nep-cna New Economics Papers
on China
Issue of 2015‒08‒13
ten papers chosen by
Zheng Fang
Ohio State University

  1. The Competitive Earning Incentive for Sons: Evidence from Migration in China By Li, Wenchao; Yi, Junjian
  2. Understanding the Effects of Education on Health: Evidence from China By Huang, Wei
  3. Left Behind, At Risk, and Vulnerable Elders in Rural China: What the RUMIC Data Reveal about the Extent, Causes, and Consequences of Being Left Behind By Connelly, Rachel; Maurer-Fazio, Margaret
  4. Has trade openness reduced pollution in China? By Sandra PONCET; Laura HERING; José DE SOUSA
  5. The impact of Chinese competition on Africa’s manufacturing By Sylviane GUILLAUMONT JEANNENEY; Ping HUA
  6. Measuring patent quality in international comparison: Index development and application to China By Boeing, Philipp; Mueller, Elisabeth
  7. China’s electrical equipment manufacturing in the Global Value Chain: A GVC income analysis based on World Input-Output Database (WIOD) By Yingying Lu
  8. Testing For Stock Return Predictability In A Large Chinese Panel By Joakim Westerlund; Paresh K Narayan; Xinwei Zheng
  9. Understanding the Health Effects of the Death of Spouses in Modern China: Evidence from the city of Qingdao By KAWATA Keisuke; WANG Meixin; YIN Ting
  10. China's Farewell to Coal: A Forecast of Coal Consumption through 2020 By Yu Hao; Zong-Yong Zhang; Hua Liao; Yi-Ming Wei

