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on China |
| By: | Boeing, Philipp; Brandt, Loren; Dai, Ruochen; Lim, Kevin; Peters, Bettina |
| Abstract: | China's patenting activity has surged over the past two decades, yet questions remain about the quality and sources of innovation. We develop a new method to measure the importance of a patent for innovation, based on the use of a Large Language Model to process patent text data and a new theory of the innovation process. We apply this method to study the evolution of patenting in China from 1985 until recently, and also classify patent ownership using a comprehensive business registry. Our method and data yield several novel facts about Chinese patenting. Among these are that the patents which are important for innovation have become less important on average; that knowledge within China has become more important than knowledge outside of China for directing innovation in China; and that knowledge produced by Chinese entities has been more important than knowledge produced by foreign entities in China. These findings have implications for China's growth trajectory and reflect both global trends in the decline of innovativeness and potential effects of domestic policy. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:328016 |
| By: | Holger Görg, Toshihiro Okubo, Eric Strobl, Maximilian von Ehrlich |
| Abstract: | In this paper we use comprehensive historic firm level data for 1925 to 1938 to estimate productivity spillovers from Japanese textile companies’ affiliates in China (Zaikabo) to local cotton producers in China. We geo-localized firms in order to capture the important role of distance in facilitating productivity spillovers. Our results provide clear evidence for positive productivity spillovers from Zaikabo to local Chinese firms. This goes hand-in-hand with a change in production technology towards greater use of capital (spindles). We also find that spillovers are very localised, being strongest within a radius of up to 10km around the Zaikabo. Furthermore, evidence for spillovers is particularly strong for firms in Shanghai. Our paper is the first to provide evidence for such spillovers from foreign firms in a historical context. |
| JEL: | F23 N65 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ube:dpvwib:dp2506 |
| By: | Agustina Giraudy (American University); Ernesto Stein (Tecnologico de Monterrey); Francisco Urdinez (Pontificia Universidad Católica de Chile); Victor Zuluaga (Banco de México) |
| Abstract: | This paper investigates the impact of the first Trump administration's (2016-2022) US-China Trade War on the sectoral composition and geographic allocation of Chinese foreign direct investment (FDI) in Mexico. Leveraging a novel dataset of Chinese investment projects (2001-2024) and exploiting product-level variation in US tariff exposure, we implement a difference-in-differences design to identify causal effects. The analysis reveals three key findings. First, Chinese firms responded to increased US tariffs by relocating production to Mexico (i.e., nearshoring), with sectors more exposed to the Trade War (that is, receiving larger tariff hikes) having significantly higher Chinese FDI inflows. Second, these effects emerge with a lag of approximately three to five years following tariff imposition. Third, place-based policies significantly influenced the geography of Chinese investment: Mexico's Zona Libre de la Frontera Norte program altered the relative attractiveness for Chinese FDI of the affected regions compared to others. The findings highlight how global trade disputes interact with place-based policies to shape investment patterns, offering lessons for developing economies seeking to attract nearshoring FDI while balancing employment and regional development objectives |
| Keywords: | Foreign Direct Investment, Trade War, Nearshoring, Mexico, China, Place-based Policy |
| JEL: | F13 F14 F21 F23 O19 P33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:gnt:wpaper:11 |
| By: | Deng, Guoying; Du, Pengcheng; Hernandez, Manuel A.; Xu, Shu |
| Abstract: | This paper examines the association between corporate income taxes and labor market informality. We present a theoretical framework showing that a higher tax enforcement can push firms to pass on the burden to workers by reducing their social security compliance as well as downsizing and lowering wages. The model propositions are tested using a regression discontinuity design that exploits a national corporate tax reform in China. We find that for every one percentage point increase in the effective tax rate, firms reduce their probability of making basic social security contributions by 0.8%, their compliance rate by 1.4 percentage points, and the probability of making supplementary contributions by 0.6%, while the number of workers and wages fall by 4.4% and 0.7%, respectively. We observe that the effects are more salient among firms privately owned and controlled, large businesses, and in locations where social security contributions are directly collected by the social security administration. The findings suggest that workers not only bear part of the higher corporate taxes faced by firms, but an increase in firms’ tax burden contributes to social security evasion and informality in labor markets. JEL Codes: H32, H55, J30, J23, H25 |
| Keywords: | taxes; labour market; social security; remuneration; China; Asia; Eastern Asia |
| Date: | 2024–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:140480 |
