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on China |
| By: | Sébastien Marchand (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Damien Cubizol (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Elda Nasho Ah-Pine (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Huanxiu Guo (The Institute of Economics and Finance - Nanjing Audit University) |
| Abstract: | In 2013, the Chinese central government launched a war on air pollution. As a new and major source of information, the Internet plays an important role in diffusing environmental news emotion and shaping people's perceptions and emotions regarding the pollution. How could the government make use of the environmental news emotion as an informal regulation of pollution? The paper investigates the causal relationship between web news emotion (defined by the emotional tone of web news) and air pollution (SO2, NO2, PM2.5 and PM10) by exploiting the central government's war on air pollution. We combine daily monitoring data of air pollution at different levels (cities and counties, respectively the second and third administrative levels in China) with the GDELT database that allows us to have information on Chinese web news media (e.g. emotional tone of web news on air pollution). We find that a decrease of the emotional tone in web news (i.e. more negative emotions in the articles) can help to reduce air pollution at both city and county level. We attribute this effect to the context of China's war on air pollution in which the government makes use of the environmental news emotion as an informal regulation of pollution. |
| Keywords: | News emotion,Air pollution,Mass media,The internet,Government,China |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cdiwps:hal-03448375&r= |
| By: | Hui Xu; Yue Wu |
| Abstract: | How does import competition from China affect engagement on ESG initiatives by US corporates? On the one hand, reduced profitability due to import competition and lagging ESG performance of Chinese exporters can disincentivize US firms to put more resources to ESG initiatives. On the other hand, the shift from labor-intensive production to capital/technology-intensive production along with offshoring may improve the US company's ESG performance. Moreover, US companies have incentives to actively pursue more ESG engagement to differentiate from Chinese imports. Exploiting a trade policy in which US congress granted China the Permanent Normal Trade Relations and the resulting change in expected tariff rates on Chinese imports, we find that greater import competition from China leads to an increase in the US company's ESG performance. The improvement primarily stems from "doing more positives" and from more involvement on environmental initiatives. Indirect and direct evidence shows that the improvement is not driven by the change in production process or offshoring, but is consistent with product differentiation. Our results suggest that the trade shock from China has significant impact on the US company's ESG performance. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.12402&r= |
| By: | Pablo Fajgelbaum (Princeton University); Pinelopi K. Goldberg (Yale University); Patrick Kennedy (University of California, Berkeley); Amit Khandelwal (Columbia GSB); Daria Taglioni (World Bank) |
| Abstract: | We study global trade responses to the US-China trade war. We estimate the tariff impacts on product-level exports to the US, China, and rest of world. On average, countries decreased exports to China and increased exports to the US and rest of world. Most countries export products that complement the US and substitute China, and a subset operate along downward-sloping supplies. Heterogeneity in responses, rather than specialization, drives export variation across countries. Surprisingly, global trade increased in the products targeted by tariffs. Thus, despite ending the trend towards tariff reductions, the trade war did not halt global trade growth. |
| Keywords: | Conflicts, Globalization, United States, China, Trade disputes, Exports, International relations, Tariffs |
| JEL: | F10 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-56&r= |
| By: | Prateek Bansal; Rubal Dua |
| Abstract: | China and India, the world's two most populous developing economies, are also among the world's largest automotive markets and carbon emitters. To reduce carbon emissions from the passenger car sector, both countries have considered various policy levers affecting fuel prices, car prices and fuel economy. This study estimates the responsiveness of new car buyers in China and India to such policy levers and drivers including income. Furthermore, we estimate the potential for rebound effect and the effectiveness of a feebate policy. To accomplish this, we developed a joint discrete-continuous model of car choice and usage based on revealed preference survey data from approximately 8000 new car buyers from India and China who purchased cars in 2016-17. Conditional on buying a new car, the fuel consumption in both markets is found to be relatively unresponsive to fuel price and income, with magnitudes of elasticity estimates ranging from 0.12 to 0.15. For both markets, the mean segment-level direct elasticities of fuel consumption relative to car price and fuel economy range from 0.57 to 0.65. The rebound effect on fuel savings due to cost-free fuel economy improvement is found to be 17.1% for India and 18.8% for China. A revenue-neutral feebate policy, with average rebates and fees of up to around 15% of the retail price, resulted in fuel savings of around 0.7% for both markets. While the feebate policy's rebound effect is low - 7.3% for India and 1.6% for China - it does not appear to be an effective fuel conservation policy. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.08995&r= |
| By: | Amanda Liu; Jing Liu; Ilhyock Shim |
| Abstract: | This paper examines how Chinese banks used on-balance sheet shadow loans for regulatory arbitrage and whether the financial market priced in the banks' use of shadow loans and the resulting vulnerabilities in 2016–2020. It finds that banks chose to window-dress their regulatory capital ratio by using shadow loans. It also shows that banks with a higher shadow loan ratio or a lower break-even non-performing loan ratio obtained from reverse stress testing faced higher wholesale funding costs. Finally, after the announcement of a rare bank failure event, more vulnerable banks witnessed lower cumulative stock and bond returns. |
| Keywords: | bank capital regulation, Chinese economy, regulatory arbitrage, shadow banking, reverse stress test. |
| JEL: | G12 G14 G21 G28 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:999&r= |
| By: | Jing Xing; Katarzyna A. Bilicka; Xipei Hou |
| Abstract: | In this paper, we investigate distortions created by turnover taxes. As a natural experiment, we explore a reform that replaced turnover taxes with value-added taxes for some service industries in China, while the taxation of manufacturing industries remained unchanged. The reform increased sales, R&D investment, and employment for affected service firms, which is primarily driven by outsourcing from downstream manufacturing firms. We document that smaller and less innovative manufacturing firms outsource more, and reallocation increases the quality of innovation for affected service firms. Our study provides new evidence on the negative impact of turnover taxes imposed on business inputs. |
| JEL: | D25 H25 H32 O32 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29650&r= |
| By: | Javier Garcia-Bernardo; Petr Jansk\'y |
| Abstract: | We exploit the new multinational corporations' country-by-country reporting data with unparalleled country coverage to study the distributional consequences of profit shifting to tax havens. We find that countries with lower incomes tend to lose more tax revenue relative to total tax revenues. We estimate that multinational corporations worldwide shifted up to US\$1 trillion of profits in 2016. We further establish that corporations headquartered in the United States and China shift profits most aggressively and that the Cayman Islands is the largest tax haven. In terms of methodology, we show that a logarithmic function is preferable to linear and quadratic ones for modelling the extremely non-linear relationship between profits and tax rates. Although their estimates of the global scale of profit shifting are similar, they differ substantially at country level: the logarithmic function points to profits being shifted considerably more to countries with zero or very low effective tax rates. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.08444&r= |