nep-cna New Economics Papers
on China
Issue of 2021‒10‒25
six papers chosen by
Zheng Fang
Ohio State University

  1. Illuminating the Effects of the US-China Tariff War on China's Economy By Davin Chor; Bingjing Li
  2. Reputational Assets and Social Media Marketing Activeness: Empirical Insights from China By Johansson, Anders C.; Zhu, Zhen
  3. Gender identity and relative income within household: Evidence from China By Han Dongcheng; Kong Fanbo; Wang Zixun
  4. Faster fiscal stimulus and a higher government spending multiplier in China: Mixed-frequency identification with SVAR By Mingyang Li; Linlin Niu
  5. Minimum wages and the China Syndrome: Causal evidence from US local labor markets By Milsom, L.; Roland, I.
  6. Green financial development improving energy efficiency and economic growth: A study of CPEC area in COVID-19 era By Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen

  1. By: Davin Chor; Bingjing Li
    Abstract: How much has the US-China tariff war impacted economic outcomes in China? We address this question using high-frequency night lights data, together with measures of the trade exposure of fine grid locations constructed from Chinese firms' geo-coordinates. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each 1 percentage point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. We combine these with structural elasticities that relate night lights to economic outcomes, motivated by the statistical framework of Henderson et al. (2012). The negative impact of the tariff war was highly skewed across locations: While grids with negligible direct exposure to the US tariffs accounted for up to 70% of China's population, we infer that the 2.5% of the population in grids with the largest US tariff shocks saw a 2.52% (1.62%) decrease in income per capita (manufacturing employment) relative to unaffected grids. By contrast, we do not find significant effects from China's retaliatory tariffs.
    JEL: E01 F10 F13 F14 F16
    Date: 2021–10
  2. By: Johansson, Anders C. (Stockholm China Economic Research Institute); Zhu, Zhen (Kent Business School, University of Kent)
    Abstract: We explore the linkages between social media marketing activeness and reputational assets on digital platforms with a unique sample of over 8,000 customer-to-customer (C2C) sellers registered on both Taobao, China’s largest C2C online shopping platform, and Sina Weibo, China’s largest microblogging platform. A unique collaborative effort between the two platforms enables us to examine whether C2C sellers are motivated to engage in marketing activities on a separate social media platform. Applying machine learning and natural language processing methods, we first identify whether C2C sellers conduct social media marketing on their microblogs. We then differentiate between earned and owned reputation factors accumulated on both platforms and test their relationships to social media marketing activeness. We find that earned reputation factors on both platforms are significantly associated with social media marketing activeness. However, we identify a conflict of owned reputation factors between the two platforms, which provides a potential explanation for the limited success of the cross-platform collaboration.
    Keywords: social media marketing; reputational assets; electronic commerce; China
    JEL: L81 M15 M30 M31
    Date: 2021–10–15
  3. By: Han Dongcheng; Kong Fanbo; Wang Zixun
    Abstract: How does women's obedience to traditional gender roles affect their labour outcomes? To investigate on this question, we employ discontinuity tests and fixed effect regressions with time lag to measure how married women in China diminish their labour outcomes so as to maintain the bread-winning status of their husbands. In the first half of this research, our discontinuity test exhibits a missing mass of married women who just out-earn their husbands, which is interpreted as an evidence showing that these females diminish their earnings under the influence of gender norms. In the second half, we use fixed effect regressions with time lag to assess the change of a female's future labour outcomes if she currently earns more than her husband. Our results suggest that women's future labour participation decisions (whether they still join the workforce) are unaffected, but their yearly incomes and weekly working hours will be reduced in the future. Lastly, heterogeneous studies are conducted, showing that low-income and less educated married women are more susceptible to the influence of gender norms.
    Date: 2021–10
  4. By: Mingyang Li; Linlin Niu
    Abstract: Motivating with two scenarios in which the government spending in China timely reacted to output shock within a quarter, this letter points out a downward bias in the estimation of Chinese government spending multiplier using the classical lag restriction for shock identification in a quarterly SVAR framework à la Blanchard and Perotti (2002). By relaxing the lag-length restriction from one quarter to one month, we propose a mixed-frequency identification (MFI) strategy by taking the unexpected spending change in the first month of each quarter as an instrument. The estimation results show that the Chinese government significantly reacts to output shock counter-cyclically within a quarter, with the resulting government spending multiplier being 0.546 on impact and 1.849 at the maximum. A comparison study confirms that results based on the identification strategy of Blanchard and Perotti (2002) suffer severe downward bias in such a case.
    Keywords: government spending multiplier; inside lag; mixed-frequency identification; SVAR model.
    JEL: C32 C36 E23 E62
    Date: 2021–10–19
  5. By: Milsom, L.; Roland, I.
    Abstract: Exposure to Chinese import competition led to significant manufacturing job losses in the United States. Local labor markets, however, differ significantly in how they fared with respect to manufacturing employment. An important question is whether labor market institutions have an impact on the dynamic response of manufacturing employment to rising import penetration. We contribute to this debate by showing that minimum wages amplified the negative effect of Chinese import penetration on manufacturing employment in US local labor markets between 2000 and 2007. We develop a rigorous double-edged identification strategy. First, we construct shift-share instrumental variables to address the endogeneity of import penetration. Second, we use a border identification strategy to distinguish the effects of minimum wage policies from the effects of other local labor market characteristics that are unrelated to policy. Specifically, we rely on comparing commuting zones that are contiguous to each other but located in different states with different minimum wage policies. The approach essentially considers what happens to the response of manufacturing employment to import penetration when one crosses a policy border.
    Keywords: Import penetration, labor market institutions, minimum wages, manufacturing employment
    JEL: E24 F14 F16 J23 L60 R12
    Date: 2021–10–07
  6. By: Zhang, Linyun; Huang, Feiming; Lu, Lu; Ni, Xinwen
    Abstract: This study seeks to evaluate the effect of green financial development, improving energy efficiency and economic growth on Covid-19 tenure. For this, the CPEC area is recommended to look into. Present study revealed the energy economic negative repercussions of Covid-19 impacts. It is assumed that, in China and Pakistan, economic expansion, trade openness, financial development, and urbanization coexist. To verify the postulated impacts of economic activity on the environment, we do Johansen cointegration, error correction, and Granger causality tests. We discovered that economic growth, energy consumption, trade openness, financial development, and urbanization had a long-term relationship to CO2 emissions in Pakistan. Urbanization is the only macroeconomic factor with a detrimental effect on carbon emissions. As with China, no cointegration is found across variables, but unidirectional causality from energy consumption and economic growth to economic growth is established. Economic growth, energy consumption, and trade openness also each have bidirectional causal effect on financial development. According to statistical data, along with significant projected economic development in CPEC countries, policymakers and regulators are urged to strengthen environmental protection laws in China and Pakistan.
    Keywords: Green financial development,Energy Financing,Energy Efficiency,Economic growth,Covid-19 crises,Capital formation
    Date: 2021

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