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on China |
| By: | Myeongwan Kim |
| Abstract: | A key economic issue in Canada is the declining Business Enterprise Research and Development in manufacturing since the early 2000s. Accompanying this, the total factor productivity (TFP) growth in manufacturing slowed after 2000. However, there has not been a definitive explanation for these trends. To deepen our understanding of this phenomenon, we focus on the increasing Chinese import share in the total domestic absorption in Canadian manufacturing since the early 2000s, which appears to be driven by positive supply shocks within Chinese manufacturing. Based on a firm-level database covering all incorporated firms in Canadian manufacturing, we find that rising Chinese import competition led to declines in R&D expenditure and TFP growth within firms but reallocated employment towards more productive firms and induced less productive firms to exit. The negative within-effects were pronounced for firms that were initially smaller, less profitable, and less productive. These firms also experienced declines in their profit margins due to rising Chinese import competition while larger and better-performing firms did not. Our estimates imply that rising Chinese import competition can explain about 7 per cent of the total decline of $1.36 billion (2007 CAD) in R&D expenditure in Canadian manufacturing between 2005 and 2010. Although it led to declines in TFP within firms, the positive reallocation effects more than offset the negative within-effect. Had there been no increase in Chinese import competition between 2005 and 2010, TFP in Canadian manufacturing would have declined by 1.26 per cent per year instead of the actual 1.09 per cent per year over this period. |
| Keywords: | China Shock, Canada, Imports, Productivity, Innovation |
| JEL: | F62 O32 O51 O53 L60 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1903&r=all |
| By: | Bradley, Elizabeth; Chen, Xi; Tang, Gaojie |
| Abstract: | Grants and services provided by the government may crowd out informal arrangements, thus weakening informal caring relations and networks. In this paper, we examine the impact of social security expansion on neighborhood cohesion of elders using China’s New Rural Pension Scheme (NRPS), one of the largest existing pension program in the world. Since its launch in 2009, more than 400 million Chinese have enrolled in NRPS. We use two waves of China Health and Retirement Longitudinal Study (CHARLS) to examine the effect of pension receipt on two dimensions of neighborhood cohesion among older adults, i.e. participation in collective recreational activities (e.g., socializing and organizational activities) and altruistic activities (e.g., helping those in need in the community), and the frequencies of these activities. Employing an instrumental variable approach, our empirical strategy addresses the endogeneity of pension receipt via exploiting geographic variation in pension program roll-out. We find evidence that receiving pension only slightly reduces collective recreational activities while significantly crowding out altruistic activities in the communities. |
| Keywords: | neighborhood cohesion,pension,crowd out,diversity |
| JEL: | H55 I38 O22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:453&r=all |
| By: | Mathilde Maurel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Thomas Pernet (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Zhao Ruili (SUIBE - Shangai University of International Business and Economics) |
| Abstract: | We study how a bank's involvement in a firm's financing may be in line with environmental policies pursued by the Chinese central government. Specifically, we evaluate the effectiveness of credit reallocation away from polluting projects when the government imposes stringent environmental policies. We combine the industries' financial dependencies with time, including cross-cities variation in policy intensity to identify the causal effect on the sulfur dioxide (SO2) emission. We find that SO2 emissions are lower in industries with high reliance on credits and stricter environmental regulations. Furthermore, our results suggest that locations with strong environmental policies lead firms to seek funding in less regulated areas, which confirms the pollution haven hypothesis. |
| Keywords: | Banks,Financial Dependency,Environmental regulation,China |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02423350&r=all |
| By: | Shuonan Zhang (Portsmouth Business School) |
| Abstract: | In this paper, we build and estimate a DSGE model to study how state-owned enterprises (SOEs) and entrusted lending affect growth and business cycles in China. Our model is featured SOEs being bank-favoured firms as well as policy tools, and more productive private firms (POEs) who can borrow from SOEs through entrusted lending. Our findings suggest SOEs dampen output volatility at the cost of TFP volatility. As policy tools, SOEs cause the expense larger than the dampening effect while a reverse case is found for SOEs being bank-favoured firms. In contrast, entrusted lending could dampen variations of both output and TFP by reallocating credits between SOEs and POEs, hence mitigating the cost of SOEs. Focusing on the recent growth slowdown in China, we further show that entrusted lending was conducive to both economic growth and TFP growth by mitigating capital misallocation. |
