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on China |
| By: | Chor, Davin; Manova, Kalina; Yu, Zhihong |
| Abstract: | Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with InputOutput tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed. |
| Keywords: | global value chains; production line position; upstreamness; firm heterogeneity; firm lifecycle; China |
| JEL: | F10 F23 L23 L24 L25 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108215&r=all |
| By: | Jeannine Bailliu; Xinfen Han; Barbara Sadaba; Mark Kruger |
| Abstract: | Given China's complex monetary policy framework, the People's Bank of China's (PBOC) monetary policy rule is difficult to infer from its observed behaviour. In this paper, we adopt a novel approach, using text analytics to estimate and interpret the unknown component in the PBOC's reaction function. We extract the unknown component in a McCallum-type monetary policy rule for China through a state-space model framework using a set of summary topics extracted from official PBOC documents. Then, using a set of sectional topics extracted from the same set of PBOC documents, we provide this component with its rightful interpretation. Our results show that this unknown component is related to the Chinese government's agenda of supply-side structural reforms, suggesting that monetary policy is used as a tool to achieve structural reform objectives. Structural vector autoregression (SVAR) results confirm these findings by providing evidence of the importance of the government's supply-side reform objectives for the conduct of monetary policy. |
| Keywords: | Econometric and statistical methods; International topics; Monetary policy communications; Monetary policy framework |
| JEL: | C63 E58 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-3&r=all |
| By: | Torsten Heinrich (Faculty for Economics and Business Administration, Chemnitz University of Technology); Jangho Yang (Institute for New Economic Thinking at the Oxford Martin School, University of Oxford); Shuanping Dai (School of Economics, Jilin University) |
| Abstract: | Understanding the microeconomic details of technological catch-up rocesses offers great po-tential for informing both innovation economics and development policy. We study the economictransition of the PR China from an agrarian country to a high-tech economy as one examplefor such a case. It is clear from past literature that rapidly rising productivity levels played acrucial role. However, the distribution of labor productivity in Chinese firms has not been com-prehensively investigated and it remains an open question if this can be used to guide economicdevelopment. We analyze labor productivity and the dynamic change of labor productivity infirm-level data for the years 1998-2013 from the Chinese Industrial Enterprise Database. Wedemonstrate that both variables are conveniently modeled as L Ì evy alpha-stable distributions,provide parameter estimates and analyze dynamic changes to this distribution. We find thatthe productivity gains were not due to super-star firms, but due to a systematic shift of theentire distribution with otherwise mostly unchanged characteristics. We also found an emergingright-skew in the distribution of labor productivity change. While there are significant differencesbetween the 31 provinces and autonomous regions of the P.R. China, we also show that there aresystematic relations between micro-level and province-level variables. We conclude with someimplications of these findings for development policy. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:tch:wpaper:cep040&r=all |
| By: | ; Kaiji Chen; Patrick C. Higgins; Daniel F. Waggoner; Tao Zha |
| Abstract: | We study the impacts of the 2009 monetary stimulus and its interaction with infrastructure spending on credit allocation. We develop a two-stage estimation approach and apply it to China's loan-level data that covers all sectors in the economy. We find that except for the manufacturing sector, monetary stimulus itself did not favor state-owned enterprises (SOEs) over non-SOEs in credit access. Infrastructure investment driven by nonmonetary factors, however, enhanced the monetary transmission to bank credit allocated to local government financing vehicles in infrastructure and at the same time weakened the impacts of monetary stimulus on bank credit to non-SOEs in sectors other than infrastructure. |
| Keywords: | infrastructure investment; monetary policy transmission; fiscal shocks; policy interaction; credit reallocation; LGFVs |
| JEL: | E5 E02 C3 C13 |
| Date: | 2020–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:89447&r=all |
| By: | Giulio Marini (Quantitative Social Science, Social Research Institute, UCL, London, UK); Lili Yang (University of Oxford, Department of Education, Centre for Global Higher Education, 15 Norham Gardens, OX2 6PY, Oxford, UK) |
| Abstract: | This paper compares the research productivity between two groups of Chinese early- and mid-career researchers, who both got their PhDs in research leading institutions outside Mainland China. One group was recruited back to mainland China under a specific scheme, called “Young Thousand Talents” (“Y1000T”) – a clear attempt by the Chinese Government to tackle brain drain and to nurture Chinese universities. These researchers got their PhD predominantly, though not exclusively, from US institutions. Many other Chinese researchers of similar age, disciplines and prestige of PhD awarding institutions continue to work outside China at research-intensive universities. We collected a sample of this latter category of Chinese diasporas, searching from US research intensive universities. We use this distinction to set up a quasi-experimental research design in order to answer whether or not scheme recipients returnees (“Y1000T”) have been more productive in research, in comparison to those who remained outside China. The comparison primarily considers the number of publications. Results show that after coming back to China, Y1000T returnees have significantly increased their productivity in terms of the number of outputs, arguably because of their favourable research conditions. |
| Keywords: | Policy effect; Talent mobility; China; the US; Early and mid-career researchers; Research performance |
| JEL: | C93 I23 M52 O32 O38 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2102&r=all |
| By: | Valerio Mendoza, Octasiano; Borsi, Mihály Tamás; Comim, Flavio |
