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on China |
| By: | Hanming Fang; Jing Wu; Rongjie Zhang; Li-An Zhou |
| Abstract: | We advance a novel hypothesis that China’s recent anti-corruption campaign may have contributed to the recent resurgence of the state-owned enterprises (SOEs) in China as an unintended consequence. We explore the nexus between the anti-corruption campaign and the SOE resurgence by presenting supporting evidence from the Chinese real estate sector, which is notorious for pervasive rent-seeking and corruption. We use a unique data set of land parcel transactions merged with firm-level registration information and a difference-in-differences empirical design to show that, relative to the industrial land parcels which serve as the control, the fraction of residential land parcels purchased by SOEs increased significantly relative to that purchased by private developers after the anti-corruption campaign. This finding is robust to a set of alternative specifications. We interpret the findings through the lens of a model where we show, since selling land to private developers carries the stereotype that the city official may have received bribes, even the “clean” local officials will become more willing to award land to SOEs despite the presence of more efficient competing private developers. We find evidence consistent with the model predictions. |
| JEL: | D73 R31 R52 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29688&r= |
| By: | Mathilde Maurel (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Thomas Pernet |
| Abstract: | This paper analyses the efficiency of a set of environmental measures introduced by the 11th Five Years Plan (FYP) in China in 2006, using a rich and unique dataset borrowed from the Ministry of Environmental Protection (MEP) and the State Environmental Protection Agency (SEPA). By exploiting plausibly exogenous variation in regulatory stringency generated by the targets' system in China across provinces in 2006, we find evidence that pollution-intensive cities substantially decreased the emission of SO2, whereas cities where the presence of SOEs (State Owned Enterprises) is large did not. We interpret these results as pointing to the evidence of a still ongoing SBC (Soft Budget Constraints) surrounding Chinese SOEs. The findings are robust to the inclusion of different specifications of fixed effects, and other key determinants of firm pollution. Moreover, we investigate what are the main factors behind the no-compliance to the regulations: the overlapping (or not) with TCZ (SPZ, Coastal) cities where the environmental (growth) policies are prioritized, * The authors are grateful to William F. Shughart II and two anonymous reviewers, whose comments improved the manuscript considerably. We are also very greatful to Zhao Ruili and Zhou Ling for their precious help in collecting the data from the China Environment Statistics Yearbook. |
| Keywords: | Differencein-Difference estimation Q53,Soft Budget Constraint,Kornai,China,Environmental regulation |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03511874&r= |
| By: | Zhiguo He; Bibo Liu; Feifei Zhu |
| Abstract: | This paper studies the connection between share pledging and entrepreneurial activities in China, challenging the common wisdom that share pledging funds circle back to the listed firms. Share pledging funds are at the discretion of the shareholders who pledge their publicly traded shares, and survey evidence shows that a majority of the largest shareholders (67.3%) used pledging funds outside the listed firms. By linking firm registration data with share pledging data, we show a positive relation between shareholders’ pledging transactions and entrepreneurial activities. Utilizing the launch of the exchange market in 2013 as a quasi-natural experiment that favors share pledging by natural person shareholders against that by legal entity shareholders, our difference-in-differences (DiD) analysis shows natural person shareholders increased their entrepreneurial activities significantly in response to the policy shock, relative to legal entity shareholders. In addition to various robustness checks, we also show that shareholders with better access to share pledging invest more heavily in industries with above-median growth potential. |
| JEL: | G15 G23 O16 O53 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29731&r= |
| By: | Palizha AIREBULE; Haitao CHENG; ISHIKAWA Jota |
| Abstract: | We explore the carbon emissions of the world's five highest carbon emitters by applying the shared responsibility (SR) criterion, under which both producers and consumers share the responsibility for emissions. Using the SR method based on the value-added approach, we can investigate carbon emissions at both national and sectoral levels. Between 2002–2014, carbon emissions in China and India grew dramatically. SR increased by 157% in China and 116% in India. The main driving force of China's carbon emissions was the rapid growth of its exports, and the main driver of India's carbon emissions was its high carbon-intensive production technologies. Although carbon emissions had a declining trend in the USA and Japan, it could have resulted from cross-border carbon leakage. More than 40% of the five countries' national carbon emissions under SR were attributed to "electricity, gas, steam and air conditioning supply." This overwhelming share was attributable to their large amounts of production and high carbon emission intensity. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21099&r= |
| By: | Glauber, Joseph W. |
