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on China |
| By: | Brennan, Louis; Eszterhai, Viktor; He, Shaowei |
| Abstract: | China's EV industry is investing heavily in Hungary giving it an additional mode of entry into the European market. As the EU attempts to protect European incumbent firms with the imposition of tariffs on EV imports from China, this investment creates a challenge for European policy makers. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:306298 |
| By: | Yibo Qiao (Nanjing University); Andrea Ascani (Gran Sasso Science Institute) |
| Abstract: | This paper investigates the effect of High-speed Railway (HSR) on city industrial upgrading. Using the Annual Survey of Industrial Firms (1998-2015) and HSR opening information in China, we conduct a difference-in-differences-in-differences (DDD) analysis on 300 prefecture- and higher-level cities and 389 4-digit manufacturing industries. We find that HSR enables cities to enter more complex industries, and this result is robust under parallel trend test, placebo test, instrumental variable estimation, and other specifications. We contribute to Evolutionary Economic Geography by considering HSR as a regional external linkage and by integrating the causal analysis in the study of regional diversification. |
| Keywords: | High-speed railway, industrial upgrading, complexity, regional diversification, China |
| JEL: | H54 O18 R11 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp58 |
| By: | Shiyun Cao (Institute for Economic and Social Research, Jinan University); Jennifer T. Lai (School of Finance, Guangdong University of Foreign Studies); Paul D. McNelis (Boston College) |
| Abstract: | This paper assesses the network connectedness of risks in China’s stock market, focusing on how shocks in the real estate sector impact financial institutions. We analyze the effect of financial instability in real estate firms on the stability of the broader financial system. To measure the transmission of these risks, we use two key methods: generalized forecast error variance decomposition and the ∆CoVaR approach.Our findings reveal that banks often serve as net receivers of risk, while non-bank financial institutions amplify the transmission of real estate-related risks. This highlights the critical role of non-banks in propagating risk throughout the financial system and underscores the importance of robust systemic risk monitoring across financial networks. |
| Keywords: | financial contagion, China, real estate, regulation |
| JEL: | G21 G22 G23 G28 |
| Date: | 2024–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:boc:bocoec:1083 |
| By: | Xiaojun Yu (School of Finance, Capital University of Economics and Business, Beijing, China.); Russell Smyth (Department of Economics, Monash University, Victoria, Australia.); Yao Yao (School of Economics and International Trade, Shanghai Lixin University of Accounting and Finance, Shanghai, China.); Quanda Zhang (Institute of Innovation, Science and Sustainability, Federation University Australia, Victoria, Australia & Department of Economics, Monash University, Victoria, Australia.) |
| Abstract: | We estimate the causal effect of climate change induced water stress on firm-level productivity in China. In contrast with most extant studies that have employed precipitation to proxy firm-level availability of water, we use local water runoff, which we argue is a more appropriate measure of water stress on firms. By matching a panel for half a million formal industrial firms with county-level data on water runoff, we find that shocks to local water runoff, defined as a standard deviation increase or decrease in local water runoff from its long-run average, exert asymmetric effects on firm productivity. A negative shock to water runoff reduces firm productivity by between 1.93 and 5.40 per cent, depending on the magnitude of the shock, while the effect of a positive shock to water runoff on firm productivity is insignificant. These results are robust to numerous sensitivity checks. We show that water runoff outperforms other proxies of water availability across different horserace specifications. We find that the main transmission mechanisms are the adverse effect of negative shocks to water runoff on constraining water inputs in production, disruptions to power generation and, to a lesser extent, higher financing cost. Our study sheds new light on how climate change can impede economic development. |
| Keywords: | Water stress, water runoff, climate change, firm performance, panel model |
| JEL: | L60 O44 O47 Q54 Q25 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:2024-20 |
| By: | Zilong Li (School of Economics, University College Dublin; Geary Institute for Public Policy, University College Dublin, Ireland); Xidong Guo (Vanke School of Public Health, Tsinghua University, Beijing 100084, China); Zuzanna Studnicka (School of Economics, University College Dublin, Ireland); Jiming Zhu (Vanke School of Public Health, Tsinghua University, Beijing 100084, China) |
| Abstract: | We examine the home advantage in the Chinese Basketball Association during the “neutral venues policy”, a period of approximately 2.5 years when games were relocated to neutral sites due to China’s strict COVID-19 regulations. We observe a reduced home advantage under this policy, providing a natural experiment to analyze the heterogeneous effects of neutral venues. We investigate these effects from two perspectives: (1) the relative strength of the home team and (2) the climate conditions of the home team’s original location. We find that stronger home teams are less affected by playing in neutral venues, suggesting that such teams rely less on the benefits of their home ground. Moreover, teams based in colder regions experience a more pronounced decline in home advantage during winter when they are unable to play on their home courts. |