| Abstract: | This paper investigates the evolution of human capital in China for 31 provinces over the period of 1985-2016 from a club convergence perspective. Per capita human capital stocks, estimated using the Jorgenson-Fraumeni lifetime income approach, are for the first time examined within a non-linear latent factor framework that allows to model a wide range of transition dynamics for each province along the path to convergence. The study finds no overall convergence between provinces in China, however, the results strongly support the existence of multiple convergence clubs. While a small group of provinces are converging toward the highest levels of human capital, most of the other provinces are failing to catch up and form separate clusters that converge to lower equilibria. These regional patterns provide new evidence on the increasing human capital gap between Chinese provinces, posing a significant challenge to a more inclusive and harmonious human, and economic development. |
| Keywords: | Human capital; Club convergence; Dynamic factor model; Asia; China |
| JEL: | C33 C53 I25 O15 R11 |
| Date: | 2021–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105200&r=all |
| By: | Russell Cooper; Guan Gong; Guanliang Hu; Ping Yan |
| Abstract: | This paper studies the exporting decision of Chinese manufacturing firms. The economic framework stresses the dynamic decision by both state controlled and private entities to export in a model with labor adjustment costs. In this complex environment, a simple decision rule whereby export status depends only on current productivity does not hold. Nor does this rule match data patterns. The estimated model is used to understand the factors that influence export status. The analysis highlights the economic significance of labor adjustment costs in shaping both employment and trade dynamics. |
| JEL: | E24 F14 F16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28289&r=all |
| By: | Marlene Amstad; Leonardo Gambacorta; Chao He; Dora Xia |
| Abstract: | Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets. We find the TSI to contribute around 10% of model capacity to explain the stock price variability from January 2018 to June 2019 in countries that are more exposed to the China-US value chain. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%). No equity market benefits from the China-US trade war, and Asian markets tend to be more negatively affected. In particular, we find that sectors most affected by tariffs such as information technology related ones are particularly sensitive to the tone in trade tension. |
| Keywords: | stock returns, trade, sentiment, big data, neural network, machine learning |
| JEL: | F13 F14 G15 D80 C45 C55 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:917&r=all |
| By: | Bu, Di; Hanspal, Tobin; Liao, Yin; Liu, Yong |
| Abstract: | We study risk taking in a panel of subjects in Wuhan, China - before, during the COVID-19 crisis, and after the country reopened. Subjects in our sample traveled for semester break in January, generating variation in exposure to the virus and quarantine in Wuhan. Higher exposure leads subjects to reduce planned risk taking, risky investments, and optimism. Our findings help unify existing studies by showing that aggregate shocks affect general preferences for risk and economic expectations, while heterogeneity in experience further affect risk taking through beliefs about individuals' own outcomes such as luck and sense of control. |
| Keywords: | COVID-19,Risk taking,Beliefs,Formative experiences,Expectations,China |
| JEL: | G50 G51 G11 D14 G41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:301&r=all |
| By: | Zhang, Qianxue (University of Warwick) |
| Abstract: | Global supply chains have become increasingly important in international trade over the past decade. Nevertheless, it remains di cult to quantify the role of supply-chain trade in transmitting and amplifying shocks, given the challenge of identifying and tracing the exogenous shocks across economies. This paper argues that the lockdown of Hubei province in China due to the Coronavirus (COVID-19) outbreak provides a natural experiment to study the importance of China's role in global value chains. Since the lockdown started during the Lunar New Year, Hubei's migrant workers who went home could not return to workplaces in other provinces, resulting in a massive labor supply shock. I feed the supply shock through a Ricardian model with intermediate goods and sectoral linkages to study trade and welfare e ects across several economies. While welfare in China is the most strongly a ected, the shock also has sizeable implications for the US and the UK. However, close neighbors such as South Korea and Japan gain from the shock. There are large variations regarding the sectoral contributions to the aggregate welfare changes. The model also performs well in predicting bilateral export changes. |
| Keywords: | COVID-19 ; Labor supply shock ; Global supply chains ; Sectoral linkages ; Productivity effect ; Welfare effect JEL Classification: F10 ; F11 ; F14 ; F17 ; F41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1323&r=all |
| By: | Armenak Antinyan (Wenlan School of Business, Zhongnan University of Economics and Law, China); Thomas Bassetti (Department of Economics and Management “Marco Fanno”, University of Padua, Italy); Luca Corazzini (Department of Economics and VERA, University Of Venice Cà Foscari); Filippo Pavesi (School of Economics and Management, LIUC (Carlo Cattaneo University), Italy) |
| Abstract: | Narratives impact people’s opinions on relevant policy issues, and their political context may influence these effects. Indeed, some specific contexts may be more easily swayed by certain stories that provide explanations for current social and economic phenomena. We explore this issue by considering the ongoing COVID-19 pandemic as a natural experiment that creates the ideal conditions for existing narratives to gain momentum and spread. In particular, we run a survey experiment in the US by exposing subjects to two media-based popular explanations on the causes of the COVID- 19 pandemic. The Lab narrative attributes the upstart of the pandemic to human error and scientific misconduct in a laboratory in China, while the Nature narrative describes the genetic and biological causes of the virus. We find evidence that subjects’ beliefs on the origins of the disease are influenced by the narrative they are presented with. Moreover, the Lab narrative leads subjects living in Republican leaning states to express less favorable opinions about trade openness and the relevance of climate change relative to those living in Democratic leaning states. Thus, our findings provide support for the idea that recalling stories that are part of larger narratives can lead to divergence of opinions on crucial issues leading to an increase in policy polarization. Finally, we explore the underlying features of social contexts associated with US states’ political orientation, that moderate the impact of narratives on policy opinions. |
| Keywords: | Economic Narratives, COVID-19, Policy Issues, Survey Experiment |
| JEL: | D72 D83 C83 C99 P16 Z18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2021:04&r=all |