| Abstract: | China’s rapid rise as a leading global exporter of manufacturing goods since its accession to the WTO in 2001 has been the focus of both admiration and, increasingly, concern, but China is also a large importer of goods, particularly agricultural products. Since China's accession to the WTO, China agricultural exports have increased by 8 percent annually while imports have risen by almost twice that rate. China has become the world's largest importer of agricultural products and the first or second largest destination for many of the world's top agricultural exporters such as the US, Brazil, Australia, New Zealand, Canada and Argentina. This paper examines the evolution of China's agricultural trade since accession and discusses how agricultural trade policy and domestic support policies have evolved, with particularly emphasis on China's experience as complainant and respondent in WTO trade disputes. |
| Keywords: | CHINA; EAST ASIA; ASIA; WORLD; WTO; agricultural trade; dispute settlement; trade disputes; international trade; trade; tariffs; imports; exports |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:2085&r= |
| By: | Chen, Jie; Pastore, Francesco |
| Abstract: | In this paper, we use the Chinese General Social Survey data (2010-2017) to analyse the returns to different education qualifications. We additionally compare the returns to vocational education with returns to academic education, at both the upper secondary level and the tertiary level. Compared to those who only complete compulsory education, upper secondary graduates earn about 20% more, vocational college graduates earn 50%, and academic university graduates earn 75% more. At tertiary level, academic education pays better than vocational education, although the difference shrinks over the years. At upper secondary level, the evidence is indeterminate, depending on different econometric techniques (i.e., OLS, IV, Lewbel method, or PSM). These findings add to the limited quantitative evidence on returns to vocational education. The dynamics emerged from the findings echo the discussion on labor market mismatch and overeducation in China, which has important policy implications. |
| Keywords: | dynamic,vocational education,academic education,upper secondary,tertiary,China |
| JEL: | I26 I25 J24 J31 C36 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:858r&r= |
| By: | Laura Alfaro; Cathy Ge Bao; Maggie X. Chen; Junjie Hong; Claudia Steinwender |
| Abstract: | We investigate how firms adapt to trademark protection, an extensively used but underexamined form of IP protection, by exploring a historical precedent: China's trademark law of 1923---an unanticipated and disapproved response to end foreign privileges in China. By exploiting a unique, newly digitized firm-employee-level dataset from Shanghai in 1872-1941, we show that the trademark law shaped firm dynamics on all sides of trademark conflicts. The law spurred growth and brand investment among Western firms with greater dependence on trademark protection. In contrast, Japanese businesses, which had frequently been accused of counterfeiting, experienced contractions while attempting to build their own brands after the law. The trademark law also led to new linkages with domestic agents, both within and outside the boundaries of Western firms, and the growth of Chinese intermediaries. At the aggregate level, trademark-intensive industries witnessed a net growth in employment and the number of product categories. A comparison with previous attempts by foreign powers---such as extraterritorial rights, bilateral treaties, and an unenforced trademark code---shows that those alternative institutions were ultimately unsuccessful. |
| JEL: | D2 F2 N4 O1 O3 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29721&r= |
| By: | Canaan, Serena (Simon Fraser University); Mouganie, Pierre (Simon Fraser University); Zhang, Peng (University of Cambridge) |
| Abstract: | Despite the prevalence of school tracking, evidence on whether it improves student success is mixed. This paper studies how tracking within high school impacts high-achieving students' short- and longer-term academic outcomes. Our setting is a large and selective Chinese high school, where first-year students are separated into high-achieving and regular classrooms based on their performance on a standardized exam. Classrooms differ in terms of peer ability, teacher quality, class size, as well as level and pace of instruction. Using newly collected administrative data and a regression discontinuity design, we show that high-achieving classrooms improve math test scores by 23 percent of a standard deviation, with effects persisting throughout the three years of high school. Effects on performance in Chinese and English language subjects are more muted. Importantly, we find that high-achieving classrooms substantially raise enrollment in elite universities, as they increase scores on the national college entrance exam—the sole determinant of university admission in China. |
| Keywords: | classroom tracking, peer quality, teacher quality, regression discontinuity, China |
| JEL: | I21 I24 I26 J24 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15039&r= |
| By: | Wang, Jiyuan; Alessie, Rob; Angelini, Viola |
| Abstract: | In this paper we study whether the presence of binding liquidity constraints and the existence of fixed costs can explain the underinvestment of parents in their children's human capital. We first incorporate these two potential mechanisms into the theoretical model of Raut & Tran (2005) and then we test their empirical relevance using data from the China Health and Retirement Longitudinal Study (CHARLS). Our results show that especially fixed costs play an important role in explaining human capital underinvestment. |
