nep-cna New Economics Papers
on China
Issue of 2018‒04‒16
ten papers chosen by
Zheng Fang
Ohio State University

  1. Markets and markups: a new empirical framework and evidence on exporters from China By Corsetti, Giancarlo; Crowley, Meredith; Han, Lu; Song, Huasheng
  2. Counterintuitive facts regarding household saving in China: the saving glut By Kevin Luo; Tomoko Kinugasa
  3. Establishing National Carbon Emission Prices for China By Chia-Lin Chang; Te-Ke Mai; Michael McAleer
  4. Risk Spillovers in Returns for Chinese and International Tourists to Taiwan By Chia-Lin Chang; Shu-Han Hsu; Michael McAleer
  5. Supplier Search and Re-matching in Global Sourcing - Theory and Evidence from China By Defever, F.; Fischer, C.; Suedekum, J.
  6. A Rebalancing Act for China and Africa; The Effects of China’s Rebalancing on Sub-Saharan Africa’s Trade and Growth By Roger Nord; Wenjie Chen
  7. Inventor Name Disambiguation with Gradient Boosting Decision Tree and Inventor Mobility in China (1985-2016) By YIN Deyun; MOTOHASHI Kazuyuki
  8. Innovation Networks and Clusters Dynamics By He, Ming; Walheer, Barnabé
  9. Does it matter what workers do? The role of workers' relational agency in the hybridisation of TNC subsidiaries in China and Mexico By Wenten, Frido
  10. The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms By Haichao Fan; Yu Liu; Nancy Qian; Jaya Wen

  1. By: Corsetti, Giancarlo; Crowley, Meredith; Han, Lu; Song, Huasheng
    Abstract: We develop a new empirical framework to analyse destination-specific markup and quantity adjustments to bilateral exchange rates by exporters. The framework offers two methodological innovations. First, we develop an unbiased estimator of the markup elasticity that correctly isolates marginal costs in large unbalanced panels where the set of markets served by firms varies endogenously with currency movements. Second, we exploit Chinese linguistics to process characters recorded in Chinese custom forms to build a novel, general, product classification distinguishing high and low differentiation goods|which we can use to proxy for exporters' market power. Applying this framework to exporters from China over 2000-2014, we document substantial heterogeneity in destination-specific markup elasticities across product classes and firm types. Conditional on a price change, the average markup elasticity for highly differentiated consumption goods is 32%; markup adjustments explain three quarters of incomplete pass through into import prices for these goods. In contrast, the average for low-differentiation intermediates is only 5%, suggesting that pricing for these goods responds to global, rather than local, economic conditions. Markup elasticities are higher for both state-owned and foreign-invested enterprises than for private enterprises, which, on average, pursue aggressively competitive strategies throughout our sample.
    Keywords: exchange rates; pricing-to-market; product classification; differentiated goods; market power; markup elasticity; trade elasticity; China
    JEL: F31 F41
    Date: 2018–02
  2. By: Kevin Luo (Graduate School of Economics, Kobe University); Tomoko Kinugasa (Graduate School of Economics, Kobe University)
    Abstract: This study begins by confirming that China has been in a state of overaccumulation over the past decade. Against this backdrop, we empirically investigate the underlying determinants of Chinese household saving, and present both intuitive and distinct insights. Considering that overaccumulation has become a major threat to China's economic performance, we find that certain policies and phenomena, which are usually regarded as positive factors (e.g., the SOE reform), are primarily responsible for China's excess saving, and those usually deemed to be negative factors (e.g., the real estate bubble), have essentially mitigated the surplus saving.
