nep-cna New Economics Papers
on China
Issue of 2014‒12‒03
nine papers chosen by
Zheng Fang
Ohio State University

  1. Mapping and Understanding Ethnic Disparities in Length of Schooling: The Case of Ningxia Autonomous Region, China By Gustafsson, Björn Anders; Sai, Ding
  2. Village political economy, land tenure insecurity, and the rural to urban migration decision : evidence from China By Giles, John; Mu, Ren
  3. Minimum Wages and Firm Employment: Evidence from China By Yi Huang; Prakash Loungani; Gewei Wang
  4. Decision Making Among Heterogeneous Members: A Study on Economic Efficiency under the Centralized Structure of Chinese Farmer Professional Cooperatives By Ma, Meilin; Zhu, Heng
  5. Climate change, the monsoon, and tea yields in China By Nemec-Boehm, Rebecca L.; Cash, Sean B.; Anderson, Bruce T.; Ahmed, Selena; Griffin, Timothy S.; Orians, Colin M.; Robbat, Albert Jr.; Stepp, Richard A.; Han, Wenyan
  6. Food versus Crude Oil: What Do Prices Tell Us? Evidence from China By Wang, Yumeng; Zhao, Shuoli; Yang, Zhihai; Liu, Donald J.
  7. Impact of information cost and switching of trading strategies in an artificial stock market By Yi-Fang Liu; Wei Zhang; Chao Xu; Jørgen Vitting Andersen; Hai-Chuan Xu
  8. Wealth Effects of Rare Earth Prices and China's Rare Earth Elements Policy By Maximilian Mueller; Denis Schweizer; Volker Seiler
  9. Mobile telecommunications infrastructure and economic growth: Evidence from China By Ward, Michael R.; Zheng, Shilin

  1. By: Gustafsson, Björn Anders (University of Gothenburg); Sai, Ding (Chinese Academy of Social Sciences)
    Abstract: Disparities in length of schooling between the largest Muslim minority in China, the Hui, and the Han majority are investigated. We use household data collected in Ningxia autonomous region in 2007. It is found that compared with Han persons of the same age and gender, Hui persons have shorter educations with the exception of young and middle-aged urban males who have twelve years of schooling, on average. Particularly noteworthy is that as many as 45 percent of adult rural Hui females are not literate. Possible reasons for the shorter educations of Hui in many segments of the population are numerous. We show that the incentive to invest in length of schooling is smaller among Hui than Han as the association between education and income is weaker. We also report that Hui parents spend fewer resources on education than Han parents and that fewer years of schooling for Hui in the first generation helps to explain why Hui persons in the second generation have shorter educations.
    Keywords: China, schooling, Hui ethnicity, Han ethnicity, Ningxia, inequality
    JEL: I24 J15 P35
    Date: 2014–10
  2. By: Giles, John; Mu, Ren
    Abstract: This paper investigates the impact of land tenure insecurity on the migration decisions of China's rural residents. A simple model first frames the relationship among these variables and the probability that a reallocation of land will occur in the following year. After first demonstrating that a village leader's support for administrative land reallocation carries with it the risk of losing a future election, the paper exploits election-timing and village heterogeneity in lineage group composition and demographic change to identify the effect of land security. In response to an expected land reallocation in the following year, the probability that a rural resident migrates out of the county declines by 2.8 percentage points, which accounts for 17.5 percent of the annual share of village residents, aged 16 to 50, who worked as migrants during the period. This finding underscores the potential importance of secure property rights for facilitating labor market integration and the movement of labor out of agriculture.
    Keywords: Common Property Resource Development,Population Policies,Urban Housing,Political Economy,Municipal Housing and Land
    Date: 2014–11–01
  3. By: Yi Huang; Prakash Loungani; Gewei Wang
    Abstract: This paper provides the first systematic study of how minimum wage policies in China affect firm employment over the 2000-2007 periods. Using a novel dataset of minimum wage regulations across more than 2,800 counties matched with firm-level data, we investigate both the effect of the minimum wage and its policy enforcement tightening in 2004. A dynamic panel (difference GMM) estimator is combined with a “neighbor-pairs-approach†to control for unobservable heterogeneity common to “border counties†that are subject to different minimum wage changes. We show that minimum wage increases have a significant negative impact on employment, with an estimated elasticity of -0.1. Furthermore, we find a heterogeneous effect of the minimum wage on employment which depends on the firm's wage level. Specifically, the minimum wage has a greater negative impact on employment in low-wage firms than in high-wage firms. Our results are robust for different treatment groups, sample attrition correction, and placebo tests.
