|
on China |
| By: | James Harrigan; Haiyan Deng |
| Abstract: | China's trade pattern is influenced not just by its overall comparative advantage in labor intensive goods but also by geography. We use two variants of the Eaton-Kortum (2002) model to study China's local comparative advantage. The theory predicts that China's share of export markets should grow most rapidly where China's share is initially large. A corollary is that exporters that have a big market share where China's share is initially large should see the largest fall in their market shares. These market share change predictions are strongly supported in the data from 1996 to 2006. We also show theoretically that since trade costs are proportional to weight rather than value, relative distance affects local comparative advantage as well as the overall volume of trade. The model predicts that China has a comparative advantage in heavy goods in nearby markets, and lighter goods in more distant markets. This theory motivates a simple empirical prediction: within a product, China's export unit values should be increasing in distance. We find strong support for this effect in our empirical analysis on product-level Chinese exports in 2006. |
| JEL: | F1 F14 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13963&r=cna |
| By: | Dong, Fengxia; Jensen, Helen H. |
| Abstract: | China's bilateral trade in food and agricultural products has grown dramatically following entry into the WTO, but the country faces significant problems related to sanitary and phytosanitary (SPS) compliance. The authors summarize current SPS conditions, the food safety regulatory system, production environment, inspection technology, and information systems. This discussion includes China's progress on resolving SPS problems and adjusting to SPS measures in world markets. |
| Keywords: | China, food safety |
| Date: | 2008–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12898&r=cna |
| By: | Appleton, Simon (University of Nottingham); Song, Lina (University of Nottingham); Xia, Qingjie (Peking University) |
| Abstract: | This paper estimates trends in absolute poverty in urban China from 1988 to 2002 using the Chinese Household Income Project (CHIP) surveys. Poverty incidence curves are plotted, showing that poverty has fallen markedly during the period regardless of the exact location of the poverty line. Income inequality rose from 1988 to 1995 but has been fairly constant thereafter. Models of the determination of income and poverty reveal widening differentials by education, sex and party membership. Income from government anti-poverty programs has little impact on poverty, which has fallen almost entirely due to overall economic growth rather than redistribution. |
| Keywords: | poverty, inequality, economic growth, welfare, public policy, China |
| JEL: | O15 J38 O38 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3459&r=cna |
| By: | Mehrotra , Aaron (BOFIT); Sánchez-Fung, José R. (BOFIT) |
| Abstract: | This paper forecasts inflation in China over a 12-month horizon. The analysis runs 15 alternative models and finds that only those considering many predictors via a principal component display a better relative forecasting performance than the univariate benchmark. |
| Keywords: | inflation forecasting; data-rich environment; principal components; China |
| JEL: | C53 E31 |
| Date: | 2008–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_002&r=cna |
| By: | Yang, Ling; Lahr, Michael/L |
| Abstract: | The literature on regional disparities in China is both broad and deep. Nonetheless much of its focus has been on the effects of trade liberalization and national policies toward investment in interior provinces. Few pieces have examined whether the disparities might simply be due to differences in industry mix, final demand, or even interregional trade. Using multiregional input-output tables and disaggregated employment data, we decompose change in labor productivity growth for seven regions of China between 1987 and 1997 into five partial effects—changes in value added coefficients, direct labor requirements, aggregate production mix, interregional trade, and final demand. Subsequently we summarize the contributions to labor productivity of the different factors at the regional level. In this way, we present a new perspective for recent causes of China’s interregional disparity in GDP per worker. |
| Keywords: | Decomposition; input-output analysis; productivity; regional disparity; China |
| JEL: | O1 C6 R11 O4 |
| Date: | 2008–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8313&r=cna |
| By: | Wendy Dobson (Institute for International Business, Rotman School of Management); A.E. Safarian (Rotman School of Management) |