| Keywords: | Two-Sided Altruism,Human Capital,Liquidity Constraints,Fixed Costs |
| JEL: | J24 J31 I2 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1027&r= |
| By: | Karel Janda; Ladislav Kristoufek; Binyi Zhang |
| Abstract: | Objective of this paper is to empirically investigate the dynamic connectedness between oil prices and stock returns of clean energy related and technology companies in China and U.S. financial markets. Three different multivariate Generalised Autoregression Conditional Heteroscedasticity (VAR-MGARCH) model specifications are used to investigate the return and volatility spillovers among series. By comparing these three models, we find that the VAR(1)-DCC(1,1) model with the skewed Student t distribution fits the data the best. The results of DCC estimation reveal that, on average, a $1 long position in Chinese clean energy companies in the Chinese financial market can be hedged for 18 cents with a short position in clean energy index in the U.S market. Our empirical findings provide investors and policymakers with the systematic understanding of spillover effects between China and U.S. clean energy stock markets. |
| Keywords: | Clean energy, Oil, Technology, Stock prices, VAR-MGARCH |
| JEL: | G11 Q20 |
| Date: | 2021–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:prg:jnlwps:v:4:y:2022:id:4.001&r= |
| By: | Chen, Xi (Yale University); Qiu, Yun (Jinan University); Shi, Wei (Jinan University); Yu, Pei (Rice University) |
| Abstract: | We consider a model of network interactions where the outcome of a unit depends on the outcomes of the connected units. We determine the key network link, i.e., the network link whose removal results in the largest reduction in the aggregate outcomes, and provide a measure that quantifies the contribution of a network link to the aggregate outcomes, which complements the intercentrality measure of the key network node proposed by Ballester, Calvó-Armengol, and Zenou (2006). We provide an example examining the spread of Covid-19 in China. Travel restrictions were imposed to limit the spread of infectious diseases. As uniform restrictions can be inefficient and incur unnecessarily high costs, we examine the design of restrictions that target specific travel routes. Our approach may be generalized to multiple countries to guide policies during epidemics ranging from ex ante route-specific travel restrictions to ex post health measures based on travel histories, and from the initial travel restrictions to the phased reopening. |
| Keywords: | network interactions, key network links, COVID-19, transmission |
| JEL: | C21 I18 D85 H75 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15038&r= |
| By: | Vanessa ALVIAREZ; CHEN Cheng; Nitya PANDALAI-NAYAR; Liliana VARELA; YI Kei-Mu; ZHANG Hongyong |
| Abstract: | We study the role of multinationals (MNCs) in driving structural transformation. We begin by developing a stylized two-country, three-sector general equilibrium model with multinational production and trade. We show analytically that a decrease in FDI costs leads to an increase in the manufacturing employment share of the host country and a decrease in the source country, consistent with structural transformation. We test the model's firm-level predictions by using confidential microdata to study the response of Japanese MNC parents and affiliates to an exogenous change in China's openness to FDI. We find that the China affiliates of Japanese MNCs in industries where inward FDI was exogenously encouraged experienced increases in manufacturing employment. We also find that MNC parents in industries where inward FDI was exogenously encouraged experienced larger losses in home country manufacturing employment and increases in home country services and R&D employment. Finally, we expand our confidential microdata to cover several high and middle-income countries and implement an accounting decomposition separating the change in overall manufacturing employment shares into MNC and non-MNC components. We find a significant role for MNCs across all countries, suggesting the mechanism we highlight is an important driver of structural transformation. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21100&r= |
| By: | Cui, Jingbo; Wang, Chunhua; Zhang, Junjie; Zheng, Yang |
| Abstract: | China has implemented an emission trading system (ETS) to reduce its ever-increasing greenhouse gas emissions while maintaining rapid economic growth. With low carbon prices and infrequent allowance trading, whether China’s ETS is an effective approach for climate mitigation has entered the center of the policy and research debate. Utilizing China’s regional ETS pilots as a quasi-natural experiment, we provide a comprehensive assessment of the effects of ETS on firm carbon emissions and economic outcomes by means of a matched difference-in-differences (DID) approach. The empirical analysis is based on a unique panel dataset of firm tax records in the manufacturing and public utility sectors during 2009 to 2015. We show unambiguous evidence that the regional ETS pilots are effective in reducing firm emissions, leading to a 16.7% reduction in total emissions and a 9.7% reduction in emission intensity. Regulated firms achieve emission abatement through conserving energy consumption and switching to low-carbon fuels. The economic consequences of the ETS are mixed. On one hand, the ETS has a negative impact on employment and capital input; on the other hand, the ETS incentivizes regulated firms to improve productivity. In the aggregate, the ETS does not exhibit statistically significant effects on output and export. We also find that the ETS displays notable heterogeneity across pilots. Mass-based allowance allocation rules, higher carbon prices, and active allowance trading contribute to more pronounced effects in emission abatement. |
