nep-cna New Economics Papers
on China
Issue of 2014‒10‒22
three papers chosen by
Zheng Fang
Ohio State University

  1. The Sloping Land Conversion Program in China: Effect on Rural Households’ Livelihood Diversification By Zhen Liu
  2. The Determinants of the Benchmark Interest Rates in China: A Discrete Choice Model Approach By Hyeongwoo Kim; Wen Shi
  3. Internationalization of Middle Size Multinational Enterprises in Chinese Markets: Mirroring Back Effects By Andrea Pontiggia; Tiziano Vescovi

  1. By: Zhen Liu (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: By overcoming the barriers that limit access to financial liquidity and human resource, the Sloping Land Conversion Program (SLCP) can promote rural livelihood diversification. This paper examines this effect using a household survey data set spanning the 1999 implementation of the Sloping land conversion program. Our results show that SLCP works as a valid external policy intervention on rural livelihood diversification. In addition, the findings demonstrate that there exist heterogeneous effects of SLCP implementation on livelihood diversification across different rural income groups. The lower income group was more affected by the program in terms of income diversification.
    Keywords: Sloping Land Conversion Program; China; Livelihood diversification; Income diversity index; Identification condition; Difference in differences
    JEL: Q12 Q15 Q58
    Date: 2014–09
  2. By: Hyeongwoo Kim; Wen Shi
    Abstract: This paper empirically investigates the determinants of key benchmark interest rates in China using an array of constrained ordered probit models for quarterly frequency data from 1987 to 2013. Specifically, we estimate the behavioral equation of the People's Bank of China that models their decision-making process for revisions of the benchmark deposit rate and the lending rate. Our findings imply that the PBC's policy decisions are better understood as responses to changes in inflation and money growth, while output gaps and the exchange rate play negligible roles. We also implement in-sample fit analyses and out-of-sample forecast exercises. These tests show robust and reasonably good performances of our models in understanding dynamics of these benchmark interest rates.
    Keywords: Monetary Policy; People's Bank of China; Ordered Probit Model; Deposit Rate; Lending Rate; In-Sample Fit; Out-of-Sample Forecast
    JEL: E52 E58
    Date: 2014–09
  3. By: Andrea Pontiggia; Tiziano Vescovi
    Abstract: In this paper, we focus on the internationalization strategies implemented by Middle Size Multinational Enterprises (MMNE) in Chinese markets. We assume that these strategies differs from those of the large multinational companies. Differences explained by the size of the company (medium) compared to the size of the potential market (large). The hypothesis is that in the internationalization strategy of Medium size Multinational Enterprises (MMNEs) is recursive and based on two-way innovation process. This processes is defined as a mirroring back phase and its shown by companies prone to innovate the business model because of the international exposure. Culturally distant and large markets may support firms to increase their strategic innovation rate. Evidences based on case studies show the content and the modes of the internationalization of MMNEs.
    Keywords: management, finance, economics.
    JEL: F23 M16 M31 D22 D21
    Date: 2014–09

This nep-cna issue is ©2014 by Zheng Fang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.