    Keywords: Minimum wages;China;Employment;Business enterprises;Labor demand;Labor supply;Wage policy;Econometric models;China, employment, minimum wages
    Date: 2014–10–16
  4. By: Ma, Meilin; Zhu, Heng
    Abstract: Farmer cooperatives are playing an increasingly crucial role in the current reform of the agricultural sector in China. Two features of these organizations have stood out amidst the undergoing, rapid development. One is the highly concentrated decision-making structure, while the other being the high level of member heterogeneity in terms of production capacity and ownership portion. Current literature has few quantitative models for analyzing the effects of governance centralization and member heterogeneity on cooperative economic efficiency. This article focuses on evaluating the efficiency of decisions made under different voting structures when members are highly heterogeneous. We use a net income model for a two-stage investment decision. We find that members with a larger ownership in a Chinese cooperative tend to have better aligned interest with the organization and can make more efficient decisions relative to those with less ownership. When heterogeneity among members is high, a more centralized decision making structure can lead to higher economic efficiency. Additionally, because the optimal level of centralization is determined by the redistribution policy of cooperative profits and properties of member heterogeneity, different cooperatives would accordingly have different optimal degrees of centralization.
    Keywords: Chinese Farmer Professional Cooperatives, Economic efficiency, Centralized decision power, Member heterogeneity, Community/Rural/Urban Development, Industrial Organization, Q13, D71,
    Date: 2014–07
  5. By: Nemec-Boehm, Rebecca L.; Cash, Sean B.; Anderson, Bruce T.; Ahmed, Selena; Griffin, Timothy S.; Orians, Colin M.; Robbat, Albert Jr.; Stepp, Richard A.; Han, Wenyan
    Abstract: The objective of this research is to estimate the economic impact of climate change on tea production in China. We use historical weather and production data from 1980 to 2011 to construct a yield response model from panel data that estimates the partial effect of specific weather factors on tea yields in China, with a specific focus on monsoon dynamics. We base our analysis upon methodologies employed in previous studies, many of which use a yield response model to estimate the impact climate change on crop yields or other economic indicators of agricultural productivity. Previous studies have tended to focus mostly on staple crops like maize as well as other food crops like fruits and vegetables, but tea is an important export crop for many developing countries. Instead of estimating the monsoon based on historical dates of onset, duration and retrieval we construct the actual approximated onset and retrieval dates based on the year-by-province cumulative precipitation function. To date our research is the first to estimate the monsoon period using this method. Results indicate that a later monsoon onset date, as well as a later monsoon retrieval date have a small but significant negative impact on yields over the last 30 years. A delay in either the monsoon onset or retrieval of only 3-4 days reduced yields by .1% each. However, we did not find a statistical association between the length of the monsoon. Total rainfall during the monsoon period was found to have a small and positive impact on yields, even when controlling for extreme temperatures and low precipitation. We also found a strong positive effect of increased maximum daily temperatures during the monsoon period on tea yields. Spring maximum daily temperatures did not have a significant impact on tea yields. Our results have important implications for tea producer in China in the face of future global climate changes.