| Keywords: | climate change; emission trading system; firm emissions; 72073055; 71773043; 71773062 |
| JEL: | R14 J01 |
| Date: | 2021–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113492&r= |
| By: | Xinqing Lu (Sciences Po – Paris School of International Affairs); Erpu Zhu (Sciences Po – Paris School of International Affairs); Loyle Campbell (Sciences Po – Paris School of International Affairs); Manfred Hafner (Fondazione Eni Enrico Mattei, Sciences Po – Paris School of International Affairs, The John Hopkins University – School of Advanced International Studies); Michel Noussan (Fondazione Eni Enrico Mattei, Sciences Po – Paris School of International Affairs, Decisio); Pier Paolo Raimondi (Fondazione Eni Enrico Mattei, Istituto Affari Internazionali) |
| Abstract: | This paper compares the different multi-level climate and energy governance in China, the European Union and the United States. While many comparisons across these three economies exist, they concentrate on comparing the climate and energy “policy instruments” and their results. This paper puts a focus on the importance of institutionalized multi-level governance processes, i.e., the “politics” - the actors and interaction processes inherent in a mode of governance, and the “polities” - the institutional setting. How are priorities and targets decided from both bottom-up and top-down processes? How do the central governments exert control over local authorities and ensure the implementation of their policies? How do the central governments enforce and evaluate the results of the policies? And finally, how do citizens play a role in the multi-level governance in these three blocs? Analysis of multilevel governance highlights the importance of target setting and cadre evaluation in China whereas legislation is the dominant process in the EU and the US. |
| Keywords: | Multi-level Governance, Climate Policy, Energy Policy, Energy Transition, China, the European Union, the United States |
| JEL: | N50 Q48 Q58 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.34&r= |
| By: | Huang, Yin-Siang; Lu, You-Xun |
| Abstract: | In the context of sustainable development and “going global” strategies, Chinese firms are paying more attention to corporate environmental responsibility (CER). Using a sample of Chinese firms from 2010-2019, this study examines the impact of CER on corporate financial performance (CFP) and international bank loans. We find that the proactive disclosure of non-hazardous industrial waste (NHIW) emissions has no significant effect on the return on assets (ROA) but significantly increases the return on equity (ROE). In addition, our results show that international banks will offer lower loan spreads and longer loan maturities to firms with better environmental performance. |
| Keywords: | Non-hazardous industrial waste; corporate environmental responsibility; financial performance; international bank loans |
| JEL: | G32 G34 Q53 Q56 |
| Date: | 2022–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111682&r= |
| By: | Qin, Weiguang; Bhattarai, Keshab |
| Abstract: | We find that the monetary policy in the mainland China will underestimate the volatility of major macro variables when it fails to consider the influence of capital flows to and from the Hong Kong RMB offshore market. Analyses of SVAR model reveals that the Hong Kong RMB offshore market affects money market in the mainland China through changes in the financial flows and exchange rates. In the early stage of the implementation of structural monetary policy (SMP) for macroeconomic stability, the cross-border flows of capital occurs due to changes in arbitrage behavior from the Hong Kong RMB offshore market, which affects not only money supply but also expectations of households and firms about actual interest rate and exchange rates that often produce opposite of intended effects in the price and output. Scenario one of SVAR simulations, that ignored the Hong Kong RMB offshore market came with lower volatilities of the target macro variables but the model generated values of variables did not match well to the actual data. Scenario two of the simulation of the same SVAR model including the Hong Kong RMB offshore market, had model values of model variables closely matching to the actual data though with slightly higher volatilities of those variables. |
| Keywords: | RMB offshore market, monetary policy, macroeconomic volatility, exchange rate |
| JEL: | E58 E61 O38 |
| Date: | 2022–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111768&r= |
| By: | Loyle Campbell (Sciences Po – Paris School of International Affairs); Manfred Hafner (Fondazione Eni Enrico Mattei, Sciences Po – Paris School of International Affairs, The John Hopkins University – School of Advanced International Studies); Xinqing Lu (Sciences Po – Paris School of International Affairs); Michel Noussan (Fondazione Eni Enrico Mattei, Sciences Po – Paris School of International Affairs, Decisio); Pier Paolo Raimondi (Fondazione Eni Enrico Mattei, Istituto Affari Internazionali); Erpu Zhu (Sciences Po – Paris School of International Affairs) |
