nep-cna New Economics Papers
on China
Issue of 2018‒09‒24
eighteen papers chosen by
Zheng Fang
Ohio State University

  1. The Impact of New Rural Pension Scheme on the Rural Elderly in China: Evidences of Regional Differences in Formal and Informal Labor Supply By Lin, B.; Lin, Z.; Zhang, Y.Y.; Liu, W.
  2. Community Networks and the Growth of Private Enterprise in China By Dai, R.; Mookherjee, D.; Munshi, K.; Zhang, X.
  3. Policy Uncertainty and Foreign Direct Investment: Evidence from the China-Japan Island Dispute By Cheng Chen; Tatsuro Senga; Chang Sun; Hongyong Zhang
  4. Convergence in China's Regional Agricultural Productivity: Catching up or Lagging Behind? By Wang, S.L.; Huang, J.; Wang, X.; Tuan, F.
  5. China’s “Great Migration”: The impact of the reduction in trade policy uncertainty By Anna Maria Mayda; Giovanni Facchini; Maggie Y. Liu; Minghai Zhou
  6. Industrial Interdependence: China 1995-2010 By Jose-Miguel Albala-Bertrand
  7. China’s Foreign Agriculture Investments By Gooch, Elizabeth; Gale, Fred
  8. Determinants and impacts of marketing channel choice among cooperatives members: Evidence from agricultural cooperative in China By Liu, Y.
  9. The Evolution of the Intrahousehold Division of Labor in a Market Development Context– A Longitudinal Study of Rural China By He, Yong
  10. Land Consolidation, Productivity and Technical Efficiency: Evidence from a Cross Section of Farm Households in China By Cheng, Shen; Bravo-Ureta, Boris E.; Zheng, Zhihao; Sun, Hao
  11. Does New Rural Social Pension Insurance Relieve Depression of the Elderly in Rural China :Evidence from the China Health and Retirement Longitudinal Study By Zheng, Xiaodong; Fang, Xiangming; Barger, Brian
  12. Managing digital marketing strategies in emerging markets: The case of China By Francesca Checchinato; Lala Hu
  13. Valuation Biases Caused by Public Distrust: Identification and Calibration with Contingent Valuation Studies of Two Air Quality Improvement Programs in China By Hua Wang; Jie He; Desheng Huang
  14. Internet Usage and Rural Entrepreneurship in China By Zhang, Chuanchuan; Zhao, Jianmei
  15. The political economy of protection in GVCs: Evidence from Chinese micro data By Anna Maria Mayda; Rodney D. Ludema; Miaojie Yu; Zhi Yu
  16. Whether Residents’ Environmental Risk Perceptions Affect Their Attitudes toward Medical Insurance: Evidence from China By Ding, Jinxiu; Yu, Chin-Hsien; Li, Ding; Fang, Lei
  17. Will the New Rich Waste More Food? Evidence from China By Hao, Na; Wang, Hong Holly; Wetzstein, Michael E.
  18. Competitive Differential Pricing By Yongmin Chen; Jianpei Li; Marius Schwartz

  1. By: Lin, B.; Lin, Z.; Zhang, Y.Y.; Liu, W.
    Abstract: This paper evaluates the effect of China’s New Rural Pension Scheme (NRPS) on labor supply of the rural elderly in the forms of both formal labor supply informal labor supply, using data from China Health and Retirement Longitudinal Study (CHARLS). We explore the regional differences of the NRPS effect on labor supply between the West and non-West regions of China. Our analysis shows that western rural China has a more severe problem of “ceaseless toil” compared to the rest of the country. We find that NRPS improves the “ceaseless toil” situation of the Chinese rural elderly but the results show a very different pattern between western China and other part of the country.
    Keywords: Community/Rural/Urban Development, Labor and Human Capital
    Date: 2018–07
  2. By: Dai, R.; Mookherjee, D.; Munshi, K.; Zhang, X.
    Abstract: This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. We develop a network-based model that generates predictions for the dynamics of firm entry, concentration, and firm size across birth counties with varying social connectedness (measured by population density). These predictions are verified over the 1990-2009 period with administrative data covering the universe of registered firms. Competing non-network-based explanations can explain some, but not all, of the results. Moreover, supplementary evidence indicates that network spillovers occur within the birth county and, going down even further, within clans within the county. Having validated the model, we estimate its structural parameters and conduct counter-factual simulations, which estimate that entry over the 1995-2004 period would have been 40% lower (with a comparable decline in the stock of capital) in the absence of community networks. Additional counter-factual simulations shed light on misallocation and industrial policy in economies where networks are active.
