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on China |
| By: | William Latham (Department of Economics,University of Delaware); Hong Yin (Department of Economics,University of Delaware) |
| Abstract: | We examine the return to innovation in terms of economic growth at the provincial level to assess whether or not policies that promote R&D, such as China’s Science and Technology Policy, have been productive for all of China’s regions. The return to innovation at the provincial level is estimated using a value-added Cobb-Douglas production function. The measure of the effect of innovation (patenting activity) is valued-added industrial output. The data are a balanced panel for 30 provinces for the period 1991-2004. We find that the production function including innovation fits the Chinese provincial level data well. These estimates indicate that technology plays a positive role in industrial growth at the provincial level; however, the contribution of technology is far too small, which indicates that China’s economic growth is largely driven by the factor inputs. The results support the views that the linkages between innovation activity and commercialization of new technology are weak within Chinese domestic firms which have difficulties in exploiting and adopting the new technologies. The results also indicate that the inter-regional technology spillovers are positive but relatively small and weak, compared to the European regions and the states in the US. The estimated results further confirm that the impact of industrial reforms during the period of 1994-99 on China’s technological development is negative, as there seems to be neither exogenous technical progress nor technology’s contribution to the value-added industrial output during those years. |
| Keywords: | China, patents, productivity, innovation, regions |
| JEL: | O33 R11 O47 O55 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:08-20.&r=cna |
| By: | Arslan Razmi (University of Massachusetts Amherst) |
| Abstract: | China’s rapid growth and success in poverty reduction over the last three decades has inspired world-wide admiration. This paper uses a simple framework with a Kaleckian flavor to analyze structural developments in the Chinese economy, and to understand some of the distributional consequences. Some of the possible sources of these distributional developments are then further analyzed using a trade-theoretic approach. Other aspects of China’s investment- and export-led growth strategy are discussed along with the problems that the focused pursuit of such a strategy has raised. We conclude that China’s growth model may now have outlived its utility, both on economic and socio-political grounds. JEL Categories: |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2008-09&r=cna |
| By: | Qu, Zhaopeng (Frank) (Beijing Normal University); Zhao, Zhong (IZA) |
| Abstract: | One of the most notable social phenomena in China is the large urban-rural disparity. There are many studies of it, but most of them focus on income or earnings inequality. In this paper, we investigate the consumption disparity between urban and rural households in China from 1988 to 2002. Our results suggest that low quantiles are associated with large consumption disparity. The price effect is the dominant factor for the urban-rural consumption disparity. This disparity increased significantly, both at mean and at every quantile, from 1988 to 2002. However, most of the increase happened from 1988 to 1995, and this increase was mainly from the higher growth rate of urban household consumption. Our results also suggest that rural-urban migration and improvement of the rural educational level are very helpful in reducing urban-rural disparity. |
| Keywords: | inequality, consumption, quantile regression decomposition, China |
| JEL: | O18 O53 C15 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3659&r=cna |
| By: | Ritola, Maria (BOFIT) |
| Abstract: | This study analyses the level and geographic dimension of China's market integration. The objective is to provide a broad characterization of China's market integration by performing a variety of empirical tests and providing comparisons to other studies on the same topic. The models tested are grounded in the law of one price. Price convergence is analysed with univariate time series methods, where linear and non-linear cointegration models refer to convergence in the short run and in the long run, respectively. The non-linear model is considered a good fit for analysing transitional economies, because the non-linear trend variable in the model indicates whether there is movement towards integration in the long run. Convergence of prices is first analysed by comparing city-level prices with China's national average price level and then by dividing China into three regional clusters. The estimation results suggest that the level of integration across Chinese cities is fairly high by international standards. The great majority of price series trending towards integration are services. The geographic pattern of China's market integration did not turn out as expected. Eastern cities are among the least integrated cities in the nationwide examination. Relatively high levels of integration were detected from several central and south-eastern cities. Furthermore, the cluster convergence approach to analyse China's market integration did not augment the eastern cities' level of convergence. |
| Keywords: | China; market integration; law of one price; price dispersion; regional clusters; convergence |
| JEL: | C12 C32 P22 R10 |