| Abstract: | How is the Chinese economy making the transition from imitation to innovation as the source of sustained long term growth? We address this question using the evolutionary approach to growth in which institutions support technical advance and enterprises develop capabilities to learn and innovate. Growth is seen as a series of disequilibria in which obstacles to innovation such as outdated institutions and weak incentive systems can cause growth to slow. We review existing literatures on institutions and firm behavior in China and compare these findings with those of our survey of Chinese firms in 2006. Industry and firm studies in the literature show how productivity is rising because of firm entry and exit rather than the adoption of new technologies. A striking feature both of the studies in the literature and our survey is the increasing competitive pressures on firms that encourage learning. Our survey of privately owned small and medium enterprises in five high tech industries in Zhejiang province found a market-based innovation system and evidence of much process and some product innovations. These enterprises respond to growing product competition and demanding customers with intensive internal learning, investment in R&D and a variety of international and research linkages. |
| JEL: | O23 H20 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:iibwps:11&r=cna |
| By: | Emek Basker (Department of Economics, University of Missouri-Columbia); Pham Hoang Van |
| Abstract: | We use data from the Census of Retail Trade and the International Trade Commission to test the theory that big retail chains serve as a platform for imports from LDCs. Controlling for overall sector growth, Chinese and other LDC imports have increased disproportionately in retail sectors with the largest consolidation into chains over the period 19972002. Our estimation results imply that between 1997 and 2002 the marginal propensity to import from China was 3.3 times larger for the largest firms than for smaller retailers. The disproportionate growth of large retailers over this period explains 19% of the growth in consumer goods imports from China. |
| Keywords: | Imports, Retail Chains |
| JEL: | F12 F14 L11 L81 |
| Date: | 2008–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0804&r=cna |
| By: | Song, Lina (University of Nottingham) |
| Abstract: | This paper tests three hypotheses concerning intra-household resource allocation in rural China. First, whether increasing the women's bargaining power alters household expenditure patterns. Second, whether households allocate fewer resources to daughters than to sons. Third, whether increasing the bargaining power of women reduces pro-boy discrimination. We find that expenditure patterns do vary with proxies for women's bargaining power. Pro-boy discrimination is suggested by: lower female outlay equivalent ratios for adult goods; greater sensitivity of household health spending to young boys than to young girls; and high male sex ratios. No evidence is found to support the third hypothesis. |
| Keywords: | intrahousehold allocation, women, bargaining power, China |
| JEL: | D1 D13 D61 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3464&r=cna |
| By: | Song, Lina (University of Nottingham); Appleton, Simon (University of Nottingham) |
| Abstract: | Survey data from urban China in 2002 show levels of life satisfaction to be low, but not exceptionally so, by international comparison. Many of the determinants of life satisfaction in urban China appear comparable to those for people in other countries. These include, inter alia, unemployment, income, marriage, sex, health and age. Communist Party membership and political participation raise life satisfaction. People appear fairly satisfied with economic growth and low inflation, and this contributes to their overall life satisfaction. There is dissatisfaction over pollution, but this – like job insecurity – does not appear to impact on life satisfaction. |
| Keywords: | life satisfaction, happiness, economic growth, unemployment, China |
| JEL: | I31 I38 J18 D63 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3443&r=cna |
| By: | Appleton, Simon (University of Nottingham); Knight, John (University of Oxford); Song, Lina (University of Nottingham); Xia, Qingjie (Peking University) |
| Abstract: | Why is it that, as the Chinese Communist Party has loosened its grip, abandoned its core beliefs, and marketized the economy, its membership has risen markedly along with the economic benefits of joining? We use three national household surveys, spanning eleven years, to answer this question with respect to labour market rewards in urban China. We conceptualize individual demand for Party membership as an investment in “political capital” that brings monetary rewards in terms of higher wages. This wage premium has risen with the growing wage differentials associated with the emergence of a labour market and the continuing value of political status in the semi-marketized transitional economy. However, a demand-side explanation does not explain the fact that the wage premium is higher for the personal characteristics that reduce the probability of membership. We develop an explanation in terms of a rationing of places and a scarcity value for members with those characteristics. |
| Keywords: | China, Communist Party, labour market, economic transition, wages |
| JEL: | J31 J40 J71 P20 P30 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3454&r=cna |
| By: | Zu, Liangrong (International Labour Organization); Song, Lina (University of Nottingham) |
