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on China |
| By: | Jian Chu (Nanjing University); Raymond Fisman (Boston University); Songtao Tan (Renmin University of China); Yongxiang Wang (University of Southern California, Shanghai Advanced Institute of Finance, Shanghai Jiaotong University, Shanghai) |
| Abstract: | Audits are a standard mechanism for reducing corruption in government investments. The quality of audits themselves, however, may be affected by relationships between auditor and target. We study whether provincial chief auditors in China show greater leniency in evaluating prefecture governments in their hometowns. In city-fixed-effect specifications – in which the role of shared background is identified from auditor turnover – we show that hometown auditors find 38 percent less in questionable monies. This hometown effect is similar throughout the auditor’s tenure, and is diminished for audits ordered by the provincial Organizations Department as a result of the departure of top city officials. We argue that our findings are most readily explained by favoritism rather than an endogenous response by local officials to concerns of better enforcement by hometown auditors. We complement these city-level findings with firm-level analyses of earnings manipulation by state-owned enterprises via real activity manipulation (a standard measure from the accounting literature), which we show is higher under hometown auditors. |
| Keywords: | Social Ties, Audit quality, State-owned enterprise, Government investment, China |
| JEL: | D73 G3 M42 H83 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-343&r=all |
| By: | Funke, Michael; Tsang, Andrew |
| Abstract: | The People’s Bank of China (PBoC) has taken numerous measures to cushion the impacts of the COVID-19 health crisis on the Chinese economy. As the current monetary policy framework features a multi-instrument mix of liquidity tools and pricing signals, we employ a dynamic-factor modeling approach to derive an indicator of China’s monetary policy stance. Our approach assumes that comovements of several monetary policy instruments share a common element that can be captured by an underlying unobserved component. We use the derived indicator to trace the response of the PBoC to the coronavirus pandemic. The estimates reveal that the PBoC has implement novel policy measures to ensure that commercial banks maintain liquidity access and credit provision during the COVID-19 crisis. |
| JEL: | C54 E32 E52 I15 |
| Date: | 2020–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2020_012&r=all |
| By: | Qingnan Xie; Richard B. Freeman |
| Abstract: | China-born scientists and engineers who conduct their research outside China, the diaspora researchers of our title, contributed to global science through the exceptional quantity and quality of their scientific work and through distinctive connections to China-based researchers and research. Analysis of the Scopus database of English language scientific journal articles shows that Chinese diaspora research publications are a substantial and growing proportion of global scientific publications, receive an above average number of citations per article, and are published at above average rates in high Scopus CiteScore journals. In addition, diaspora researchers helped China advance to the forefront of science through collaboration on papers with China-based researchers and through the citation network linking China-based research to research outside the country. |
| JEL: | F1 I2 J2 J3 J5 O3 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27169&r=all |
| By: | Ding, Lanlin; Jones, Andrew M. (University of York); Nie, Peng (Xi’an Jiaotong University) |
| Abstract: | We present a comprehensive analysis of ex ante inequality of opportunity (IOp) in health among Chinese adults aged 60+ and decompose the contributions of different sets of circumstances. Data are drawn from the 2011 and 2015 waves of the China Health and Retirement Longitudinal Study (CHARLS) linked with the 2014 CHARLS Life History Survey. We use a range of blood-based biomarkers, and apply a re-centered influence function (RIF) approach and a Shapley-Shorrocks decomposition to partition the contribution of circumstances across different quantiles of the biomarker distributions. We find that IOp accounts for between 3.75% and 29.57% of total health inequality in old age across the range of biomarkers. Shapley-Shorrocks decompositions show that spatial circumstances such as urban/rural residence and province of residence are the dominant determinants of IOp for most of the biomarkers. Distributional decompositions further reveal that the relative contributions to IOp in health of household socioeconomic status and health and nutrition conditions in childhood increase towards the right tails of the distribution for most of the biomarkers, where the clinical risk is focused. |
| Keywords: | biomarkers, CHARLS, China, inequality of opportunity, Shapley-Shorrocks decomposition, unconditional quantile regressions |
| JEL: | D63 I12 I14 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13292&r=all |
| By: | Dong, Xiaoge; Voigt, Stefan |
