nep-cna New Economics Papers
on China
Issue of 2014‒12‒29
four papers chosen by
Zheng Fang
Ohio State University

  1. China's R&D subsidies: Allocation and effectiveness By Boeing, Philipp
  2. Chinese imports competition’s impact on employment and the wage distribution: evidence from French local labor markets By Malgouyres, Clément
  3. Endogenous FDI Spillovers from Japan to Russia and China with Spillover-Prevention Costs By Kiyoshi Matsubara
  4. Revisit' the Silk Road: A Quasi-Experiment Approach Estimating the Effects of Railway Speed-Up Project on China-Central Asia Exports By Hangtian Xu

  1. By: Boeing, Philipp
    Abstract: This study investigates the allocation of China's R&D subsidies and its effectiveness in stimulating firms' own R&D investments for the population of Chinese listed firms throughout the time period 2001 to 2006. For allocation, we find that firm participation is determined by prior grants, high quality inventions, and minority state-ownership. Provincial variation in China's transition towards a market-driven economy reveals that R&D subsidies are less often distributed by more market-oriented provincial governments and that China's innovation policy is more supportive of firms located in developed provinces. Considering effectiveness, we find that grants instantaneously crowd-out firms' own R&D investments but are neutral in later periods. In 2006, one public RMB reduces own R&D investments made by firms by half a RMB. For repeated recipients, high-tech firms, and minority state-owned firms grants have an insignificant effect.
    Keywords: R&D subsidies,economic transition,China,propensity score matching,difference-in-differences
    JEL: O38 O32
    Date: 2014
  2. By: Malgouyres, Clément
    Abstract: The rapid rise of Chinese exports over the past two decades has raised concerns for manufacturing employment in high-income countries. Spill-overs beyond manufacturing are an important issue given the large size of the non-traded sector in modern economies and household imperfect spatial mobility. In this paper, I follow the methodology developed by Autor et al. (2013a) to estimate the impact of Chinese imports competition onto French local labor markets, with an emphasis on the spill-overs effects beyond manufacturing. I consider a wide array of labor market outcomes, notably the distribution of wages, thus shedding light on the impact of low wage country imports competition on the local degree of wage inequality. I find that local employment and total labor income in both manufacturing and non-manufacturing are negatively affected by rising exposure to imports. Overall the number of jobs displaced by Chinese imports competition is larger outside than within the manufacturing sector. Jobs destructions are concentrated among low and medium-skill occupations in both traded and non-traded sectors. Hourly wages are negatively affected in both sectors in the middle part of the distribution. Local labor markets strongly exposed to Chinese competition did not experience a rise in the dispersion of hourly wages, with even a reduction of lower-tail inequality in the non-tradable sector. I find evidence suggesting that a high-minimum wage explains this reduction in lower-tail inequality, thus providing a striking illustration of how labor market institutions mediate the effect of globalization-induced shocks to labor demand
    Keywords: import competition, local labour markets, labour demand, wage structure, China, France
    JEL: F16 J23 J31 R11 R23
    Date: 2014
  3. By: Kiyoshi Matsubara
    Abstract: This paper explores the role of FDI-spillover prevention costs in the strategic choice for a MNE of a developed country such as Japan about whether it perform FDI to an emerging economy such as Russia and China and about a degree of FDI spillovers that it allows. After discussing the exogenous spillover case in a duopoly model, this paper shows that with a quadratic prevention cost function, the MNE may choose a positive level of spillovers lower than the benchmark exogenous level, and also shows how endogenizing spillovers affect the home firmÂfs decision on plant location. In the m-FDI-host-country firm case, the effects of the number of FDI-host country firms on the level of spillovers and the cutoff value of trade cost are not always monotonic.
    Keywords: FDI; Endogenous Spillovers; Spillover-prevention Costs;
    JEL: F12 F23 O33
    Date: 2014–11
  4. By: Hangtian Xu
    Abstract: China's main railway line linking east and west was speeded-up in Oct. 21, 2000, which improves freight efficiency between eastern China and Xinjiang (the hub of China and Central Asia). This paper tests the impact of exogenous domestic accessibility variation on export. By employing a transaction-level customs database, empirical results find benefited exporters (use rail freight) increase the export value to Central Asia by around 30% compared with exporters use other freight modes, and exporters use rail freight but enjoy limited speeded-up mileage. The speed-up effect is due to mixed channels: net export creation, export diversion in freight modes and exporters. Increase in export value of related exporters is exerted by export expansion of existing exporters but not entry of new exporters. This paper also finds exports of medium value products benefit most from speed-up, which are more sensitive to shipping efficiency than low and high value products. Overall, speed-up effect on regional development of Xinjiang is two-fold. It weakens the function of Xinjiang as the hub, but promotes its export in other international markets by better accessibility to coast.
    Keywords: Domestic transport costs; China-Central Asia; Export; Firm-level; Transport infrastructure
    Date: 2014–11

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