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on China |
| By: | Huang,Zhangkai; Liu,Jinyu; Ma,Guangrong; Xu,L. Colin |
| Abstract: | The serious implications of privatizing state-owned enterprises for politicians, managers, and investors make such decisions highly contingent on firm characteristics and past performance, complicating the identification of the privatization effects. A unique opportunity for this identification arises from a rule of promotion of local politicians based on age requirements in China. This paper finds that Chinese cities whose top officials were older than age 58 were 20 percent less likely to privatize local state-owned enterprises during the wave of state-owned enterprise restructuring starting in the late 1990s. Relying on the regression discontinuity design, the analysis finds that privatizations led to productivity gains of more than 170 percent, an order of magnitude larger than the traditional estimates based on the firm fixed effect specification (including its random-growth variant). The paper further finds that the privatization effects are significantly larger when the government is less involved in the affairs of local firms. The findings underscore the need to deal with the time-varying selectivity of privatizations and highlight the crucial role that state-owned enterprise privatizations played in China's economic takeoff. |
| Date: | 2020–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9261&r=all |
| By: | Myeongwan Kim |
| Abstract: | The explosive growth in Chinese imports to Canada over the last two decades has had both negative and positive effects. In this paper, we look at the impact of Chinese imports on the prices Canadians pay for household consumption goods. We find Canadians have benefited from lower prices on some goods and lower inflation overall. To quantify the importance of Chinese imports for individual consumer products and map them to consumer price data, we construct concordance between products in the consumer price index (CPI) and commodities in the Harmonized Commodity Description and Coding System. We estimate that over the 2001-2011 period, cumulative inflation would have been 1.17-percentage-points higher for the total CPI had there been no change in the Chinese share of total imports in Canada. This assumes other factors are held constant. The average annual inflation for the total CPI was 2.1 per cent over the 2001-2011 period, implying that annual inflation would have been about 0.12-percentage-points higher if there had not been a surge in imports from China. |
| Keywords: | China Shock, Canada, Imports, Productivity, Innovation |
| JEL: | F62 O32 O51 O53 L60 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1908&r=all |
| By: | Ding, L.; Jones, A.M.; Nie, P. |
| Abstract: | We present a comprehensive analysis of ex ante inequality of opportunity (IOp) in health among Chinese adults aged 60+ and decompose the contributions of different sets of circumstances. Data are drawn from the 2011 and 2015 waves of the China Health and Retirement Longitudinal Study (CHARLS) linked with the 2014 CHARLS Life History Survey. We use a range of blood-based biomarkers, and apply a re-centered influence function (RIF) approach and a Shapley-Shorrocks decomposition to partition the contribution of circumstances across different quantiles of the biomarker distributions. We find that IOp accounts for between 3.75% and 29.57% of total health inequality in old age across the range of biomarkers. Shapley-Shorrocks decompositions show that spatial circumstances such as urban/rural residence and province of residence are the dominant determinants of IOp for most of the biomarkers. Distributional decompositions further reveal that the relative contributions to IOp in health of household socioeconomic status and health and nutrition conditions in childhood increase towards the right tails of the distribution for most of the biomarkers, where the clinical risk is focused. |
| Keywords: | biomarkers; CHARLS; China; inequality of opportunity; Shapley-Shorrocks decomposition; unconditional quantile regressions; |
| JEL: | D63 I12 I14 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:20/10&r=all |
| By: | Markus K. Brunnermeier; Michael Sockin; Wei Xiong |
| Abstract: | China's economic model involves active government intervention in financial markets. We develop a theoretical framework in which interventions prevent a market breakdown and a volatility explosion caused by the reluctance of short-term investors to trade against noise traders. In the presence of information frictions, the government can alter market dynamics since the noise in its intervention program becomes an additional factor driving asset prices. More importantly, this may divert investor attention away from fundamentals and totally toward government interventions (as a result of complementarity in investors' information acquisition). A trade-off arises: government's objective to reduce asset price volatility may worsen, rather than improve, information efficiency of asset prices. |
| JEL: | G01 G14 G28 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27171&r=all |
| By: | Janda Karel; Binyi Zhang |
| Abstract: | Understanding the influencing factors of carbon dioxide emissions is an essential prerequisite for pol- icy makers to maintain sustainable low-carbon economic growth. Based on the Autoregressive Distributed Lag Model (ARDL) and Vector Error Correction Model (VECM), we investigate the relationships among economic growth, carbon emission, financial development, renewable energy consumption and technology innovation for China for the period 1965-2018. Our empirical results confirm the presence of a long run relationship among the underlying variables. Our long run estimates show that financial development has negatively significant impacts on carbon emissions, whereas renewable energy and technology innovation have limited impacts on carbon mitigations. In addition, the short run Granger causality analysis reveals that renewable energy consumption has a bidirectional Granger causality with carbon emissions and technology innovations. In the short run, we find that financial development can positively effect China’s carbon mitigation indirectly, via the channels of renewable energy sources and technology innovations. Our results have a number of public policy implications for Chinese policy makers to maintain sustainable low carbon economic development: (i) establish a green finance market to mobilize the social capital into green industry; (ii) continue the environmental law enforcement to control for carbon emissions among energy-intensive industries; (iii) provide government fiscal incentives to promote renewable energy sources on both supply and demand sides of the market. |