    Keywords: climate change, tea, agriculture, China, yield response model, monsoon, Agricultural and Food Policy, Crop Production/Industries, Research Methods/ Statistical Methods,
    Date: 2014
  6. By: Wang, Yumeng; Zhao, Shuoli; Yang, Zhihai; Liu, Donald J.
    Abstract: This study investigates the causal relationship between the prices of rice, crude oil, wheat, corn and soybean in China, using monthly price data over the period of January 1998 to December 2013. Employing an autoregressive distributed lag (ARDL) bounds test, we explore the cointegration relationship among the price variables. We estimate the ARDL long-run price relationship and the short-run error correction process (ARDL-EC). The results show that rice price are affected by crude oil, wheat, corn and soybean price as the forcing variables. Both the long-run and short-run price transmission elasticity estimates suggest the importance of crude oil price on the formation of rice prices in China. Furthermore, the adjustment speed coefficient is found to be statistically significant, supporting the notion that there is an error correction mechanism for maintaining the long-run price relationship facing short-run shocks.
    Keywords: food prices, crude oil price, long-run and short-run relationships, ARDL-EC model, Agricultural and Food Policy,
    Date: 2014
  7. By: Yi-Fang Liu (College of Management and Economics - Tianjin University, China Center for Social Computing and Analytics - Tianjin University, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Wei Zhang (College of Management and Economics - Tianjin University, China Center for Social Computing and Analytics - Tianjin University); Chao Xu (College of Management and Economics - Tianjin University, China Center for Social Computing and Analytics - Tianjin University); Jørgen Vitting Andersen (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Hai-Chuan Xu (College of Management and Economics - Tianjin University, China Center for Social Computing and Analytics - Tianjin University)
    Abstract: This paper studies the switching of trading strategies and its effect on the market volatility in a continuous double auction market. We describe the behavior when some uninformed agents, who we call switchers, decide whether or not to pay for information before they trade. By paying for the information they behave as informed traders. First, we verify that our model is able to reproduce some of the stylized facts in real financial markets. Next we consider the relationship between switching and the market volatility under different structures of investors. We find that there exists a positive relationship between the market volatility and the percentage of switchers. We therefore conclude that the switchers are a destabilizing factor in the market. However, for a given fixed percentage of switchers, the proportion of switchers that decide to buy information at a given moment of time is negatively related to the current market volatility. In other words, if more agents pay for information to know the fundamental value at some time, the market volatility will be lower. This is because the market price is closer to the fundamental value due to information diffusion between switchers.
    Keywords: Agent-based model; heterogeneity; switching behavior; market volatility
    Date: 2014–04
  8. By: Maximilian Mueller (WHU–Otto Beisheim School of Management); Denis Schweizer (Concordia University); Volker Seiler (University of Paderborn)
    Abstract: The strategic importance of rare earth elements (REEs) has become increasingly important because of their relative scarcity and worldwide increasing demand, as well as China’s quasi-monopoly of this market. REEs are virtually not substitutable, and they are essential for a variety of high-tech products and modern key technologies. This has raised serious concerns that China will misuse its dominant position to set export quotas in order to maximize its own profits at the expense of other rare earth user industries (e.g., the wealth transfer motive). In fact, export restrictions on REEs were the catalyst for the U.S. to lodge a formal complaint against China in 2012 at the WTO. This paper analyzes possible wealth transfer effects by focusing on export quota announcements (so-called MOFCOM announcements) by China, and then calculating share price reactions for Chinese REE suppliers, U.S. REE users, and the rest of the world REE refiners. The results of the multivariate regression analyses do not support the view of a wealth transfer in connection with the MOFCOM announcements. This suggests that export quotas may be viewed more as a public scapegoat, and have limited influence on markets. We find instead that extreme REE price movements should be the topic of concern, as they have a significant impact on share prices for all companies in the REE industry.
    Keywords: Announcement Effects, Event Study, Rare Earths Elements, WTO
    JEL: F13 F52 G14 Q31 Q34 Q37 Q38
    Date: 2014–11
  9. By: Ward, Michael R.; Zheng, Shilin
    Abstract: We contribute to the role of telecommunications infrastructure on economic growth in three ways. We separately examine fixed-line and mobile telephone subscription levels. We compare results across periods and regions that differ by the level of development. In addition, we develop a method designed to address endogeneity of telecommunications with respect to growth. We find that mobile services contribute much more to growth but that the effect diminishes as the provincial economy develops more.
    Keywords: Growth,Mobile Phone,China
    JEL: O4 L96
    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.
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