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on China |
| By: | Xuan Huang; Bruno Lanz |
| Abstract: | Using a dual-market sorting model of workers' location decisions, this paper studies the capitalization of air pollution in wages and property prices across Chinese cities. We exploit quasi-experimental variations in particulate matter (PM10) concentration induced by a policy subsidizing coal-based winter heating in northern China, specifying a regression discontinuity design based on cities' location relative to the policy boundary. We estimate that the elasticity of wages and house prices with respect to PM10 concentration is 0.41 and -0.71 respectively. Our results are robust to the use of an alternative source of exogenous variation in PM10 concentration (sandstorms), supporting the view that the local effect we measure provides policy-relevant information on the value of air quality improvements in China. |
| Keywords: | Hedonic model; Air pollution; Labor market; Housing prices; Local public goods. |
| JEL: | H41 J31 R31 Q53 |
| Date: | 2015–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_37&r=cna |
| By: | Lulu Gu; W. Robert Reed (University of Canterbury) |
| Abstract: | This paper analyzes the financing of Chinese mergers and acquisitions. It is motivated by two issues associated with characteristic features of the Chinese economy. First, foreign ownership restrictions can potentially inhibit Chinese acquiring firms’ use of equity to finance overseas M&A deals. Second, the ability of state-owned enterprizes (SOEs) to secure favorable loan terms may provide them an incentive to rely more on cash financing. We collate data from four databases to obtain a sample of over 6000 M&A deals that were completed during the 1997-2014 period. We find evidence to support the first supposition but not the second. |
| Keywords: | Mergers and acquisitions (M&As), foreign ownership restrictions, state owned enterprises (SOEs), M&A financing, Chinese firms |
| JEL: | G34 G28 N20 |
| Date: | 2015–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:15/17&r=cna |
| By: | Chen, Zeyuan (Department of Economic History, Lund University); Bengtsson, Tommy (Department of Economic History, Lund University); Helgertz, Jonas (Department of Economic History, Lund University) |
| Abstract: | Transitioning into retirement is an under-researched phenomenon in developing countries. Largely, this is linked to a predominance of contexts where – in particular – the rural population remains outside the coverage of any formal pension system. In 2008, China introduced the New Rural Social Pension (NRSP), a program which by now covers the majority of the Chinese rural elderly. This paper examines the effects of the NRSP on the labor supply of the elderly in rural China. As pension benefit eligibility at the time of its implementation is conditional on age, a regression discontinuity design is applied to investigate the casual effect of the receipt of pension benefits on labor supply. Furthermore, as the NRSP is neither means-tested nor conditions on retirement, it induces a pure income effect on employment. Using data from the China Health and Retirement Longitudinal Study, a nationally representative data set, we find that the receipt of pension benefits increases the probability of retirement among the rural elderly by around 15%. |
| Keywords: | China; New Rural Social Pension; Labor supply; Regression discontinuity; Retirement |
| JEL: | H55 J26 |
| Date: | 2015–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0139&r=cna |
| By: | Zhang, Xin; Zhang, Xiaobo; Chen, Xi |
| Abstract: | Existing studies that evaluate the impact of pollution on human beings understate its negative effect on cognition, mental health, and happiness. This paper attempts to fill in the gap via investigating the impact of air quality on subjective well-being using China as an example. By matching a unique longitudinal dataset at the individual level, which includes self-reported happiness and mental well-being measures, with contemporaneous local air quality and weather information according to the exact date and place of interview, we show that worse air quality reduces shorter-term hedonic happiness and increases the rate of depressive symptoms. However, life satisfaction, an evaluative measure of happiness, is largely immune from immediate bad air quality. |
| Keywords: | air pollution, welfare, psychology, hedonic happiness, life satisfaction, mental well-being, air quality, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1463&r=cna |
| By: | Shimokawa, Satoru |
| Abstract: | Prohibiting land reallocation improves tenure security, but it remains unclear whether this sufficiently facilitates the development of farmland rental markets in China. To fill this gap, we investigate how farmland rental activities are influenced by full-scale land reallocation (FSLR) and partial land reallocation (PLR), which differ in scale and imposition. Employing the instrumental-variables and the difference-in-differences approaches, we find that PLR substitutes relation-specific contracting in the markets, while FSLR complements arms-length contracting. The different impacts are attributable to the difference in imposition rather than scale. These findings suggest the need for further reforms. |
| Keywords: | China, Land tenure, Agriculture, Right of property, Agricultural economies, Farmland reallocation, Farmland rental market, Rural China |
| JEL: | O12 Q12 Q15 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper543&r=cna |
| By: | Kee,Hiau Looi; Tang,Heiwai |
| Abstract: | China has defied the declining trend in domestic content in exports in many countries. This paper studies China?s rising domestic content in exports using firm- and customs transaction-level data. The approach embraces firm heterogeneity and hence reduces aggregation bias. The study finds that the substitution of domestic for imported materials by individual processing exporters caused China?s domestic content in exports to increase from 65 to 70 percent in 2000?2007. Such substitution was induced by the country?s trade and investment liberalization, which deepened its engagement in global value chains and led to a greater variety of domestic materials becoming available at lower prices. |