| Abstract: | This paper shows that courts are not only a crucial part of the rule of law in the conventional sense but that they can also serve an important function in revealing information regarding the performance of lower level governments to the central government, and thereby improve their performance. After having developed a general argument in that vein, the recent reforms to the Chinese court system are partially interpreted as an attempt to make the courts monitoring agents of the central government. Based on primary data from more than 1,000 Chinese local courts, the argument is tested empirically and its hypotheses are largely confirmed. |
| Keywords: | Court system of China,court reforms,courts-as-information-providers,courts as monitoring agents |
| JEL: | H11 H77 K40 N45 P21 P37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ilewps:35&r=all |
| By: | Mary Amiti; Sang Hoon Kong; David E. Weinstein |
| Abstract: | Starting in early 2018, the U.S. government imposed tariffs on over $300 billion of U.S. imports from China, increasing the average tariff rate from 2.7 percent to 17.5 percent. Much of the escalation in tariffs occurred in the second and third quarters of 2019. In response, the Chinese government retaliated, increasing the average tariff applied on U.S. exports from 5.7 percent to 20.4 percent. Our new study finds that the trade war reduced U.S. investment growth by 0.3 percentage points by the end of 2019, and is expected to shave another 1.6 percentage points off of investment growth by the end of 2020. In this post, we review our study of the trade war’s effect on U.S. investment. |
| Keywords: | protection; event studies; adjustment costs |
| JEL: | F4 E2 F00 |
| Date: | 2020–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:88070&r=all |
| By: | Renée Fry-McKibbin; Ziyu Yan |
| Abstract: | This paper uses tests drawn from the literature on financial market contagion measured by changes in higher-order comoments to establish the patterns in the interdependence between equity markets in Shanghai and Shenzhen with Hong Kong as mainland China liberalized their capital market. On the announcement of the opening of the Shanghai market correlations rise, but subside by the launch. Following the launch changes in coskewness, cokurtosis and covolatility emerge. The liberalization process is complete by mid-September 2016. |
| Keywords: | Shanghai-Hong Kong Stock Connect, Shenzhen Hong-Kong Stock Connect, Contagion, Spillovers |
| JEL: | G15 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-55&r=all |
| By: | Rasmus Fatum; Takahiro Hattori; Yohei Yamamoto |
| Abstract: | We consider if the Chinese accumulation of reserves is associated with unintended consequences in the form of increased private sector risk taking. Using sovereign credit default swap spreads and stock index prices as indicators of risk taking, we provide evidence to suggest that as reserve holdings increase, so does the willingness of the private sector to take on more risk. This is an important finding that adds credence to the suggestion that insurance through costly reserves, to be used in the event of a crisis, may lead to private sector actions that in and of themselves make it more likely that this insurance will be used. |
| Keywords: | International reserves; risk taking; China |
| JEL: | F31 G15 |
| Date: | 2020–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:88094&r=all |
| By: | Jean-Louis Combes (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Mary-Françoise Renard (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Shuo Shi (CCES - China Center for Economic Studies, Fudan University) |
| Abstract: | The objective of the paper is to study the relationship between international trade openness and domestic market integration in Late Imperial China. More specifically, we focus on a natural experiment namely the Unequal Treaties of the second half of the nineteenth century that lifted the long-existing international trade restriction system. The integration of domestic markets is analyzed while looking at the existence of a long term common movement in the grain prices between provinces. The econometric results show that trade openness did not lead to better integration of the Chinese domestic grain markets. Our results support the hypothesis according to which long-distance trade has not generated efficiency gains in domestic markets. We evidence a strong segmentation between domestic and international grain markets owing to different traded products and operators. |
| Keywords: | Market integration,Law of one prices,Late Imperial China |
| Date: | 2020–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02619286&r=all |
| By: | Isaksson, Ann-Sofie (Research Institute of Industrial Economics (IFN)); Kotsadam, Andreas (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Drawing on our recent work on local effects of Chinese development projects in Africa, this review article highlights a number of distinguishing features of Chinese aid, and discusses how these may translate into local aid impacts that differ from those of other donors. Unlike aid from other major donors, Chinese aid projects were found to fuel local corruption, discourage trade union involvement, to not increase political incumbency support, and to make ethnic identities more salient in the local areas. As such, our findings highlight important donor heterogeneities as well as the need to consider not only to what extent aid achieves its explicit objectives, but also its potential unintended effects, or externalities. |
| Keywords: | China; Africa; Foreign aid |
| JEL: | F35 O19 O55 |