| Keywords: | Home advantage; COVID-19; Neutral venues; Cold temperature; Team strength |
| JEL: | D91 L83 Q54 Z20 |
| Date: | 2024–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:ucd:wpaper:202408 |
| By: | Chuanglian Chen (Jinan University); Xiaobin Liu (Sun Yat-sen University); Jun Yu (University of Macau); Tao Zeng (Zhejiang University) |
| Abstract: | This paper investigates the time-varying asymmetric and zone-like preferences of the People’s Bank of China (PBoC) and its corresponding monetary policy reaction function. We assume that the priority given to different policy objectives in the loss function of the PBoC can evolve over time. Based on this assumption and the economic system, the central bank minimizes losses and derives an optimal forward-looking monetary policy rule with time-varying parameters. The paper explores four distinct types of loss related to inflation, output, and leverage, resulting in a total of 64 distinct models. Leveraging a modified maximum likelihood estimation approach, we estimate these models and utilize the Akaike information criterion (AIC) to identify the most suitable model. Based on the data from 1996 to 2022, we find that: (1) the PBoC’s reaction to inflation differentials exhibits slight asymmetry, featuring a no-intervention zone between -1% and 1%. The monetary authority intervenes when inflation diverges by more than 1% from the target, otherwise relying on market self-regulation; (2) regarding output gaps, the PBoC asymmetrically intervenes, displaying a stronger inclination towards averting overheating compared to downturns; (3) in response to credit leverage differentials, policy reactions follow a linear pattern. The empirical results underscore the central bank’s adaptability and responsiveness to economic fluctuations and strongly demonstrate the flexibility and advantages of our framework. |
| Keywords: | Time-varying parameter model, forward-looking monetary policy rule, leverage, asymmetric and zone-like preference |
| JEL: | E5 C32 C51 C52 E52 E58 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202421 |
| By: | X. Liu; H. Yu |
| Abstract: | This paper evaluates the impact of a mandatory shutdown policy of small-capacity coal power plants during China's $11^{th}$ Five-Year Plan (2006--2010) on under-5 mortality. We collect information on 2181 coal power plants that operated during 2000--2010 and compile a unique dataset combining coal power plants, county-level under-5 mortality and socioeconomic variables, high spatial resolution data of PM$_{2.5}$ and SO$_2$ and meteorological conditions. We model the impacts of air pollution on under-5 mortality using IV-Lasso method, with distance-weighted sums of retired capacity and high altitude wind conditions as instrument candidates for air pollutants. Our estimates imply the phase-out policy saved around 46, 000 lives during the $11^{th}$ Five-Year Plan period. We also find heterogeneity in policy effects across regions. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.10728 |
| By: | Vicente Ferreira; Joao Pedro Ferreira; Dario Guarascio; Francesco Zezza |
| Abstract: | The return of inflation in Western economies has fueled the debate on its main drivers, bringing sector-specific shocks and supply chain bottlenecks to the forefront. Building on the seminal approach of Weber et al. (2024), this paper develops a method to assess the degree of exposure to these shocks in EU countries. Using inter-country input-output data stemming from the FIGARO database, we identify systemically significant sectors in four regions within the EU: Core, Southern Periphery, Eastern Periphery, and financial hubs. We also analyze exposure to foreign shocks. Two main conclusions can be drawn: on the one hand, periphery countries are more exposed to shocks originating in the EU core than the other way around; on the other hand, all EU regions are considerably exposed to price shocks originating from non-EU countries (namely, Russia and China). The strategic dependencies of the block pose challenges for price stability and require targeted policies. |
| Keywords: | Inflation; Supply chain shocks; Input-Output; Core-periphery |
| JEL: | C67 E31 E61 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp254 |
| By: | Giovanni Carnazza; Paolo Liberati; Agnese Sacchi |
| Abstract: | In recent times, many countries have continued to deal with political instability due to difficulties in improving democratic practices and limiting episodes of violence and terrorism. Using a sample of 27 European Union (EU) countries observed yearly during the period 1999-2021, we empirically analyze how the domestic political instability of a given country can be affected by the degree of trade diversification adjusted for the political instability of the nonEU countries it trades with. We adopt a network-based approach and build a novel geopolitical dependency index. We find there is a risk of importing political instability along with international trade by increasing trade concentration or the import share from more politically unstable non-EU countries. Given the relevance of the United States and China for European economic activity, we also test our main hypothesis by adjusting the geopolitical dependency index. We see China’s prominent role in trade and political tension in EU countries compared to the US. |
| Keywords: | political instability, trade diversification, network analysis, geopolitical dependency, EU countries |
| JEL: | D74 D85 F10 F50 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2024/319 |