nep-cna New Economics Papers
on China
Issue of 2019‒09‒02
four papers chosen by
Zheng Fang
Ohio State University

  1. China’s Industrial Policy: an Empirical Evaluation By Panle Jia Barwick; Myrto Kalouptsidi; Nahim Bin Zahur
  2. Does E-Commerce Reduce Traffic Congestion? Evidence from Alibaba Single Day Shopping Event By Cong Peng
  3. The Labor Supply Consequences of Having a Boy in China By Shing-Yi Wang
  4. The Effects of Schooling on Costless Health Maintenance: Overweight Adolescents and Children in Rural China By Mark R. Rosenzweig; Junsen Zhang

  1. By: Panle Jia Barwick; Myrto Kalouptsidi; Nahim Bin Zahur
    Abstract: Despite the historic prevalence of industrial policy and its current popularity, few empirical studies directly evaluate its welfare consequences. This paper examines an important industrial policy in China in the 2000s, aiming to propel the country's shipbuilding industry to the largest globally. Using comprehensive data on shipyards worldwide and a dynamic model of firm entry, exit, investment, and production, we find that the scale of the policy was massive and boosted China's domestic investment, entry, and world market share dramatically. On the other hand, it created sizable distortions and led to increased industry fragmentation and idleness. The effectiveness of different policy instruments is mixed: production and investment subsidies can be justified by market share considerations, but entry subsidies are wasteful. Finally, the distortions could have been significantly reduced by implementing counter-cyclical policies and by targeting subsidies towards more productive firms.
    JEL: L1 L5 L6 O2
    Date: 2019–07
  2. By: Cong Peng
    Abstract: Traditional retail involves traffic both from warehouses to stores and from consumers to stores. E-commerce cuts intermediate traffic by delivering goods directly from the warehouses to the consumers. Although plenty of evidence has shown that vans that are servicing e-commerce are a growing contributor to traffic and congestion, consumers are also making less shopping trips using vehicles. This poses the question of whether e-commerce reduces traffic congestion. The paper exploits the exogenous shock of an influential online shopping retail discount event in China (similar to Cyber Monday), to investigate how the rapid growth of e-commerce affects urban traffic congestion. Portraying e-commerce as trade across cities, I specified a CES demand system with heterogeneous consumers to model consumption, vehicle demand and traffic congestion. I tracked hourly traffic congestion data in 94 Chinese cities in one week before and two weeks after the event. In the week after the event, intra-city traffic congestion dropped by 1.7% during peaks and 1% during non-peak hours. Using Baidu Index (similar to Google Trends) as a proxy for online shopping, I found online shopping increasing by about 1.6 times during the event. Based on the model, I find evidence for a 10% increase in online shopping causing a 1.4% reduction in traffic congestion, with the effect most salient from 9am to 11am and from 7pm to midnight. A welfare analysis conducted for Beijing suggests that the congestion relief effect has a monetary value of around 239 million dollars a year. The finding suggests that online shopping is more traffic-efficient than offline shopping, along with sizable knock-on welfare gains.
    Keywords: e-commerce, traffic congestion, heterogeneous consumers, shopping vehicle demand, air pollution
    JEL: R4 O3
    Date: 2019–08
  3. By: Shing-Yi Wang
    Abstract: Combining eight years of panel data with an event study approach, we show that rural Chinese women's labor supply falls for one year following the birth of a daughter before returning to their pre-birth levels. The negative impact of the birth of a son on women's labor supply is much larger in magnitude and persists for four years. We also find that households reduce their cigarette consumption more following the arrival of a boy than a girl. Furthermore, there is an increase in the mother's probability of being in school, her leisure time, and her participation in household decision-making following the birth of boys relative to daughters. There is no evidence of increases in investments in boys that would be complementary to mothers' time, such as breastfeeding, immunizations or consumption of milk or meat. Together, these results are consistent with the idea that mothers are rewarded for giving birth to boys, leading them to have more leisure and work less.
    JEL: J13 J16 J22 O12 O53
    Date: 2019–08
  4. By: Mark R. Rosenzweig; Junsen Zhang
    Abstract: Obesity is an important global health problem. Although obesity is not directly related to access to health care or constrained by resource deprivation, overweight status is predominantly found in poor, less-educated populations. This paper seeks to identify the causal role of schooling in affecting obesity among children and adolescents, using new estimation methods that exploit unique panel data on young twins in China. The estimates indicate that higher levels of schooling negatively affect being overweight and positively affect healthy behavior, with a large component of the causal effects due to increased information on the benefits of maintaining a healthy weight. There is also evidence that the higher-income associated with increased schooling increases incentives to invest in health.
    JEL: I12
    Date: 2019–07

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