| Keywords: | Financial development, Carbon emissions, ARDL, China |
| JEL: | K32 O13 P28 |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:prg:jnlwps:v:2:y:2020:id:2.003&r=all |
| By: | Tao Xiong; Wendong Zhang (Center for Agricultural and Rural Development (CARD)); Chen-Ti Chen |
| Abstract: | China is the world's largest pork producer and a leading pork importer. Since August 2018, ongoing outbreaks of African Swine Fever (ASF), a highly contagious and deadly disease affecting pigs, have hit China's livestock industries and wiped out 40% of China's pigs. We leverage data on daily stock returns from 25 major publicly listed firms from China and eight major pork-exporting countries to provide the first systematic analysis of the firm-level economic impacts of the outbreaks. We find that on average announcements of ASF outbreaks have led to positive and significant stock returns for both Chinese and international hog companies. Notably, Chinese hog companies on average enjoyed 10%-40% of cumulative abnormal returns during the 2019 Chinese Spring Festival, a peak demand season for pork. We show that larger hog firms tend to capture greater positive stock returns. Our results suggest opportunities for consolidation, expansion, and upgrades of China's meat industry that have long-run implications for its global competitiveness and efficiency. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:20-wp602&r=all |
| By: | Shahbaz, Muhammad; Shafiullah, Muhammad; Khalid, Usman; Song, Malin |
| Abstract: | Energy resources are an important material foundation for the survival and development of human society, and the relationship between energy and economy is interactive and complementary. This paper analyzes the energy consumption–economic growth nexus in Chinese provinces using novel and recent nonparametric time-series as well as panel data empirical approaches. The dataset covers 30 provinces over the period of 1980-2018. The empirical analysis indicates the presence of a nonlinear functional form and smooth structural changes in most of the provinces. The nonparametric empirical analysis validates the presence of a nonlinear unit root problem in energy consumption and economic growth, and nonlinear cointegration between the variables. Additionally, the nonparametric panel cointegration test reports evidence of convergence in energy consumption and economic growth patterns across the provinces. The nonparametric regression analysis finds economic growth to have a positive effect, on average, on energy consumption in all provinces, except for Beijing. Further, the energy environmental Kuznets curve exists between economic growth and energy consumption in 20 out of 30 Chinese provinces. The Granger causality analysis reveals the presence of a mixed causal relationship between economic growth and energy consumption. The empirical findings have important implications for Chinese authorities in planning for improving energy efficiency, decoupling between economic growth and energy consumption, and reducing the environmental footprint of provinces. |
| Keywords: | Energy Consumption, Economic Growth, China, Nonparametric Analysis |
| JEL: | Q4 |
| Date: | 2020–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100769&r=all |
| By: | Bobby Chung (University of Illinois at Urbana-Champaign); Jian Zou (University of Illinois at Urbana-Champaign) |
| Abstract: | We utilize random assignment of students into classrooms in China middle schools to study the mechanisms behind the spillover of peer parental education on student achievement. Analyzing the China Education Panel Survey, we find a causal relationship between classmates' maternal education and student test score. In addition to the conventional peer effect and teacher response channel, we identify mother adjustment of parenting style as another important mediating factor. We provide suggestive evidence about the existence of mother's network, which facilitates the change in parenting style. We also find that the spillover of peer maternal education on non-repeaters and non-migrant students is stronger, primarily driven by higher parental investment on time. |
| Keywords: | peer effects, peers' parents, parental investments, parenting style |
| JEL: | D91 I24 J13 Z13 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-045&r=all |
| By: | Belot, Michèle (European University Institute); Choi, Syngjoo (Seoul National University); Tripodi, Egon (European University Institute); van den Broek-Altenburg, Eline (University of Vermont); Jamison, Julian C. (University of Exeter); Papageorge, Nicholas W. (Johns Hopkins University) |
| Abstract: | Covid-19 and the measures taken to contain it have led to unprecedented constraints on work and leisure activities, across the world. This paper uses nationally representative surveys to document how people of different ages and incomes have been affected across six countries (China, South Korea, Japan, Italy, UK and US). We first document changes in income/work and leisure. Second, we document self-reported negative and positive non-financial effects of the crisis. We then examine attitudes towards recommendations (wearing a mask in particular) and the approach taken by public authorities. We find similarities across countries in how people of different generations have been affected. Young people have experienced more drastic changes to their lives, and overall they are less supportive of these measures. These patterns are less clear across income groups: while some countries have managed to shield lower income individuals from negative consequences, others have not. We also show that how people have been affected by the crisis (positively or negatively) does little to explain whether or not they support measures implemented by the public authorities. Young people are overall less supportive of such measures independently of how they have been affected. |
