demand, the expansion ration of flexible capacity in different scenarios, the investment decision on flexible capacity make by a risk-neutral manager is rather different when compared to a loss-aversion one. Lastly, subsidy or penalty based on the amplitude of underage cost could mitigate the flexible capacity investment decision gap when manager present loss-aversion. References | Related Articles | Metrics

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Canthe Introduction of TOPSIS in Risk Early-warning Model Improve theAccuracy of Early-warning?-A Case Study from Listed Companies of Manufacturing Industry ZHU Wei-dong, WU Peng 2015, 23 (11):  96-104.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.012 Abstract ( 1831 )   PDF (860KB) ( 1316 )   Save Taking the indebted ST listed companies and twice as many the non-ST of manufacturing industry in Shanghai and Shenzhen A-share from 2011 to 2012 as sample, 30 financial indicators that can reflect the business profitability, profitability of shareholders, cash flow capacity, operational capacity, development capacity and debt solvency and other 8 qualitative indicators including ownership structure, management structure and location of the companies are selected. Considered the sample of 2011 as a training set while the 2012 as testing set, a traditional warning model and double classification model in which TOPSIS method are introduced on the basis of the principal component analysis are built. The results show that the introduction of TOPSIS in risk early-warning model can increase the accuracy of early-warning significantly. It can improve the accuracy of early warning system 18.5% for ST companies and 11.1% for samples in general. This suggests that the method of double classification can be applied to build an effective risk early-warning model. References | Related Articles | Metrics

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Grey Fuzzy Integral Correlation Degree Decision Model CHANG Zhi-peng, CHENG Long-sheng 2015, 23 (11):  105-111.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.013 Abstract ( 1909 )   PDF (853KB) ( 1792 )   Save In grey correlation degree decision model (GRCM), it is assumed that all the attributes are mutually independent. However, in real decision making problems, the interaction often exists between attributes which leads GRCM to lose effectiveness. For this problem, the fuzzy integral theory is introduced and grey fuzzy integral correlation degree decision model (GRFICM) is established. To solve the model, the Mobius transformation coefficients based on weights and interaction degrees are defined to calculate 2-order additive fuzzy measures. In Mobius transformation coefficients, the weights are determined by the rank correlation analysis method and Mahalanobis-Taguchi Gram-Schmidt jointly, and the interaction relations and interaction degrees are judged by experts. An evaluation of the financial situation of low-rent housing safeguard family is provided as a practical case in order to validate GRCM and GRFICM by comparing. The validation results show that GRFICM makes the decision results more scientific and reasonable, and is more worth of spreading. References | Related Articles | Metrics

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Construction and Application of Multi-variable MGM(1,m) Coupled System Model Based on Self-memory Principle GUO Xiao-jun, LIU Si-feng, YANG Ying-jie 2015, 23 (11):  112-118.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.014 Abstract ( 1815 )   PDF (848KB) ( 1672 )   Save A novel multi-variable MGM(1,m) self-memory coupled system model is presented for use in multi-variable systems with interactional relationship under the condition of small sample size. The proposed model can uniformly describe the relationships among system variables and improve the modeling accuracy. The model combines the advantages of the self-memory principle of dynamic system and traditional MGM(1,m) model through coupling of the above two prediction methods. The weakness of the traditional grey prediction model, i.e., being sensitive to initial value, can be overcome by using multi-time-point initial field instead of only single-time-point initial field in the system's self-memorization equation. As shown in the case study of foundation pit deformation prediction, the novel model can take full advantage of the system's multi-time historical data and accurately predict the system's evolutionary trend. And it prominently possesses higher accuracy of simulation and prediction than the traditional multi-variable MGM(1,m) model. The results show that the proposed model enriches and perfects grey prediction theory, and can be applied to other similar multi-variable engineering systems. References | Related Articles | Metrics

