nep-cna New Economics Papers
on China
Issue of 2007‒04‒21
five papers chosen by
Zheng Fang
Ohio State University

  1. Great Expectations? The Subjective Well-Being of Rural-Urban Migrants in China By John Knight; Ramani Gunatilaka
  2. Human Capital, Economic Growth, and Regional Inequality in China By Belton Fleisher; Haizheng Li; Min Qiang Zhao
  3. The Spite Dilemma Revisited: Comparison between Chinese and Japanese By Tatsuyoshi Saijo; Junyi Shen; Xiangdong Qin; Kenju Akai
  4. Local Firms in Latecomer Developing Countries amidst China's Rise -The case of Vietnam's motorcycle industry- By Fujita, Mai
  5. The Socioeconomic Determinants of Individual Environmental Concern: Evidence from Shanghai Data By Junyi Shen; Tatsuyoshi Saijo

  1. By: John Knight; Ramani Gunatilaka
    Abstract: This paper may be the first to link the literatures on migration and on subjective well-being in developing countries. It poses the question: why do rural-urban migrant households settled in urban China have an average happiness score lower than that of rural households? Three basic hypotheses are examined: migrants had false expectations about their future urban conditions, or about their future urban aspirations, or about their future selves. Estimated happiness functions and decomposition analyses, based on a 2002 national household survey, indicate that certain features of migrant conditions make for unhappiness, and that their high aspirations in relation to achievement, influenced by reference groups, also make for unhappiness. It is difficult to form unbiased expectations about life in a new and different world.
    Keywords: Rural-urban migration, Subjective well-being, Happiness, Relative deprivation, Aspirations, China
    JEL: I32 O15
    Date: 2007
  2. By: Belton Fleisher (Ohio State University and IZA); Haizheng Li (Georgia Institute of Technology); Min Qiang Zhao (Ohio State University)
    Abstract: We study the dispersion in rates of provincial economic- and TFP growth in China. Our results show that regional growth patterns can be understood as a function of several interrelated factors, which include investment in physical capital, human capital, and infrastructure capital; the infusion of new technology and its regional spread; and market reforms, with a major step forward occurring following Deng Xiaoping’s "South Trip" in 1992. We find that FDI had much larger effect on TFP growth before 1994 than after, and we attribute this to emergence of other channels of technology transfer when marketization accelerated. We find that human capital positively affects output per worker and productivity growth. In particular, in terms of its direct contribution to production, educated labor has a much higher marginal product. Moreover, we estimate a positive, direct effect of human capital on TFP growth. This direct effect is hypothesized to come from domestic innovation activities. The estimated spillover effect of human capital on TFP growth is positive and statistically significant, which is very robust to model specifications and estimation methods. The spillover effect appears to be much stronger before 1994. We conduct cost-benefit analysis and a policy "experiment," in which we project the impact increases in human capital and infrastructure capital on regional inequality. We conclude that investing in human capital will be an effective policy to reduce regional gaps in China as well as an efficient means to promote economic growth.
    Keywords: regional inequality, TFP growth, FDI, human capital, technology spillovers
    JEL: O15 O18 O47 O53
    Date: 2007–03
  3. By: Tatsuyoshi Saijo (Osaka University); Junyi Shen (Osaka University); Xiangdong Qin (Shanghai Jiao Tong University); Kenju Akai (Osaka University)
    Abstract: This paper studies Chinese choice behavior in the provision of public goods via the voluntary contribution mechanism. The laboratory experiment conducted in China adopts the same design as the one used in Saijo and Nakamura (1995), i.e. either cooperating (full contribution) or free riding (no contribution) is predicted as the unique Nash equilibrium with a high (larger than one) or low (smaller than one) marginal return of contribution. Comparing the results of Chinese subjects with their Japanese counterparts, we find significant differences between these two countries in terms of their choice behavior, despite the similarities in their cultures and the proximity in geographical positions. Japanese subjects are more likely to act spitefully, and, in contrast, Chinese subjects are more likely to perform cooperatively. In addition, concerning the deviations from the Nash equilibria with different marginal returns, the statistical results indicate that Chinese subjects behave more consistent with the theoretical prediction in the high marginal return case, while Japanese choice behavior seems less different from the theoretical expectation in the low marginal return case.
    Keywords: Voluntary contribution mechanism, Spite dilemma, Chinese, Japanese
    JEL: C91 H41 D71
    Date: 2007–04
  4. By: Fujita, Mai
    Abstract: This paper examines the impact of China’s recent rise on the development of local firms in latecomer developing countries. Based on a detailed analysis of Vietnam’s motorcycle industry, the paper argues that China’s impact may go beyond what a trade analysis suggests. Indeed, China’s rise induced a dynamic transformation in the structure of value chains within Vietnam’s motorcycle industry, bringing about far-reaching consequences on the development and upgrading trajectories of local firms. The implications of the case study for the wider “global value chain†approach is also discussed.
    Keywords: Global value chain, Motorcycle industry, Vietnam, China, Upgrading, Motorcycles
    JEL: F23 L22 L62
    Date: 2007–03
  5. By: Junyi Shen (Osaka School of International Public Policy, Osaka University); Tatsuyoshi Saijo (ISER, Osaka University)
    Abstract: This study examines the influence of socioeconomic characteristics on eleven measures of environmental concern by applying a pooled sample of 1200 individuals in Shanghai, China. Previous studies, which made efforts to explain environmental concern as a function of social structure, suggest that there are traditionally five hypotheses (the age, gender, social class, residence, and political hypotheses) for socioeconomic determinants, which are associated with individual environmental concerns. Unlike those methodologies adopted in many previous studies, we apply an ordered probit model to test three hypotheses (the age, gender, and social class hypotheses) in this study. As a result, high income and high education level are found to be positively related to environmental concern as expected. However, we find that in contrast to most of the existing studies, the marginal effect of age on the probability of being environmentally concerned is positive in several measures, implying that the older are more concerned about the environment than the younger. In addition, weak evidences indicate that women are less concerned about the environment than men. Other socioeconomic characteristics such as employment status and household size are not significant in most of the environmental concern measures we defined.
    Keywords: Socioeconomic determinants, Environmental Concern, Ordered Probit Model, Chinese
    JEL: C25 C81 Q59
    Date: 2007–04

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