| Keywords: | State-owned Enterprises, Shadow Lending, Resource Allocation, Financial Friction, Business Cycles |
| JEL: | C32 E32 E44 |
| Date: | 2020–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2020-01&r=all |
| By: | Ma, Chang; Rogers, John; Zhou, Sili |
| Abstract: | We document the effect on Chinese firms of the Shanghai (Shenzhen)-Hong Kong Stock Connect. The Connect was an important capital account liberalization introduced in the mid-2010s. It created a channel for cross-border equity investments into a selected set of Chinese stocks while China’s overall capital controls policy remained in place. Using a difference-in-difference approach, and with careful attention to sample selection issues, we find that mainland Chinese firm-level investment is negatively affected by contractionary U.S. monetary policy shocks and that firms in the Connect are more adversely affected than those outside of it. These effects are stronger for firms whose stock return has a higher covariance with the world market return and for firms relying more on external financing. We also find that firms in the Connect enjoy lower financing costs, invest more, and have higher profitability than unconnected firms. We discuss the implications of our results for the debate on capital controls and independence of Chinese monetary policy. |
| JEL: | F38 E40 E52 G15 |
| Date: | 2020–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2020_001&r=all |
| By: | Li, Xaxi; Xue, Qian-Li; Odden, Michelle C.; Chen, Xi; Wu, Chenkai |
| Abstract: | Exposures in childhood and adolescence may impact the development of diseases and symptoms in late life. However, evidence from low- and middle- income countries is scarce. In this study, we examined the association of early life risk factors with frailty among older adults using a large, nationally representative cohort of community-dwelling Chinese sample. 6,806 participants aged ≥60 years from the China Health and Retirement Longitudinal Study were included. We measured 13 risk factors in childhood or adolescence through self-reports, encompassing six dimensions (education, family economic status, nutritional status, domestic violence, neighborhood, and health). We used multinomial regression models to examine the association between risk factors and frailty and further calculated the absolute risk difference for the statistically significant factors. Results show that worse health condition in childhood and unfavorable childhood and adolescent socioeconomic status as measured by educational attainment and neighborhood quality may increase the risk of late-life frailty among Chinese older adults. Severe starvation in childhood was associated with higher risk of prefrailty. The risk differences of being frail were 5.7% lower for persons with a high school or above education, 1.5% lower for those whose fathers were literate, 4.8% lower for the highest neighborhood quality, and 2.9% higher for worse childhood health status compared to their counterparts. |
| Keywords: | Early Life Environments,Life Course Health,Physical Health,Frailty,Aging,China |
| JEL: | I10 I14 I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:454&r=all |
| By: | Qinxin Guo (Graduate School of Economics, Kobe University, Japan); Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | In this study, a stated choice survey was conducted in Anhui Province, China. The best-worst scaling method, an alternative method to the discrete choice experiment, was used to value rural residents' attitude toward agri-environmental policy. Using the multinomial logit and random parameter logit model, the results showed that respondents thought the best policy included protecting underground water quality as the objective, straw recycling as the method, technological support provided by the government, a supervision level of 30% of farmers, and a 6,000 RMB subsidy directly disbursed by the government. Conversely, respondents thought the worst policy included protecting biodiversity as the objective, purchasing pesticides and fertilizers from the prescribed list as the method, no technological support provided by the government, an increased supervision level of 50% of farmers, and a 4,500 RMB subsidy requiring a contract with the government. The results of the latent class logit model suggested the respondents who are older, have fewer children under middle school age, less agree with the rural environment will have a large impact on agriculture production, have more knowledge of agricultural and environmental 2 protection would show more sensitivity to the attributes of agri-environmental policies. |