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Dynamic Comprehensive Evaluation and Speed Characteristics Analysis of a Matter-Element Method LIAO Zhi-gao, ZHAN Min, XU Jiu-ping 2015, 23 (11):  119-127.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.015 Abstract ( 1618 )   PDF (880KB) ( 1244 )   Save For dynamic multiple attribute decision making problems, a matter-element method classification dynamic comprehensive evaluation method is put forward, and speed characteristics analysis data improvement measures also are proposed. Firstly, through correlation analysis link qualitative and quantitative factors, let those factors quantitative; Then, after "retiring" standardized data, from two angles of mean and ideal point for reference, and adopt advanced "average" and "backward" average classification and dynamic comprehensive evaluation; And on this basis, the use of speed characteristic analysis the reason and improvement measures are put forward. Finally, through a numerical example shows the feasibility and effectiveness of those methods. References | Related Articles | Metrics

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Contract Design for "Company+Farmer" Pattern under the Impact of Adverse Weather FU Hong-yong, DAN Bin 2015, 23 (11):  128-137.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.016 Abstract ( 1640 )   PDF (1515KB) ( 1478 )   Save Aiming at the fact that adverse weather affects agricultural production and makes supply chain members suffer uncontrollable risk during contract farming, a stochastic profit model for a two-stage agricultural supply chain consisting of a risk-averse farmer and a risk-neutral company was built. Under the CVaR criterion, a CVaR decision model was constructed for the risk-averse farmer. Then the influence of adverse weather on the optimal decisions was analyzed by comparing optimal decisions in the centralized system and decentralized system. It is found that adverse weather reduces the supply chain performance and that the risk aversion of the farmer aggravates the double marginalization. In order to solve these issues, an improved revenue sharing contract was designed based on weather index and farmer's risk aversion degree. The result shows that company can motivate both parties to share revenue and bear the risks by designing the contract according to the influence of adverse weather. Besides, the perfect win-win coordination for agricultural supply chain can be achieved after the implement of this contract, which makes up the efficiency loss in the decentralized system and enhances the steadiness of the supply chain. Finally, the result obtained in this paper can provide guidance for relevant studies and firms in practice. References | Related Articles | Metrics

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Fresh Agricultural Product's Optimal Procurement Decisions with Retailer's Once Ordering in Advance ZHANG Wei, ZHOU Gen-gui 2015, 23 (11):  138-144.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.017 Abstract ( 1788 )   PDF (3394KB) ( 1274 )   Save In this paper, supply chain consisting of one retailer and one supplier is focused on, investigating its order decisions in the presence of the intractable problem of entities wastage of fresh agricultural product. Once delivering and twice delivering model is constructed respectively on the basis of the retailer's once ordering in advance, and it's found that the optimal ordering quantity is greater with twice delivering than that with once delivering. Moreover, compared with once delivering, maximum profits of both members are greater under twice delivering. Case analysis is applied to demonstrate that both the retailer and the supplier share the channel risk due to the wastage of fresh agricultural product, and that setting appropriate wholesale price in the selling season proves to have a positive effect in enhancing the ability against loss risks. Our conclusions provide vital significance in depth practice of agriculture-supermarket jointing. References | Related Articles | Metrics

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Research on Efficiency Evaluation Models for Network Systems Based on Free Disposability Principles ZHOU Zhong-bao, YU Huai-ning, MA Chao-qun, LIU Pei, LIU Wen-bin 2015, 23 (11):  145-152.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.018 Abstract ( 1775 )   PDF (1544KB) ( 1440 )   Save Production possibility set (PPS) is the basis for constructing DEA models of network systems. The connection conditions of sub-processes are the key points for building the PPS. In nature, the existing network DEA models assume that all inputs and outputs of sub-processes satisfy the strongly free disposability principle. However, it is not always true in real production and management activities. Therefore, from the perspective of different free disposability principles, the connection conditions for inputs and outputs of sub-processes are studied; the production possibility sets and their equivalent formulations for general network systems are built. The DEA models are constructed accordingly for evaluating the efficiencies of network systems are built. In the end, the proposed models are used to evaluate the performance of China's listed banks. This research is quite informative for performance evaluation and improvement for general network systems. References | Related Articles | Metrics

