nep-cna New Economics Papers
on China
Issue of 2019‒12‒09
six papers chosen by
Zheng Fang
Ohio State University

  1. Who patents, how much is real invention and how relevant? A snapshot of firms and their inventions based on the 2016 SIPO China Patent Survey By Margit Molnar; Hui Xu
  2. Trade in Information Technologies and Changes in the Demand for Occupations By Jerbashian, Vahagn
  3. Renewable Energy Financial Modelling: A China Case Study By Karel Janda; Binyi Zhang
  4. Are Your Labor Shares Set in Beijing? The View through the Lens of Global Value Chains By Ariell Reshef; Gianluca Santoni
  5. Intraday Time-series Momentum: Evidence from China By Jin, Muzhao; Kearney, Fearghal; Li, Youwei; Yang, Yung Chiang
  6. Anti-Corruption Reforms and Microfinancing: Evidence from Households' Fintech Borrowing By Zhang, Yifei

  1. By: Margit Molnar; Hui Xu
    Abstract: China has surpassed the United States in patent applications and has become world leader. Strong patenting activity, however, did not lead to strong productivity growth. The delinking of patenting activity from productivity growth could be explained by quality and relevance issues. Although the number of patents has been soaring, few are genuine inventions. Relatively low utilisation rates of patents point to a low degree of relevance. This paper uses a representative survey of Chinese patenting firms to provide a detailed picture of the patenting landscape along the dimensions of geographical areas, detailed industrial sectors, traditional and modern industries as defined by the Chinese government, firm age, size and ownership. It also overviews government subsidies across firms. Transport equipment makers hold most patents per firm, followed by electronics manufacturers. State-owned firms spend more on R&D per patent, but hold fewer patents per researcher than private or foreign-invested firms. High patenting performance and government support are not necessarily linked to high utilisation of patents. Smaller, younger and private firms expect a higher return on their patents and so do exterior design patent holders. Furthermore, the paper examines what drives patenting activity. Higher R&D spending by the firm and higher share of researchers in its workforce tend to be associated with higher patents per employee. Smaller and older firms tend to patent more, and government support also appears to matter. Exterior design patents are associated with different firm characteristics: R&D intensity is lower and government support matters less. Most firms consider IPR protection insufficient and the share of firms having experienced patent infringement is the greatest among the largest firms. Many of them do not do anything once their rights are infringed as they do not expect effective remedy. Instead of patenting, which may not provide sufficient protection from imitators, they adopt other strategies like reaping the first mover advantage to market their goods or sign confidentiality agreements with their staff or contracts on commercial secrets. This Working Paper relates to the 2019 Economic Survey of China ( mic-snapshot/).
    Keywords: Chinese patenting, firm-level analysis, government subsidies, invention patents, IPR
    JEL: O31 O34 O38
    Date: 2019–12–10
  2. By: Jerbashian, Vahagn
    Abstract: I use data from the World Input-Output Database and show that trade in information technologies (IT) has a significant contribution to the growth in foreign intermediate goods in 2001-2014 period. China has become one of the major foreign suppliers of IT and has strongly contributed to the rise in trade in IT. The growth in IT imports from China is associated with lower IT prices in sample European countries. The fall in IT prices has increased the demand for high wage occupations and reduced the demand for low wage occupations. From 20 to 95 percent of the variation in the demand for occupations stemming from the fall in IT prices can be attributed to the trade with China.
    Keywords: Trade,Information Technologies,China,Demand for Occupations
    JEL: F16 J23 J24 O33 L63
    Date: 2019
  3. By: Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic; Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Prague, Namesti Winstona Churchilla 4, 130 67 Prague, Czech Republic); Binyi Zhang (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic)