| Date: | 2008–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_013&r=cna |
| By: | Prema-Chandra Athukorala |
| Abstract: | TThis paper examines the implications of China's rapid integration into global production networks for export performance of countries in Southeast Asia. In a clear departure from the conventional practice, the trade flow analysis of the paper is based on a careful disaggregation of reported trade data into components and final goods, with a view to delineating supply-side complementarities arising from cross-border production fragmentation. There is clear evidence that network-related trade in components has strengthened Southeast Asia's trade links with China, opening up new opportunities for the expansion of component production/assembly writhing vertically integrated global industries. However, these trade links with China have not lessoned the dependence of growth dynamism of these countries on the global economy; the dynamism of regional cross-border production networks depends inexorably on China's trade in final goods with North America and the European Union. |
| Keywords: | China, Southeast Asia, production fragmentation, global production networks |
| JEL: | F14 F23 O53 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2008-04&r=cna |
| By: | D Mayston; J Yang |
| Abstract: | Against the background of the recent rate of expansion of China's higher education system that has outstripped even China's own high rate of economic growth, the paper examines evidence of the emerging problem of graduate overeducation within China. Based upon a pecking-order model of employment offers and associated ordered probit model, it analyses the empirical factors which determine the incidence of graduate overeducation across China. The extent to which individual students have an incentive to become overeducated compared to a socially optimal level of their education is also examined in the context of a supporting economic model that compares individual and socially optimal levels of investment in education, in the face of labour market demands. The extent of the divergence between individual and socially optimal levels of investment in education, and of the associated levels of graduate overeducation, is found to depend upon how recent major increases in the supply of graduates within China will interact with the future growth rates in job specifications, in demand variables and in resultant graduate wages within China. |
| Keywords: | Graduate overeducation. higher education policy. Optimal education investment. Economic growth in China |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:08/25&r=cna |
| By: | Jikun Huang; Yunhua Wu; Zhijian Yang; Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | With rapid income growth, dairy production and consumption in China have increased significantly. This emergence of the dairy sector will provide opportunities for farmers to participate in a high-value, potentially more lucrative enterprise. The overall goal of this paper is to analyze the major determinants of farmers' participation in dairy production. Our main question is whether or not the pace of the emergence of the dairy processing industry has affected the ability of farmers to participate in dairy production and whether or not it has limited the expansion of their herd size. Based on household, village and processor surveys conducted in the Greater Beijing region, our analysis shows that the location of dairy processing firms is one of the key factors that determines the participation of farmers in dairy production. Although other factors affect participation and herd size—for example, access to roads and the ability to get a job off the farm (which affects the opportunity cost of household members)—access to dairy processors is shown to be the major factor that has encouraged the growth of dairy production over the past decade. The results also show that poor, less educated farmers with relatively less access to land are not excluded from the rapid expansion of the Greater Beijing dairy market. |
| Keywords: | China, dairy processing, dairy production. |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:08-wp476&r=cna |
| By: | Zhihong Yu; Yundan Gong; Sourafel Girma; Holger Görg |
| Abstract: | It is widely accepted that China has been experiencing an export-led growth approach. However, the question whether government can reshape industry structure through production subsidies to enhance export performance has not been answered. This paper analyses the impact of production subsidies on firms’ export performance using a very comprehensive and recent firm level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important |
| Keywords: | Exporting, subsidies, China, endogenous Tobit |
| JEL: | F1 O2 P3 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1442&r=cna |
| By: | Jensen, Robert T. (Brown U); Miller, Nolan (Harvard U) |
| Abstract: | Many developing countries use food price subsidies or price controls to improve the nutrition of the poor. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute towards foods with higher non-nutritional attributes like taste, but lower nutritional content per unit currency, weakening or perhaps even reversing the intended impact of the subsidy. We present data from a randomized program of large price subsidies for poor households in two provinces of China. We find that the nutritional impact caused by the subsidy was at best extremely small, and for some households actually negative. |
| JEL: | I38 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-025&r=cna |