  1. By: Li, Wenchao (National University of Singapore); Yi, Junjian (National University of Singapore)
    Abstract: This paper first finds a clear pattern of child gender difference in family migration in China. Specifically, our estimates show that on average, the first child being a son increases the father's migration probability by 25.2 percent. We hypothesize that the family's competitive earning incentive for sons drives this child gender effect on family migration: parents migrate to earn more money in an attempt to improve their sons' relative standing in response to the ever-rising pressure in China's marriage market. This competitive-earning-incentive hypothesis is then supported by additional empirical evidence. We further find that, facing heavier financial pressure from the marriage market, parents spend less on their sons' education and more on marriage and buying houses and durable goods. This gender difference in resource allocation, together with the absentee-father problem resulting from paternal migration, may unexpectedly adversely affect boys' long-run human capital development in China.
    Keywords: competitive earning incentive, sex ratio, migration
    JEL: J11 J13 O15
    Date: 2015–07
  2. By: Huang, Wei (Harvard University)
    Abstract: Using a national representative sample in China from three largest on-going surveys, this study examines the effects of education on health among working-age population and explores the potential mechanisms. Using the exogenous variation in temporal and geographical impacts of Compulsory Schooling Laws (CSLs), it finds an additional year of schooling decreases 2-percentage points in reporting fair or poor health, 1-percentage points for underweight and 1.5-percentage points for smoking, and increases cognition by about 0.16 standard deviation. Further analysis also suggests that nutrition, income, cognition and peer effects are important channels in the education-health nexus, and all of these factors explain almost half of the education's impact. These suggest that CSLs have improved national health significantly in China and the findings help to explain the mixed findings in the literature.
    Keywords: education, health, China
    JEL: I12 I21 I28
    Date: 2015–07
  3. By: Connelly, Rachel (Bowdoin College); Maurer-Fazio, Margaret (Bates College)
    Abstract: Migration of any distance separates family members for long periods of time. In China, an institutional legacy continues to privilege the migration of working-age individuals who often leave children and elders behind in the rural areas. Up to now, the literature has treated children and elders analogously, labeling each group "left-behind". We argue that analysis of elder stayers needs to be more nuanced, distinguishing among differing groups of elders. Of these groups, those living alone without any adult children in the village are most at risk of negative consequences of migration, while those living with other non-migrant children are much less affected by migration. We find evidence, when focusing on the consequences of migration on elders, that an elder-centric analysis is preferable to a migrant-child-centric analysis.
    Keywords: living arrangements, aging, China, rural, elderly, left behind, at risk, migration
    JEL: J12 J14 J21 J26 O53
    Date: 2015–07
  4. By: Sandra PONCET (Université de Paris I); Laura HERING (FERDI); José DE SOUSA (FERDI)
    Abstract: We use recent detailed Chinese data on trade and pollution emissions to assess the environmental consequences of China’s integration into the world economy. We rely on a panel dataset covering 235 Chinese cities over the 2003-2012 period to see whether the environmental repercussions from trade openness depend on whether the latter concerns processing or ordinary activities. In line with our theoretical predictions, we find a negative and signicant effect of trade on emissions that is larger for processing trade and activities undertaken by foreign firms: the environmental gains from either ordinary trade activities or domestic firms are much lower, even though these today represent the main drivers of China’s export and import growth. This result suggests some caution regarding pollution prospects in the context of the declining role of processing trade.
    JEL: F10 F14 O14
    Date: 2015–07
  5. By: Sylviane GUILLAUMONT JEANNENEY (Université d'Auvergne); Ping HUA (FERDI)
    Abstract: In this paper, the impact of Chinese competition on Africa’s manufacturing value added is analyzed through a model of manufacturing. Using panel data on 44 African countries covering the period 2000 to 2013, and controlling for the usual determinants of industrialization – such as the size of the domestic market, the quality of infrastructure and governance – we find that exports of manufactured goods by China and other countries to African countries mainly exert a negative effect on African manufacturing, while a moderate real appreciation of African currencies vis-à-vis the renminbi positively influences manufacturing value added, probably due to the reduced cost of imported machine and transport equipment from China (which accounted for 36% of total African imports from China in 2013) and to the reduced price of imported consumption goods increasing the remuneration of poor workers and therefore improving their productivity. However, a strong real appreciation (of more than 33%) instead exerts a negative effect on African’s manufacturing, as traditional theory predicts.
    Keywords: manufacturing, China, Africa, real exchange rates
    JEL: E60 L60 O55
    Date: 2015–07
  6. By: Boeing, Philipp; Mueller, Elisabeth
    Abstract: We develop an index that compares the quality of Patent Cooperation Treaty (PCT) applications by considering citations generated by International Search Reports (ISRs). In its most restrictive variation, i.e. excluding citations from the home country and self-citations, the ISR index is not biased by selectivity in filing strategies, differences in citations due to varying national examination procedures, or domestic economic policies. Against the background of strong increases in Chinese patenting between 2001 and 2009, we compare the quality of Chinese PCT applications with those from high-income countries. Chinese PCT applications achieve only 34% of the quality level of international PCT applications. In addition, their quality is decreasing over time. We find that the patent quality of firms increases in R&D stocks but decreases with the introduction of PCT subsidies. Our results confirm that China's expansion of international filings was achieved to the detriment of quality.
    Keywords: patent quality,PCT system,China
    JEL: O34 O32
    Date: 2015
  7. By: Yingying Lu
    Abstract: This paper empirically analyzes China’s electrical equipment manufacturing industry in the context of global value chain (GVC) by using the GVC income approach (Timmer et al., 2013) and the World Input-Output Database (WIOD). Four major questions are addressed by measuring several different indicators. China is found to have comparative advantage and competitiveness in terms of its large share of value added contribution in the world electrical equipment manufacturing industry. However, such competitiveness is not sustainable for two reasons: (1) China is actually a net value added importer, which limits its dominance and development in this industry; (2) the majority of China’s GVC income comes from capital investment rather than high-skilled or valuable activities, which means the competitiveness is easy to be taken over as physical capital is more “mobile” than human capital. The paper also finds that the global financial crisis (GFC) did have certain impact on the electrical equipment GVCs in general, but the impact is not necessarily negative and big for each economy. For China, the GFC led to a decrease in the average real wage in this industry due to the decreasing high-skilled labor compensation share and the increasing low-skilled one. The analysis also implies that to upgrade the China’s position in the electrical equipment manufacturing GVC may ultimately mean upgrading the agriculture sector such that more labor can be engaged in medium- and high-skilled activities.
    Keywords: Global Value Chain (GVC), Input-Output Analysis, GVC income, China, Electrical Equipment Manufacturing
    JEL: C67 F14 L63
    Date: 2015–07
  8. By: Joakim Westerlund (Deakin University); Paresh K Narayan (Deakin University); Xinwei Zheng (Deakin University)
    Abstract: This paper proposes a simple panel data test for stock return predictability that is flexible enough to accommodate three key salient features of the data, namely, predictor persistency and endogeneity, and cross-sectional dependence. Using a large panel of Chinese stock market data comprising more than one million observations, we show that most financial and macroeconomic predictors are in fact able to predict returns. We also show how the extent of the predictability varies across industries and firm sizes.
    Keywords: Panel data; Bias; Cross-section dependence; Predictive regression; Stock return predictability; China.
    JEL: C22 C23 G1 G12
  9. By: KAWATA Keisuke; WANG Meixin; YIN Ting
    Abstract: This paper provides new empirical results to understand the impacts of the death of spouses on the surviving partner's health status. We use the survey data for elderly persons in the city of Qingdao in China, which include information for individual health status and other basic characteristics. Based on the probit estimation and the propensity-score approaches, we estimate the impacts of the death of spouses on health status. These estimation results consistently show the heterogeneous health effects between males and females; we can observe statistically significant negative effects on females' health status, while any statistically significant effects for males were unable to be found. One of the possible interpretations of these results is the unique policy in the Mao era (1949-1976).
    Date: 2015–07
  10. By: Yu Hao; Zong-Yong Zhang; Hua Liao; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: In recent decades, China has encountered serious environmental problem, especially severe air pollution that has affected eastern and northern China frequently. Because most air pollutants in China are closely related to coal combustion, the restriction of coal consumption is critical to the improvement of the environment in China. In this study, a panel of 29 Chinese provinces from 1995 to 2012 is utilized to predict China's coal consumption through 2020. After controlling for the spatial correlation of coal consumption among neighboring provinces, an inverted U-shaped Environmental Kuznets Curve (EKC) between coal consumption per capita and GDP per capita in China is detected. Furthermore, based on the estimation results and reasonable predictions of key control variables, China's provincial and national coal consumption through 2020 is forecasted. Specifically, under the benchmark scenario, consumption is expected to continue growing at a decreasing rate until 2020, when China's coal consumption would be approximately 4.43 billion tons. However, if China can maintain relatively high growth rate (an annual growth rate of 7.8 percent), the turning point in total coal consumption would occur in 2019, with projected consumption peaking at 4.16 billion tons.
    Keywords: Coal consumption, Environmental Kuznets Curve, Spatial correlation, Panel data, Forecast
    JEL: Q47
    Date: 2014–09–11

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