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on China |
| By: | Jing Wu; Yongheng Deng; Jun Huang; Randall Morck; Bernard Yeung |
| Abstract: | In generating fast economic growth, China is also generating growing concern about its environmental record. Using 2000-2009 data, we find that, while spending on environmental infrastructure has visible positive environmental impact, city spending is strongly tilted towards transportation infrastructure. Investment in transportation infrastructure correlates strongly with both real GDP growth, a measure of tangible economic growth relevant to city-level Party and government cadres’ promotion odds, and with land prices, which affect city governments’ revenues from land lease sales. In contrast, city governments’ spending on environmental improvements is at best uncorrelated with cadres’ promotion odds, and is uncorrelated with local GDP growth and land prices. These findings suggest that, were environmental quality explicitly linked to a cadre’s chance of promotion, or were environmental quality to affect land prices substantially, city-level public investment in environmental improvement would rise. |
| JEL: | G0 H54 P2 P26 Q56 Q58 R11 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18754&r=cna |
| By: | Jing Wu; Joseph Gyourko; Yongheng Deng |
| Abstract: | Previous research on the United States and Japan finds economically large impacts of changing real estate collateral value on firm investment. Working with unique data on land values in 35 major Chinese markets and a panel of firms outside the real estate industry, we estimate investment equations that yield no evidence of a collateral channel effect. One reason for this stark difference appears to be that some of the most dominant firms in China are state-owned enterprises (SOEs) which are unconstrained in the sense that they do not need to rely on rising underlying property collateral values to obtain all the financing necessary to carry out their desired investment programs. However, we also find no collateral channel effect for non-SOEs when we perform our analysis on disaggregated sets of firms. Norms and regulation in the Chinese capital markets and banking sector can account for why there is no collateral channel effect operating among these firms. We caution that our results do not mean that there will be no negative fallout from a potential real estate bust on the Chinese economy. There are good reasons to believe there would be, just not through a standard collateral channel effect on firm investment. |
| JEL: | E22 G11 G31 R11 R3 R39 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18762&r=cna |
| By: | Robert Elliott; Ying Zhou |
| Abstract: | A popular explanation for China's rapid economic growth in recent years has been the dramatic increase in the number of private domestic and foreign-owned firms and a decline in the state-owned sector. However, recent evidence suggest that China's state-owned enterprise (SOEs) are in fact stronger than ever. In this paper we examine over 78,000 manufacturing firms between 2002 and 2006 to investigate the relationship between ownership structure and the degree of firm-level exposure to export markets and firm-level productivity. Using a conditional stochastic dominance approach we reveal that although our results largely adhere to prior expectations, the performance of state-owned enterprises differs markedly between those that export and those that supply the domestic market only. It appears that China's internationally focused SOEs have become formidable global competitors. |
| Keywords: | Productivity, China, firm-level, State-owned enterprise, heterogeneity, stochastic dominance |
| JEL: | L2 L3 P3 D2 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:13-03&r=cna |