    Keywords: China; Household saving; Over-accumulation; GMM estimator; Policy design
    JEL: C33 D12 E21 G28
    Date: 2018–04
  3. By: Chia-Lin Chang (National Chung Hsing University, Taiwan); Te-Ke Mai (National Tsing Hua University, Taiwan); Michael McAleer (Asia University, Taiwan; Erasmus University Rotterdam, The Netherlands)
    Abstract: The purpose of the paper is to establish national carbon emissions prices for the People’s Republic of China, which is one of the world’s largest producers of carbon emissions. Several measures have been undertaken to address climate change in China, including the establishment of a carbon trading system. Since 2013, eight regional carbon emissions markets have been established, namely Beijing, Shanghai, Guangdong, Shenzhen, Tianjin, Chongqing, Hubei and Fujian. The Central Government announced a national carbon emissions market, with power generation as the first industry to be considered. However, as carbon emissions prices in the eight regional markets are very different, for a variety of administrative reasons, it is essential to create a procedure for establishing a national carbon emissions price. The regional markets are pioneers, and their experience will play important roles in establishing a national carbon emissions market, with national prices based on regional prices, turnovers and volumes. The paper considers two sources of regional data for China’s carbon allowances, which are based on primary and secondary data sources, and compares their relative strengths and weaknesses. The paper establishes national carbon emissions prices based on the primary and secondary regional prices, for the first time, and compares both national prices and regional prices against each other. The carbon emission prices in Hubei, Guangdong, Shenzhen and Tianjin are highly correlated with the national prices based on the primary and secondary sources. Establishing national carbon emissions prices should be very helpful for the national carbon emissions market that is under construction in China, as well as for other regions and countries worldwide.
    Keywords: Pricing Chinese carbon emissions; National pricing policy; Energy; Volatility; Energy finance; Provincial decisions
    JEL: C22 C58 G12 Q48
    Date: 2018–03–30
  4. By: Chia-Lin Chang (National Chung Hsing University, Taiwan); Shu-Han Hsu (National Chung Hsing University, Taiwan); Michael McAleer (Asia University, Taiwan; Erasmus University Rotterdam, The Netherlands)
    Abstract: Fluctuations in the numbers of visitors directly affect the rates of return on tourism business activities. Therefore, maintaining a firm grasp of the relationship between the changes in the numbers of Chinese tourists and international travellers visiting Taiwan is conducive to the formulation of an effective and practical tourism strategy. Although the topic of international visitors to Taiwan is important, existing research has discussed the issue of the travel demand between Chinese tourists and international travellers visiting Taiwan. This paper is the first to examine the spillover effects between the rate of change in the numbers of Chinese tourist arrivals and the rate of change in the numbers of international traveller arrivals. Using daily data for Chinese tourists and international travellers visiting Taiwan over the period from 1 January 2014 to 31 October 2016, together with the Diagonal BEKK model, the paper analyses the co-volatility spillover effects between the rate of change in the numbers of international travellers and the rate of change in the numbers of Chinese tourists visiting Taiwan. The empirical results show that there is no dependency relationship between the rate of change in the numbers of Chinese tourists and the rate of change in the numbers of international travellers visiting Taiwan. However, there is a significant negative co-volatility spillover effect between the rate of change in the numbers of Chinese tourists and the rate of change in the numbers of international travellers. The empirical findings suggest that Taiwan should abandon its development strategy of focusing only on a single market, namely China, and to be pro-active in encouraging visits by international travellers to Taiwan for sightseeing purposes, thereby increasing the willingness of international travellers to visit Taiwan. Moreover, with the reduction in the numbers of Chinese tour groups visiting Taiwan, and increases in the numbers of individual travellers, the Taiwan Government should change its previous travel policies of mainly attracting Chinese tour group travellers and actively promoting in-depth tourism among international tourists, by developing tourism that focuses on the special characteristics of different localities. In this way, the government can enhance the quality of Taiwan’s tourism, and also attract travellers with high spending power.
    Keywords: Risk spillovers; International tourism arrivals; Chinese tourist arrivals; Group tourists; Individual tourists; Medical tourists; Co-volatility effects; Diagonal BEKK model
    JEL: C22 C32 C58
    Date: 2018–03–30
  5. By: Defever, F.; Fischer, C.; Suedekum, J.
    Abstract: In this paper, we consider a dynamic search-and-matching problem of a firm with its intermediate input supplier. In our model, a headquarter currently matched with a supplier, has an interest to find and collaborate with a more efficient partner. However, supplier switching through search and re-matching is costly. Given this trade-off between the fixed costs and the expected gains from continued search, the process will stop whenever the headquarter has found a sufficiently efficient supplier. Using firm-product-level data of fresh Chinese exporters to the United States, we obtain empirical evidence in line with the predictions of our theory. In particular, we find that the share of short-term collaborations is higher in industries with more supplier-cost dispersion, an indication of higher expected search opportunities.
