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on China |
| By: | Liu, Jianan (Renmin University of China); Cai, Hongbo (Beijing Normal University); Lin, Carl (Bucknell University) |
| Abstract: | Competition in the labor market theoretically leads to higher wages, yet empirical evidence to substantiate it, particularly in developing countries, has been sparse. Our study delves into the impact of increased competition in the labor market on workers' wages using a panel dataset from Chinese industrial firms spanning 1998 to 2013. Employing OLS and IV regressions, we demonstrate that a decrease in employer concentration is significantly linked to higher wages. The elasticities of employer concentration on wages fall within the range of -0.034 and -0.107. Additionally, our findings suggest that state-owned enterprises gained the most from this upswing in competition, primarily due to restructuring. Furthermore, we demonstrate that total factor productivity serves as an important channel linking employer concentration to wages. |
| Keywords: | competition, monopsony, labor market concentration, wages, China |
| JEL: | J42 J3 O53 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17226 |
| By: | Bickenbach, Frank; Dohse, Dirk; Langhammer, Rolf J.; Liu, Wan-Hsin |
| Abstract: | China uses subsidies extensively to take a leading role in the global markets of green-tech products such as battery electric vehicles and wind turbines. Against the background of the current EU investigations into Chinese subsidies in these sectors, this article takes a careful look at the Chinese subsidy system and provides new data on direct government subsidies to leading Chinese producers of electric cars and wind turbines. Extensive government support has allowed Chinese companies to scale up rapidly, to dominate the Chinese market and to expand into foreign markets. The article concludes that the EU should use its strong bargaining power due to the single market to induce the Chinese government to abandon the most harmful subsidies. |
| Keywords: | China, industrial subsidies, battery electric vehicles, wind turbines, railway rolling stock, EU, anti-subsidy proceeding |
| JEL: | F13 O25 O53 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:301402 |
| By: | La Nauze, Andrea; Tan, Tze Yong |
| Abstract: | Axbard and Deng (2024) exploit the rollout of new pollution monitors in China in 2015 in 177 medium-size cities to study the effect of air-quality monitors on enforcement actions by local governments and air quality. In their main difference-in-difference analysis, they identify the change in the probability of enforcement for firms that are close to versus further away from the monitor. They find that being within 10km of a monitor increases the probability that a firm receives any enforcement action by 0.0033 (standard error 0.00056) relative to a mean of 0.0046. Computationally, we successfully reproduce the main claims of the paper. We observe minor coding anomalies that do not have a material impact. We find that the main result on all enforcement is robust to all robustness checks: (1) randomization inference (2) alternative fixed effects and (3) multiple hypothesis testing. |
| Keywords: | Replication, Reproducibility, Robustness, Accountability, Regulatory Enforcement, Pollution, China |
| JEL: | K32 L51 O13 P25 P28 Q52 Q53 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:144 |
| By: | Chad P. Bown; Lorenzo Caliendo; Fernando Parro; Robert W. Staiger; Alan O. Sykes |
| Abstract: | We formalize the GATT/WTO principle of reciprocity in workhorse quantitative trade models, characterizing reciprocal tariff cuts that hold terms of trade fixed and investigating their labor-market impacts. We provide closed-form expressions mapping reciprocal tariff cuts to labor market dislocation. We demonstrate that a country’s own tariff liberalization is a sufficient statistic for the labor-market adjustments it can expect from tariff negotiations that satisfy reciprocity. Applying our theoretical results to China’s 2001 WTO accession, we find that China’s tariff reductions exceeded reciprocity norms, increasing real incomes but amplifying the manufacturing employment dislocation – the China Shock – in the United States and globally. |
| JEL: | F02 F1 F13 F14 F16 F66 F68 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32835 |
| By: | Ande Shen; Jiwei Zhou |
| Abstract: | This paper explores the causal impact of education opportunities on rural areas by exploiting the higher education expansion (HEE) in China in 1999. By utilizing the detailed census data, the cohort-based difference-in-differences design indicates that the HEE increased college attendance and encouraged more people to attend senior high schools and that the effect is more significant in rural areas. Then we apply a similar approach to a novel panel data set of rural villages and households to examine the effect of education opportunities on rural areas. We find contrasting impacts on income and life quality between villages and households. Villages in provinces with higher HEE magnitudes underwent a drop in the average income and worse living facilities. On the contrary, households sending out migrants after the HEE experienced an increase in their per capita income. The phenomenon where villages experienced a ``brain drain'' and households with migrants gained after the HEE is explained by the fact that education could serve as a way to overcome the barrier of rural-urban migration. Our findings highlight the opposed impacts of education opportunities on rural development and household welfare in rural areas. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.12915 |
