nep-cna New Economics Papers
on China
Issue of 2017‒08‒20
four papers chosen by
Zheng Fang
Ohio State University

  1. R&D Efficiency in High-Tech Firms in China By Lee, Sang-Ho; Chen, Zhao; Xu, Wei
  2. Time-Varying Impacts of Financial Credits on Firm Exports: Evidence from Trade Deregulation in China By Cheng, Dong; Hu, Zhongzhong; Tan, Yong
  3. Capital flows, money supply and property prices: The case of China By Taguchi, Hiroyuki; Tian, Lina
  4. Tail dependence between gold and sectorial stocks in China: Perspectives for portfolio diversication By Joscha Beckmann; Theo Berger; Robert Czudaj; Thi-Hong-Van Hoang

  1. By: Lee, Sang-Ho; Chen, Zhao; Xu, Wei
    Abstract: Using firm-level data from Changzhou, one of the representative prefectural cities in the Yangzi River Delta in China, we investigate the performances of both internal and external R&D in high-tech firms. We find that, on average, high-tech firms with more internal R&D expenditure apply for more patents in terms of both the total number of patents and the number of invention patents. Internal R&D is the most efficient in foreign firms, followed by private firms and then followed by SOEs (state-owned enterprises). These findings highlight the importance of privatizing high-tech firms in China if the Chinese government intends to accelerate industrial upgrading and convert the pattern of “Made in China” into “Created in China.”
    Keywords: internal R&D; external R&D; high-tech firms; R&D performances
    JEL: D22 H76 L25
    Date: 2017–08
  2. By: Cheng, Dong; Hu, Zhongzhong; Tan, Yong
    Abstract: This paper investigates the heterogeneous and time-varying effects of financial credits on firm-level export performance. Using a data set covering comprehensive Chinese manufacturing firms and employing a difference-in-differences approach, we find that financial credits improve firm-level exports and productivity more for firms switching from indirect to direct export than continuing indirect exporting firms. Further, we employ a difference-in-difference-in-differences approach and find that improvements in firm-level finance have larger positive impacts on firm export values in the post-WTO accession period, conditioning on the firm switching from indirect to direct exporting. The time-varying impact may suggest an export distortion in China before its WTO accession.
    Keywords: Financial Credits, WTO Accession, Indirect export, Direct Export, Difference-in-Differences
    JEL: F13 F14 G28
    Date: 2017–08–07
  3. By: Taguchi, Hiroyuki; Tian, Lina
    Abstract: This article examines the interaction among capital flows, money supply and property prices with a focus of Chinese economy by using a vector auto-regression (VAR) estimation as an analytical framework. The key research questions were, first, whether money supply has been determined independently from capital flows, and then which factor, capital flows or money supply, has given a dominant effect on property prices. The contributions of this study are to investigate the impacts on property prices jointly from capital flows as an external factor and from money supply as a domestic factor, and to count on the differences in the trends in property prices of seventy regional cities in China. The main findings through the VAR estimations were as follows. First, domestic money supply has been determined exclusively from external capital flows through the authority’s perfect sterilization of foreign-exchange-market intervention. Second, the main contributor to property prices’ movement has been domestic money supply rather than external capital flows. Third, some deviations of property prices from the trend in money supply were found in big cities and/or coastal advanced cities.
    Keywords: Capital flows, Money supply, Property prices, China, Seventy reginal cities, Vector auto-regression estimation
    JEL: E51 F32 O53
    Date: 2017–07
  4. By: Joscha Beckmann (University of Duisburg-Essen, Department of Economics, Chair for Macroeconomics); Theo Berger (University of Bremen, Department of Business Administration, Chair for Applied Statistics and Empirical Economy); Robert Czudaj (Chemnitz University of Technology, Department of Economics, Chair for Empirical Economics); Thi-Hong-Van Hoang (Montpellier Business School, Montpellier Research in Management)
    Abstract: This article analyzes the relationship between gold quoted on the Shanghai Gold Exchange and Chinese sectorial stocks from 2009 to 2015. Using different copulas, our results show that there is weak but significant tail dependence between gold and Chinese sectorial stock returns. This means that the dependence between extreme movements of the two assets is not pronounced and confirms the role of gold as a safe haven asset. Based on analyzing the efficient frontier, CCCGARCH optimal weights, hedge ratios and hedging effectiveness, we further show that adding gold into Chinese stock portfolios can help to reduce their risk. Gold appears to be the most efficient diversifier for stocks of the materials sector and the less efficient for the utilities sector. As a robustness check, we also compare gold to oil and indicate that gold is more efficient than oil in the diversification of Chinese stock portfolios.
    Keywords: Shanghai Gold Exchange, Chinese sectorial stocks, oil, copulas, portfolio implications
    JEL: G11 C58
    Date: 2017–07

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