| Keywords: | COVID-19, inequality, age, income, cross-country comparison |
| JEL: | E24 I14 I31 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13366&r=all |
| By: | Shenzhe Jiang (Peking University); Jianjun Miao (Boston University); Yuzhe Zhang (Texas A&M University) |
| Abstract: | China’s housing prices have been growing rapidly over the past few decades, despite low growth in rents. We study the impact of housing bubbles on China’s economy, based on the understanding that local governments use land-sale revenue to fuel infrastructure investment. We calibrate our model to the Chinese data over the period 2003-2013 and find that our calibrated model can match the declining capital return and GDP growth, the average housing price growth, and the rising infrastructure to GDP ratio in the data. We conduct two counterfactual experiments to estimate the impact of a bubble collapse and a property tax. |
| Keywords: | Housing Bubble, Infrastructure, Economic Growth, Chinese Economy, Property Tax |
| JEL: | O11 O16 O18 P24 R21 R31 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2020-005&r=all |
| By: | Chowdhry, Sonali; Felbermayr, Gabriel; Stamer, Vincent |
| Abstract: | This policy brief examines the effects of the Covid19 pandemic on international trade. Major exporting economies have posted record year-over-year monthly declines in export volume ranging from -7.9% in Germany to -24.3% in South Korea. While logistical bottlenecks are being solved, low demand puts pressure on trade activity. The shipping industry has reduced its activity around Europe, Asia and America by up to -10% pointing to a prolonged reduction in trade. Over the first quarter of 2020, China's trade contracted severely with most economies - particularly Canada, Japan, Russia, Italy and South Africa.The trade collapse affects businesses differently and especially hits those firms that participate in low-value added stages of global value chains by assembling components. |
| Keywords: | Trade,Covid-19,China,GVCs,Handel |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkpb:spezial-corona-update-4en&r=all |
| By: | Emran,M. Shahe; Jiang,Hanchen; Shilpi,Forhad J. |
| Abstract: | This paper incorporates gender bias against girls in the family, school and labor market in a model of intergenerational persistence in schooling where parents self-finance children's education because of credit market imperfections. Parents may underestimate a girl's ability, expect lower returns, and assign lower weights to their welfare (?pure son preference?). The model delivers the widely used linear conditional expectation function under constant returns and separability but generates an irrelevance result: parental bias does not affect relative mobility. With diminishing returns and complementarity, the conditional expectation function can be concave or convex, and parental bias affects both relative and absolute mobility. This paper tests these predictions in India and China using data not subject to coresidency bias. The evidence rejects the linear conditional expectation function in rural and urban India in favor of a concave relation. Girls in India face lower mobility irrespective of location when born to fathers with low schooling, but the gender gap closes when the father is college educated. In China, the conditional expectation function is convex for sons in urban areas, but linear in all other cases. The convexity supports the complementarity hypothesis of Becker et al. (2018) for the urban sons and leads to gender divergence in relative mobility for the children of highly educated fathers. In urban China, and urban and rural India, the mechanisms are underestimation of the ability of girls and unfavorable school environment. There is some evidence of pure son preference in rural India. The girls in rural China do not face bias in financial investment by parents, but they still face lower mobility when born to uneducated parents. Gender barriers in rural schools seem to be the primary mechanism. |
| Keywords: | Educational Sciences,Gender and Development,Economics of Education,Rural Labor Markets,Labor Markets,Inequality |
| Date: | 2020–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9250&r=all |
| By: | Danilo Leiva-Leon (Banco de España); Gabriel Perez-Quiros (European Central Bank and CEPR); Eyno Rots (Magyar Nemzeti Bank) |
| Abstract: | We propose an empirical framework to measure the degree of weakness of the global economy in real-time. It relies on nonlinear factor models designed to infer recessionary episodes of heterogeneous deepness, and fitted to the largest advanced economies (U.S., Euro Area, Japan, U.K., Canada and Australia) and emerging markets (China, India, Russia, Brazil, Mexico and South Africa). Based on such inferences, we construct a Global Weakness Index that has three main features. First, it can be updated as soon as new regional data is released, as we show by measuring the economic effects of coronavirus. Second, it provides a consistent narrative of the main regional contributors of world economy’s weakness. Third, it allows to perform robust risk assessments based on the probability that the level of global weakness would exceed a certain threshold of interest in every period of time. With information up to March 2nd 2020, we show that the Global Weakness Index already sharply increased at a speed at least comparable to the experienced in the 2008 crisis. |
| Keywords: | international, business cycles, factor model, nonlinear |
| JEL: | E32 C22 E27 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2015&r=all |