| By: | Qi Shao (School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, China; Economic Growth Centre, School of Social Sciences, Nanyang Technological University, Singapore); Danhua Deng (Fudan University); Zhuo Qiao (School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, China); Xinyang Li (School of Economics and Management, Tsinghua University, Beijing, China); Tianyu Bai (School of Business, Sun Yat-sen University, Guangzhou, China) |
| Abstract: | This study uses the implementation of the Golden Tax Project Phase III (CTAIS-3) in China as a quasi-natural experiment to explore the impact of big data tax enforcement on the corporate tax digital transformation. By constructing the corporate tax digital transformation index, the findings reveal that CTAIS-3 significantly promotes corporate tax digital transformation through compliance and cost effects. |
| Keywords: | Big Data Tax Enforcement; Corporate Tax Digital Transformation; Compliance Effect; Cost Effect |
| JEL: | H25 M15 O33 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nan:wpaper:2507 |
| By: | Yumin Hu; Luca Macedoni; Mingzhi (Jimmy) Xu |
| Abstract: | Using barcode-level data from the NielsenIQ Homescan Consumer Panel, we study how income inequality affects the prices of identical goods across US counties. We find that higher inequality reduces prices for products with low market shares but increases prices for products with high market shares. With higher inequality, larger firms, which sell more high-market-share goods, tend to raise prices, while smaller firms lower them. We find a similar pattern using Chinese export data across countries. To interpret these findings, we develop a model where a mean-preserving spread in income affects pricing through the convexity of demand and the convexity of the price derivative of demand with respect to income. We derive conditions under which inequality raises the price elasticity for low-market-share products and lowers it for high-market-share products, matching our empirical results. |
| Keywords: | consumer heterogeneity, income inequality, prices, markups |
| JEL: | L11 D31 D43 F14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12181 |
| By: | Kristina Butaeva (University of Chicago); Lian Chen (University of California, Los Angeles); Steven Durlauf (University of Chicago); Albert Park (Asian Development Bank) |
| Abstract: | This paper examines intergenerational mobility in the People’s Republic of China (PRC) and Russia during their transitions from central planning to market systems. We consider mobility as movement captured by changes in status between parents and children. We provide estimates of overall mobility, which involves mobility during transition to a system’s steady state, as well as steady state mobility, which captures long-run mobility independent of transitional dynamics or shifts in the marginal distribution of outcomes across generations. We further decompose overall mobility into structural and exchange components. We find that the PRC exhibits more overall educational mobility than Russia, mostly because of greater structural mobility, whereas Russia exhibits greater steady-state educational mobility. In contrast, both overall and steady state occupational mobility are similar in the PRC and Russia. Comparing these results to the United States (US), we find steady state mobility in education is substantially higher in the US and Russia compared to the PRC, but occupational steady state mobility is comparable in all three countries. |
| Keywords: | intergenerational mobility;education;occupation;transition economy |
| JEL: | J62 I25 P36 |
| Date: | 2025–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021651 |
| By: | Marcus Vinicius de Freitas |
| Abstract: | China's ascent to the position of the world's most prominent energy consumer has altered global energy markets and fundamentally reshaped the geopolitics of energy security. As China navigates the complexities of sustaining its economic momentum, ensuring access to reliable, affordable, and diversified energy sources has become an existential imperative, intricately woven into its foreign policy strategy. In parallel, Africa's immense wealth of both conventional and renewable resources, coupled with its drive toward industrialization and sustainable development, presents a remarkable opportunity for a transformative partnership. This Policy Paper explores the strategic intersection between China's energy imperatives and Africa's developmental aspirations. It argues for a relational cooperation model that transcends a narrow transactional approach, and champions an inclusive, sustainable, and future-oriented partnership. Historically characterized by overseas investments in oilfields, critical infrastructure, and renewable energy projects, China's engagement is examined against Africa's chronic energy poverty and industrialization needs. China can enhance its energy security and gain access to Africa's abundant energy resources. At the same time, Africa can accelerate its progress towards the goals enshrined in Agenda 2063, improve its energy infrastructure, and boost its industrialization. However, the partnership is not without significant risks. Issues of debt sustainability, environmental and social governance, and political instability threaten to undermine the transformational potential of China–Africa energy cooperation. Accordingly, this Policy Paper stresses the imperative for transparent, inclusive, and sustainable modes of engagement, advocating for stronger environmental stewardship, enhanced local capacity-building, and greater alignment with Africa's regional integration agendas. This emphasis on transparency and sustainability is crucial to building confidence in the partnership. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pp27_25 |