    Keywords: Input sourcing; relational contracts; supplier search
    Date: 2017
  6. By: Roger Nord; Wenjie Chen
    Abstract: How does China’s new growth model affect sub-Saharan Africa? To address this question, this paper first looks at the growing ties between China and Africa; attempts to estimate more precisely the impact on growth through the trade channel; and finally draws some policy implications regarding whether this means an end of the Africa Rising narrative or merely the beginning of a new chapter.
    Keywords: Economic growth;Trade;Trade policy;Trade relations;China, growth, sub-Saharan Africa, trade channel, Africa Rising
    Date: 2017–04–07
  7. By: YIN Deyun; MOTOHASHI Kazuyuki
    Abstract: This paper presents the first systematic disambiguation result of all Chinese patent inventors in the State Intellectual Property Office of China (SIPO) patent database from 1985 to 2016. We provide a method of constructing high-qualitative training data from lists of rare names and evidence for the reliability of these generated labels when large-scale and representative hand-labeled data are crucial but expensive, prone to error, and even impossible to obtain. We then compare the performances of seven supervised models, i.e., naive Bayes, logistic, linear discriminant analysis (LDA) and quadratic discriminant analysis (QDA), as well as tree-based methods (random forest, AdaBoost, and gradient boosting decision trees), and found that gradient boosting classifier outperforms all other classifiers with the highest F1-score and stable performance in solving the homonym problem prevailing in Chinese names. In the last step, instead of adopting the more popular hierarchical clustering method, we clustered records with the density-based spatial clustering of applications with noise (DBSCAN) based on the distance matrix predicated by the GBDT classifier. Varying across different testing data and parameters of DBSCAN, our algorithm yielded a F1-score ranging from 93.5%-99.3% with splitting error within the range 0.5%-3% and lumping error between 0.056%-0.37%. Based on our disambiguated result, we provide an overview of Chinese inventors' regional mobility.
    Date: 2018–03
  8. By: He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool); Walheer, Barnabé (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: CFor several decades, the manufacturing industry has been the pillar industry in terms of economic growth in China. The importance of the manufacturing industry is also highlighted by the numerous policy interventions in favour of this industry. In this paper, we identify the key industrial sectors in terms of technical performances and technological advancements for the period 1999-2007. This represents particular valuable information in the context of policy implementations. The distinguishing features of our study are five-fold. One, we make used of a tailored firm-level database. Two, we distinguish between four types of firm ownership. Three, we consider 30 manufacturing sectors. Four, we extend a well-established methodology to answer our questions. Five, we rely on a robust nonparametric estimation method. Our results confirm that firm ownership is important in explaining technical efficiency and technology gap. We also show that foreign firms set the standard for technical efficiency, and are the leaders in terms of technology advancement; that private firms show technology advancements accompanied by eciency losses; and that China has successfully revitalized state-owned firms, although there is still room for improvement. Finally, we find evidence that China's industrial development plans have been successful in stimulating technology progress in many key sectors; but that the current policy of (re)nationalization may undermine technical efficiency and slow down technology progress.
    Keywords: technology gap; technical eciency; manufacturing industry; China; metafrontier; DEA.
    Date: 2018–04–01
  9. By: Wenten, Frido
    Abstract: This article questions if the issue of hybridisation - or convergence and divergence - in the operations of global car producers is sufficiently addressed on the level of ideal typical 'productive models' or other forms of static ideal types. Arguing that there are difficulties in accounting for dynamic change and process, I suggest a shift in attention to processes of relational agency between social agents on and beyond the shop floor. Based on empirical evidence on the Chinese and Mexican subsidiaries of one of the largest global car manufacturers, I argue that in these relational processes worker agency has to be considered as a factor that shapes institutional change and variety, as well as the actual performance of shop floor institutions.
    JEL: J50
    Date: 2017–06–20
  10. By: Haichao Fan; Yu Liu; Nancy Qian; Jaya Wen
    Abstract: This paper uses a balanced panel of large manufacturing firms to provide novel evidence on the dynamic effects of computerizing VAT invoices on tax revenues and firm behavior in China, 1998-2007. We find that computerization explains 14.38% of cumulative VAT revenues and increases the effective average tax rate by approximately 4.7-14% in the seven subsequent years. The evidence suggests that the effects of computerization change over time: tax revenue gains are likely to be smaller in the long run. Meanwhile, firms reduce output and input, and increase productivity monotonically over time.
    JEL: H26 H32 O10
    Date: 2018–03

This nep-cna issue is ©2018 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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