| Date: | 2020–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1337&r=all |
| By: | Rui Dong (University of China); Raymond Fisman (Boston University); Yongxiang Wang (University of Southern California); Nianhang Xu (Renmin University of China) |
| Abstract: | We document a negative relation between air pollution during corporate site visits by investment analysts and subsequent earnings forecasts. After accounting for analyst, weather , and firm characteristics, an extreme worsening of air quality from “good/excellent†to “severely polluted†is associated with a more than 1 percentage point lower profit forecast, relative to realized profits. We explore heterogeneity in the pollution-forecast relation to understand better the underlying mechanism. Pollution only affects forecasts that are announced in the weeks immediately following a visit, indicating that mood likely plays a role, and the effect of pollution is less pronounced when analysts from different brokerages visit on the same date, suggesting a debiasing effect of multiple perspectives. Finally, there is suggestive evidence of adaptability to environmental circumstances – forecasts from analysts based in high pollution cities are relatively unaffected by site visit pollution. |
| Keywords: | Pollution; Forecasting bias; Investment analysts; Adaptation |
| JEL: | D91 Q5 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-345&r=all |
| By: | Olivier Damette (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UL - Université de Lorraine - UNISTRA - Université de Strasbourg); Stéphane Goutte (Cemotev - Centre d'études sur la mondialisation, les conflits, les territoires et les vulnérabilités - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines) |
| Abstract: | Faced with the global pandemic of Covid-19, we need to better understand the links between meteorological factors, air quality and the virus. In the vein of a recent empirical literature, we reassess the impact of weather factors like temperatures, humidity and air quality indicators on Covid-19 daily cases in China both for Wuhan and Beijing. Using a consistent number of observations (104), we compute, for the first time, correlations but also Granger causality and above all, a spectral analysis using Wavelet methods. Our results go further previous studies and reveal the complexity of the studied relationships when both time and frequency domains are taken into account. Wavelet analysis enables us to go further usual correlations analysis. Though negative humidity impact on Covid-19 cases was expected to be relatively clear regarding previous literature based on correlations, we do not find evidence of such a result. The controversial effect of warmer temperatures on the Covid-19, often difficult to identify or sometimes identified as surprisingly positive, can negatively emerge via Wavelet analysis for some periods only. This result is however clear-cut for the Hubei Province but for the Beijing one. Finally, our results reveal a bi-directional causality between air quality and the number of infected people. Short-run causality from Covid-19 to air quality (better induced air quality) via lockdown policies disappear in a medium-run and turns to become a significant causal link from induced air quality improvement to Covid-19 daily cases (reduction of infected people). |
| Date: | 2020–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02629139&r=all |
| By: | Martial Foucault (Centre de recherches politiques de Sciences Po); Vincenzo Galasso (Università Bocconi) |
| Abstract: | On March 9th, with the official count of COVID-positive individuals at 7,985 and of deaths from COVID at 463, Italy was the first European country to entered into a comprehensive, nation-wide lockdown. Containment measures were further tightened on March 22nd, when a Prime Minister’s Decree mandated the shut-down of any unessential productive activity, de facto bringing to a halt a large chunk of the Italian economy. Other European countries immediately followed: Austria on March 16th, France and Germany on March 17th, the UK on March 23rd.The aim of these lockdown measures was to confine the spread of the coronavirus, to limit pressure on the national health system and, of course, to contain the death counts. Different degrees of lockdown were implemented at different point in time and across different countries. These public policy measures included closing schools, closing non-essential businesses, economic activities and institutions, stopping public transportation, prohibiting meetings of two or more people, imposing quarantine on people entering the country, closing borders. Moreover, individuals were asked (or mandated) to follow health and social distancing measures, such as, washing hands, coughing in the elbow, stop hugging or greeting, keeping physical distance from the others, staying at home, avoiding crowed places, stop meeting friends. Early studies (Kraemer, 2020) show that these measures were effective in reducing COVID-19 spread in the province of Hubei in China. However, these restraining measures cause also economic and psychological harms for the restrained individuals (Brookset al., 2020) and have economic consequences (see Baldwin and di Mauro, 2020, for a review). |
| Keywords: | COVID-19; Cross-Country; Data Survey |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5cmk499mce8lvosvi0jdis0dla&r=all |