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on China |
| By: | Kwon, Ohyun (School of Economics); Fleisher, Belton (Department of Economics); McGuire, William (Department of Economics); Zhao, Min Qiang (The Wang Yanan Institute for Studies in Economics) |
| Abstract: | We study the implications of financial-market imperfections on labor and capital misallocation in China. Financial friction stems from private sectors’ credit constraints that limit the efficient use of capital relative to state firms. Our model can jointly explain labor flows out of and capital flows into Chinese provinces with high capital market distortion. To formally test our model hypotheses, we develop a measure of regional financial friction based on our model such that underlying financial friction can be inferred from differences-in-differences in the market shares of private and state sectors and their marginal rental rates of capital. Our regression results confirm that our measure of financial friction has robust power in explaining interprovincial capital and labor flows. Our structural analysis shows that improving financial frictions results in an aggregate 3.9% welfare gain in China that is rather heterogeneously distributed across provinces. |
| Keywords: | financial friction; regional capital flows; Chinese economy |
| JEL: | F21 F22 O15 P23 R13 |
| Date: | 2020–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2020_001&r=all |
| By: | Ma, Yue (City University of Hong Kong); Fairlie, Robert W. (University of California, Santa Cruz); Loyalka, Prashant (Stanford University); Rozelle, Scott (Stanford University) |
| Abstract: | EdTech which includes online education, computer assisted learning (CAL), and remote instruction was expanding rapidly even before the current full-scale substitution for in-person learning at all levels of education around the world because of the coronavirus pandemic. Studies of CAL interventions have consistently found large positive effects, bolstering arguments for the widespread use of EdTech. However CAL programs, often held after school, provide not only computer-based instruction, but often additional non-technology based inputs such as more time on learning and instructional support by facilitators. In this paper, we develop a theoretical model to carefully explore the possible channels by which CAL programs might affect academic outcomes among schoolchildren. We isolate and test the technology-based effects of CAL and additional parameters from the theoretical model, by designing a novel multi-treatment field experiment with more than four thousand schoolchildren in rural China. Although we find evidence of positive overall CAL program effects on academic outcomes, when we isolate the technology-based effect of CAL (over and above traditional pencil-and-paper learning) we generally find small to null effects. Our empirical results suggest that, at times, the "Tech" in EdTech may have relatively small effects on academic outcomes, which has important implications for the continued, rapid expansion of technologies such as CAL throughout the world. |
| Keywords: | computer-assisted learning, EdTech, ICT, pencil effects, student learning, educational productivity, RCT |
| JEL: | I21 O15 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13080&r=all |
| By: | Ajmani, Manmeet; Choudhary, Vishruta; Kishore, Avinash; Roy, Devesh |
| Abstract: | We assess food trade among and across two Asian trading blocs, the Association of Southeast Asian Nations (ASEAN) and the South Asian Association for Regional Cooperation (SAARC), and China. Using most recent innovations in the empirical trade model, we find subpar trade for several countries but some over-trading as well, likely driven by weak economic fundamentals determining trade. Further, we find that Bangladesh, Philippines, Sri Lanka, and Viet Nam under-export to China, and to nearly all ASEAN and SAARC countries, with the magnitude varying between 40 and 100 percent below the predicted trade levels. While checking for competing explanations, we identify trading pair time variant factors such as tariffs reducing the magnitude of under-exporting of ASEAN and SAARC countries by 1 and 3 percent, respectively. We also highlight unobserved variables such as trust between countries as factors important for strong agricultural trade. |
| Keywords: | CHINA; EAST ASIA; ASIA; ASEAN; models; trade; international trade; gravity model; multilateral resistance; zero trade; under-trading; over-trading; SAARC |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1914&r=all |
| By: | Refk Selmi (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, ESC Pau); Youssef Errami (ESC Pau, IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau); Mark Wohar (University of Nebraska [Omaha] - University of Nebraska System) |
