nep-cna New Economics Papers
on China
Issue of 2014‒11‒28
seven papers chosen by
Zheng Fang
Ohio State University

  1. Migration, Local Off-farm Employment and Agricultural Production Efficiency: Evidence from China By Yang, Jin; Wang, Hui; Jin, Songqing; Chen, Kevin; Riedinger, Jeffrey; Peng, Chao
  2. Precautionary Saving of Chinese and U.S. Households By Horag Choi; Steven Lugauer; Nelson C. Mark
  3. Stimulating Shale Gas Development in China: A Comparison with the US Experience By Tian, Lei; Wang, Zhongmin; J. Krupnick, Alan; Liu, Xiaoli
  4. On Price Endogeneity in the Analysis of Food Demand in China By Hovhannisyan, Vardges; Bozic, Marin
  5. Peer Effects on Childhood and Adolescent Obesity in China By Nie, Peng; Sousa-Poza, Alfonso; He, Xiaobo
  6. Price Discovery of World and China Vegetable Oil Markets and Causality with Non-Gaussian Innovations By Dharmasena, Senarath; Fang, Lu; Bessler, David A.; Jing, Wang
  7. Asset recombination in international partnerships as a source of improved innovation capabilities in China By Collinson S.; Narula R.

  1. By: Yang, Jin; Wang, Hui; Jin, Songqing; Chen, Kevin; Riedinger, Jeffrey; Peng, Chao
    Abstract: This paper studies the effect of local off-farm employment and migration on rural households’ technical efficiency of crop production using a five-year panel dataset from more than 2,000 households in five Chinese provinces. While there is not much debate about the positive contribution of migration and local off-farm employment to China’s economy, there is an increasing concern about the potential negative effects of moving labor away from agriculture on China’s future food security. This is a critical issue as maintaining self-sufficiency in grain production will be critical for China to feed its huge population in the future. Several papers have studied the impact of migration on production and yield with mixed results. But the impact of migration on technical efficiency is rarely studied. Methodologically, we incorporate the correlated randomeffects approach into the standard stochastic production frontier model to control for unobservable that are correlated with migration and off-farm employment decisions and technical efficiency. The most consistent result that emerged from our econometric analysis is that neither migration nor local off-farm employment has a negative effect on the technical efficiency of grain production, which does not support the widespread notion that vast-scale labor migration could negatively affect China’s future food security.
    Keywords: migration, local off-farm, agriculture, efficiency, China, Community/Rural/Urban Development, Food Security and Poverty, Productivity Analysis, D24, O12, O13,
    Date: 2014–07
  2. By: Horag Choi; Steven Lugauer; Nelson C. Mark
    Abstract: We employ a model of precautionary saving to study why household saving rates are so high in China and so low in the US. The use of recursive preferences gives a convenient decomposition of saving into precautionary and non precautionary components. This decomposition indicates that over 80 percent of China's saving rate and nearly all of the US saving arises from the precautionary motive. The difference in the income growth rate between China and the US is vastly more important for explaining saving rate differences than differences in income risk. We estimate the preference parameters and find that Chinese and US households are more similar in their attitude toward risk than in their intertemporal substitutability of consumption.
    JEL: E21 F4
    Date: 2014–09
  3. By: Tian, Lei; Wang, Zhongmin (Resources for the Future); J. Krupnick, Alan (Resources for the Future); Liu, Xiaoli
    Abstract: In this paper, we use the US shale gas experience to shed light on how China might overcome the innovation problem inherent in exploring and developing shale gas plays with complex geology. We separate shale gas development into two stages, an innovation stage and a scaling-up stage, with the first presenting a much bigger challenge than the latter. Our analysis suggests that China’s national oil companies offer the best hope for overcoming the innovation problem. China’s policy of opening shale gas development to new entrants is a market-oriented reform that can be justified on various grounds, but the new entrants will not play a major role in overcoming the innovation problem even though they may help scale up production later on.
    Keywords: shale gas, innovation, China
    Date: 2014–07–16
  4. By: Hovhannisyan, Vardges; Bozic, Marin
    Abstract: Price endogeneity has been ignored in previous analyses of food demand in China. We examine agricultural input price data from the China National Bureau of Statistics and use reduced-form price equations to account for price endogeneity in this setting. Applying our unique econometric approach to the analysis of provincial-level food demand in China, we find strong statistical evidence of price endogeneity. Models that ignore price endogeneity result in substantially biased elasticities and misleading estimates of future food demand in China.
    Keywords: Consumer welfare, expenditure endogeneity, food demand in China, Generalized Quadratic AIDS, price endogeneity., Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Q11, Q13, Q17,
    Date: 2014–05–24
  5. By: Nie, Peng (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim); He, Xiaobo (University of Adelaide)
    Abstract: Using data from the China Health and Nutrition Survey (CHNS), this study analyzes peer effects on obesity in a sample of 3- to 18-year-old children and adolescents in China. Even after a rich set of covariates and unobserved individual heterogeneity are controlled for, it is evident that such peer effects do indeed exist. These effects are stronger in rural areas, among individuals at the upper end of the BMI distribution, and especially among females. All else being equal, female adolescents whose peers have a higher BMI are less likely to consider themselves overweight, suggesting that peer effects may be working through changed societal bodyweight norms.
    Keywords: peer effects, children and adolescents, BMI, China
    JEL: I10 I15 J13 C14
    Date: 2014–10
  6. By: Dharmasena, Senarath; Fang, Lu; Bessler, David A.; Jing, Wang
    Keywords: Vegetable oil, causality, non-Gaussian Innovations, price discovery, International Relations/Trade, Marketing, Research Methods/ Statistical Methods, F1, C1, C3, C4, C5,
    Date: 2014–05
  7. By: Collinson S.; Narula R. (UNU-MERIT)
    Abstract: This paper examines how multinational enterprises MNEs and local partners, including suppliers, customers and competitors in China, improve their innovation capabilities through collaboration. We analyse this collaboration as a three-way interaction between the ownership-specific O advantages or firm-specific assets FSAs of the MNE subsidiary, the FSAs of the local partner, and the location-specific assets of the host location. Our propositions are examined through a survey of 320 firms, supplemented with 30 in-depth case studies. We find that the recombination of asset-type Oa FSAs and transaction-type Ot FSAs from both partners leads to new innovation-related ownership advantages, or recombinant advantages. The study reveals important patterns of reciprocal transfer, sharing and integration for different asset categories tacit, codified and different forms of FSA and explicitly links these to different innovation performance outcomes. Ot FSAs, in the form of access to local suppliers, customers or government networks are particularly important for reducing the liability of foreignness for MNEs.
    Keywords: Multinational Firms; International Business; Globalization: Policy; Management of Technological Innovation and R&D;
    JEL: F23 O32
    Date: 2014

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.