nep-cna New Economics Papers
on China
Issue of 2021‒08‒23
seven papers chosen by
Zheng Fang
Ohio State University

  1. Trade-Policy Dynamics: Evidence from 60 Years of U.S.-China Trade By George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg
  2. Exploring Spatial Price Relationships: The Case of African Swine Fever in China By Michael S. Delgado; Meilin Ma; H. Holly Wang
  3. Regulating Conglomerates in China: Evidence from an Energy Conservation Program By Qiaoyi Chen; Zhao Chen; Zhikuo Liu; Juan Carlos Suárez Serrato; Daniel Xu
  4. Strategic coupling and regional resilience in times of uncertainty: the industrial chain chief model in Zhejiang, China By Huiwen Gong; Robert Hassink; Cassandra Wang
  5. Why North Korean Refugees are Reluctant to Compete: The Roles of Cognitive Ability By Syngjoo Choi; Byung-Yeon Kim; Jungmin Lee; Sokbae Lee
  6. Does Offshoring Production Reduce Innovation: Firm-Level Evidence from Taiwan By Lee G. Branstetter; Jong-Rong Chen; Britta Glennon; Nikolas Zolas
  7. Variety, Fertility, and Long-term Economic Growth By Jianchoun Dou

  1. By: George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg
    Abstract: We study the growth of Chinese imports into the United States from autarky during 1950-1970 to about 15 percent of overall imports in 2008, taking advantage of the rich heterogeneity in trade policy and trade growth across products during this period. Central to our analysis is an accounting for the dynamics of trade, trade policy, and trade-policy expectations. We isolate the lagged effects of past reforms and the current effects of uncertainty about future reforms. We build a multi-industry, heterogeneous-firm model with a dynamic export participation decision to estimate a path of trade-policy expectations. We find that being granted Normal Trade Relations (NTR) status in 1980 was largely a surprise and that, in the early stages, this reform had a high probability of being reversed. The likelihood of reversal dropped considerably during the mid 1980s, and, despite China's accession to the World Trade Organization (WTO) in 2001, changed little throughout the late 1990s and early 2000s. Thus, although uncertainty depressed trade substantially following the 1980 liberalization, much of the trade growth that followed China's WTO accession was a delayed response to previous reforms rather than a response to declining uncertainty.
    JEL: F1 F14 F62
    Date: 2021–08
  2. By: Michael S. Delgado; Meilin Ma; H. Holly Wang
    Abstract: We use a temporary ban on inter-province shipping of live hogs induced by the 2018 outbreak of African Swine Fever (ASF) in China as a natural experiment to study spatial mechanisms behind the dynamics of market integration. With a unique dataset of weekly provincial hog prices, we employ a novel spatial network model to estimate the strength of price co-movement across provinces pre and post the ban. Results indicate that, in the highly integrated national market prior to the ban, longer geographical distances between two provinces did not weaken the strength of their price linkage. The ban broken down spatial integration. Longer distances became a significant obstacle to spatial price linkage in the post-ban periods, implying faster re-integration of hog prices between proximate provinces than remote ones. The negative effect of distance can be rationalized by the interplay between arbitrage opportunities and imperfect information. Our findings highlight information transparency as a key to market integration post shipping bans used to curb animal pandemics like ASF.
    JEL: C22 C23 Q18
    Date: 2021–08
  3. By: Qiaoyi Chen; Zhao Chen; Zhikuo Liu; Juan Carlos Suárez Serrato; Daniel Xu
    Abstract: We study a prominent energy regulation affecting large Chinese manufacturers that are part of broader conglomerates. Using detailed firm-level data and difference-in-differences research designs, we show that regulated firms cut output and shifted production to unregulated firms in the same conglomerate instead of improving their energy efficiency. Conglomerate spillovers account for 40% of the output loss of regulated firms and substantially reduce aggregate energy savings. Using a structural model, we show that alternative polices that use public information on business networks could lower the shadow cost of the regulation by more than 40% and increase aggregate energy savings by 10%.
    JEL: H23 L51 O44 Q48
    Date: 2021–07
  4. By: Huiwen Gong; Robert Hassink; Cassandra Wang
    Abstract: The question of how regions can remain competitive and resilient in times of uncertainty is a central concern for economic geographers. To date, two key concepts— strategic coupling and regional economic resilience—have been used separately to study regional economic dynamics in times of uncertainty. Through a careful examination of the industrial chain chief model in Zhejiang Province, this paper argues that both concepts are essential and should be combined in a coherent manner to better explore the topic of interest. Moreover, it is pointed out that the existing conceptualization of the two concepts suffers from some limitations and a reconceptualization of the two key concepts is needed if economic geographers are to make policy recommendations to local policy-makers.
    Keywords: Regional resilience; strategic coupling; Zhejiang, China; value chains; policy
    Date: 2021
  5. By: Syngjoo Choi; Byung-Yeon Kim; Jungmin Lee; Sokbae Lee
    Abstract: This paper investigates the development of competitiveness by comparing three Korean groups in South Korea, born and raised in three countries with distinct institutional environments: South Korea, North Korea, and China. Results based on laboratory experiments show that North Korean refugees are significantly less competitive than South Koreans or Korean-Chinese immigrants. Furthermore, analyses through the lens of a choice model with probability weighting suggest that lower cognitive ability may be associated with lower levels of expected performance, more pessimistic subject beliefs and greater aversion to competition.
    Date: 2021–08
  6. By: Lee G. Branstetter; Jong-Rong Chen; Britta Glennon; Nikolas Zolas
    Abstract: Does the offshoring of production degrade or enhance the innovative capabilities of manufacturing firms? We contribute to this debate by exploiting a policy shock that differentially affected the ability of Taiwanese firms to offshore some products to China. We find causal evidence that offshoring impacts both the level and nature of innovation. In the technologies directly related to product categories that could be offshored more easily after the policy shock, overall innovation levels decline and innovative effort shifts away from product innovation and towards process innovation. However, we also find evidence of a second-order positive effect of offshoring on the levels of innovation—particularly product innovation—in other parts of the firm’s portfolio. These results are consistent with the notion that offshoring production induces a complex reallocation of innovation effort within the firm, both across and within technology categories. Our paper examines this reallocation in the context of Taiwanese electronics firms, and introduces new methods that could be used to study post-offshoring reallocations of innovative effort in other contexts.
    JEL: F2 F6 O3 O4
    Date: 2021–08
  7. By: Jianchoun Dou (Shaanxi Normal University, Xi’an, China)
    Abstract: This study develops a novel mechanism to explain the long-term economic and demographic evolution from the Malthusian stage to the modern stage. In the model, the progress in human history is characterized by not only technological advances but also the expansion of variety of goods. The technological progress, which enhances productivity, is in favor of population growth. Meanwhile, the growth of variety that expands consumption sets tends to reduce fertility. The change of fertility finally depends on the relative growth rate of these two kinds of innovations. With the help of some hypotheses that correspond to the stylized facts in the history of science and technology, the model predicts an evolutional pattern of technology and fertility that is consistent with unified growth theory.
    Keywords: Variety, Fertility, Economic growth, Innovations
    JEL: J11 J13 N3
    Date: 2021–07–18

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