| Abstract: | For decades, the two economic superpowers-the U.S and China-have been integrated. But the U.S. administration under Trump presidency is now attempting to undo that, as a deepening trade rift with China affect businesses in both economies. In July, August and September 2018, the United States successively increased tariffs on a total of $250 billion in annual imports of Chinese goods, stating that it wished to safeguard U.S. companies from unfair Chinese practices and lessen the bilateral trade deficit. China responded with tariffs on $110 billion of imports from the United States. The trade tensions between the two economic superpowers have led to a significant and rapid reduction in bilateral trade in taxed goods. This paper seeks to examine the heightened uncertainty surrounding the U.S.-China trade war to shed some light on the reactions of sectoral U.S. stock market to China tariff threats. While all sectors face increasing uncertainty, this trade war had varying sectoral effect. Specifically, the responses of information technology, industrials and energy were even more severe than the reactions of financials, consumer discretionary and staples, healthcare, real estate, aerospace and defense and utilities. Such positioning is designed to create a portfolio with balanced exposure to certain sectors for offense (information technology and industrials) and others for defense (healthcare, real estate and utilities). |
| Keywords: | US-China trade war,Tariffs,US stock market,Sectoral level analysis |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02523186&r=all |
| By: | Natacha Aveline-Dubach (GC (UMR_8504) - Géographie-cités - UP1 - Université Panthéon-Sorbonne - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This chapter sheds light on the forces that drive global financial investment into the real estate markets of megacity regions across the world. Although financial approaches and metrics of valuation stem from the Anglo-American investment culture, their rooting in different institutional contexts produces varied trajectories of financialization. Hybridization dynamics are seen especially in East Asia, where local cultures and institutional arrangements were not initially fit to integrate Western investment concepts. This chapter highlights the diverging patterns of real estate financialization in three East Asian countries /regions: Japan, Hong Kong, and Mainland China. It is based on a framework that combines three key elements: i) the representations of 'investable' markets by the global financial industry; ii) the initiatives taken by state agencies to provide a supportive environment for financial investment; and iii) the response by property developers to the supply of market capital in the built environment. |
| Abstract: | Ce chapitre révèle les dynamiques de l'investissement financier global vers les marchés immobiliers des mégapoles à travers le monde. Bien que les approches financières et les mesures d'évaluation proviennent de la culture d'investissement anglo-américaine, leur enracinement dans des contextes institutionnels différents produit des trajectoires de financiarisation variées. Les dynamiques d'hybridation sont particulièrement visibles en Asie orientale, où les cultures locales et les arrangements institutionnels n'étaient pas initialement adaptés pour intégrer les concepts d'investissement occidentaux. Ce chapitre met en évidence les modèles divergents de financiarisation de l'immobilier dans trois pays/régions d'Asie de l'Est : Le Japon, Hong Kong et la Chine continentale. Il est basé sur un cadre qui combine trois éléments clés : a) les représentations des marchés "investissables" par l'industrie financière mondiale ; b) les initiatives des pouvoirs publics pour fournir un environnement favorable à l'investissement financier ; c) la réponse des promoteurs à l'offre de capital financier pour les opérations immobilières. |
| Keywords: | Real estate,financialization,East Asia,REITs,property,urban policy,China PRC,Hong Kong Chine,Japanese Studies |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02517518&r=all |
| By: | Bing Tong (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan); Guang Yang (School of Economics, Nankai University) |
| Abstract: | Nominal interest rates in China has long been controlled by the government, making their changes lagging behind price changes. We model this in a New Keynesian model with a transiently fixed interest rate, and prove that interest rate fixation can magnify model volatility and lead to economic instability. Under the fixed interest rate, the model enters a vicious spiral until monetary policy switches to a flexible interest rate rule, which represents the shadow rate of the economy, determined by discrete (and insufficient) interest rate adjustments and other policy tools. This explains Chinas large business cycle fluctuations over the past decades. |