    Keywords: Community Networks, Entrepreneurship, Misallocation, Institutions, Growth and Development.
    JEL: J12 J16 D31 I3
    Date: 2018–09–11
  3. By: Cheng Chen (University of Hong Kong); Tatsuro Senga (Queen Mary University of London); Chang Sun (Princeton University); Hongyong Zhang (RIETI)
    Abstract: Can a temporary negative shock generate long-lasting effects on economic activities? To show causal evidence, we utilize data from Japanese multinational corporations (MNCs) and explore the economic impact of the unexpected escalation of an island dispute between China and Japan in 2012. Our difference-in-differences (DID) estimation substantiates that a sharp, but temporary fall in local sales of Japanese MNCs in China led to persistent downward deviation of foreign direct investment (FDI) from its trend. Moreover, despite the quick recovery of local sales, Japanese MNCs in China have continued to underestimate their local sales, which generates pessimistic and more dispersed forecast errors after the island crisis. We view this as evidence for a belief-driven channel through which a large and unexpected negative shock leads agents to revise their beliefs and start tail risk hedging.
    Keywords: Uncertainty, Forecasts, FDI, Geopolitical conflicts, Business cycles
    JEL: D84 E22 E32 F23
    Date: 2016–11–02
  4. By: Wang, S.L.; Huang, J.; Wang, X.; Tuan, F.
    Abstract: In this study, we use a multilateral total factor productivity (TFP) panel data, spanning 1985-2013 period, to test hypotheses of convergence to a single TFP level (σ convergence) and to a region-specific steady state TFP growth rate (β convergence) for China’s farm sector. Results show that there is no evidence of an overall σ convergence across all provinces. However, we find robust evidences of β convergence. Estimated rates of β convergence are conditional on how we capture the heterogeneity across regions. Overall, the rate of β convergence ranges from 0.016 to 0.039. Estimates also show that higher growth rate of education, R&D, capital/labor ratio, or intermediate goods/labor ratio can boost the rate of TFP growth.
    Keywords: Agricultural and Food Policy, International Development
    Date: 2018–07
  5. By: Anna Maria Mayda (Department of Economics and SFS, Georgetown University); Giovanni Facchini (University of Nottingham); Maggie Y. Liu (Smith College); Minghai Zhou (University of Nottingham, Ningbo China)
    Abstract: We analyze the effect of China’s integration into the world economy on workers in the country and show that one important channel of impact has been internal migration. Specifically, we study the changes in internal migration rates triggered by the reduction in trade policy uncertainty faced by Chinese exporters in the U.S. This reduction is characterized by plausibly exogenous variation across sectors, which we use to construct a local measure of treatment, at the level of a Chinese prefecture, following Bartik (1991). This allows us to estimate a difference-in-difference empirical specification based on variation across Chinese prefectures before and after 2001. We find that prefectures facing the average decline in trade policy uncertainty experience an 18 percent increase in their internal in-migration rate – this result is driven by migrants who are “non-hukou”, skilled, and in their prime working age. Finally, in those prefectures, working hours of “native” unskilled workers significantly increase – while the employment rates of neither native workers nor internal migrants change.
    Keywords: hukou, immigration, internal migration, trade policy uncertainty
    JEL: F22 J61 O15
    Date: 2018–09–07
  6. By: Jose-Miguel Albala-Bertrand (Queen Mary University of London)
    Abstract: This paper is a continuation of our study of structural change in China and deals with the changes of domestic industrial/sectoral backward and forward linkages (i.e. the pull and push of the economy) as well as the changes in their domestic and imported components (i.e. via import substitution/penetration) over the 1995-2010 period. We present the results in terms of rates of change for the period as a whole as well as for their yearly evolution over such a period. The main conclusions are that the secondary sector has become the main pull engine of the economy by far, with the tertiary sector also increasing its pull, and that there are three distinctive periods for the evolution of import substitution/penetration, which seem to correspond to both international crises and domestic reform.