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Entry Deterrence Strategy When Selling to Strategic Consumers YANG Guang-yong, JI Guo-jun 2015, 23 (11):  153-162.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.019 Abstract ( 1765 )   PDF (1493KB) ( 1904 )   Save Entrants imitating incumbent's original product improve quality of original product and introduce imitating innovative product, which attracts strategic consumers who rationally choose purchase timing and types. This erodes incumbent's leadership. Hence, faced with this threat, value of integral and modular upgrade strategies adopted by incumbent is studied, where in former strategy, the incumbent could introduce upgraded version via equivalent, increasing or decreasing performance price ratio path, whereas in latter strategy, incumbent could only introduce upgraded version via increasing performance price ratio path. Our conclusions show that for integral upgrade strategy, decreasing performance price ratio path could strengthen incumbent first-mover advantage in respect to market share and expected profits; For modular upgrade strategy, higher product modularity has more positive effects on incumbent maintaining leadership on market share, but have less valuable to incumbent maintaining expected profits advantages. References | Related Articles | Metrics

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Evolution Trajectory and Intrinsic Machanism of Green Purchase Behavior ZHAO Ai-wu, DU Jian-guo, GUAN Hong-jun 2015, 23 (11):  163-170.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.020 Abstract ( 2065 )   PDF (2165KB) ( 2036 )   Save Because of the premium of green products, it is more difficult for consumers to purchase green products instead of just holding green thoughts. In order to find out the real evolution trajectory and intrinsic mechanism of green purchase behavior, the effect of environmental awareness is introduced into purchase motivation function. Considering consumers' microscopic heterogeneity, limited rationality and the complexity of environment, the advantage of computational experiment method is taken to model green purchase behavior according to real-life scenario. By dynamic simulation under different scenarios, the evolution trajectory of green purchase behavior is explored from the macro aspect, and the intrinsic mechanism is analyzed from the microscopic aspect. Experimental results show, although the price sensitivity and the awareness of environment are two key factors in consumers' green purchase decision-making, "friend influence" can significantly improve the green market share when green product information is more widespread. Green consumers should actively spread green product information while they practice their own green purchase, which would prompt more consumers to turn the concept of green consumption into green purchasing action, and has important practical significance to promote the healthy development of green market. References | Related Articles | Metrics

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Grey Matrix Similar Incidence Model for Panel Data and Its Application CUI Li-zhi, LIU Si-feng 2015, 23 (11):  171-176.  doi: 10.16381/j.cnki.issn1003-207x.2015.11.021 Abstract ( 2080 )   PDF (966KB) ( 2001 )   Save Grey incidence analysis is an important part of grey system theory which is used to ascertain the relationship grade between an inflential factor and the major behaviour factor. However, most of grey incidence models are mainly applied to the field in which the operational behaviour factor and relational factor are the cross-sectional data or time series data in a given system. Therefore, the grey model on pannel data is worth exploring that is the asscociated content in this paper.According to the basic idea of grey incidence of grey system theory, the degree of relative closeness of the development rate and growth rate indexes between the relative factor matrices and characteristic behavior matrix of the system is measured from two dimensions of individual and time on the basis of the definition of the matrix sequence of a discrete data sequence. With the measurement of grey incidence degree, the grey matrix similar incidence model of panel data is put forward from the traditional vector space to the matrix space and its properties are discussed. Finally, CO2 emission is taken as an example where the data of carbon dioxide has been calculated for six provinces by the IPCC method in 2006 and the other data are from the Statistical Yearbook. And a grey matrix similar incidence model is established by measuring the CO2 emission in 2005-2012 of six provinces in the central region in China. The real example shows its simplification and practicability. The empirical results show that people may take some main factors into account to abate carbon dioxide emission which are an effective way to implement energy saving and carbon emission reduction. For example, the central region can appropriately control the population scale but also put intensive economic development way that guide residents to live low carbon and improve the consciousness of energy conservation and carbon emission reduction. References | Related Articles | Metrics