| Keywords: | Interest rate peg, Chinese economy,New Keynesian Model, Monetary policy, Business cycle |
| JEL: | E31 E32 E42 E52 E58 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:fds:dpaper:202001&r=all |
| By: | Chu, Amanda M.Y.; Lv, Zhihui; Wagner, Niklas F.; Wong, Wing-Keung |
| Abstract: | We investigate growth determinants for Mongolia as a small emerging economy considering China as its large neighbor. Our causality analysis during January 1992 to August 2017 reveals significant linear and nonlinear relationships in growth explanation. China’s GDP and coal prices, together with some of their linear and nonlinear lagged components, predict Mongolia’s GDP, where a one percent increase in China’s GDP relates to an increase in Mongolia of 1.5 percent. Current exchange rates and the nonlinear components of lagged levels of consumer prices also explain growth. Our results underline the role of macroeconomic drivers of growth in emerging economies. |
| Keywords: | gross domestic product (GDP); economic growth; energy prices; coal prices; consumer prices; foreign direct investment (FDI); exchange rates; cointegration; multivariate Granger causality; nonlinear Granger causality; |
| JEL: | C53 E52 F42 |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99185&r=all |
| By: | Wong, Gary (University of Macau); Fleisher, Belton M. (Ohio State University); Zhao, Min Qiang (Xiamen University); McGuire, William H. (University of Washington Tacoma) |
| Abstract: | We propose a new methodology to estimate empirically the input price-induced technical change and total factor productivity (TFP) growth in China. Our primary goal is to test Hicks' induced innovation hypothesis by examining whether technical change in China has been induced by sharp increase in input prices that have accompanied its rapid economic growth. Utilizing the idea of a firm's two-stage optimization problem, we develop a new parametric form of the variable profit function wherein the derived input demand and output supply functions can be easily constrained to be regular, and the functional structure is parsimonious in the number of parameters. Applying this methodology to Chinese time series data for 1986–2015, we find that not only is wage-induced innovation significant and quantitatively important, but also that it substantially buffers a long-term decline in TFP growth that would otherwise be quite substantial. We conclude that China's economic growth is predominantly driven by wage-induced innovation along with massive injection of heavily subsidized physical inputs in public works and huge investment in industrial sectors. |
| Keywords: | induced innovation, total factor productivity, variable profit functions, China |
| JEL: | D22 D24 O30 O53 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13017&r=all |
| By: | Jia, Ning (Central University of Finance and Economics); Fleisher, Belton M. (Ohio State University) |
| Abstract: | We study the effect of the Thousand Young Talents Program (TYTP) on the academic quality of return migrant scientists to China. Using a unique dataset of the top Chinese mathematics departments' new hires, we find that the program leads to considerable increases in measures of their educational background and research productivity. The effects are concentrated in the elite C9 league, where the proportion of hires who received PhD degrees from top-50 overseas mathematics departments increased nearly four times after the initiation of the program. The data also reveal large and statistically significant increases in weighted pre-hire publications and weighted citations to pre-hire publications under the program. However, it appears that research output of previously hired faculty members declined after the introduction of TYTP hires, suggesting minimal or even negative impact of TYTP on faculty colleagues' academic achievements. |
| Keywords: | migration, scientific research, R&D policy |
| JEL: | J61 O31 O38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13073&r=all |
| By: | Chunding Li; Xin Lin; John Whalley |
| Abstract: | This paper builds a 29-country numerical general equilibrium model with inside money and trade cost to simulate and compare the effects of China and the US taking part in the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which is a high standard mega regional trade agreement. Comparison results show that China will benefit CPTPP member countries more than the US on trade, GDP, and manufacturing employment. China’s entering the CPTPP can also benefit most non-member countries on GDP and manufacturing employment. By joining, the US will benefit the whole world more, as the US economic scale is larger than that of China. Our simulation results reveal that China will be more welcomed to the CPTPP by member countries. |
| JEL: | C68 F47 F53 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26877&r=all |