    Keywords: China, Industrial structural change, Input-output decomposition, Trajectories over 1995-2010
    JEL: L16 O4 B4 E2
    Date: 2016–10–24
  7. By: Gooch, Elizabeth; Gale, Fred
    Abstract: Chinese companies are increasing their investments in foreign agricultural and food assets. Their broad aims are to gain profits for Chinese investors while achieving national food security and projecting China’s influence abroad. While the United States is the largest supplier of China’s agricultural imports, it has not been a major target of Chinese agricultural investment. Chinese investors tend to enter less-developed countries where there are few competitors, potential to raise productivity using Chinese technology, and potential to diversify suppliers of Chinese imports. A few companies with access to financing from Chinese banks are pursuing mergers, acquisitions, and partnerships with companies in more developed markets. These investments reflect changes in China’s demand for food and its need for upgrades in technology and management, but most ventures have modest impacts on agricultural trade.
    Keywords: Financial Economics
  8. By: Liu, Y.
    Abstract: This paper examines the impact of agricultural cooperatives working as a marketing channel, and the determinant of members’ decision to sell products through agricultural based on household-level data of agricultural cooperatives members from poor rural areas in Sichuan province, in China. Employing different treatment effect estimators, i.e. PSM and IPWRA, we find that selling products through agricultural cooperatives has a positive and statistically significant effect on both farmers’ annual total household income and farm income. It was also found that the effect on farm income (around 180%) is higher than annual total household income (around 20%). Comparing the difference between ATTs and ATEs, we could suggest that the efficiency of agricultural cooperatives can be improved by encouraging non-sellers to sell products through agricultural cooperatives, which is possible to do according to the results of a probit model. Following empirical results obtained using the probit model, we conclude that farm size, farming machine, distance to market, credit constraint, sale condition, motivation to participate in agricultural cooperatives and the knowledge of agricultural cooperatives positively and significant influence the probability of a member selling products through agricultural cooperatives, while the market information ownership shows a negative significant effect on the choice.
    Keywords: Agricultural and Food Policy, International Development, Marketing
    Date: 2018–07
  9. By: He, Yong
    Abstract: With a panel sample of more than 3000 rural Chinese households surveyed over 21 years, this study estimates the evolution of relative roles of social status and human capital in the intrahousehold division of labor under the context of a rapid market development. With the guidance of a theoretical framework, it is found that: 1) market development enhanced the status of women, and changed the traditional rule of “women indoors and men outdoors”; 2) market development allocated more young labor to outward wage-earning jobs and left a higher share of the elderly and juvenile in land-based semi-market activities and chores, indicating an increasing importance of human capital over family status; 3) market enlargement relaxed the entrance requirements for labor market in terms of education level, age and height.
    Keywords: intrahousehold division of labor, human capital, rural China, family status, market development, chores.
    JEL: D13 J22 O12
    Date: 2018
  10. By: Cheng, Shen; Bravo-Ureta, Boris E.; Zheng, Zhihao; Sun, Hao
    Keywords: Productivity Analysis, Production Economics, Agricultural and Food Policy
    Date: 2017–07–03
  11. By: Zheng, Xiaodong; Fang, Xiangming; Barger, Brian
    Keywords: Agricultural and Food Policy, Agribusiness, Consumer/Household Economics
    Date: 2017–07–03
  12. By: Francesca Checchinato (Dept. of Management, Università Ca' Foscari Venice); Lala Hu (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: Since Internet has been seen as global, few studies have examined the influence of the context in the digital marketing strategies. This paper wants to contribute on the debate about standardization-adaptation, focusing on the digital strategies, defining how companies adapt them to the Chinese market identifying the drivers that call for this adaptation. China is selected because it is a contradictory market: more advanced than the Western one but also with many restrictions. We carry out a qualitative research based on interviews with nine key informants operating in the digital Chinese market with different roles. Our findings suggest that there are drivers that force companies to create an online presence and drivers that impact the digital localization. The main adaptations concern international distribution strategy and communication related to contents and media as well as organization.