| By: | Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (Harvard University) |
| Abstract: | Previous research finds that the greater geographic mobility of foreign than native-born workers facilitates labor market adjustment to shifting regional economic conditions. We examine immigration's role in enabling U.S. commuting zones to respond to manufacturing job loss caused by import competition from China. Although foreign-born population headcounts fell by a larger proportion than those of the native-born in trade-exposed regions, the contribution of immigration to labor market adjustment in this episode was small. Because most U.S. immigrants arrived in the country after manufacturing regions were already mature, few took jobs in industries that later saw import surges. The foreign-born population share in regions with high trade exposure was only three-fifths that in regions with low exposure. Immigration may do more to aid adjustment to cyclical shocks, in which job loss follows recent hiring booms, than to aid adjustment to secular decline, in which hiring booms occurred longer ago. |
| Keywords: | immigration, import competition, geographic labor mobility, manufacturing decline, job loss |
| JEL: | E24 F14 F16 J23 J31 L60 O47 R12 R23 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17213 |
| By: | Ruiting Wang; Xue Wang; Gang Xu; Tao Zha |
| Abstract: | We estimate the effects of privatization on zombie versus healthy state-owned enterprises (SOEs) in China, extending our analysis beyond TFP to a broad array of financial and economic indicators. Privatizing zombie SOEs enhances labor productivity and TFP, reduces bank and government subsidies, alleviates leverage and administrative expenses, improves liquidity, boosts profits, and accelerates sales growth. These benefits are more pronounced than for healthy SOEs and are robust across regions and industries. Our findings offer policy implications for emerging markets, suggesting that prioritizing the privatization of underperforming, zombie-like entities can lead to substantial economic improvements and greater efficiency. |
| JEL: | D22 L21 L33 P31 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32795 |
| By: | Mattia Filomena (Department of Economics and Social Sciences, Marche Polytechnic University); Matteo Picchio (Department of Economics and Social Sciences, Marche Polytechnic University); Alessia Lo Turco (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)) |
| Abstract: | We study the effects of globalization on workplace accidents in the Italian manufacturing sector from 2008 to 2019. We focus on both the local intensity of import exposure to China and the share of foreign-born residents. To handle potential endogeneity concerns, we instrument the import exposure to China with that of other high-income countries and local immigration exposure with historical co-national local settlements. Our findings highlight a worsening of workplace safety following an increase in import competition, especially for male workers. An inspection of the channels suggests that the effect works through an increasing workload. |
| Keywords: | Workplace injuries, globalization, import competition, immigration, shift-share instruments. |
| JEL: | F16 I1 J28 J61 R11 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:488 |
| By: | Jin Liu; Martin Rotemberg; Sharon Traiberman |
| Abstract: | We characterize sabotage, exemplified by recent U.S. policies concerning China's semiconductor industry, as trade policy. For some (but not all) goods, completely destroying foreigners’ productivity increases domestic real income by shifting the location of production and improving the terms of trade. The gross benefit of sabotage can be summarized by a few sufficient statistics: trade and demand elasticities and import and production shares. The cost of sabotage is determined by countries' relative unit labor costs for the sabotaged goods. We find important non-monotinicities: for semi-conductors, partially sabotaging foreign production would lower US real income, while comprehensive sabotage would raise it. |
| JEL: | F10 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32798 |
| By: | Junshu Jiang; Jordan Richards; Rapha\"el Huser; David Bolin |
| Abstract: | In econometrics, the Efficient Market Hypothesis posits that asset prices reflect all available information in the market. Several empirical investigations show that market efficiency drops when it undergoes extreme events. Many models for multivariate extremes focus on positive dependence, making them unsuitable for studying extremal dependence in financial markets where data often exhibit both positive and negative extremal dependence. To this end, we construct regular variation models on the entirety of $\mathbb{R}^d$ and develop a bivariate measure for asymmetry in the strength of extremal dependence between adjacent orthants. Our directional tail dependence (DTD) measure allows us to define the Efficient Tail Hypothesis (ETH) -- an analogue of the Efficient Market Hypothesis -- for the extremal behaviour of the market. Asymptotic results for estimators of DTD are described, and we discuss testing of the ETH via permutation-based methods and present novel tools for visualization. Empirical study of China's futures market leads to a rejection of the ETH and we identify potential profitable investment opportunities. To promote the research of microstructure in China's derivatives market, we open-source our high-frequency data, which are being collected continuously from multiple derivative exchanges. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.06661 |