    Abstract: In this paper, we analyse the dynamic relationship among the Chinese renewable energy stock prices, the U.S renewable energy stock prices, oil prices and technology stock prices. We apply a four-variable Lag Augmented Vector Autoregressive (LA-VAR) model to study the return interactions among the variables. Moreover, we also use Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models to study the dynamic conditional volatility of the Chinese renewable energy stock prices. The empirical results indicate that both return and conditional volatility of the Chinese renewable energy stock prices can be explained by past movements of the U.S renewable energy stock prices and technology stock prices. In addition, we find significant evidence to support the existence of the GARCH effects in the Chinese renewable energy stock prices. However, only weak statistical evidence reveals the significance of the leverage effects in the Chinese renewable energy stock market.
    Keywords: Renewable energy, Financial modeling, China
    JEL: Q20 G15
    Date: 2019–05
  4. By: Ariell Reshef; Gianluca Santoni
    Abstract: We study the evolution of labor shares in 1995-2014 while taking into account international trade based on value added concepts. On average, the decline in labor shares (starting around 1980) accelerates in 2001-2007, after which labor shares recover somewhat. In contrast, skilled labor shares consistently increase. The acceleration in the decline in labor shares is associated with increased intensity of intermediate input exporting; this manifests in a sharp increase in the foreign component in upstreamness of industries and countries in global value chains (GVCs). China's global integration accounts for much of this. Declines in the price of investment together with capital-skill complementarity can explain both the consistent increase in skilled labor shares and the reversal of trend in overall labor shares. Compared to shares in GDP, labor shares in gross national product (GNP) are higher in countries with positive net FDI positions; the uneven spread of multinational activity contributes to greater inequality through this channel.
    Keywords: Labor Share;Skilled Labor Share;Global Value Chains;Offshoring;Vertical Integration
    JEL: E25 F14 F15 F16 F66 J00
    Date: 2019–12
  5. By: Jin, Muzhao; Kearney, Fearghal; Li, Youwei; Yang, Yung Chiang
    Abstract: This study conducts an investigation of intraday time-series momentum across four Chinese commodity futures contracts: copper, steel, soybean, and soybean meal. Our results indicate that the first half-hour return positively predicts the last half-hour return across all four futures. Furthermore, in metals markets, we find that first trading sessions with high volume or volatility are associated with the strongest intraday time-series momentum dynamics. Based on this, we propose an intraday momentum informed trading strategy that earns a return in excess of standard always long and buy-and-hold benchmarks.
    Keywords: Intraday Predictability; Time-Series; Momentum
    JEL: G12 G13 G15
    Date: 2019
  6. By: Zhang, Yifei
    Abstract: Despite a surging literature in investigating different impacts of corruption and/or anti-corruption from firms’ perspective, it is still unclear whether and how corruption and/or anti-corruption affect households’ borrowing behaviour. In this paper, we focus on a Chinese online peer-to-peer lending market and analyse the impact of the recent China’s anti-corruption campaign on households’ borrowing costs. We employ a Difference-in-Differences (DID) estimation strategy and investigate three exogenous shocks regarding the movement: 1) the 2012 Eight Point Policy announcement; 2) multiple rounds of the Central Inspection Team Campaigns during 2013 and 2014; 3) and the anti-corruption rules for military-related personnel in early 2015. Our results show that equilibrium interest rates of borrowers pertaining to Non-SOEs dropped significantly comparing to that of SOEs and/or government agencies in the wake of the first two events. Borrowers affiliating with military-related institutions were also worsened after the military specific anti-corruption campaign. Finally, we examine the two possible economic channels. Suggestive evidences show that both a rise of interest risk premium for SOEs borrowers and a better outlook of Non-SOEs after the anti-corruption reform could account for the observed favour of the borrowing costs towards Non-SOEs borrowers. These findings are consistent with previous studies regarding the effects of anti-corruptions from firms’ aspects such as Lin et al., (2016) and Griffin et al., (2016). This study also complements the P2P literature by demonstrating the importance of online borrowers’ occupations / job affiliations.
    Keywords: Peer-to-Peer Crowdfunding; Corruption; Household Debt;
    JEL: D14 D73
    Date: 2019–11–11

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