| Keywords: | Agri-environmental policy; Best-worst scaling; Latent class model; Random parameter logit model; Multinomial logit model |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2020-01&r=all |
| By: | Zhang, Xin; Wang, Yixuan; Chen, Xi; Zhang, Xun |
| Abstract: | This paper is one of the first to examine the associations between prenatal sunshine exposure and birth outcomes, specifically the incidence of low birth weight (LBW) and small for gestational age (SGA), based on a nationally representative birth record dataset in China. During the sample period in the 1990s, migration was limited in rural China, allowing us to address the identification challenges, like residential sorting and avoidance behaviors. We found a nonlinear relationship between the length of sunlight and birth outcomes. In particular, prenatal exposure to increasing sunshine was associated with a reduction in the incidence of LBW and SGA, especially in the second trimester during pregnancy. This finding was consistent with the clinical evidence suggesting positive effects of sunshine on birth outcomes via obtaining vitamin D or relieving maternal stress. |
| Keywords: | Sunshine Duration,Low Birth Weight,Small for Gestational Age,China |
| JEL: | I12 J13 I18 Q51 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:452&r=all |
| By: | Duan, Wenjing; Martins, Pedro S. |
| Abstract: | Do firms in China share rents with their workers? We address this question by examining firm-level panel data covering virtually all manufacturing firms over the period 2000-2007, representing an average of 52 million workers per year. We find evidence of rent sharing (RS), with wage-profit elasticies of between 4% and 6%. These results are based on multiple instrumental variables, including firm-specific international trade shocks. We also present a number of complementary findings to understand better the nature of RS in the country: it involves an element of risk sharing, as wages also decrease when profits fall; RS is lower in regions with more latent competition from rural workers; higher minimum wages tend to reduce RS; and, while employer labour market power reduces wages, it increases RS. Overall, despite its importance, RS in China is smaller and more symmetric than in developed economies, which re ects the weaker bargaining power of its workers and the different nature of its labour market institutions. |
| Keywords: | Wages,Bargaining,Monopsony |
| JEL: | J31 J41 J50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:448&r=all |
| By: | Görg, Holger; Mao, Haiou |
| Abstract: | This paper evaluates firms' exporting responses to BRI and considers their heterogeneity in ownership types, product types, regional origin and trade mode. This is done by analyzing firm-product-destination level customs data from 2011 to 2015 in a gravity model framework. Our empirical results show that aggregate export behavior did not change significantly after BRI. However, ownership matters when evaluating firms reactions. SOEs increase their total exporting and average export value (the intensive margin) to BRI countries, while private domestic firms show no reaction to BRI at any margin. Further, our results on regional heterogeneity suggests that "open through the west", i.e., boosting the development of western regions in China, did not appear to work in the short term. Our findings show clearly the implications of BRI's impact from firm level perspective. |
| Keywords: | belt and road Initiative,firm's export,extensive margin,intensive margin,state-owned firms |
| JEL: | F10 O24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:21&r=all |
| By: | Yan, Binjian; Chen, Xi; Gill, Thomas M. |
| Abstract: | This paper examines the extent to which childhood circumstances contribute to health inequality in old age and how the contributions may vary across key dimensions of health. We link the China Health and Retirement Longitudinal Study (CHARLS) in 2013 and 2015 with its Life History Survey in 2014 to quantify health inequality due to childhood circumstances for which they have little control. We evaluate comprehensive dimensions of health ranging from cognitive health, mental health, physical health, self-rated health to mortality. Our analytic sample includes about 8,000 Chinese persons age above 60. Using the Shapley value decomposition approach, we first show that childhood circumstances may explain 1-23 percent of health inequality in old age across multiple health outcomes. Second, while both direct health-related circumstances and indirect health-related circumstances contribute significantly to health inequality, the latter tends to be more sizable. Our findings support the value of a life course approach in identifying the key determinants of health in old age. |
| Keywords: | Life course approach,Inequality of opportunity,Physical health,Cognitive ability,Mental health,Mortality |
| JEL: | I14 D63 I18 J13 J14 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:451&r=all |