| Abstract: | This paper compares how the pursuit of self-sufficient Lithium-ion battery production by the three main geo-economic players (China, the European Union, and the United States) is unfolding by looking at the electrification of the transport sector. The analysis of this paper uses the concept of energy security and the 4 As outlined by the Asia Pacific Energy Research Center (2007) to outline the availability, accessibility, affordability, and acceptability of Lithium-ion (Li-Ion) batteries for each respective actor. This paper aims to compare the dynamics of each geoeconomic player’s EV deployment along these four indicators. Most work in this field assesses the battery strategies of these three geo-economic players individually or focuses on EV deployment from a purely economics perspective. In contrast, this paper attempts to bridge this gap through the framework of energy security to compare how each of the three player’s battery strategy connects to broader EV deployment. Adopting this framework allows us to highlight how China’s strong industrial policies and generous incentives contrast to the government multilateral alliance-building done in the European Union and the overwhelmingly dominant role of private actors found in the United States. |
| Keywords: | Lithium-Ion Batteries, Electric Vehicles, Energy Transition, Energy Security, China, the European Union, the United States |
| JEL: | Q48 Q30 F59 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.35&r= |
| By: | International Monetary Fund |
| Abstract: | China’s recovery is well advanced—but it lacks balance and momentum has slowed, reflecting the rapid withdrawal of fiscal support, lagging consumption amid recurrent COVID-19 outbreaks despite a successful vaccination campaign, and slowing real estate investment following policy efforts to reduce leverage in the property sector. Regulatory measures targeting the technology sector, intended to enhance competition, consumer privacy, and data governance, have increased policy uncertainty. China’s climate strategy has begun to take shape with the release of detailed action plans. Productivity growth is declining as decoupling pressures are increasing, while a stalling of key structural reforms and rebalancing are delaying the transition to “high-quality”—balanced, inclusive and green—growth. |
| Date: | 2022–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/021&r= |
| By: | Jia Meng (Ma Yinchu School of Economics, Tianjin University, Tianjin, China); ZhongXiang Zhang (China Academy of Energy, Environmental and Industrial Economics, China) |
| Abstract: | This paper aims at analyzing the impact of corporate environmenral information disclosure from the perspective of investors. To that end, we have collected environmental information disclosure data of all Chinese listed companies from 2004 to 2020 and controlled the impacts of annual reports on investor response. We apply the Fama-French five-factor model to calculate the accumulative abnormal returns of stocks during the event window period. Our results suggest that environmental information disclosure can have a significant negative response among investors when we take the impacts of annual reports into consideration. Moreover, we find that heavy-polluting companies and companies with high institutional shareholding are more likely to have negative reactions from investors. Notably, the negative response is found significant after the Ambient Air Quality Standard was revised in 2012. Furthermore, high environmental expenditure and strict environmental regulation will result in negative investor responses, while the political connection can alleviate the negative impacts of environmental information disclosure. The results remain robust in different ways. The findings suggest that listed companies may lack the incentive to engage in environmental management and are reluctant to disclose environmental information. Consequently, the government should formulate a mandatory disclosure policy and provide administrative support to environmentalfriendly companies. Besides, companies should improve innovation technology to cut down environmental costs. Meanwhile, investors should be aware of the importance of corporate environmental behaviors and realize the long-term benefits of environmental management of listed companies. |
| Keywords: | Environmental information disclosure, Investor response, Corporate annual reports, Fama-french five factor model, China's capital market |
| JEL: | L24 O3 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2022.03&r= |
| By: | Ding, Yihong; Balcombe, Kelvin; Robinson, Elizabeth |
| Abstract: | This paper studies Chinese grape growers’ time discounting and its implications for the adoption of technology that can reduce the negative effects of increasing precipitation. Using primary data collected in Xinjiang Province, we undertook a contingent valuation of rain covers that protect fruit from rain and estimated a discounted utility model using these data. Using a hierarchical Bayesian approach, we find that local grape growers discount the future very heavily, with a discount rate of 0.17 per year, which is almost four times higher than the Chinese market interest rate. Farmers also tend to underestimate the benefits of adopting covers, with their purchase decisions appearing to largely depend on their past actual losses rather than future anticipated losses. These findings have broader implications for policies promoting proactive adaptation in response to likely increased rainfall in the region. Targeting farmers who give lower weight to events far off in the future and understanding that many farmers may tend only to make adoption decisions that have strong short-term benefits could improve the efficacy of climate policies that target agricultural technologies. |
| Keywords: | China; contingent valuation; grape; hierarchical Bayesian approach; increased rainfall; technology adoption; time discounting |
| JEL: | C11 O13 Q12 Q16 |
| Date: | 2021–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113546&r= |