| Abstract: | This paper empirically investigates how Chinese executives and managers perceive and interpret corporate social responsibility (CSR), to what extent firms’ productive characteristics influence managers’ attitudes towards their CSR rating, and whether their values in favour of CSR are positively correlated to firms’ economic performance. Although a large proportion of respondents express a favourable view of CSR and a willingness to participate in socially responsible activities, we find that the true nature of their assertion is linked to entrepreneurs’ instincts of gaining economic benefits. It is the poorly-performing firms, or rather, firms with vulnerable indicators – smaller in size, State-owned, producing traditional goods and located in poorer regions that are more likely to have managers who opt for a higher CSR rating. Managers’ personal characteristics per se are not significant in determining their CSR choice. Moreover, controlling for other observed variables, we find that managers’ CSR orientation is positively correlated with their firms’ performance. The better-off a firm is, the more likely its manager is to get involve in CSR activities. Firms with better economic performance before their restructuring would sustain higher post-restructuring performance. |
| Keywords: | corporate social responsibility, profit maximisation, China |
| JEL: | M14 M21 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3449&r=cna |
| By: | Kozluk, Tomasz (BOFIT) |
| Abstract: | In a broad sample of developed and emerging economies over the past ten years we apply the approximate factor model in a search for common global and regional driving-forces in stock market returns and volatility. We focus particularly on two emerging stock markets - Russia and China, because of their unique characteristics and performance in the past years. We find that while Russian markets, like the CEEC region, substantially increased their integration with global stock markets, both the Chinese A- and B-share markets continued to move largely independently from global movements and only slightly increased in comovement with regional forces. We provide evidence of a general increase in global comovement of stock markets over the past decade and a decline in the role of regional forces, which imply a decrease of the effectiveness of cross-country hedging strategies. |
| Keywords: | stock markets; financial integration; Russia; China; global and regional integration |
| JEL: | F36 G11 G14 |
| Date: | 2008–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_004&r=cna |
| By: | Oxelheim, Lars (Research Institute of Industrial Economics (IFN)); Ghauri, Pervez (King's College London) |
| Abstract: | In this paper it is argued that the restructuring following the stiffer competition stemming from increased global integration will trigger a race between countries to attract inward foreign direct investment (FDI). It is further argued that this race consists of last minute efforts and tailor-made packages designed by governments and their agencies to temporarily improve their country’s otherwise inferior profile. This race is non-transparent and the factors used to compete for inward FDI (the 'elements' of the race) deviate from those of long-term efforts to develop a favourable investment climate and improve productivity, as well as medium-term efforts, such as lowering corporate taxes. The paper elaborates on the research problem of properly understanding the drivers of inward FDI in the absence of data on the elements of the non-transparent race. It also addresses the economic policy problem following from this race with a scenario where a large share of global FDI ends up in China, putting the cohesion of the EU at stake and triggering a regional race within China. |
| Keywords: | Inward FDI; China; European Union; Investment-diverting Policies |
| JEL: | E61 F15 F21 F23 F36 F42 G18 G34 |
| Date: | 2008–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0745&r=cna |
| By: | Krug, B.; Hendrischke, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | We start our exploration of China’s institutional change by asking what the China experience can tell us about institutional economics and organization theory. We point to under-researched areas such as the formation of firms and the interplay between firms and local politics. Our findings support the dynamic capability approach which concentrates on activities rather than on pre-defined groups and models institution building as a co-operative game between the local business community and local government agencies. We find that the analysis of firms has to set in before they are formed by entrepreneurs and networks and we identify political management as a core competence of these two groups. While this contradicts the conventional view of clientelism or principle agent relations as institutional building blocks, we don’t propose competing models. Instead, we suggest focusing on a dynamic process in which the role of players can change. Faced with the spontaneous emergence of institutions, our concept of institutional architecture captures the fact that the two models can co-exist side by side and that, once the dichotomy between formal and informal institutions is given up, there can be a transition from local patron-client relations to local business-state coordination. |
| Keywords: | institutional change;entrepreneurship;networks;dynamic capabilities;diversity and convergence of institutions |
| Date: | 2008–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765012191&r=cna |