    Keywords: China, digital marketing, e-commerce, internationalization, Internet.
    JEL: M31
    Date: 2018–09
  13. By: Hua Wang (School of Environment and Natural Resources, Renmin University of China, Beijing, China); Jie He (Département d'économique, École de gestion, Université de Sherbrooke); Desheng Huang (Policy Research Center for Environment and Economy, and Ministry of Ecology and Environment, China)
    Abstract: Contingent valuation (CV) studies often adopt public programs in the scenario designs in order to increase credibility and to ensure incentive compatibility. However, such scenario designs can introduce biases in willingness-to-pay (WTP) estimations due to the potential distrusts of respondents in the governments who are responsible for implementing the public programs. In this study, a joint selection modeling strategy, which accommodates both valuation protests and WTP adjustments, is developed for identification and calibration of the potential biases in WTP estimations caused by the public distrust in government. The joint selection model of WTP with public distrust in government is applied to two CV studies conducted in China on air quality improvements. Both channels through which public distrust in government can affect WTP estimation, valuation protest and WTP adjustment, are empirically identified, and the potential biases in WTP estimation caused by the public distrust in government can be as high as 20%.
    Keywords: public distrust, contingent valuation, protest, selection bias, WTP determination.
    Date: 2018–09
  14. By: Zhang, Chuanchuan; Zhao, Jianmei
    Keywords: Consumer/Household Economics, Productivity Analysis, Institutional and Behavioral Economics
    Date: 2017–07–03
  15. By: Anna Maria Mayda (Department of Economics and SFS, Georgetown University); Rodney D. Ludema (Department of Economics and SFS, Georgetown University); Miaojie Yu (Peking University); Zhi Yu (Shanghai University of Finance and Economics,)
    Abstract: This paper explores the political economy of import protection in a setting where imports may contain a country’s own domestic value added (DVA) via domestically-produced inputs that get exported and used in foreign downstream production. We show that domestic upstream and downstream producers are generally allies in favor of protection, but this alliance may weaken as DVA increases, because a home tariff on finished goods decreases foreign demand for home inputs. Empirically, we examine detailed discriminatory trade policies of 27 countries plus the EU toward China and use Chinese transaction-level processing trade data to construct a measure of DVA. We also measure input customization. We find that both upstream and downstream political organization increase downstream protection, but the effect of the former is smaller when inputs are customized and DVA as a share of final imports from China is larger. Tariffs on products containing inputs that are neither customized nor politically organized appear to be unaffected by the DVA share.
    Keywords: Trade policy, lobbying, global value chains.
    JEL: F10 F13 F14
    Date: 2018–09–08
  16. By: Ding, Jinxiu; Yu, Chin-Hsien; Li, Ding; Fang, Lei
    Keywords: Institutional and Behavioral Economics, Risk and Uncertainty, Consumer/Household Economics
    Date: 2017–06–30
  17. By: Hao, Na; Wang, Hong Holly; Wetzstein, Michael E.
    Keywords: Institutional and Behavioral Economics, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety
    Date: 2017–06–30
  18. By: Yongmin Chen (Department of Economics, University of Colorado Boulder, USA); Jianpei Li (School of International Trade and Economics, University of International Business and Economics, China); Marius Schwartz (Department of Economics, Georgetown University, USA)
    Abstract: This paper analyzes welfare under differential versus uniform pricing across oligopoly makes that differ in costs of service. We establish necessary and sufficient conditions on demand properties—cross/own elasticities and curvature—for differential pricing by symmetric firms to raise aggregate consumer surplus, profit, and total welfare. The analysis reveals intuitively why differential pricing is generally beneficial though not always—including why profit can fall, unlike for monopoly—and why it is more beneficial than oligopoly third-degree price discrimination. When firms have asymmetric costs, however, differential pricing can reduce profit or consumer surplus even with ‘simple’ demands such as linear.
    Keywords: Differential Pricing, Price Discrimination, Demand Curvature, Cross-Price Elasticity, Pass-Through, Oligopoly
    JEL: D43 L13 L10
    Date: 2018–09–11

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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