| By: | Ziyan Zhao (Economic Growth Centre, School of Social Sciences, Nanyang Technological University); Pengyu Liu (School of Business and Management, Jilin University, 2699 Qianjin Avenue, Changchun city, Jilin province, China.); Guoxin Song (School of National Development and Security Studies, Jilin University, 2699 Qianjin Avenue, Changchun city, Jilin province, China.) |
| Abstract: | This study proposes a new latent threshold time-varying parameters factor-augmented vector autoregressive (LT-TVP-FAVAR) model and then explore the dynamic impact of Chinese tax policy on economic growth from the dual perspective of total tax revenue and tax structure. The proposed LT-TVP-FAVAR model can both model parameter changes and avoid overparameterization such that it can capture economic dynamics better. We propose a two-step estimation method (including a Markov chain Monte Carlo algorithm) to estimate the LT-TVP-FAVAR model. Extensive point forecasts present evidence for the LT-TVP-FAVAR model’s strength. The main empirical conclusions are: (1) increasing total tax revenue has a negative impact on economic growth, but this has weakened since China entered the economic new normal period; (2) From the perspective of tax structure, increases in both commodity tax and income tax primarily exert a positive effect on economic growth, while increases in the other tax have a negative effect on economic growth. Additionally, the positive effect of increasing commodity taxes on economic growth has obviously weakened since China entered the economic new normal period, whereas the positive effect of income tax on economic growth sharply increased after the outbreak of the COVID-19 pandemic. The inhibitory effect of increases in the other tax on economic growth during the economic new normal and COVID-19 pandemic periods is stronger than during the financial crisis and economic recovery periods. |
| Keywords: | Tax policy, Economic growth, Dynamic impact, LT-TVP-FAVAR |
| JEL: | C11 C32 C51 E60 O47 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:nan:wpaper:2402 |
| By: | Ruoyan Zhang (School of Public Policy and Administration, Xi'an Jiaotong University, China; Economic Growth Centre, Nanyang Technological University, Singapore); Shengqiang Zhou (School of Economics and Management, Nanjing Forestry University, China); Ru Chen (Bay Area International Business School, Beijing Normal University, China; Economic Growth Centre, Nanyang Technological University, Singapore) |
| Abstract: | China is harmonizing the symbiotic relationship between humans and nature through efforts to implement grassland ecological compensation policies (GECP), which have triggered changes in the resilience of farmers' livelihoods within grassland ecosystems. This study examines the direct impacts of climate change on the livelihood resilience of farm households and the direct and moderating effects of GECP on livelihood resilience by constructing a robust empirical strategy using sample data from a multi-year tracking of the regions where GECP was implemented. The results showed that the level of livelihood resilience of farm households showed an increasing trend during the period 2010–2019, buffering capacity and learning capacity are important components in the livelihood resilience of farm households, and higher temperatures and reduced precipitation have negative impacts on the livelihood resilience of farm households. The direct effect of GECP implementation significantly increased the level of livelihood resilience of farm households in the second cycle, but GECP was shown to play a significant moderating role in the relationship between climate change risk and livelihood resilience. The policy moderating effect attenuated the impact of climate change risk on the resilience of farmers' livelihoods and was more pronounced for farmers in husbandry-oriented livelihood strategies. Subsidy intensity is a key factor influencing the moderating effect, more so among farmers with lower levels of resilience and livestock-reducing production decisions. Enhancing the diversity and precision of subsidies is a future direction of improvement for GECP. |
| Keywords: | Livelihood resilience, Climate change, Grassland ecosystem, Ecological compensation, Moderating effect |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nan:wpaper:2502 |
| By: | Liu Cui (Zhejiang University); Yit Wey Liew (Sunway University); Muhammad Habibur Rahman (Durham University) |
| Abstract: | This study examines the economic and distributional effects of China’s National Pilot Program for Returnee Entrepreneurship, which encourages rural migrants to return to their hometowns for business creation and employment. Drawing on county-level socioeconomic indicators and nationally representative household survey data, we find that the program substantially boosted local economic development. Yet the gains were uneven as household-level analysis reveals a significant rise in within-county inequality. The mechanism operates through unequal access to capital, skills, and risk tolerance, enabling better-endowed households to capture a disproportionate share of the benefits. These findings underscore a key policy trade-off: while returnee entrepreneurship initiatives can stimulate aggregate growth, they may simultaneously exacerbate disparities within rural communities |
| Keywords: | Labor migration, Economic development, Inequality |
| JEL: | J61 O15 D63 L26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:dur:durham:2025_03 |