| Keywords: | E-Business,Economic Theory&Research,Currencies and Exchange Rates,Markets and Market Access,Water and Industry |
| Date: | 2015–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7491&r=cna |
| By: | Conlé, Marcus |
| Abstract: | China´s rapid economic ascent has been accompanied by brilliant institutionalist scholarship elaborating on the significance of institutional diversity for China´s recent development trajectory. As valuable as these analyses are, their foundation in the transition literature seems to have resulted in their focusing mainly on offering explanations for the characteristics and the (temporary) persistence of institutional diversity rather than on providing insights about the impact of that diversity on such issues as innovation and competitive advantage. This focus has arguably contributed to both, a limited understanding of China´s development model as well as a limited impact of the findings concerning China´s institutional reality on the research program of the comparative capitalisms, specifically on the debate on the benefits and flaws of the so-called Varieties of Capitalism (VoC). Building on recent work on innovation in China, the present paper seeks to provide a typology of architectural innovation, a concept that was originally introduced by Rebecca Henderson and Kim Clark as an extension to the radical/incremental innovation typology, in order to capture the main features of a pattern that appears to be found in a great number of China´s (assembly) industries. After illustrating this pattern with the help of an exemplary case study of China´s passenger vehicle sector, the paper will give a brief discussion of how institutional diversity and the various roles of government relate to the identified pattern of innovation. |
| Keywords: | China,varieties of capitalism,architectural innovation,assembly industries,passenger vehicles |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:udedao:1042015&r=cna |
| By: | Philip Gunby (University of Canterbury); Yinghua Jin; W. Robert Reed (University of Canterbury) |
| Abstract: | This study performs a meta-analysis of research that estimates the relationship between FDI and Chinese economic growth. Our sample includes 37 studies and a total of 280 estimates. We include both English- and Chinese-language studies. Our initial “raw” finding is that FDI has had a substantial, positive impact on Chinese economic growth. Furthermore, our results suggest that the effect is not inflated by endogeneity, nor impacted by publication bias. However, the positive effect is found to be smaller for more recent and better designed studies. When we adjust for preferred study and sample characteristics, we find that the estimated economic effect of FDI on Chinese economic growth is much smaller than indicated by the overall literature, and statistically insignificant. This suggests that the cause(s) of the Chinese “economic miracle” likely lie elsewhere. |
| Keywords: | Meta-analysis, FDI, China, economic growth |
| JEL: | O53 F20 |
| Date: | 2015–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:15/16&r=cna |
| By: | Leilei Shen (Kansas State University); Peri Silva (Kansas State University) |
| Abstract: | Measuring the effects of international trade on labor market outcomes has never been more im-portant given the increasing interconnections among economies around the globe. However, using measures of exposure to trade flows based on gross exports may lead to a misleading picture given that production processes have essentially become globalized, allowing firms to have access to im-ported inputs as an example. We consider the effects of international trade by building a model with firm heterogeneity where firms have the ability to offshore the production of inputs. Our model highlights that international trade offers an opportunity for firms to become more productive by en-gaging in o ff-shoring activities while they face competition from imports of final goods in the do-mestic market. We then construct a measure of U.S. exposure to Chinese goods using value added trade to analyze its effects on U.S. local labor markets. Using value added trade, we find that con-tinuously rising exports from China to the U.S. do not have significant effects on employment and wages. We further decompose the measure of exposure into value added trade in intermediate and in final goods. In line with the theoretical framework, we find that an increase in value added ex-ports from China in final goods leads to a decrease in employment across U.S. local labor markets, while the effects from a change in the exposure to trade in intermediate goods are not significant. |
| Keywords: | Value added exports, employment, wages |
| JEL: | F13 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:373&r=cna |
| By: | Filipski, Mateusz J.; Jin, Ling; Zhang, Xiaobo; Chen, Kevin Z. |
| Abstract: | In addition to human casualties and physical damage to infrastructure, natural disasters affect survivors emotionally and psychologically. Research on such impacts has almost exclusively been confined to the medical field, and focused on severe conditions such as post-traumatic stress disorder. The fact that emotional shocks and increased risk awareness may trigger changes in the preferences and behavior of economic agents has until now largely been ignored, including by economists. Based on panel datasets from China’s Sichuan province, which was struck by an earthquake in 2008, and using distance from epicenter as a proxy for earthquake severity, we empirically show that the saving and consumption behavior of households closer to the epicenter changed after the earthquake. They saved less, spent more lavishly on alcohol and cigarettes, and also played majiang (a Chinese game) more often. The magnitude of the estimated impact on saving behavior, a drop of 6 percentage points for each degree of earthquake intensity, is economically significant. It appears that the earthquake has induced a shift in people’s preferences characterized by a carpe diem attitude toward spending and greater preference for the present. |
| Keywords: | earthquakes, natural disasters, spending, sociology, psychology, risk, seism, carpe diem, discount rate, environmental shocks, resilence, post-traumatic stress disorder, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1461&r=cna |